MINUTES OF THE
	ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS

	Sixty-eighth Session
	June 9, 1995


The Committee on Government Affairs was called to order at 8:00 a.m., on Friday, 
June 9, 1995, Chairman 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
Mr. Dennis Nolan
Mrs. Gene Wines Segerblom
Ms. Patricia A. Tripple
Mr. Wendell P. Williams

GUEST LEGISLATORS PRESENT

Mr. Morse Arberry

STAFF MEMBERS PRESENT:

Denice Miller; Research Analyst

OTHERS PRESENT:

Scott Craigie; Sprint/Central Telephone, Jennifer Stern; City of Sparks, John 
L. Balentine; Public Purchasing Study Commission, Dennis Healy; NHPA, Jeff 
Leathly; NHPA, Galen Denio; PSC, Ande Engleman; FOI, Thom Sheets; Southwest 
Gas Corporation, Major Dan Hammack; NHP, Joanne Ray; Washoe County, Kevin 
Chadwick; Washoe County, George Cotton; Clark County, Mike Meizel; LCB,

Bill Cavagnaro; LVMPD, Glenn Taylor; City of Reno, Dean Borges; Public Works 
Board, Tom Tatro; State Purchasing, Fred Schmidt; Attorney General-OCA, Susan 
Dent; State Risk Management, Eric Cooper; Washoe County Sheriff's Office, Tom 
Grady; League of Cities, Joe Guild; Southwest Gas Corp.

SENATE BILL NO. 343-	Revises provisions governing disclosure of certain 
information relating to public utilities. (BDR 58-1596)

Scott Craigie, representing Sprint Central Telephone testified S.B. 343 is divided 
into two halves.  The need for this bill is created by the fact that there is increasing 
competition in the utility market place.  For the first time these companies are 
dealing with competitors.  

Ande Engleman, Freedom of Information, stated this bill is consensus legislation 
that will essentially protect proprietary information and trade secrets that private 
companies need to have protected, while at the same time protecting the public's 
right to know on public information.  The process is a company will file a document 
to say they need to keep certain information confidential.  This will go to each 
individual commissioner who may review it.  The commission can hold a public 
meeting which they will deliberate in public, while keeping the information 
confidential.  If it is necessary to go into a quasi-judicial hearing, the commission 
may do this in order to hear arguments.  Deliberations must still take place in 
public.  All the parties have agreed to this.  They have made these meetings 
accessible to the Public Service Commission and the Consumer Advocate's Office. 
 


Scott Craigie stated they have a large group of people in support of this bill.  They 
have learned through negotiations, that none speaks for the other.  This is a 
consensus piece of legislation.    He went through the new language of the bill.  
Section 1, subsection 1, allows access of the Consumer Advocate's Office  access 
to all of the books, records and materials of any public utility commission.  That 
right needs to be in the body of law where people look at what access issues are. 
 Line 9, page 1, indicates when there is proprietary information, anyone who has 
access must hold on to that information until a determination is made by the 
commission as to whether the information can be exchanged.  The need for this 
"trade secrets" legislation is brought on in the telecommunications area primarily. 
 When the Public Service Commission adopted regulation that allows competition 
in phone companies, the outcome will no longer be a monopoly, but competition. 
 Subsection 2, line 11, outlines the various "tools" the commission may use to hold 
some of the information proprietary and thus confidential.  Subsection A, line 13, 
states they can use protective orders.  The commission has used these for many 
years.  This gives the legal basis for doing so.  Section B states they may have a 
closed session, or the presiding officer can go in and receive the information that 
the utilities say should be held confidential and examine it.  They cannot deliberate, 
or do anything that has to be done in public.  They may only receive and look at 
that information.  Subsection 3 deals with how the material is to be handled.  The 
commission has the ability, at line 17, to restrict access to records and transcripts 
of the hearings, due to sensitive information.  On page three, line 27 even though 
the records and transcripts of the sessions where they receive confidential 
information can be restricted, the consumer advocate and staff of the commission 
will always have access to those records.  If there is an issue of violation of the 
open meeting law, the consumer advocate, who is a deputy attorney general, will 
always have those records in possession and the ability to review them.  At line 20 
they may prohibit any party from the hearing, except the consumer advocate at his 
will may attend the meeting.  There is public representation.   Page 2 line 4 
subsection 5, the commission must as a commission deliberate, discuss and vote 
on whatever action in a fully open hearing.  Line 17, section 2, subsection 2,  
defines what types of materials can be considered "trade secrets."  They went to 
existing law, that defines trade secrets and defines commercially sensitive 
information and used the bodies of definitions already in law.    

