MINUTES OF THE ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session May 23, 1995 The Committee on Government Affairs was called to order at 8:00 a.m., on Tuesday, May 23, 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 Mr. Pete Ernaut Mrs. Vivian L. Freeman Mr. William Z. (Bill) Harrington Ms. Saundra (Sandi) Krenzer Mrs. Gene Wines Segerblom Ms. Patricia A. Tripple Mr. Wendell P. Williams COMMITTEE MEMBERS EXCUSED: Mr. Dennis Nolan GUEST LEGISLATORS PRESENT: Assemblyman Lynn Hettrick, District No. 39, Co-Speaker of the Assembly; Assemblyman Robert E. Price, District No. 17 STAFF MEMBERS PRESENT: Denice Miller, Senior Research Analyst OTHERS PRESENT: Mr. Bill Woodward; Ms. Brenda Olson; Mr. Robert Morris, District Attorney's office, Douglas County; Mr. Frank Scharo; Mr. David R. McClure; Mr. John A. Dinucci; Mr. Greg Painter; Mr. Jeffrey Pisciotta; Ms. Mary Cioffi; Mr. Ron Lynn, Assistant Director, Building Department, Clark County; Mr. Robert Hadfield, Washoe County; Mr. Steven E. Tackes, MCI Telecommunications Industry Group; Mr. Galen Denio, Public Service Commission, State of Nevada; Mr. Fred Schmidt, Consumer Advocate, Attorney General's office, State of Nevada; Ms. Ande Engleman; Ms. Kathryn McClain, Clark County Manager's office; Ms. Deynira Flores, Clark County Manager's office; Mr. Robert Auer, Deputy Attorney General; Ms. Lucille Lusk, Nevada Concerned Citizens (See also Exhibit B attached hereto). ASSEMBLY BILL NO. 597 - Authorizes certain cities and counties to allow use of independent contractors to review plans for and inspect buildings. Assemblyman Lynn Hettrick, District No. 39, Co-Speaker of the Assembly, testified. He advised the purpose of A.B. 597 was to ensure counties' and cities' use of private building inspectors and plan checkers was legal in Nevada. He said some counties already utilized a program similar to that provided by A.B. 597 and those counties were concerned they might be exposing themselves to liability by doing so. He stated the Uniform Building Code (UBC) allowed use of private plan checkers and inspectors for commercial buildings but was not explicit as to whether private plan checkers and inspectors could be used for residential buildings. Mr. Hettrick said he would like to request the Attorney General to provide an opinion as to whether or not the UBC provided for use of private plan checkers and inspectors for residential buildings. He advised, if it did, A.B. 597 would be unnecessary, however, if it did not, there was a need to make such use legal in Nevada. Mr. Hettrick stated those counties of Nevada which covered a large area but which had small populations would support A.B. 597 because it was impossible for those counties to maintain sufficient staff to provide plan checks and building inspections throughout the county. He suggested A.B. 597 would allow those counties to save both staff time and money and, also, would make it more convenient for builders who were in the process of construction to obtain building inspections and proceed with their construction. He indicated larger (more heavily populated) counties might have less interest in A.B. 597. Mr. Hettrick maintained the major advantage to be obtained from using private plan checkers and building inspectors was that one could have plans checked or a building inspected more quickly (than one could if using county or city plan checkers or building inspectors). He suggested how quickly a building inspection could be accomplished was important to a contractor who had to meet deadlines. He said A.B. 597 would allow contractors to utilize private building inspectors and it required such inspectors be approved by the county. Chairman Bache asked whether Mr. Hettrick thought A.B. 597 should be amended to include a population cap of 100,000. Mr. Hettrick replied he would have no problem with such an amendment. Assemblyman Tripple asked, "Is the county-hired person still responsible for the work of the private contractors." Mr. Hettrick replied, if a county approved a private plan checker or private building inspector, he believed the county would be responsible for his work. Ms. Tripple referred to subsection 4 of Section 1 of A.B. 597 and asked whether a contractor would be able to choose the building inspector he wished to use. Mr. Hettrick responded, under A.B. 597, as presently drafted, a contractor could hire any building inspector he wished. He indicated, over the years, there had been as many problems with county building inspectors as there had been with private building inspectors. He said, "...a crook is a crook. It doesn't matter where he's employed." He advised Douglas County indicated it would prefer to maintain a list of private building inspectors and to designate which of those inspectors a contractor was to use. Assemblyman Bennett referred to the bond requirement set forth in subsection 2 of Section 1 of A.B. 597. He asked the purpose for including the language "or any other form of security authorized by the governing body for the same purpose" and asked whether, pursuant to that language, someone could "...ask for something outlandish..." Mr. Hettrick said he understood that provision to require posting of either a bond or some other form of security, which would allow an individual to post cash, rather than a bond, if he so chose. Mr. Bennett asked if the intent of the provision was to limit the amount of security required to approximately $10,000. Mr. Hettrick replied affirmatively. Mr. Bill Woodward testified. Mr. Woodward said, currently, he was a private building inspector and worked in Douglas County. He stated he had previously been employed by Douglas County as a building inspector. He expressed support for A.B. 597. He suggested, because of Nevada's growth, many of its smaller communities, due to budget restraints, were unable to provide the services which contractors and other builders needed. Mr. Woodward indicated Douglas County's program for use of private plan checkers and private building inspectors worked well. He said there were safeguards to ensure the program worked "...within the restraints of the building codes." Mr. Woodward contended, pursuant to Section 202B of the UBC, a county which adopted the UBC had authority to utilize private plan checkers and private building inspectors. He suggested use of private plan checkers and building inspectors would help smaller communities to provide the services which those engaged in building construction needed. Mr. Woodward proposed subsection 2 of Section 1 of A.B. 597 be amended to change the designation "county building inspector" to "county building official," in order to coincide with the language in Chapter 2 of the UBC. Assemblyman Lambert referred to the provision in section 3 of A.B. 597 which provided immunity to a city or a county for "an inspection conducted by an officer or employee of the state or any of its agencies or political subdivisions." She asked whether that language meant a city or county would not have such immunity if an inspection was conducted by a private inspector. Mr. Woodward replied he saw no difference. Ms. Brenda Olson testified. She stated she was employed by Watchdog Building Consultants and also had her own business. She advised she was testifying on behalf of her husband who was a general contractor. She said she and her husband used only private building inspectors to inspect their construction projects and contended, if the program which allowed them to do so was abolished, it would cost them a great deal of money. She contended many county building inspectors did not arrive when they were scheduled to arrive and explained she and her husband lost money, daily, if they were unable to have their projects inspected. Ms. Olson said she was training to become a certified plan reviewer. She declared, if the program for use of private plan checkers and building inspectors was abolished, "...my whole business goes away, completely." She