MINUTES OF THE ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session May 9, 1995 The Committee on Government Affairs was called to order at 8:00 a.m., on Tuesday, May 9, 1995, Chairman Douglas A. Bache 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 Mrs. Vivian L. Freeman Mr. William Z. (Bill) Harrington Ms. Saundra (Sandi) Krenzer Mr. Dennis Nolan Mrs. Gene Wines Segerblom Ms. Patricia A. Tripple Mr. Wendell P. Williams COMMITTEE MEMBERS EXCUSED: Mr. Pete Ernaut GUEST LEGISLATORS PRESENT: Senator Joseph M. Neal, Jr., District No. 4; Assemblyman Robert E. Price, District No. 17; Assemblyman David E. Humke, District No. 26. STAFF MEMBERS PRESENT: Ms. Denice Miller, Senior Research Analyst OTHERS PRESENT: Mr. Keith G. Swearingen, Personnel Officer, Department of Prisons, State of Nevada; Mr. Robert Bayer, Director, Department of Prisons; Mr. Robert Gagnier, Executive Director, State of Nevada Employees' Association; Mr. Gary Yoes, Political Action Coordinator, Local 1864, Service Employees International Union; Mr. Doug Busselman, Executive Vice President, Nevada Farm Bureau; Ms. Carole Vilardo, Nevada Taxpayers Association; Ms. Janice Wright, Deputy Executive Director, Department of Taxation; Mr. Ron Lange, Deputy Administrator, Division of Health, Department of Human Resources, State of Nevada; Mr. R. Michael Turnipseed, State Engineer, State of Nevada; Mr. Lew Dodgion, Administrator, Division of Environmental Protection, Department of Conservation and Natural Resources, State of Nevada; Mr. Tom Fronapfel, Assistant Director of Planning, Department of Transportation, State of Nevada; Mr. Donald Klasic, General Counsel, University and Community College System of Nevada; Ms. Barbara Willis, Director, Department of Personnel, State of Nevada; Mr. Joseph Johnson, Coalition for Nevada's Wildlife, Sierra Club; Ms. Rose McKinney-James, Director, Department of Business and Industry, State of Nevada; Judge John F. Mendoza, Chairman, Public Service Commission, State of Nevada; Mr. Doug Ponn, Director of Governmental Affairs, Sierra Pacific Power Company; Mr. Keith Ashworth, Nevada Power Company; Ms. Marcia Cobian, Executive Director, Nevada Telephone Association; Mr. Ray Bacon, Nevada Manufacturers Association; Mr. Tim Carlson, Executive Director, Commission on Economic Development; Ms. Elizabeth A. Livingston, Nevada Women's Lobby (See also Exhibit B attached hereto). SENATE BILL NO. 275 - Requires state personnel system to provide that state employee is entitled to copy of findings or recommendations made by appointing authority or his representative regarding proposed disciplinary action. Senator Joseph M. Neal, Jr., District No. 4, testified. He said S.B. 275 was designed to cause investigative reports to be given to state employees who were subject to disciplinary action. He explained, at the present time, reports concerning investigations of charges against state employees were not provided to those employees. Assemblyman Bennett asked, "...have we had any abuses of this...?" Senator Neal replied affirmatively. Assemblyman Neighbors asked whether the employee would be required to sign the report and the report would then be made part of his personnel record. Senator Neal replied in the negative. Assemblyman Lambert asked whether Senator Neal wished the provisions of S.B. 275 to apply only in cases which involved extreme disciplinary action, such as termination of employment, or wished them to apply in all disciplinary actions. Senator Neal responded he believed any employee who was subject to disciplinary action should have a copy of any report which concerned him. Assemblyman Tripple suggested Senator Neal might wish to consider requiring employees to sign investigative reports concerning them. Mr. Bennett asked whether an investigative report would be made part of an employee's "...annual fitness report..." Senator Neal replied such a report dealt only with proposed disciplinary action. Discussions ensued between Mr. Bennett and Senator Neal. Assemblyman Williams suggested, if an employee signed an investigative report, his doing so would constitute nothing more than an acknowledgment that he had seen and read the report. Mr. Keith G. Swearingen, Personnel Officer, Department of Prisons, State of Nevada, testified. He advised it was the Department of Prison's practice to provide an employee with copies of all reports concerning his disciplinary action. He said the Department of Prisons' objection to S.B. 275 was based on its objection to providing an employee with the entire case file regarding his disciplinary action. He maintained such a file was confidential and there was a need to protect confidential informants and other individuals who provided information. Mr. Swearingen advised the Department of Prisons provided an employee involved in a disciplinary action with copies of all reports concerning that action. He explained those reports were reviewed with the employee by a predetermination hearing officer and, thereafter, a recommendation was made as to what disciplinary action should be taken. He stated, if the employee disagreed with the proposed disciplinary action, he could appeal to the state hearing officer, who was appointed by the Personnel Commission. Mr. Bennett observed S.B. 275 said an employee was to receive a copy of any findings or recommendations and said nothing about "...a case file and confidential informants." He suggested, if S.B. 275 did require the case file be provided to the employee, the name of any confidential informant which appeared in that file could be obliterated. Mr. Robert Bayer, Director, Department of Prisons, testified. He indicated there might be some confusion as to what was meant by the language "findings or recommendations made by an appointing authority or his representative." He suggested, if S.B. 275 were amended by inserting the word "final" before the words "findings or recommendations," that might resolve the concern the Department of Prisons had about S.B. 275. He contended, once an investigation was completed, in a disciplinary proceeding, if any formal disciplinary action was to be taken against an employee, that employee should be entitled to all documents and all information used to support the imposition of that disciplinary action. He said, however, if the language being discussed was interpreted to mean any recommendation made by anyone who received information during the course of an investigation, providing copies of those recommendations to an employee could create serious problems. Chairman Bache asked Mr. Bayer whether he had given the same testimony before the Senate's committee as he had just given. Mr. Bayer replied he had not. Assemblyman Nolan asked whether state agencies were compelled to follow the recommendations of disciplinary boards or whether they had the opportunity to