Thomas Sheets, Southwest Gas Corporation, stated this bill is a "marriage" of a 
number of confidentiality issues.  Section 3 deals with employee personnel records. 
 The theory behind this part of the bill, is an employee, whether public or any other 
private owned industry, has a right to expect privacy with respect to matters that 
deal with his relationship with his employer.  Where this is qualified in a public 
utility context, is if they are matters of public safety or there is an overriding public 
interest.  Section 3 is designed to address the issue of the need for confidentiality 
and an employee's right to confidentiality with respect to his personnel records, 
whether salary history, treatment for substance abuse, benefit designations, 
retirement accruals, or any incident associated with the personnel relationship with 
a company.  The bill specifically gives the commission the discretion to determine 
whether a personnel record contains such information relating to an issue of public 
safety or an issue of overriding public interest that it should be made available to 
the public.  


Mr. Sheets stated the public utilities' thoughts on this bill is the discretion to make 
these types of decisions must be vested with someone, and they must have 
confidence in someone to make the appropriate decision.  The decision maker in 
their case, is the Public Service Commission and the members who are appointed 
as the commissioners.  This portion of the bill is designed to balance the interest 
to privacy of a public utility employee, and the interest of the public with their 
respect to their need to know.   Section 3, subsection 2, indicates that no 
personnel record shall be examined, and then in section 3, there are exceptions of 
information which are not to be construed as being personnel records.

Mrs. Krenzer questioned Section 2, subsection 2, why is confidential commercial 
information added and where is it defined.

Mr. Sheets, referred to Rule 26 C-7, which provides for trade secrets or other 
confidential research development or commercial information not to be disclosed 
or to be disclosed only in a designated manner.  The practical definition of 
"commercially sensitive information" is information that, if made available to a 
competitor or another customer, would provide them with commercial leverage or 
commercial advantage, so as to place the public utility at a business disadvantage. 
 

Galen Denio, Commissioner of the Public Service Commission, pointed out this 
amendment would affect all public utility areas.  It has been the experience of the 
commission since the late 1980's, trade secret information has been a problem 
they have had to deal with, not only in the telephone areas, but the electric 
industries as well as the gas industry.  The courts have said to look to those three 
sections to deal with the "trade secret" information.  This is what the commission 
has done.  This amendment clarifies for the commission how they are going to deal 
with that.  The commission believes this is consistent with what the courts have 
told them in past cases.  

Ande Engleman stated this does"broaden" what in the past was kept confidential, 
and she does have some concerns.  If they run into a problem with this over the 
next year and a half, she will be back next session to see it is fixed.

Mrs. Krenzer stated for the record, while they have referenced statutes, she does 
not feel either "trade secrets" or "confidential commercial information" are defined 
in these statutes.  She is still not convinced that NRS 49.325 or NRCP 26C7 define 
these.

Galen Denio interrupted to say "trade secrets" are defined in NRS 600 A.040. 

Mrs. Krenzer reiterated that "confidential commercial information is not."

Mr. Bennett asked Mr. Sheets in Section 3 subsection 3b, compensation and perks 
of an employee, do you feel this releasable due to other terms and conditions that 
an employee has to sign, that being proprietary information.  