expressed strong support for the program and suggested general contractors would encounter many legal problems if the program was eliminated. She contended, if the program was illegal, all inspections conducted under the program were illegal. Chairman Bache asked whether Ms. Olson and her husband generally used the same private building inspector or whether they used various inspectors. Ms. Olson replied they used various inspectors. Assemblyman Segerblom asked who was responsible, the contractor or the inspector, if a building inspector passed a construction project and that project was faulty. Ms. Olson replied the inspector was responsible. Mr. Robert Morris, District Attorney's office, Douglas County, testified. He indicated his testimony would coincide with a letter he wrote to Assemblyman Hettrick (Exhibit C). He advised the Douglas County Board of County Commissioners had met and discussed the county's program for use of independent building inspectors. He said the board was interested in the program but had decided to terminate it, effective July 1, 1995, because the board believed the county could not utilize such a program as presently established and under current state law. He indicated the board requested he voice his concerns about A.B. 597. Mr. Morris referred to subsection 2 of Section 1 and declared he believed it important that a city's or county's building official administer the program (for use of private plan checkers and building inspectors) and be able to establish rules or regulations needed to administer the program. Mr. Morris called attention to subsection 4 of Section 1 and said he believed it important to allow "...the supervisor to spot check work of independent inspectors." He indicated the only way he could envision that being accomplished was by requiring an independent inspector to notify the city or county of any inspection he was to conduct prior to conducting that inspection. He recommended such a requirement be established. Mr. Morris referred to subsection 5 of Section 1. He advised, usually, plan checks and building inspections were performed by different individuals, and he suggested the refund discussed in subsection 5 should be tied to the specific service provided. Mr. Morris referred to subsection 2 of Section 3 and suggested that subsection be amended to include independent contractors. He maintained such an amendment would provide independent contractors immunity from liability in the performance of their jobs. He indicated independent contractors also should be included under the provisions of subsection 1 of Section 4. Mr. Morris advised, under the present program for use of private building inspectors, a contractor could choose any building inspector he wished and could pay that inspector an undisclosed sum. He pointed out this ability gave the appearance of impropriety, which was one reason he believed "...county dispatch..." was worth considering. He suggested another means of solving that problem was to require payments to private building inspectors be made through the county. He advised one of the best suggestions he had heard was to require a contractor who intended to use a private building inspector to pay the full fees for all inspections to the county, prior to any inspections being made, and to have the county then disburse those fees to the independent building inspector as he completed his inspections. Mr. Morris said he had written an opinion stating the program for using independent building inspectors was illegal under state law. He cited NRS 278.570 and explained that statute allowed a building inspector to appoint such employees as he deemed necessary for the fulfillment of his duties. He advised that statute provided the appointment, promotion, demotion and removal of such employees would be subject to the same provisions of law as those which governed other, corresponding, civil employees of the (same) city or county. He suggested the law he was discussing required building inspectors be county employees. Chairman Bache asked whether Mr. Morris had prepared his proposed amendments in written form. Mr. Morris indicated he could provide the committee with a copy of the letter he wrote to Assemblyman Hettrick (Exhibit C). Chairman Bache requested Mr. Morris prepare his proposed amendments in written form and provide them to the committee. Mrs. Lambert asked whether or not Douglas County intended to ask the Attorney General for an opinion to support Mr. Morris' opinion. Mr. Morris responded he did not know whether or not the county intended to do so. He indicated he wrote his opinion two years ago and, as yet, no one had provided him with legal authority which would cause him to change that opinion. He advised the UBC contained provisions counties could adopt but pointed out the state delegated to counties their specific powers. He asserted counties' police powers were strictly construed. He referred to the statute he previously cited and stated, "...it's very clear to me that they contemplate employees doing the county's police power when it comes to building inspections." Mrs. Lambert referred to "...the franchise portion of Chapter 268, in Section 5 of this bill..." and asked, "Would you know anything about that?" Mr. Morris responded he had not reviewed the latter portions of A.B. 597 very carefully. Mr. Frank Scharo testified. He said he had been a licensed building contractor, in the area of Minden and Gardnerville, for nearly 25 years. He advised, during most of those 25 years, he had used county building inspectors, however, during approximately the last five years he had used private building inspectors also. He maintained the program for use of private building inspectors was a good program and he had observed no abuse of that program. He declared he would like to see the program retained. Mr. David R. McClure testified. He advised he provided certified plan reviews and building inspections in Douglas County. He said he also provided building inspections for both FHA and the Veterans Administration, on both new and existing constructions, and was the Veterans Administration's inspector for "...the specially adapted housing program in northern Nevada and northern California." He stated he was certified by "ICBO" and had an "A" license, in California, to inspect hospitals and schools. Mr. Scharo read from prepared text (Exhibit D). He enumerated the advantages gained from use of private building inspectors. He advised the fee for a building permit included the cost of inspections and maintained, therefore, because a contractor who used a private inspector paid for his inspection, the city or county which issued the building permit could use the monies included in the permit fee for inspections for other purposes. He indicated allowing use of private inspectors would permit a city or county to base the number of its inspection personnel on light work load periods, which would keep its wage and benefit costs to a minimum. He suggested using private inspectors would allow contractors to engage in construction both early and late in the day and also on weekends, which would enable a contractor to save as many as 14 days in the construction of a house. He advised this would save the contractor considerable construction and labor costs, thereby making him more competitive in pricing and selling his finished product. He suggested enabling contractors to price houses more competitively would contribute to providing affordable housing. He asserted allowing use of private inspectors would provide good public relations for a city or county. Mr. Scharo proposed cities and counties could exercise control over work done by private inspectors by requiring those inspectors to notify the city or county, at the beginning of a work day, of any inspections they intended to perform, thus allowing the city or county to monitor those inspections. He suggested payment for private inspections could be made