impose more severe or less severe discipline than that recommended. Mr. Swearingen responded an appointing authority could choose either to follow the recommendations of a predetermination hearing officer or not to follow them. Assemblyman Krenzer asked for comment on Mr. Bennett's suggestion that the name of a confidential informant could be obliterated from a case file prior to providing that file to an employee. Mr. Bayer reiterated prior testimony regarding the need to protect individuals who provided information during an investigation. Lengthy discussions ensued between Mrs. Krenzer and Mr. Bayer. Assemblyman Segerblom asked whether documents from a file regarding a disciplinary action would be placed in an employee's personnel file without those documents being "...signed and noticed." Mr. Bayer replied an employee had access to and reviewed everything placed in his personnel file. Chairman Bache referred to the language "the commission shall adopt by regulation a system for administering disciplinary measures," contained in subsection 1 of Section 1 of S.B. 275, and asked whether the fact the commission would adopt regulations would not provide sufficient protection against the concerns Mr. Bayer had expressed with regard to subsection 2. Mr. Bayer replied he would have no problem with anything the commission decided to do. He indicated he had no concern about S.B. 275 until it was suggested to him S.B. 275 might necessitate providing an employee with all material in the case file concerning his disciplinary action. Mr. Robert Gagnier, Executive Director, State of Nevada Employees' Association, testified. He expressed support for S.B. 275, as written. He advised his testimony would be the same as the testimony he gave before the Senate. Mr. Gagnier suggested it was necessary to differentiate between documentation in an employee's performance evaluation and that discussed by S.B. 275. He advised, in a performance evaluation, the employee being evaluated must acknowledge receipt of his written performance evaluation by signing it. He said, "That's totally separate from what this bill talks about." Mr. Gagnier advised, at the present time, an employee must be provided with written notice of any proposed disciplinary action against him, advising him of the basis for the action, of what disciplinary action was proposed and of when the predisciplinary hearing at which he could respond to the allegations against him was set. He stated, however, there was no requirement the individual who conducted the predisciplinary hearing provide the employee with a copy of whatever that individual sent to the appointing authority of the agency by which the employee was employed. He asserted all S.B. 275 required was that the employee be given a copy of the findings and recommendations made by the predisciplinary hearing officer. He declared the State of Nevada Employees' Association believed S.B. 275 to be a very good bill. Mr. Nolan said he agreed with Mr. Gagnier's interpretation of S.B. 275 and was certain that interpretation represented Senator Neal's intent in proposing S.B. 275. He observed the word "findings," on line 8 of S.B. 275, might cause some concern because it might be construed to mean investigatory findings. He suggested amending S.B. 275 to say "final" findings or recommendations would eliminate that concern. Mr. Gagnier responded his only concern about Mr. Nolan's suggestion was, if the word "findings" was not included in S.B. 275, an individual appointed to conduct a predisciplinary hearing could issue findings without making any recommendation and the employee subject to the disciplinary proceeding might then receive no copy of the findings because no recommendation was made. Mr. Nolan asked whether Mr. Gagnier would have a problem if the words "final findings" were used. Mr. Gagnier replied he would not like to agree to an amendment to Senator Neal's bill. Senator Neal interjected the language on the last two lines of S.B. 275 modified the earlier language "findings and recommendations" to cause "findings and recommendations" to pertain to proposed disciplinary action. Chairman Bache closed the hearing on S.B. 275. ASSEMBLY BILL NO. 518 - Prohibits state agency from taking certain adverse action against employee for testimony before legislative house or committee on his own behalf. Assemblyman Robert E. Price, District 17, testified. He provided some background on the origin of A.B. 518. He said an item on the agenda for the last meeting of the Interim Finance Committee dealt with eliminating a position in a state agency. He advised the employee whose position was to be eliminated wished to testify before the Interim Finance Committee and requested he be allowed to use some of his annual leave to do so but his request was denied, presumably because the agency by which he was employed did not wish him to testify before the committee. Mr. Price stated Senator Raggio, who was chairing the meeting of the Interim Finance Committee, asked the employee's supervisor why the employee was not permitted to appear before the committee and the employee's supervisor responded he had the right to prohibit the employee from taking time off from his work. Mr. Price declared it never occurred to him that a state employee's rights would be less than those of the average citizen. He contended any individual should be able to appear before the legislature. He asserted the concept of "total quality management" required using employees' information and knowledge to learn how to run a company, agency, city government or state government better and more efficiently. Mr. Price indicated a question was raised as to whether or not A.B. 518 should apply to probationary employees. He advised a state employee could be dismissed without cause during his probationary period and indicated he would not wish a probationary employee who was dismissed to be able to use A.B. 518 as a tool to suggest he was dismissed because he testified before the legislature. Mr. Price indicated the bill drafter who prepared A.B. 518 asked whether Mr. Price wished its provisions to apply to employees of the Legislative Counsel Bureau (LCB) also. Mr. Price advised the legislature prohibited its employees from participating in any political activities and pointed out A.B. 518 would apply to legislative employees as well as other state employees. Assemblyman Harrington suggested allowing employees of LCB to testify before the legislature as advocates of a particular position might damage their credibility (with respect to the information they provided to legislators in their capacity as legislative employees) and damage the effectiveness of LCB. Mr. Price responded he would be very surprised if an employee of LCB chose to testify in favor of or against an issue being considered by the legislature but believed, as