Mr. Sheets replied all the items in Section 3 are items that were negotiated by 
some or all of the parties involved.  Southwest's position initially in the negotiation, 
stated many of the items should also constitute personnel matters that should not 
be released to the public.  The reality is certainly the commission staff and 
regulators have a need to see the compensation and benefit information to 
determine whether the overall level of compensation fits in a process where just 
and reasonable rates can be determined under the standards of the commission. 
 Consequently they would not define these as"personnel records" for the purpose 
of a confidentiality bill.  It does not mean that any of them have the expectation 
that their salaries and benefit packages will be released to the public.  

Mr. Bennett asked if he could find out the salary and compensation package of a 
group.

Mr. Sheets said "yes."

Mr. Bennett asked if it should be construed that way.

Mr. Sheets stated it was part of the agreement.

A short recess was taken.

Chairman Bache called the meeting back to order.

Mrs. Braunlin stated during the interim, they will be studying "retail wheeling" the 
deregulation of the electrical power industry. She asked what would happen if 
during the interim meetings there is some information the committee would be 
asking for and it would fall under this bill, and disclosure would not be allowed.  
How would the committee have access to this information and not violate the open 
meeting law.

Galen Denio replied they would have to look at the information and determine 
whether or not by statute it could be released.  They would make every effort to 
 comply with the committee's concerns and questions.

Mrs. Braunlin asked if there would ever be a situation where they would have to 
have access to information, and it was deemed confidential by statute, what would 
be the answer.

Galen Denio replied it would be a decision the lawyers would have to answer and 
then advise.

Fred Schmidt, State Consumer Advocate, stated this bill is not to, nor does it, 
interfere with other state statutory authority already in place.  For example, the 
legislature has subpoena power, so if information was requested, this would not 
compromise your ability to go after it.  Similarly, the Attorney General's office has 
specific state statute authority to investigate and prosecute violations of the open 
meeting law.  Just because the commission can keep information confidential, does 
not mean the commission can refuse to give that information to the Attorney 
General's office in a lawful investigation, in trying to determine if the commission 
was in violation of the open meeting law.  Those statutes are not intended to be 
compromised by this new specific language.  This new language is intended to 
eliminate the time delays and the fights that have been occurring over the last three 
years as the utility industry has become more competitive in providing information 
to the attorney general's office and the Public Service Commission.  He stated 
there is some lack of clarity in terms of what is commercial secret information and 
as new competition and technologies are developed, he does not think they can put 
a specific definition in the statute that will define all those situations.  There is a 
good deal of deference, reliance and trust in the Public Service Commission.  If the 
Public Service Commission uses this bill to prevent significant amounts of 
information, which really should not be kept secret, from becoming public, then 
they will be back in two years to modify this bill.  He feels there is enough 
guidance presently that tells you through common law case law through court 
decisions, what commercial information is.  Hopefully the commission will utilize 
 and make good decisions if given this authority.  

Mr. Bennett asked why compensation and "perks" were public record.

Scott Craigie replied it is the commission's responsibility to look at all the expenses 
the utility has at every level.  They have to make sure that the rates being charged 
are the lowest appropriate rate that can be charged customers, especially since 
those utilities by definition have had some area of service where there were 
monopolies.  This is to make sure the utilities are not overpaying for salaries in 
categories or for individual people.  They could not make a judgment on these rates 
if they did not have access to these records.

Mr. Bennett agreed to looking at a group's records, but individual salaries should 
be protected and he felt there should be amending language reflecting this.      

Mr. Craigie mentioned he respected Mr. Bennett's position, but even now 
representing the utility companies they understand that those are the rules, and 
have agreed to this bill.


Mrs. Braunlin referred to the interim study and stated she did not feel the PSC 
would withhold information they requested, but she hopes they do not get 
themselves in a situation where information is needed and then told they would be 
in violation of the open meeting law if that information were passed on only to the 
committee members.

Ande Engleman replied there is a process within the open meeting law that 
addresses the receiving of confidential information by a public body.  