either directly (by a contractor) to a private inspector or from a fund established with the city or county by the contractor at the time his building permit was issued. Mr. Scharo said Douglas County had used a program for private building inspection since 1989 and contended that program was well received by the construction community. He pointed out the language of A.B. 597 would not require large counties, such as Clark County and Washoe County, to allow use of private building inspectors if they did not choose to do so, however, it would enable smaller counties, by allowing such use, to augment their budgets. Mr. Scharo suggested A.B. 597 would create jobs "...in a field to which SIIS or other rehab agencies could send qualified trainees." He also suggested it would promote small business. Mr. John A. Dinucci testified. He advised he was a private plan checker and building inspector. He indicated he did not agree that the program for use of private plan checkers and building inspectors would create the potential for conflict of interest. He said he had been a building official, plan examiner and building inspector in four states, was certified to perform inspections by the International Conference of Building Officials and had been in the construction industry for 27 years, during the last 10 of which he had worked for various governmental agencies. Mr. Dinucci asserted (Douglas County's) program had many amenities which allowed people to prosper and contended placing restraints upon a program which worked well, such as requiring a private inspector to report to the county prior to conducting an inspection, would destroy those amenities. He said he agreed with Mr. Morris that the program should be administered (by the county building official) but stated, "My problem with what he has to say is there's no difference for a conflict based on whether you're working for the government or you're a private, independent contractor." He expressed the desire the program for use of independent building inspectors continue. Mr. Greg Painter testified. He said he had resided in Douglas County for 20 years and had been a licensed general contractor in Douglas County for 10 of those 20 years. He stated, in his experience, the county had difficulty providing contractors with the services they needed. He advised he observed that difficulty during his first five years as a general contractor, however, the last five years had been made much easier by the private inspection program. Mr. Painter suggested it would be a shame to see the five or six private inspection businesses which had been established (because of Douglas County's program) disappear. He contended those businesses provided good service. Mrs. Segerblom asked whether one of the witnesses suggested the county designate the private inspector to be used rather than the contractor being allowed to select the inspector he wished to use. Mr. Painter replied that suggestion was made by the county and he believed following that suggestion not only would eliminate any potential for preferential treatment of a contractor by an inspector but also would eliminate the personal relationship between an inspector and a contractor which allowed the contractor's work to proceed more expeditiously. Mr. Jeffrey Pisciotta testified. He said he was a general contractor, in both Nevada and California, had been building homes for the last 12 years and was Vice President of the Douglas County Contractors' Association, which had approximately 175 members. Mr. Pisciotta stated he had built more than 65 "units," in the area of Minden and Gardnerville, and used the private inspection program exclusively. He said he built many duplexes and maintained, when he used county building inspectors, it took him approximately 75 days to build a duplex but, when he utilized the private inspections program, he could build an identical duplex in approximately 60 days or less. He advised he built a project in Gardnerville, which consisted of 16 buildings and, by using the private inspection program, he was able to construct each of those buildings in 50 days. He explained he saved approximately 25 days of construction time on each building which, he said, "...equates into one month of interest savings on each construction loan..." He contended he saved thousands of dollars by using the private inspection program even though the private inspections cost him approximately $300 per building. Mr. Pisciotta advised, when he used county building inspectors, he had to wait until the next business day after the day he called for an inspection for the inspector to come to his construction site. He indicated, although county building inspectors attempted to go to construction sites when requested, they were only required to advise the contractor who requested an inspection they would arrive at the construction site between 8:00 a.m. and 5:00 p.m. He explained this required him to wait at his job site and to send his employees home in order not to waste their time. He advised the average building required 20 to 25 inspections and pointed out the number of inspections required equated to the number of days he saved on his work schedule (by using private inspectors). He said he could call a private inspector at 9:00 a.m. on a given day and request an inspection be conducted at 1:00 p.m. on that same day and, 90 percent of the time, the private inspector could accommodate his request. He indicated the remaining 10 percent of the time the private inspector would arrive within an hour of the time he was requested to arrive. He suggested this allowed him to schedule both delivery of supplies and work for employees more efficiently. Mr. Pisciotta indicated contractors appreciated the county's concerns about the liability which might be incurred by allowing private inspectors to perform building inspections but declared it was the contractor who had the ultimate responsibility for his project. He maintained, if there was any problem with the structural integrity of a building, the contractor who constructed the building assumed 100 percent of the liability for that problem and it was the contractor who would be sued and not the county or the building inspectors. He said he inquired, informally, of Douglas County's community development director whether there had been any lawsuits, during the five years the county's private inspection program had been in effect, and was told there had not been. Mr. Pisciotta contended the private inspection program provided a county's public works department with an excellent opportunity to keep its staff to a minimum. He declared, if A.B. 597 was passed by the legislature, it would greatly benefit the state. He urged the committee to support A.B. 597. Ms. Mary Cioffi testified. She stated she was a realtor and was Secretary of the Douglas County Contractors' Association. She declared the contractors in Douglas County were in favor of the private inspection program. She maintained the program offered a viable alternative to over-staffing local governments with employees who might be nonproductive during times when the construction industry was slow. She asserted the program fostered competition with "...an area of local government that tends to become lax and, sometimes, oversteps its authoritative powers." She declared, "Through healthy competition, both programs will have a tendency to try and achieve the highest level of service and the most productive program will eventually survive." Ms. Cioffi contended programs for use of private building inspectors and plan checkers would not reduce local governments' revenues. She suggested the cost of such a program would be fully absorbed by those local contractors who availed themselves of its services. Ms. Cioffi reiterated previous testimony regarding benefits contractors realized from using private inspectors. Mr. Ron Lynn, Assistant Director, Building Department, Clark County, testified. He