a citizen of the United States and of Nevada, such an employee should have the right to do so if he so chose. Mr. Bennett said he found no problem in allowing the provisions of A.B. 518 to apply to employees of LCB. Ms. Tripple suggested, sometimes, a state agency might wish to present a unified position (on an issue being considered by the legislature). She said, although she believed a state employee should have the right to address the legislature as an individual, if such an employee was going to speak in his capacity as an employee of a state agency, as a courtesy, he should provide a copy of his intended testimony to his supervisor. Mr. Price responded those who testified before the legislature seldom provided the legislature, in advance, with written testimony. He contended most testimony before the legislature was given extemporaneously. He suggested, toward the end of a legislative session, there might be little notice (to individuals who wished to testify) of when a specific matter was to be considered by a legislative committee. He suggested, perhaps, A.B. 518 should clearly state that a state employee could not claim to represent a state agency when, in fact, he did not represent that agency. Mr. Harrington pointed out elected officials gave up certain rights to privacy when elected and suggested, because of the nature of the employment they accepted, some employees of LCB also must sacrifice certain privileges and certain rights in order to protect the legislative system. He indicated he was also concerned, if employees of LCB were permitted to testify before the legislature, those employees might feel pressured by certain legislators to testify with regard to certain issues. He asserted he would support the right of an LCB employee to testify about matters he was not working on in the course of his employment but contended it might be difficult for such an employee to testify, in an impartial manner, about subjects with which his work was involved. Mr. Price observed some legislators might do as Mr. Harrington had suggested. Mrs. Segerblom asked Mr. Price whether he had testified employees of LCB could not participate in political activities. Mr. Price replied affirmatively. He advised he liked Nevada's system of requiring those who worked for the legislature to conduct themselves in an impartial manner when working with the legislators but said he believed that system was sometimes carried too far. Assemblyman Freeman said she wished to follow up on comments Mr. Price made concerning an LCB employee who placed a political sign in her yard. She asked whether that incident occurred recently and also asked "...where did the directions come from, at the state level, that prohibited the employee from doing that?" Mr. Price responded, "Now, that was an LCB employee and the directions came from our staff." Mrs. Freeman reiterated her question as to when the incident occurred. Mr. Price replied it occurred either during the last election or the election prior to the last. Mrs. Freeman declared she shared some of the concerns expressed by Mr. Harrington and asked whether Mr. Price thought A.B. 518 was somewhat too broad. Mr. Price responded perhaps that question should be considered by a subcommittee on A.B. 518. Mr. Robert Gagnier, Executive Director, State of Nevada Employees' Association, testified. He expressed support for A.B. 518. Mr. Gagnier provided further details regarding the incident about which Mr. Price testified, in which a state employee was prohibited use of his annual leave to testify before the legislature. Mr. Gagnier advised, prior to each legislative session except the current one, several state agencies sent their employees a memorandum which said, if those employees wished to testify before the legislature, they must: use their annual leave to do so; advise the legislature they were not speaking on behalf of the agency; and give advance notice to the agency that they would be testifying before the legislature. He suggested the first two requirements were acceptable but the third was a method of intimidation. He declared state employees were citizens of Nevada and had a right to petition the legislature. He contended that right must be carefully guarded. Mr. Bennett asked whether the length of time it took to process an employee's request to use annual leave could create a problem with respect to that employee's ability to appear before the legislature. Mr. Gagnier replied it could. He advised, because of the nature of the business in which they were engaged, different state agencies had different policies (with respect to use of annual leave). He indicated agencies to which staffing was critical might have different requirements than agencies which had primarily office environments. He indicated some state agencies required employees to apply for use of their annual leave six months prior to the time they wished to use that leave. Chairman Bache asked whether Mr. Gagnier believed it would be better if the provisions of A.B. 518 applied to Chapter 284 of NRS rather than to Chapter 218. Mr. Gagnier replied, "...if you want to restrict this to agencies of the executive branch, then, the easiest thing to do would be to amend it into (Chapter) 284; then, it wouldn't apply to legislative employees." Mr. Gagnier said, if the committee wished to address Mr. Price's concern about A.B. 518 being applicable to probationary employees, it could amend A.B. 518 to make it applicable to NRS 284 and to refer, on line 3, to "a permanent classified employee." Mrs. Lambert asked Mr. Gagnier to comment on whether or not there was any overlap between A.B. 518 and "the whistle blower law." Mr. Gagnier replied the whistle blower law was intended to protect employees who reported wrong doing. He suggested A.B. 518 went further than the whistle blower law, in that it provided state employees an opportunity to express their opinions to the legislature, without fear of reprisal, even when those opinions had nothing to do with wrong doing. He pointed out, however, line 13 on page 2 of A.B. 518 was a reference to the whistle blower law. Mr. Gary Yoes, Political Action Coordinator, Local 1864, Service Employees International Union (SEIU), testified by reading from prepared text (Exhibit C). He expressed strong support for A.B. 518. He contended many of SEIU's members were effective advocates for their clients and their testimony could be valuable in helping the legislature formulate policies. He advised, in many instances, workers had not come forward to testify before the legislature because of their perception there would be retaliation against them if they participated in the legislative process. He maintained many state employees shared that perception and said A.B. 518 would go far to alter that perception. He asserted, if A.B. 518 became law, it might