Mrs. Krenzer testified she differed with Mr. Schmidt on the confidential commercial 
information.  She feels those are standard business practices and directly relates 
to the rates.  She asked why not take out confidential commercial information and 
leave trade secrets.  Why does it even need to be in the bill?

Fred Schmidt replied the problem they ran into has not been related to the rates. 
 They have always had authority under other statutes to see and review 
information and make public. He agreed they would like to limit it to trade secrets 
only, but due to the courts ordering them to be covered under the statutes that 
apply to all other business information, they felt it necessary to refer each of those 
sections of the law.  It is not as specific as the trade secret section, but the court 
decision makes it necessary.

Mrs. Krenzer asked if they thought about defining "commercial information."

Fred Schmidt replied they had discussed it, but would not have gotten the bill 
through session if they would have tried to resolve that issue. Despite this bill, they 
have had these issues and problems all along.  They have "patch worked" some of 
the issues by using a standard protective order agreement, which they enter into 
with the utilities just to get access to information.  There have been significant 
threats and court cases, because there is nothing specifically contained in the law 
for the PSC like it is for the court and other areas of the law.  

Galen Denio stated the commission needs some flexibility to deal with the flux of 
issues they have.  They are confident the commissioners will keep them on the 
straight and narrow as far as these issues are concerned.

Ande Engleman stated she appreciated the questions asked, and stated she was 
sure to place "checks and balances" into the bill to prevent any sort of abuse.  She 
feels all those issues have been addressed in this consensus legislation.

Mrs. Segerblom asked Mr. Denio if this would protect stockholders. 

Mr. Denio replied "yes," it provides protection for all parties and better defines how 
the commission can handle this.  

Joyce Newman interrupted saying they were confident that there is protection here 
for the shareholders.

Mr. Neighbors asked if there were violations by the commission on trade secrets, 
would a penalty be imposed.

Scott Craigie replied the protective orders which have been signed in the past have 
never presented a problem and the parties who are in this highly regulated arena 
have a good performance record on this issue.  They expect it will work extremely 
well.

Fred Schmidt replied the commission in other statutes has specific authority to 
assess sanctions such as fines and penalties to those who would violate this.  

Chairman Bache closed the hearing on S.B. 343.

ASSEMBLY BILL NO. 144-	Revises provisions relating to cooperative 
agreements concerning insurance. (BDR 22-811) 
  FIRST REPRINT.

Jennifer Stern, attorney for Swendsied and Stern, and bond counsel for the city of 
Sparks, testified the bill amends NRS 277.067 to conform to the provisions of NRS 
277.055 which was amended in 1993. This was effective July 1, 1995.  This 
would provide for cooperative agreements for the purchase of insurance or the 
establishment of self insurance reserve or fund for coverage for all forms of 
casualty insurance, it also adds in health insurance which NRS 277.050 already 
allows.  In the 1993 amendments the financing provisions, included in NRS 
277.067 and NRS 277.069 were not correspondingly amended. NRS 277.069 
would provide for the payment of claims and administrative expenses for the 
cooperative agreement to not exceed ten years rather than five years.  (Exhibit C) 
  