said he was a certified building official and chaired the Special Inspection Committee of the International Conference of Building Officials. Mr. Lynn referred to Mr. Pisciotta's testimony there had been no lawsuits during the period Douglas County's private inspection program had been in effect and said he did not wish to "...impart how many lawsuits I have right now..." but advised, during the previous few months, private inspectors had been sued, personally, three times and legal action had been taken against five (private inspection) agencies. Mr. Lynn advised, at the present time, Clark County administered a private inspection program which involved 385 private inspectors who worked for 60 quality assurance agencies. He said the county used the program extensively for plan checks as well as building inspections. Mr. Lynn stated A.B. 597 would abolish the independence of building inspectors by allowing contractors to select the inspectors they wished to use. He contended much of the integrity and authority enjoyed by building inspectors was derived from both their training and their independence from contractors and developers. He maintained inspections and plan checks should be done independently. He declared to do otherwise invited conflict of interest. Mr. Lynn stated, when he commenced Clark County's private inspection program, the primary complaint he received from private building inspectors and private inspection agencies was "...if they did their job, they were kicked off the job." He advised it was necessary to make changes to the original program. Mr. Lynn asserted A.B. 597 would make administering a private inspection program more complex. He referred to the language "may establish a program to allow independent contractor to review plans for and inspect buildings on behalf of the city or county building inspector," in subsection 1 of Section 1, and suggested "building inspector" be amended to "building official." He indicated that language conformed to the Uniform Building Code but suggested the remainder of A.B. 597 was both highly complex and cumbersome. He contended a $10,000 bond was insignificant. Mr. Lynn said he had found it necessary to remove inspectors from projects. He explained Clark County's program provided for such removal, however, it sometimes required as many as seven hearings to accomplish such removal. He maintained, "It is not inexpensive for the entity to administer such a program if done in a similar manner in which they administer their own programs, i.e., they have to check their own inspectors." He declared it was incumbent upon an agency to review the activities of inspectors who worked for it and maintained, through such review, the agency could "...weed out some of these so-called bad apples." Mr. Lynn referred to the reimbursement process provided by A.B. 597 and described that process as very cumbersome. Mr. Lynn said, with respect to delegation of enforcement responsibilities, the ability to "...deny an inspection..." was not equivalent to issuing a citation or a stop work order. He said he concurred the ability to issue a citation or a stop work order should remain with the governmental entity. He advised, in Clark County, when a private inspector discovered a problem with a construction project, he wrote down his findings and provided them to the contractor involved. He said, if the problem was not corrected or it was one which posed an imminent danger to life or to safety, the appropriate governmental entity was contacted immediately and that entity could take legal action, including issuing a citation or a stop work order, to resolve the problem. He said this procedure relieved private inspectors from "...that element of enforcement..." but did not relieve them of the responsibility to identify problems with construction projects. Mr. Lynn contended subsection 2 of Section 1 would be construed as a right to work provision. He maintained, if a local governmental entity did not establish a program for private plan checks and building inspections, individuals who wished to work at those activities would be invited by the language of subsection 2 to harass elected officials until such a program was established. Mr. Lynn advised, based on the Clark County District Attorney's interpretation of A.B. 597, A.B. 597 would increase Clark County's liability. He said enforcement could become more complex under the provisions of A.B. 597 and the cost of administering a program such as A.B. 597 would allow could be prohibitive. Mr. Lynn asserted the UBC already provided for special inspection programs and questioned the need to add another layer of government to an already complex system. He stated the UBC was a performance-based code whose objective was to ensure buildings were safe. He explained the manner in which buildings were inspected to ensure their safety was "...under the administration of that building official." He indicated a private inspection program was an acceptable method by which to ensure building safety and said, "...just like any other program, the safeguards administered by that individual is best known by that individual and best implemented by that individual or that entity." Ms. Tripple asked whether she correctly understood Mr. Lynn to say A.B. 597 was not necessary. Mr. Lynn replied, in his opinion, it was not. Mrs. Segerblom asked whether Clark County had a sufficient number of building inspectors, who were county employees, to deal with all the construction in Clark County. Mr. Lynn replied it did not. Mrs. Segerblom commented, in that case, Clark County was required to use private inspectors. Mr. Lynn suggested the number of inspectors Clark County had was not the only issue. He indicated the need for technical expertise in particular areas of construction was also involved. He explained he might need a certain number of inspectors with a particular area of expertise but would not have work for those inspectors at all times. He suggested requiring someone (other than the county) to hire those inspectors, have them licensed and provide their ongoing education placed the burden on private industry. Mr. Robert Hadfield, Washoe County, testified. He advised Washoe County requested, if A.B. 597 was to be passed by the legislature, it be amended to exclude Washoe County from its provisions. He said Washoe County perceived no benefit in A.B. 597. Chairman Bache closed the hearing on A.B. 597. ASSEMBLY BILL NO. 603 - Authorizes public service commission of Nevada to collect assessment from public utilities which provide telecommunication services. Mr. Steven E. Tackes, MCI Telecommunications Industry Group, testified. Mr. Tackes advised, in addition to MCI, he represented and was spokesman for virtually all telephone companies in Nevada and enumerated those various companies. He introduced Mr. Fred Schmidt, whom he identified as the state's Consumer Advocate, and Mr. Galen Denio, a member of the Public Service Commission, State of Nevada. He indicated he, Mr. Schmidt and Mr. Denio were present to provide their collective support for A.B. 603. He said he knew of no opposition to A.B. 603. Mr. Tackes explained A.B. 603 would authorize the Public Service Commission (PSC) to oversee the administration of a universal service fund. He advised the telephone industry had proposed this and it was perceived by the telephone industry as necessary to ensure availability of telephone service. Mr. Tackes said there were two basic reasons to pass A.B. 603: first, it would assist in making telephones available to meet the basic telephone needs of most people; and second, the more people who could be reached by telephone the more valuable the telephone service. Mr. Tackes said he knew many legislators were contacted regarding passing legislation to reform the telecommunications industry. He advised the PSC held extensive hearings and adopted very comprehensive and very good regulations governing the telecommunications