have a major, positive impact on future legislation by providing legislators (through the testimony of state employees) with a perspective previously denied them. Mrs. Lambert directed a question to Mr. Price. She asked Mr. Price's opinion about causing A.B. 518 to apply to local government employees. Mr. Price replied he would not object to broadening the applicability of A.B. 518. Chairman Bache turned the meeting over to Vice Chairman Neighbors and left his seat in the committee and testified. He stated he was in favor of A.B. 518. He advised, during the last legislative session, the director of the Nevada Rural Housing Authority testified in favor of a bill which would make the Nevada Rural Housing Authority an independent agency. He said two employees of the Nevada Rural Housing Authority took annual leave and testified before the legislature in opposition to the bill. He indicated those employees were nervous and shook while testifying. Mr. Bache said, thereafter, the Nevada Rural Housing Authority held a board meeting and some of its employees notified him of the meeting. He advised he attended the meeting, during which there was much discussion about the two employees having testified before the legislature in opposition to the Nevada Rural Housing Authority's bill. He indicated curiosity was expressed about his presence at the meeting, in response to which he explained he was present to ensure no retaliation was taken against the two employees who testified before the legislature. Mr. Bache advised, during the legislative interim, some employees of the Nevada Rural Housing Authority had contacted him and indicated they had some problems with the director of the authority but could not specifically relate any of those problems to their testimony before the legislature. He stated those employees believed, had he not been present at the Nevada Rural Housing Authority's board meeting, they would have had more problems. Vice Chairman Neighbors turned the meeting back over to Chairman Bache. Chairman Bache closed the hearing on A.B. 518. ASSEMBLY BILL NO. 538 - Imposes temporary moratorium on adoption of state regulations and creates advisory committee to study such regulations. Assemblyman Joan A. Lambert, District No. 29, left her chair in the committee and testified on behalf of Assemblyman David E. Humke, District No. 26, by reading from prepared text and a written addendum to that text (Exhibit D, jointly) provided by Assemblyman Humke. In his written testimony (Exhibit D) Mr. Humke declared an imbalance had arisen between the legislative and executive branches of (state) government. He indicated the executive branch found it necessary to promulgate regulations in order to carry out the dictates of statute but, in doing so, infringed upon the prerogatives of the legislative branch and, in effect, created new laws under the guise of regulations. He suggested it was time for the legislature to clarify the boundaries between the executive and legislative branches of Nevada's state government and to cause the executive branch to remove itself from law-making activities. Mr. Humke advised A.B. 538 would declare a two year moratorium on creation of new regulations but would provide an emergency procedure which "...the Governor may avail himself of in order to pass necessary procedures." He explained the bill also mandated a study of the regulatory process. Mr. Humke asserted heads of some state agencies would maintain A.B. 538 would prevent them from implementing both new state legislation and federal mandates. He contended A.B. 538 would allow state agencies to function but would make it more difficult for them to create additional regulations. In the addendum to his testimony (Exhibit D), Mr. Humke suggested both the state agencies listed in NRS 233B.039 and the Public Service Commission be exempted from the provisions of A.B. 538. Mrs. Lambert identified the state agencies listed in NRS 233B.039, which Mr. Humke wished exempted from the provisions of A.B. 538. Mr. Doug Busselman, Executive Vice President, Nevada Farm Bureau, testified by reading from prepared text (Exhibit E). He indicated the Nevada Farm Bureau was in favor of A.B. 538 but would like subsection 2(a) of Section 1 strengthened to clearly provide that regulations required because of legislative action taken during the current legislative session were to be adopted. Mr. Busselman stated the Nevada Farm Bureau urged at least one representative of the agricultural industry be included on the advisory committee for the study of regulations. Ms. Carole Vilardo, Nevada Taxpayers Association, testified. She said she supported the concept of A.B. 538. She stated she believed both the legislative and the executive branches of Nevada's state government acknowledged that "...the regulatory environment is almost as important and, in some instances, more important than the tax environment, the life-style environment, in attracting new businesses and fostering economic development and diversification..." She indicated she was pleased Mr. Humke intended to exempt from the applicability of A.B. 538 a number of state agencies which might have been adversely impacted by it. Ms. Vilardo declared she did not support imposing a moratorium on the creation of new regulations because she believed the current legislature had passed legislation which required agencies to promulgate regulations. Ms. Vilardo asserted creating a commission to study regulations was a good idea. She contended regulations became "...a point of law..." and suggested a business needed a degree of sophistication to understand it was governed by regulations as well as by laws. She explained some businesses were unaware of the effect regulations had upon the laws to which those businesses were subject. She proposed the legislature might review regulations to determine whether they could be updated to incorporate new technologies or could be combined for simplification. Mrs. Lambert observed Ms. Vilardo had participated in both an infrastructure study, which utilized an advisory committee to a committee of legislators, and a tax study, which utilized a committee of non-legislators, and asked Ms. Vilardo which of those formats she believed was most effective. Ms. Vilardo replied, "...I think when you're looking at parameters and the impacts to industries, that an advisory committee, such (as) was done for taxing districts or infrastructure, can be very, very helpful to legislators because most of us...will serve without compensation. Because we are involved in these areas, we have access to a great deal of information. We can pre-prepare some things to be done. So I think your advisory committee that operates at the direction of -- because you're looking at something very large -- I don't know that you can expand something like this to full