Joseph Arton, an investment banker out of Minneapolis, and also the financial 
advisor to the city of Sparks, stated their group concentrates on municipal self 
insurance.  He stated there are three areas of benefits, one is programmatic.  
Municipalities are usually on a "pay as you go" basis.  They get funds, and then 
they pay them out to take care of their insurance claims.  By borrowing funds or 
issuing bonds to take of the claims, is to match up what their claims liabilities are 
with their assets.  One of the characteristics of a self insurance program or self 
insurance claim, is that claims are incurred in a specific claim year, but those claims 
are paid out over time.  Claim occurring in this year, would be paid out over the 
next few years.  This is an opportunity for municipalities to get "up front" ten years 
of premium payments in the form of bond proceeds, and then reinvest those 
proceeds to take care of the claim pay out pattern.  This sets a base for them, so 
they know they are going to have an "income stream" over time to be able to take 
care of claims and expenses that will occur.  Another area is accounting.  There is 
a new system now out called the "Gasby" which stands for the General Accounting 
Standards Board.  All municipalities have to comply with Gasby Ten in order to get 
an unqualified audit.  One of the requirements is for municipalities to report what 
their unfunded liabilities are.  This program does not help them as far as compliance 
with Gasby Ten, they have to comply with Gasby Ten in order to get the 
unqualified audit.  This would allow them to state what they are doing about any 
unfunded liabilities they have.  Gasby Ten requires a footnote, not only for the 
liability, but how the self insurance program works and what is being done about 
any unfunded liabilities.  This allows municipalities to report and explain what they 
are doing inside their self insurance program.  The last is economic developments. 
 On a "pay as you go" basis there is not much opportunity for an individual entity 
to earn much interest income.  There is a need for short term funds, and long term 
funds.  This would allow for municipalities to set aside funds that would be used 
to pay claims in the future and they would be able to earn not only a higher interest 
rate on the portion of the portfolio dedicated to the self insurance program, but 
they would be able to take advantage of compound interest over a period of time. 
 For the city of Sparks it results in approximately a two hundred to two hundred 
fifty thousand dollar a year savings over what they are doing currently.  

Stephanie Tyler, City of Sparks, pointed out it allows for local governments to 
come  together, the cooperative agreement section of the law, and operate more 
like a business.  With the costs savings, they will be able to provide better services 
and provide more security for local government funds.  


Mr. Nolan stated it is somewhat innovative for this state for governments to 
conceptualize this sort of arrangement for workmen's comp.  It takes place in other 
states and we are now in Labor and Management going through group self 
insurance which the division of Industrial Regulation has been involved with in 
making sure the participants, whether governmental or private, can form 
associations in order to group self insure, but along with that is going to come 
some  covenant and restrictions which the DIR is putting into place to insure there 
is solvency within those organizations, especially governments.    He asked if they 
have been following this and is it not a palatable option to go group self insured 
under the regulations being advised in another piece of legislation.

Stephanie Tyler replied as a broader issue, this would not change in any way the 
requirements necessary for local government to self insure.  It does not change that 
basis in the least.  It would allow two or more to come together for better and 
deeper coverage along with better security for the local government.

Jennifer Stern concurred with Ms. Tyler and stated the cooperative statute does 
not change regulations or other statutes for self insurance for governments.  Those 
are contained in NRS 616.  All this would do is if they have the authority elsewhere 
they can come together under a cooperative agreement and finance coverage.

Mr. Nolan explained he was not opposed to the concept, but is interested in what 
SIIS and DIR will have to say about this.

Henry Etchemendy, Nevada Association of School Boards, testified this would be 
beneficial legislation as far as their interests are concerned.  There are many rural 
school districts who get themselves involved in consortiums occasionally, when 
there is a small amount of money made available to each school district for a 
certain activity, there is not enough money in order to do a project themselves.  
The rural districts are interested in the consortiums which might be put together 
 for industrial insurance, workmen's compensation, etc.   This legislation would be 
beneficial to them and he urged the committee's support.

David Thomas, State Risk Manager, testified they were not necessarily in 
opposition to A.B. 144, but thought an apparent conflict in NRS 277.067 would 
 not only relate to local governmental agencies but also relates to cooperative 
agreements between agencies of the state, and for the university system as well. 
 This would include the provision to allow them to self insure for health insurance. 
 This is in direct conflict with NRS 287, which provides the committee on benefits 
the sole authority with respect to state employee health benefit programs.  He gave 
as an example, if the state university system self insured and removed themselves 
from the state employee health plan, this would seriously jeopardize the state 
employee health plan.  There are seven thousand employees in the university 
system, and removing themselves from a twenty one thousand employee based 
program, they would lose a third of their base and this would cause serious 
financial instability of the health plan.  