industry. He indicated the telecommunications industry was pleased with the outcome of the PSC's hearings and believed A.B. 603 to be the only piece of enabling legislation needed. Assemblyman Neighbors asked whether Alltell was one of the telephone companies Mr. Tackes named as a company he represented. Mr. Tackes replied affirmatively. Ms. Tripple asked, "Are we talking about using existing telephone lines to transmit what we now call cable T.V.?" Mr. Tackes replied, probably, it would be two or three years before telephone companies became involved with cable television. Mr. Galen Denio, Public Service Commission, State of Nevada, testified. He advised the PSC endorsed A.B. 603. He said he wished to clarify that funding for the independent administrator (who would administer the universal service fund) would be included in the funding for the universal service fund. He stated the PSC agreed the universal service fund would ensure maintenance of telephone service at reasonable rates throughout Nevada. Mr. Fred Schmidt, Consumer Advocate, Attorney General's office, State of Nevada, testified. He advised he supported A.B. 603. He said the concept of A.B. 603 was consistent with federal legislation concerned with "...developing the super information highway..." and with telecommunications reform. He suggested things were being done which would make services both more available to and affordable for both consumers and service providers. Mrs. Lambert asked the meaning of the term "universal service" and how the universal service fund was to be used. Mr. Tackes replied the concept of "universal service" was tied to the idea "...the phone system is more valuable the more people you can call..." He said, therefore, the desire was to make basic telephone service available to as many people as possible, which would benefit not only those to whom telephone service was provided but also those who were able to contact them. Mrs. Lambert asked, "Are you going to pay poor people's phone bills? Are you going to put phone lines where they don't exist?" Mr. Schmidt responded regulations adopted by the PSC contained standards relating to universal service and required "...the level of penetration of telephone service currently in the population be maintained." He said, "If it drops below that level, then a hearing is required, because one of the things we don't want to have happen from competition is we don't want to have new providers come in and just cream skim very attractive, high volume business users and ignore other consumers and significantly raise costs to everyone else. One of the ways in which we can avoid that occurring as well is, if there are significant dislocation impacts, particularly for rural companies, a universal service fund concept can be utilized to make sure that bills don't get to an unreasonable level, in terms of affordability." Mr. Tackes explained how telephone services had been upgraded in areas of Nevada which previously utilized multi-party telephone lines. He advised, before a telephone company could use monies from the universal service fund to upgrade its service, it would have to both demonstrate a need for such upgraded service and prove it did not have the money with which to upgrade its service. He indicated, in addition, such a company would not be permitted to substantially raise its rates in order to upgrade its service nor to have subsidized rates and would be required to adopt plans to provide life-line services. Mrs. Segerblom asked whether the provisions of A.B. 603 would impose a large expense on public utilities or only a minimal expense. Mr. Tackes replied the expense would be minimal. Chairman Bache closed the hearing on A.B. 603. ASSEMBLYMAN LAMBERT MOVED TO DO PASS A.B. 603. ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION. Mrs. Lambert advised her husband worked for an electric utility but she had no conflict of interest with respect to telephone utilities and would vote. THE MOTION CARRIED. ASSEMBLY BILL NO. 602 - Defines "action" for purpose of open meeting law. Assemblyman Robert E. Price, District No. 17, testified. He observed, across the United States, there was a movement toward more open government. He pointed out Nevada was a leader in providing public access to government and had passed the open meeting law, under which it presently operated, in 1975. He advised the purpose of A.B. 602 was to provide a vehicle for discussions about areas of Nevada's open meeting law which needed to be better defined or to be clarified. Mr. Price discussed some of his concerns. He advised a bill was heard by the Assembly Committee on Ways and Means which dealt with the division of $7 million in scholarship funds among various universities and community colleges. He explained decisions relating to the division of those funds were made at a meeting of college presidents of which no notice was given to the public and to which the public had no access. He indicated one agency which appeared before the Committee on Ways and Means had adopted certain regulations and, when representatives of the agency were asked if the agency had complied with the open meeting law when considering its adoption of those regulations, they said it had not. Mr. Price advised a lobbyist asked whether, when the lobbyist called members of the board which he represented to ascertain their position on a bill, doing so would be considered "polling." He suggested "polling" was something which should be clarified for purposes of the open meeting law. Mr. Price pointed out there were rules the Assembly must follow to place items on its "consent agenda" and those rules gave its members an opportunity to provide input concerning the items to be placed on the agenda. He suggested, outside the legislature, that situation did not always exist. He expressed the opinion that, just as the legislature did, governmental entities and agencies should maintain records which would allow members of the public to determine who requested an item be placed on an agenda. Other issues Mr. Price suggested should be considered were whether or not task forces and subcommittees should be subject to the open meeting law, whether it was appropriate for government officials or employees to discuss public business while on a retreat and inaccessible to the public, how the open meeting law affected "search committees" attempting to select the appropriate candidate to fill a government position, and whether it was appropriate for state employees to conduct business and to enter into contracts which would bind the state while they were out of the state of Nevada. Ms. Ande Engleman testified. She submitted a page of proposed amendments to A.B. 602 (Exhibit E) and an article by Mr. Thomas Moore to which was attached a copy of the statutes comprising Nevada's open meeting law (Exhibit F). Ms. Engleman said, both during and since the time she was director of the Nevada Press Association, she received many phone calls from citizens of Clark County who were concerned about the practices of Clark County's board of county commissioners. She indicated those concerns were addressed by her proposed amendments to A.B. 602 (Exhibit E), which, she said, were not intended to expand Nevada's open meeting law but rather to clarify the law pursuant to opinions rendered by the Attorney General. Ms. Engleman advised her first proposed amendment (Exhibit E) would make information gathering public. She said the Attorney General's office had determined gathering information was part of "...the deliberative process." She suggested, when a public body intended to appear at a hearing of another body for the purpose of gathering information, the public should be given notice of that intention. Ms. Engleman referred to her second proposed amendment (Exhibit E) which would amend the definition of a "meeting" by deleting the language "at which a quorum is present" and including language which referred to matters