voting membership, but I think an advisory committee with those industries represented that tend to be the most regulated and that work in the areas of economic development and diversification would be very helpful as an adjunct to however you structured the committee, be it of legislators, new or existing within the legislative commission." Ms. Janice Wright, Deputy Executive Director, Department of Taxation, testified. She indicated the Department of Taxation was very much in favor of the concept of A.B. 538 but was concerned because the department was not exempted from the provisions of A.B. 538. Ms. Wright explained the Nevada Tax Commission was the regulating board of the Department of Taxation and often had to adopt regulations in response to a need of the business community. She advised, before promulgating any regulation, the Department of Taxation consulted the industry (which would be affected by the regulation) and worked closely with the Nevada Taxpayers Association. She said once the proposed language of a regulation was developed, the Department of Taxation posted notices of public hearings to be held before the Nevada Tax Commission. Ms. Wright indicated the Department of Taxation's concern about A.B. 538 was based on the possibility the business community might be adversely affected by delays (in the hearing process). She pointed out the Nevada Tax Commission was not a full time board and met only five or six times a year. She suggested A.B. 538 would create further delays (in the process of promulgating regulations). She indicated the Department of Taxation would like A.B. 538 to provide a method by which the department could adopt regulations requested by the business community "...as an assistance in providing clarification for the statutes for them." Mr. Ron Lange, Deputy Administrator, Division of Health, Department of Human Resources, State of Nevada, testified by reading from and expanding upon prepared text (Exhibit F). He advised the Department of Human Resources was concerned about A.B. 538 because it would prohibit agencies from updating regulations in response to changes in federal or state law, departmental reorganization or the fact the department and the industry it regulated recognized certain regulations as burdensome. Mr. Lange said the Department of Human Resources was also concerned because A.B. 538 would prohibit it from raising its fees in order to meet budget revenue targets mandated by the legislature. He explained fees constituted 25 percent of the Division of Health's approved budget. Mr. Lange indicated yet another concern of the Department of Human Resources was the fact A.B. 538 would eliminate temporary regulations adopted between July 1, 1994, and July 1, 1995. He provided examples of the problems it would create. Mr. Lange advised the Department of Human Resources was troubled by the fact A.B. 538 did not provide for one or more individuals familiar with public health to be members of the committee for the study of regulations. He contended the department's regulations were concerned, primarily, either directly or indirectly, with protection of public health. He advised the department recommended the committee to study regulations include members who were knowledgeable about issues of public health and welfare. Mr. Lange stated, based on the number of regulations the Department of Human Resources had, he believed it would be an extremely large undertaking to attempt, in a two year period, to review all regulations of all the agencies not exempted from the provisions of A.B. 538. Mr. Lange declared the Department of Human Resources supported the concept of reviewing regulations and believed such a review was necessary but was concerned about the fact A.B. 538 would impose a moratorium on the creation of regulations and prevent regulations from being updated as necessary. Chairman Bache inquired how many of those present who opposed A.B. 538 would no longer have a problem with it if it was amended to eliminate Sections 1 and 2. The members of the audience responded with a show of hands. Mr. R. Michael Turnipseed, State Engineer, State of Nevada, testified. He indicated his agency had few regulations. He advised Assembly Bill No. 314 of the sixty- seventh session required him to adopt rules of practice for conducting hearings and said those rules were submitted to the Secretary of State on December 30, 1994. He stated he assumed submitting his agency's rules to the Secretary of State fulfilled the requirement of Section 1 of A.B. 538 relating to adoption of rules by a state agency but he was not certain that assumption was correct. Mr. Lew Dodgion, Administrator, Division of Environmental Protection, Department of Conservation and Natural Resources, State of Nevada, testified. He stated he would like to see A.B. 538 amended to eliminate Sections 1 and 2. He contended a two year moratorium on all regulations would adversely impact both the regulatory community and the public. Mr. Dodgion addressed his remaining testimony to Section 3 of A.B. 538. He declared he had no problem with requiring a review of regulations and encouraged such a review. He indicated his division created many regulations and had found the earlier everyone who would be impacted by a regulation was involved in the process of establishing that regulation the better the result which was achieved. He suggested those who created regulations and who worked with the community to enforce those regulations should be included on the committee which would review regulations. Mr. Bennett asked whether or not, under state law, Nevada's environmental protection regulations could exceed federal standards. Mr. Dodgion replied whether or not they could depended upon the statutory language pertaining to a specific program. He said, "In most of the statutes, its silent with respect to `more stringent than.'" He explained, in most instances, the Environmental Commission had the ability to develop regulations which were specific to and appropriate for the state of Nevada. Mr. Tom Fronapfel, Assistant Director of Planning, Department of Transportation, State of Nevada, testified. He said the Department of Transportation would support amending A.B. 538 to remove Sections 1 and 2. He advised, as presently drafted, A.B. 538 would have an adverse effect on the Department of Transportation, mainly because the definition of "regulation" included policies, procedures and other activities. Mr. Fronapfel stated the Department of Transportation supported the concept of an advisory committee for the review of regulations but would like that committee to include a member familiar with state departments of transportation because such departments engaged in activities unique to the functions of such departments. Mr. Donald Klasic, General Counsel, University and Community College