Mrs. Lambert asked if the Committee On Benefits is the sole authority to provide 
health insurance for state employees, then a state agency could not opt out and go 
with something else.

Mr. Thomas reiterated as to this being in direct conflict with NRS 287.  This would 
allow them to do that.

Mr. Bennett asked if this testimony was presented to Senate Government Affairs.

Mr. Thomas replied it has not been there yet.

Mr. Nolan asked if health care benefits excluded workmen's compensation.

Mr. Thomas replied it was strictly employee health care benefits.

Mr. Nolan asked if this would affect not only workmen's compensation but health 
care benefit for a portion of the university workers.

Mr. Thomas replied as far as workmen's compensation was concerned, there are 
three separate pools for state employees.  The university system has their own 
plan, Department of Transportation has their own plan, and the rest of the state is 
in central payroll.  

Mrs. Segerblom asked if some cities already have a self insured plan.

Mr. Thomas replied "yes", as far as employee benefits are concerned.

Mrs. Lambert asked if the bill was amended so that it would not override the 
language in NRS 287, would it be satisfactory.

Mr. Thomas replied it would be fine.

Mr. Nolan asked the chairman's permission to have Douglas Dirks from SIIS to 
come up and answer a question.

Mr. Nolan asked if in any way would this affect worker's compensation, would it 
allow a group to go out and seek health care benefits under worker's 
compensation.

Douglas Dirks, State Industrial Insurance System replied this bill does not do 
anything more to the worker's compensation "arena" than the group self insurance 
provisions in Chapter 616.


ASSEMBLYMAN LAMBERT MOVED AMEND AND DO PASS A.B. 144 WITH 
LANGUAGE WHICH WOULD NOT OVERRIDE NRS. 287.

ASSEMBLYMAN BACHE SECONDED THE MOTION.

There was a discussion held.

Mrs. Krenzer disclosed she works for Sierra Health Services, and because of this, 
she would be abstaining from voting on the bill.

Mr. Bennett wanted to be assured by deleting the workmen's compensation and 
liability in lines 7 and 8 of page one, that they are not affecting SIIS in any way.

Chairman Bache replied everything dealing with self insurance and group self 
insurance is in chapters 616 of NRS and this should not be a problem.

MOTION CARRIED WITH MRS. KRENZER ABSTAINING.

ASSEMBLY BILL NO. 680-	Provides period of leave of absence with pay in lieu 
of compensation for industrial injury or 
occupational disease for certain peace officers.  
 (BDR 23-798)


Dennis Healy, representing the Highway Patrol Association, stated A.B. 680 is a 
bill which addresses some very important circumstances that can arise in a peace 
officer's life and some of the injuries and occupational diseases they can suffer 
while pursuing their occupation.  The bill proposes that if a peace officer sustains 
an industrial injury or suffers an occupational disease which arises out of the course 
of employment.....He then interrupted to say they want to add an amendment.  
They previously had "... a peace officer may be giving notice to his employer 
elect.." which they now want to delete, and replace that with "... the peace officer 
may request to be placed on a leave of absence with pay while still injured or 
disabled for a period of not more than one year in lieu of his receiving the 
compensation for industrial injury....." (Line 6, subsection 1 of Section 1).    Then 
on line 14 "... The  employer of a peace officer who requests to be placed on a 
leave of absence....."  He stated there are situations arise where a police officer is 
on the "front line" of protecting the public safety and oftentimes suffers injuries 
that when he is off for a period of time is tantamount to making him go bankrupt. 
 An injured officer has to take his sick leave and annual leave while it lasts to pay 
for mortgage and costs of living.  With the high percentage of injury that can come 
about for a peace officer they feel this system similar to the "Forty Eight Hundred 
System" in California would be a just request to have.  He mentioned this bill is not 
intended to take away from anyone who currently has this system, it is for those 
who do not have a system, such as the Nevada Highway Patrol Association.  They 
understand this would be a non funded item. It would be the same amount of funds 
already budgeted.