by which a public body was affected. She asserted Nevada's open meeting law applied to any subcommittee of a public body and declared most often such subcommittees posted no notice of their meetings. She said those subcommittees contended they did not need to post notice of their meetings because their membership did not constitute a quorum of the public body of which they formed a subcommittee. Ms. Engleman maintained such a subcommittee was itself a public body and should post notice of its meetings. Ms. Engleman advised her third proposed amendment (Exhibit E) dealt with the public's ability to obtain copies of materials which pertained to meetings of a public body. She stated the law provided materials to be used at a public meeting were to be provided to the public free of charge. She said, during the past week, she received numerous phone calls from residents both of Clark County and of Washoe County advising her they were charged $1 per page to obtain materials pertaining to past meetings of public bodies in those counties and were told they could obtain those materials free of charge prior to such a meeting but, subsequent to the meeting, they could no longer obtain them free of charge. She pointed out her third proposed amendment (Exhibit E) would provide the public could receive such materials, free of charge, for a period of 30 days subsequent to a meeting of a public body. Ms. Engleman said her fourth proposed amendment (Exhibit E) would cause "polling" to be included under the provisions of NRS 241.030. She suggested polling violated Nevada's open meeting law. She said she believed the language, in NRS 241.030, "over which the public body has supervision, control, jurisdiction or advisory powers" was redundant and she proposed substituting the words "any matter" for that language. Ms. Engleman proposed NRS 241.037 be amended to extend both time limitations set forth therein by 30 days. Ms. Engleman referred to her fifth proposed amendment (Exhibit E) and suggested a public body which was guilty of a technical violation of the open meeting law should be required to attend a seminar conducted by the Attorney General's office, after which that public body should be deemed to have knowledge of the open meeting law. Assemblyman Freeman commented, with respect to information gathering, she was aware of public bodies which, in the past, held caucuses prior to their meetings. She asked whether Ms. Engleman knew of any public body in Nevada which did so at the present time. Ms. Engleman replied she believed Washoe County's board of county commissioners, Spark's city council and the Airport Authority of Washoe County did so, however, notice of those caucuses was posted. Mrs. Freeman asked whether the public was permitted to attend those caucuses. Ms. Engleman replied affirmatively. Mrs. Lambert asked, with respect to information gathering, what happened if one of a county commissioner's constituents called that commissioner and provided him with information, a situation which would not provide public access. Ms. Engleman responded, in her proposed amendment (Exhibit E) she used the plural, "their." She advised it was not her intent to limit constituents' access to their elected officials on an individual basis. Mrs. Lambert posed a hypothetical situation, in which two members of a five member board of county commissioners attended a citizens' advisory board's meeting, without either knowing the other planned to attend. She asked whether those members would be required to give notice of their intention to attend that meeting. Ms. Engleman replied the amendment she proposed (Exhibit E) would require them to do so. She suggested it might be better to require such members to notify the county or city manager of their intention to attend a meeting of another body and, if the county or city manager determined the number of members who planned to attend the meeting constituted a quorum of the body to which those members belonged, he could then post notice of their intent to attend the meeting. Mrs. Lambert observed the amendment proposed by Ms. Engleman would preclude a county commissioner from attending a meeting at the request of one of his constituents if that request was received too late for him to give notice of his intention to attend. Ms. Engleman concurred with Mrs. Lambert's observation. She discussed how the public would perceive attendance of a number of members of a public body, sufficient to constitute a quorum of that body, at a meeting of another public body. She suggested the manner in which those members comported themselves at the meeting might affect the public's perception of their presence at the meeting. Mr. Neighbors commented, under his definition of an "emergency agenda," the fact a member of a public body intended to attend a meeting of another body would not, necessarily, necessitate such an agenda. He indicated he had some concern about requiring individual members of a public body to give notice of their intention to attend the meeting of another body. He referred to Ms. Engleman's second proposed amendment to A.B. 602 (Exhibit E). He pointed out, although she eliminated the reference to a quorum, subsequent language referred to gathering "...information towards a decision." He suggested that created a contradiction and asked why Ms. Engleman wished to eliminate the reference to a quorum. Ms. Engleman replied it might be a mistake to eliminate the reference to a quorum but she was attempting to "... reach the subcommittees, etc., that do fall under Nevada's open meeting law." Mr. Neighbors asked whether a county's board of county commissioners could close to the public a meeting held to discuss a lawsuit filed against the county. Ms. Engleman replied a board of county commissioners could not close one of its meetings to the public in order to meet privately with the county's attorney. Mr. Neighbors indicated he did not believe that was appropriate. Mr. Neighbors referred to the issue of "polling." He said, "Some of the rural counties, especially when we're in session here and towards this last week when they may throw the rules out and things happen fast, leave an agenda item on there so that they, if something happens to do with the legislature, they can act fast. The county manger --if an issue came up that `Wow! That's really going to affect your county.'-- what you're saying here is the county manager couldn't get on the phone and call them individually (as to) how they feel about a particular issue." Ms. Engleman replied, since 1977, anytime such an action was taken it violated Nevada's open meeting law. Discussions ensued between Mr. Neighbors and Ms. Engleman. Mr. Neighbors asked Ms. Engleman to define "emergency" (as it related to the agendas of public bodies). Ms. Engleman replied "emergency" was intended to pertain to a situation which was either life threatening or "...fiscal threatening..." She gave an example of a situation which she would consider an emergency. Mr. Neighbors posed a hypothetical situation, in which a county manager, on the day a meeting of a body was to be held, decided to attend that meeting. He asked Ms. Engleman whether she would consider that an emergency. Ms. Engleman replied there were different kinds of emergencies and said she believed "...where the attempt is being made to be public and to notify the public, I don't think we're as concerned with the details...it's more of an attitude." Ms. Tripple observed members of the legislature frequently held caucuses and asked whether those caucuses violated the open meeting law. Ms. Engleman replied the legislature was exempt from the open meeting law. Assemblyman Williams pointed out some caucuses conducted all their meetings openly. Ms. Engleman concurred. Mrs. Lambert commented a reporter was present at the last meeting of the women's caucus. Ms. Kathryn McClain, Clark County Manager's office, testified. She introduced Ms. Deynira Flores and advised