System of Nevada (UCCSN), testified. He declared, if the committee did not amend A.B. 538 to eliminate Sections 1 and 2, then UCCSN would support the amendment proposed by Assemblyman Humke which would exempt certain state agencies from the provisions of A.B. 538. He said, if the committee did amend A.B. 538 to eliminate Sections 1 and 2, UCCSN would support that action. Ms. Barbara Willis, Director, Department of Personnel, State of Nevada, testified. She indicated, if Sections 1 and 2 were removed from A.B. 538, the Department of Personnel would support the bill. She suggested the Department of Personnel was in a somewhat different situation than most state agencies because its regulations existed for the sole purpose of managing the personnel system of state government and neither affected "..the private sector..." nor impacted economic development. She said the Department of Personnel's greatest concern had to do with its ability to either implement or comply with federal laws, especially the Americans with Disabilities Act, the Family Medical Leave Act and the Federal Labor Standards Act. She advised the United States Department of Labor recently released its final regulations with respect to the Americans with Disabilities Act and said the Department of Personnel now needed to amend 19 state regulations in order to be in compliance with federal laws and regulations. Mr. Joseph Johnson, representing both the Coalition for Nevada's Wildlife and the Sierra Club, testified. He said, if A.B. 538 was not amended to delete Sections 1 and 2, the Coalition for Nevada's Wildlife wished its commission to be exempted from the provisions of A.B. 538. He explained the establishing of hunting and fishing seasons and of limits for the quantity of game and fish which could be taken were regulatory processes and contended, if A.B. 538 was passed as presently drafted, there could be no hunting in Nevada. Mr. Johnson advised the Sierra Club, also, would support deleting Sections 1 and 2 from A.B. 538. He said the Sierra Club supported the concept of an advisory committee to study regulations and it perceived environmental regulations as being a primary target of the study. He maintained there was a need to simplify regulations and to eliminate overlapping regulations. He indicated the Sierra Club would like the environmental community to be represented on the advisory committee. He said, "...perhaps we've increased this committee to an extremely large and unwieldy body and we need to look at whether it would be appropriate to have subcommittees dealing with particular sections within the law and adjusting the constituency of those subcommittees or groups of people either through having technical advisory committees or other means to address the ability to function." Mr. Johnson referred to subsection 4(a) of Section 5 of A.B. 538 and stated, generally, the Sierra Club was opposed to cost-benefit analysis because of the difficulty involved in making such an analysis. He asserted the benefits which an industry accrued for "...noncompliance on health and safety issues..." were easy to document but the cost to individuals affected by such noncompliance was difficult to assess. He declared the Sierra Club took great umbrage at the language of A.B. 538 because it merely discussed the benefits an industry gained by not complying with regulations which dealt with health and safety. Mr. Johnson referred to the issue of economic development. He observed Nevada was the leading state with respect to population growth and economic development and contended there should be no immediate concern about economic development in Nevada. Mr. Johnson referred to subsection 5(a) of Section 5 of A.B. 538 and declared the Sierra Club strongly supported that provision but disagreed to an extent with the thrust of A.B. 538 (as a whole). Mr. Johnson maintained many entities dealt with the same topic but dealt with it differently and for different purposes and, therefore, those entities often had conflicting regulations. He indicated the Sierra Club strongly supported resolving issues such as conflicting regulations but suggested there was a larger issue involved. He referred to an interim study of hazardous materials, conducted between the 1991 and 1993 legislative sessions, and said, "...most people that are experienced in those areas come away dissatisfied with the end result and seeing that there needs to be continued activity in those areas." Mr. Johnson summarized his testimony by saying the Sierra Club: strongly supported the concept of a committee to study regulations; would like to see environmentalists included on the committee; took strong exception to studying only the cost of regulations with no consideration of their benefits; and would like A.B. 538 to include provisions for a study of areas of overlapping responsibilities, with a view to simplifying regulations and eliminating duplication of and conflict in regulations. Mrs. Freeman asked Mr. Johnson's opinion of the provision of A.B. 538 that seven members of the advisory committee be members of the legislature. Mr. Johnson indicated he had no opinion as to the appropriate number of legislators who should be members of the committee but indicated the Sierra Club would like those members to have a broad spectrum of experience and background, particularly with respect to science. Mr. Bennett asked whether conservationists were represented on all boards which dealt with natural resources and conservation in Nevada. Mr. Johnson replied conservationists had no named representative on the Environmental Commission but did have representatives on the Board of Wildlife Commissioners and the State Conservation Commission. He indicated conservationists were represented on some boards but not on others and suggested, often, their representatives were selected merely through the process of selecting a representative of the general public. Mr. Bennett commented the advisory committee to study regulations would not be restricted solely to environmental issues and asked why the Sierra Club believed there was a need to have an environmentalist specifically named as a member of the committee. Mr. Johnson replied, "I guess we'd turn the question around. Why does large business, small business, mining and representative of manufacturers think that they should be, without having the environmentalist as one of the group? I think that this is primarily geared towards environmental unhealth and safety regulations. These are the ones that society has the most difficulty with, that are most onerous -- at least perceived by business." Ms. Rose McKinney-James, Director, Department of Business and Industry, State of Nevada, testified. She advised the Department of Business and Industry's greatest objection to A.B. 538 had to do with the moratorium on regulations