Jeff Leathley, Patrolman for the Nevada Highway Patrol, testified about an incident 
in which he was injured and put in the hospital for a period of five months, and off 
work for one year.  At the time of the accident he had just under 3 years at the 
department.  To pay his bills he used his sick and annual to compensate over and 
above what SIIS paid.  This ran out in a period of 3 months.  He spent the next 
nine months just with the SIIS claim and nothing else.  When he returned to work 
he did not have any sick or annual leave left and still required another 6 operations. 
 He said they should not have to use sick leave for  compensation while on a job 
related injury.

Dennis Healy stated in the case of the Nevada Highway Patrol, they currently have 
an application and authorization for leave, and with the proposed amendments, 
they would add a subsection the injured employee or diseased employee would 
apply, and the authorization would depend upon looking into the particular factors 
of his/her case.  

Mr. Healy also described Trooper Ken Gager's accident.  

Mrs. Segerblom stated it was her understanding that in the bill, they would not 
receive both industrial insurance and pay.

Mr. Healy replied "correct."

Mrs. Segerblom clarified they would only receive pay in lieu of the insurance.

Ms. Tripple asked if the pay comes from different sources, then we are asking one 
source of money to pay another source of money's obligations.

Dennis Healy stated as with the Highway Patrol, the money would have already 
been budgeted.  One of the agencies will be somewhat enriched if the other has to 
pay.

Mrs. de Braga stated she was confused.  She asked if you are under SIIS don't you 
already receive compensation that is close to your wages.


Mr. Healy replied it was his understanding you would receive two thirds of what 
your wages would be.  If you can supplement it with sick leave and vacation time, 
then you would have your total wages.  If you do not have those, then you would 
only receive the two thirds.

Mrs. de Braga asked what was meant by "in lieu of compensation".

Mr. Healy responded it would be what they are paid minus any differentials.

Mrs. de Braga clarified then it would be them finding what was the best benefit, 
and act accordingly.

Mr. Nolan stated for the losses incurred the medical benefits and compensation 
benefits are amortized back into the premium for that agency over a period of time. 
 They would still be paying their own benefits in way of premiums.

Douglas Dirks remarked Mr. Nolan was correct.  These are expenses the system 
would not incur. That being the temporary total disability expense, or the indemnity 
expense, it would all come from the particular employers.  In this case it would be 
the highway patrol's experience.  Over time, their premium rate would go down. 
It would not be a "dollar for dollar" match.

Mr. Bennett asked for an explanation of the fiscal note.

Chairman Bache responded the fiscal note is on the bill as originally proposed, 
where it is mandatory.  He did not know if the system provided a fiscal note.

Ms. Krenzer asked if the leave of absence with pay for one year was a benefit that 
they have available to them.

Mr. Healy replied "not at the present time."

Ms. Krenzer asked if the bill passed would their be funds available.

Mr. Healy stated it is not funded inasmuch as it would have already been budgeted 
for the position that the person is occupying in the Nevada Highway Patrol. 

Ms. Krenzer interrupted saying you would have to replace the person while they 
were off duty.

Mr. Healy replied no they would not.

Mrs. Lambert asked if when an officer is ill or not at work, the highway patrol goes 
an officer short.  

Mr. Healy replied, that is correct.  There will be further testimony from the Nevada 
Highway Patrol.

Mr. Neighbors asked if before you are placed on leave of absence without pay, are 
you required to use up all your annual and sick leave.

Mr. Leathly replied if this was to be enacted, then your annual and sick leave would 
be preserved, and upon returning to work everything would be status quo.

Mr. Neighbors commented the person is actually being penalized because the sick 
leave has nothing to do with the accident, and it is unfair they would have to use 
the money to compensate.