Ms. Flores' area of expertise was Nevada's open meeting law. She said Ms. Flores was responsible for "...the entire agenda process..." for Clark County's board of county commissioners' meetings. Ms. Deynira Flores, Clark County Manager's office, testified. She indicated she wished to clarify a matter discussed by Ms. Engleman. She advised Nevada's open meeting law provided a public body must make supporting materials and agendas for its meetings available to the public free of charge, however, the county clerk's office maintained records of those meetings and statute required the county clerk to charge $1 per page to reproduce materials for the public. She contended, in order for a public body to provide the information it was required to provide, that information must be made available in some location in addition to the manager's office. Ms. Flores submitted a page of proposed amendments to A.B. 602 (Exhibit G). She referred to the provision set forth in lines 6, 7, 8 and 9 on page 2 of A.B. 602. She advised Clark County requested that provision be amended to also permit electronic posting of agendas and suggested electronic posting would be done through television and computer networks. Ms. Flores commented on the definition of "action." She said, with respect to Clark County's board of county commissioners, "action" meant a vote by which the board made a decision. Chairman Bache asked whether Clark County was requesting it be allowed to provide electronic notice of meetings in addition to written notice (as opposed to in place of written notice). Ms. Flores replied affirmatively. Assemblyman Harrington asked whether anything prevented Clark County from giving electronic notice of meetings, in addition to written notice, at the present time. Ms. Flores replied it did not. She advised Clark County presently televised agendas. Mr. Harrington asked why, then, there was a need to statutorily authorize Clark County to do so. Ms. Flores replied, eventually, Clark County would like electronic posting to be its sole method of distributing agendas but would like an opportunity to test that method. She explained, often, members of the public removed agendas from the locations at which they were posted and the manager's office then received complaints from other members of the public that those agendas were not posted. Mrs. Lambert referred to Ms. Flores' testimony regarding the $1 per page the county clerk's office charged to provide copies of documents to the public. She pointed out NRS 19.035 provided a county clerk could not charge the county or any city, town or school district within the county a fee. She asked why Clark County's board of county commissioners could not request the county clerk to provide the board with whatever materials a member of the public requested the board provide him. Ms. Flores said the board currently did so, however, a problem arose when someone wanted materials immediately. She advised it could take the clerk's office two to four hours to provide copies of materials. Mrs. Lambert asked whether Ms. Flores' testimony was, if a member of the public was willing to wait for copies of materials, the board could provide those materials free of charge, however, if he wished those materials immediately, he had to pay the charge of $1 per page. Ms. Flores replied affirmatively. Mrs. Lambert said she wished to clarify whether or not backup materials for a meeting of the board of county commissioners were provided free of charge to members of the public when they requested those materials prior to the meeting. Ms. Flores responded such materials were available, free of charge, in the county manager's office, however, the county clerk's office would charge $1 per page to provide those materials. Further discussions were held between Mrs. Lambert and Ms. Flores regarding the fee charged by the county clerk to provide materials pertaining to meetings of the board of county commissioners to members of the public and regarding how those materials might be provided free of charge. Mr. Robert Auer, Deputy Attorney General, testified. He stated the Attorney General supported the provisions of A.B. 602 in their present form. He observed Assemblyman Price suggested A.B. 602 be considered by a subcommittee for the purpose of arriving at amendments to deal with the various issues the legislature perceived could arise with respect to the open meeting law. He said he could not say whether or not the Attorney General would support such amendments. Mr. Auer referred to Ms. Flores' testimony that, in Clark County, the only way a public body could take action was by means of a vote. He suggested, with respect to the open meeting law and the legislative intent of that law, to-wit that all actions of a public body be taken openly, the problem with that definition of "action" was it excluded "...decision making by the public body that is short of this formal vote." He advised case law of various states held formal (action) and informal (action) were not to be distinguished for purposes of an open meeting law. He stated the Attorney General supported the definition of "action" set forth in A.B. 602. Mr. Auer indicated he had reviewed the proposed amendments to A.B. 602 provided by Ms. Engleman (Exhibit E) and agreed many of those proposed amendments were merely attempts to clarify existing provisions of the open meeting law. He stated, however, changing the definition of "meeting," under the open meeting law, "...to where you no longer have Nevada as a quorum state..." would constitute a major change in the open meeting law and was one the committee might wish to consider carefully. He said the open meeting laws of some states precluded any two members of a public body meeting and discussing the business of that body. He asserted Nevada's open meeting law did not work in the same way. He explained Nevada was a "quorum state" and said, with respect to the hypothetical situation previously posed, in which two members of a board of county commissioners attending a town meeting, if those two members constituted less than a quorum of the board, even though their purpose was to gather information to use later at a meeting of the board, their attendance at the town meeting would not be prohibited under Nevada's open meeting law. He contended Ms. Engleman's concern was that, when subcommittees of committees of public bodies met for the purpose of arriving at recommendations to make to the parent body, those subcommittees be required to post notice of their meetings and comply with the open meeting law. He pointed out the law already required they do so. Mr. Auer indicated the Attorney General had no objection to Ms. Engleman's proposed amendments (Exhibit E) which clarified provisions already contained in the open meeting law. Mrs. Lambert advised Washoe County's board of county commissioners held a caucus on Mondays, prior to its Tuesday morning meetings. She indicated often, at its Tuesday meeting, the board took action on an agenda item without holding any discussion or making any reference to discussions held or a presentation made during the previous Monday's caucus and without any presentation being made during the Tuesday meeting. She asked whether, under the open meeting law, that situation was appropriate if notice was posted of both the caucus meeting and the regular board meeting. Mr. Auer replied it would be appropriate as long as notice of the caucus meeting was properly posted and the items on the agenda for the regular board meeting were properly described, with sufficient detail to permit the public to be aware of the matters the board would be discussing. Mrs. Lambert asked whether an agenda for a caucus meeting should contain an advisory note which explained, if one wished background information for votes held at the subsequent, regular meeting of the board of county commissioners, one should attend the caucus meeting. Mr. Auer replied the open meeting