which it would create. She said the department consisted of 29 agencies, each of which had some responsibility for regulating the state's business and industry and contended a moratorium on regulations would severely restrict the ability of those agencies to perform their statutory duties. Ms. McKinney-James indicated she agreed, conceptually, there was a need to take a closer look at the manner in which regulations were promulgated. She pointed out there were a number of small agencies within the Department of Business and Industry which had a special concern with regard to the promulgation of regulations. She stated, if a study of regulations was conducted, she would wish the members of the legislature to take into account such considerations as training, resources and information. She advised when she served as a member of the Public Service Commission and had the responsibility of "...presiding over substantial rule makings..." she was required to spend three weeks attending the judicial college and being trained to perform her duties in accordance with NRS 233B. She contended many of the department's smaller agencies did not have the resources for similar training and said the department attempted to "...do some of those things..." internally. She advised the Department of Business and industry had a cluster group devoted to regulatory oversight and would like to provide additional in-house training for some of its smaller agencies. Ms. McKinney-James said the Department of Business and Industry took the issues of notice to the public and of public participation very seriously. She referred to subsection 5(c) of Section 5 of A.B. 538 and said it was not clear to her what was intended by that provision. She suggested perhaps the sponsor of A.B. 538 could provide a better understanding of what he hoped to achieve through that provision. Mrs. Freeman referred to Mr. Johnson's testimony regarding the difficulty involved in conducting a cost-benefit analysis and asked what effect there would be on the Department of Business and Industry if A.B. 538 was passed by the legislature and a cost-benefit analysis of all regulations was required. Ms. McKinney-James responded it would require each of the department's agencies to expend substantial time and resources to conduct a cost-benefit analysis but suggested such an analysis might provide the department with a means to measure the effectiveness of its regulations. She declared she would put all of the department's agencies on notice that they should be engaged in a continuous review of their regulations in order to streamline them and to ensure they made sense and were not antiquated and, also, that those agencies should be mindful of the fact that, to the extent their regulations created a burden upon those businesses and industries they regulated, those regulations were counter-productive. Mrs. Freeman asked whether a cost-benefit analysis might be costly. Ms. McKinney-James replied affirmatively. Mrs. Freeman indicated she had heard of efforts on the federal level to streamline regulations and asked, "... do we have any kind of a history on what has happened to their efforts to do this, to help give us some guidance." Ms. McKinney-James responded she had no specific information related to those efforts. Mr. Bennett commented, "I think this debate, at this point, may be a little bit moot. Didn't we just pass out of this committee earlier an assembly bill that required agencies, when they are discussing regulations, to provide some sort of impact statement in their public notice? I'm referring to Ms. Lambert's bill. We just passed S.J.R. 8 out of the assembly and sent to the Governor a resolution asking the E.P.A. to, basically, supply the same information. So I think this debate might be a little bit moot at this point in time." Judge John F. Mendoza, Chairman, Public Service Commission (PSC), State of Nevada, testified. He provided a written statement of the PSC (Exhibit G) and indicated he would like representatives of the various utilities who dealt with the commission to express their views of A.B. 538 before he provided further testimony. Mr. Doug Ponn, Director of Governmental Affairs, Sierra Pacific Power Company, testified. He stated, with the exemption of the PSC from the provisions of A.B. 538, most of Sierra Pacific Power Company's concerns had been satisfied. He said, however, if the PSC regulations were not exempt from the provisions of Section 3 of A.B. 538, then Sierra Pacific Power Company believed there should be a representative of the utilities industry on the advisory committee for the study of regulations. Mr. Keith Ashworth, Nevada Power Company, testified. He said Nevada Power Company concurred with the remarks made by Mr. Ponn on behalf of Sierra Pacific Power Company. Mr. Ponn indicated he wished to express his personal opinion. He declared every state agency of Nevada was created by the legislature and pointed out each time the legislature created an agency the bill which created that agency included a provision requiring the agency to establish regulations. He contended, if the legislature did not believe state agencies were performing as the legislature intended them to perform, the legislature was the entity which should address that problem. He recommended the proposed advisory committee be comprised only of legislators. Ms. Marcia Cobian, Executive Director, Nevada Telephone Association, testified. She advised the Nevada Telephone Association agreed with the addendum to Assemblyman Humke's written testimony (Exhibit D) and was much in favor of Chairman Bache's suggestion that Sections 1 and 2 be deleted from A.B. 538. Ms. Cobian said there were many changes occurring in the telephone industry. She advised the PSC had just established a two-year docket for telecommunications reform. She explained Nevada Telephone Association's concern about A.B. 538, in its present form, was the potential paralyzing effect it would have upon the implementation of the PSC's docket. She contended it would "...delay the benefits of competition to consumers and to the companies." She asserted issues would arise over the next two years, upon which the PSC would rule and which would be vital to extending competition and allowing technological innovations. She declared, as written, A.B. 538 would cause Nevada to fall behind other states in the area of telecommunications reform. Judge Mendoza gave further testimony. He referred to the PSC's written statement (Exhibit G) and said the PSC's position on A.B. 538 mirrored that of the utilities industry as expressed by its representatives. He directed the committee's attention to a list of "...current rule making dockets..." attached to the PSC's written statement (Exhibit G). He suggested A.B. 538 would paralyze the PSC. He explained the telecommunications