law did not make such a requirement but did require an agenda contain a detailed description of the matters to be discussed at a meeting and whether any action was contemplated. Mr. Neighbors asked whether Mr. Auer believed the attorney-client privilege did not apply to local governments. Mr. Auer replied a Nevada Supreme Court case, involving the Douglas County commission, said "...that we're not going to let Douglas County's attorney meet, in private, with a quorum of the Douglas County commission, to discuss a pending lawsuit." He stated the supreme court's analysis held the legislature had not specifically provided an exception to the open meeting law which would allow such a meeting. He suggested, if the legislature wished to allow such meetings to take place, it would have to pass legislation providing a specific exception to the open meeting law for such meetings. Mr. Neighbors asked whether a county's attorney could meet privately with individual members of the county commission. Mr. Auer replied affirmatively. Mr. Neighbors contended such meetings would constitute "polling." Mr. Auer concurred such meetings could constitute polling and suggested there was a problem with the law in that regard. He reiterated the legislature could create an exception to the open meeting law. He suggested the legislature also might wish to consider the issue of "polling" as it pertained to public bodies and their lobbyists, during a legislative session, and whether or not such polling should be allowed under the open meeting law. Mr. Bennett pointed out Clark County's commission had seven members and asked whether, if four of those members attended a town hall meeting for the purpose of gathering information and sat together at the meeting, that would constitute a violation of the open meeting law. Mr. Auer replied Mr. Bennett's hypothetical question did not contain sufficient facts upon which to determine whether the actions of the four members of the commission would constitute a meeting as defined by the open meeting law. Ms. Lucille Lusk, Nevada Concerned Citizens, testified. She advised, for the most part, she supported A.B. 602. She said, although the open meeting law had existed for many years, there were still different interpretations of its meaning. Ms. Lusk suggested one item which was subject to varying interpretations was the definition of "public body." She advised, recently, a local school board established a citizens' committee, which utilized public funds to provide itself with secretarial and support services and materials and which made recommendations directly to the school board. She advised the open meeting law defined such a committee as a public body, however, the superintendent of schools styled the committee as a superintendent's committee and closed its meetings to the public. She said, pursuant to citizens' complaints, the Attorney General's office issued a reprimand to the school board, however, rather than open the committee's meetings to the public, the school board "...simply tried to hide it better by having recommendations made directly to the superintendent who then makes them directly to the school board without any change at all." She declared Nevada Concerned Citizens perceived such actions as circumvention of the open meeting law. Ms. Lusk said, with respect to the definition of "action," she wished to address the language "a commitment or a promise made by a majority of the members present during a meeting of a public body," contained in lines 7 and 8 of page 1 of A.B. 602. She advised she had served on a school board and said discussions about personnel matters pertaining to professional competency were exempted from the open meeting law. She indicated, when private discussions were held (by a school board) about such matters, near the end of those discussions a poll would be taken of those participating in the discussions to determine their opinions. She explained a vote would then be taken, in an open meeting, with no discussion having taken place at that meeting and with all those participating knowing what the outcome of the vote would be. She suggested the situation she described represented what the open meeting law intended should not occur. Ms. Lusk referred to Ms. Flores' testimony that Clark County wished to replace written, posted notices of meetings with electronic posting of meetings. She asserted the addition of electronic posting to written posting was a wonderful idea but contended it would be an error to replace written posting with electronic posting. She pointed out not everyone knew how to use computers and, although most people had access to television sets, not everyone did. She maintained, however, everyone had access to public buildings, during the hours those buildings were open, and written, posted notices of meetings were accessible to anyone interested in them. She stated Nevada Concerned Citizens strongly opposed eliminating written, posted notices of meetings. Ms. Lusk referred to Ms. Engleman's proposed amendments to A.B. 602 (Exhibit E) and said, as to each of those proposed amendments, she agreed with Ms. Engleman's intent but suggested, in some instances, the language of those proposed amendments could create problems. She indicated Nevada Concerned Citizens couldn't "...see any way that you can post every movement of an elected official who goes out gathering information..." and contended it was not in the public's best interest to restrict its representatives from gathering information. Ms. Lusk declared "polling" posed a real problem and suggested the committee should deal carefully with that issue. Ms. Lusk referred to Ms. Engleman's proposed amendment (Exhibit E) dealing with exceptions to requirements for open and public meetings and suggested changing the language "...matters over which the body has supervision, control, jurisdiction or advisory powers..." to the language "any matter" had the potential to cause the open meeting law to apply to such inconsequential matters as discussions held by members of a public body for the purpose of taking up a small collection for one of its members. Ms. Lusk referred to polling members of a public body to ascertain their positions with respect to matters being considered by the legislature. She contended local public bodies had tremendous influence on decisions made by the legislature. She suggested the results of a poll of members of a public body could determine the legislature's action on a given matter, while those members of the public who elected the members of the public body would have no knowledge of their position on the matter. She suggested, if it was necessary to poll each member of a public body to determine his position on a matter pending before the legislature, a meeting of the public body could be held by telephone conference call, provided the conference call was made audible to the public. Ms. Lusk referred to the charge imposed by the county clerk to provide copies of materials pertaining to a meeting of the board of county commissioners. She suggested there was a need to amend the open meeting law to make it clear the requirement a public body provide copies of information pertaining to its meetings was both a prospective and a retrospective requirement. She suggested the charge of $1 per page to obtain copies of such documents had "...a tremendous chilling effect on the right of the citizens to participate in their government..." because some documents consisted of many pages and not everyone could afford the expense involved in obtaining copies of such documents. Chairman Bache closed the hearing on A.B. 602 and appointed a subcommittee, comprised of Assemblyman Braunlin, as chairman, and Assemblymen Tripple, Freeman and Neighbors, to consider A.B. 602. There being no further business to come before the committee, Chairman Bache adjourned the meeting at 10:55 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 23, 1995 Page