industry was changing rapidly and, unless problems could be dealt with as they arose, those problems would become exaggerated and would cause greater harm to the citizens of Nevada (than they would have caused had they been dealt with when they arose). He contended increased competition among utility providers would make it necessary that the PSC be able to give its immediate consideration to possible changes within the industry. Judge Mendoza advised, during the previous year, the intrastate transportation industry was deregulated and said the PSC was required, immediately, to commence promulgating rules by which to address the issues created by that deregulation. He maintained, if the PSC had not had the ability to take immediate action, it would have been "hamstrung." Judge Mendoza stated a 300 page notice of public rule making, which proposed major changes to ensure access to transmission by the electrical utilities, was pending before the Federal Energy Regulatory Commission (FERC). He indicated, after "...that rule making..." was adopted, it would become effective within 60 days. He said, "...and if the states do not react almost forthwith to that proposed rule,...FERC will, in effect, set forth what the areas to be covered will be thrust upon us, so we will have to be ready at that particular moment to be able to take a look at that. They're giving us the option to change after they decide, but, if we do not change, then whatever they promulgate will be the law as it applies to us." He contended A.B. 538 would prohibit the PSC from acting. Judge Mendoza said he concurred with Assemblyman Humke that the PSC should be exempted from the provisions of A.B. 538. Mr. Ray Bacon, Nevada Manufacturers Association, testified. He provided written testimony (Exhibit H) and also gave oral testimony. He said the Nevada Manufacturers Association supported the general concept of A.B. 538 but recommended the legislature consider some options. He suggested, in addition to exempting those agencies named in NRS 233B from the provisions of A.B. 538, the legislature could enact legislation which would provide all regulations promulgated by state agencies would be temporary and would remain in effect only until the end of the next legislative session. He referred to subsection 4 of Section 5 of A.B. 538 and proposed, if the legislature wished a cost-benefit analysis conducted with respect to regulations, the committee might wish to consider adding another subsection to provide for such an analysis. He advised, in the opinion of the Nevada Manufacturers Association, one of the most important pieces of legislation passed during the last legislative session was Assembly Bill No. 153. He suggested, if the legislature was going to cause a study of regulations to be conducted, such a study should include a review of the effects of Assembly Bill No. 153. Assemblyman David E. Humke, District No. 26, testified. He thanked Mrs. Lambert for reading his written testimony (Exhibit D) to the committee. He advised the Executive Director of the Commission on Economic Development (CED) would testify regarding the CED's responsibility with respect to the provision commencing on line 26 of page 3 of A.B. 538. Mr. Tim Carlson, Executive Director, Commission on Economic Development, testified. He stated he concurred with most of the testimony which had been given regarding Sections 1 and 2 of A.B. 538. He said he wished to make it clear, if the CED was going to be "...put in a watchdog position...", serious consideration should be given to how the CED was to handle that responsibility and to the monetary aspects of investing the CED with that responsibility. He said he firmly believed Mr. Ashworth's comments, to the effect that the legislature should regulate the regulators, to be true. Mr. Carlson advised, with respect to economic development, the CED believed it very important all regulations which were created be examined closely. Mr. Bennett commented the testimony about A.B. 538 given on behalf of state agencies conveyed that those agencies perceived A.B. 538 as a threat to their ability to function and to create regulations. He asked whether Mr. Humke perceived A.B. 538 as conveying a message to state agencies that they were overstepping their boundaries with respect to their regulations. Mr. Humke replied he had no problem with characterizing A.B. 538 in the manner suggested by Mr. Bennett's question. He said he viewed A.B. 538 as a step toward gaining legislative control over some of the executive branch's agencies' regulatory processes. Mr. Bennett said the committee heard testimony A.B. 538 was specifically directed at environmental rules and regulations and asked Mr. Humke to respond to that contention. Mr. Humke replied he was "...taken aback at that..." He stated he considered himself a friend of the environment and advised he once appeared before the Environmental Commission to request the commission pass regulations in order to implement a bill which provided for registration and regulation of environmental managers. He declared he was not hostile to regulations per se nor was he hostile to environmentalists and he did not appreciate being so characterized. Mrs. Freeman commented the legislature sometimes directed agencies to raise their fees in order to accomplish the purposes the legislature wished them to accomplish and when those agencies then raised their fees, in compliance with the legislature's direction, the business community responded negatively. She suggested the legislature had a responsibility to adequately fund state agencies in order to protect them from encountering negative responses to actions they took at the direction of the legislature. Ms. Elizabeth A. Livingston, Nevada Women's Lobby, testified. She indicated the Nevada Women's Lobby neither supported nor opposed A.B. 538 but believed the membership of the advisory committee, which A.B. 538 would create, should be better balanced "...among the business interests, the community entities and the general public." She said the Nevada Women's Lobby would specifically recommend someone who represented social services agencies or community agencies be on the advisory committee. She indicated the Nevada Women's Lobby would like to see language included in subsection 4 of Section 5 of A.B. 538 which would direct the advisory committee to evaluate both the long term effects and the costs created by regulations not being implemented and not being complied with and also the long term benefits of regulations. Chairman Bache recognized and welcomed former assemblyman Bill Kissam, present in the audience. Chairman Bache closed the hearing on A.B. 538. There being no further business to come before the committee, Chairman Bache adjourned the meeting at 10:40 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 May 9, 1995 Page