Ms. Krenzer asked where is the incentive for someone injured, who is receiving one 
hundred percent of their salary, to have any reason to want to recuperate and go 
back to work.

Mr. Leathly replied the incentive needs to be in the writing.  It would require the 
agencies' approval, and a request would have to be made for this compensation. 
 The department would be obliged to manage this, and if any abuse were to occur, 
they would have to take action.  

Ms. Krenzer asked if he was suggesting language to be put in there to insure this.

Mr. Leathly replied he did not have any objections to some language to that effect, 
but he felt it would be an automatic thing the department would do. They would 
obviously want to keep an eye on what is going on.

Mr. Healy interrupted to say it was not their intent to give a malingerer a vacation. 
 They would want to encourage them to come back to work as soon as possible.

Mrs. Segerblom asked if this is strictly for an on the job injury.

Mr. Leathly said it would only cover a job related accident.  Anything that should 
 happen on your own time would not apply.

Mrs. de Braga asked in Section 1, subsection 1, after "..elect to have be placed.." 
would that be a good place to have the language requiring approval.

Mr. Leathly replied the language would be changed to say "... an agency may 
request to be placed...."

Major Dan Hammack, Nevada Highway Patrol, testified the department and division 
supports the amended version of A.B. 680 to benefit employees that sustain 
serious injuries in their course of employment serving the state of Nevada.  
Currently a catastrophic injury by an NHP trooper can lead to serious economic 
impact on personal finances and family during the convalescence due to the 
compensation rates provided.  The division envisions this legislation as an enabling 
statute to permit approval by management in specific cases.  The fiscal impact of 
this legislation appears to be non existent as the salary funds are already budgeted. 
 It would involve a process of granting administrative leave with pay, by the 
division to employees who suffer serious injuries in the work place.  The division 
encouraged the committee's support to insure some of these inequities are 
rectified. He handed out an example of an administrative authorization for leave 
form.  (Exhibit D).  They could use this as an addition to the approval line in order 
to reduce the economic impact on the members.

Mrs. Lambert testified the bill speaks of "peace officers" and "peace officers" are 
 beyond highway patrol officers, which have police officer powers.  There are also 
bailiffs at district courts, constables, security officers, and California correction 
officers, when they are bringing  a prisoner into Nevada.  She said there is a whole 
wide range of people.

Mr. Hammack interrupted to say there will be testimony amending out some of 
those local entities, people who are subject to collective bargaining.    He said this 
bill could be crafted to say state employees.  He said there is currently a provision 
in this statute where the employee can elect to use his sick leave in lieu of SIIS 
compensation.  This is strictly on his/her personal time.  What is being asked is to 
allow them administrative compensation for this.

Mrs. Lambert asked for clarification in that this will have absolutely no affect on the 
budget.  Overtime will not be imposed.

Major Hammack replied they protect the officer's job when they are injured.  They 
do have other officers to fill in shifts, and there is twenty four hour coverage.  They 
have the ability to shift people to insure there is an adequate level of service  the 
motoring public.

Mrs. Lambert asked if they will be paying someone else to cover the person who 
is ill.  

Major Hammack replied "yes," but the salary is still there.  

Mrs. Lambert asked if you would have to pay overtime.

Major Hammack said they would run short just as any other business, it is a normal 
part of business and shifting is done when needed.    

Mrs. Lambert asked if they asked employees to work double shifts where they 
would get overtime.

Major Hammack responded not normally, unless it is a critical situation.

Mrs. Krenzer asked how many Highway Patrol are employed.
Major Hammack replied they have 349 sworn officers statewide.

Ms. Krenzer questioned the amount of industrial accidents that happen annually.

Major Hammack replied they run three to five who suffer a critical injury within a 
year.   He commented with the amendments, there would be no problem with it 
being set up to one year.

Ms. Krenzer stated this is going to have a fiscal impact, and the financial impact 
 of five or whatever amount of positions being filled by somebody in their absence.

Major Hammack, stated the position would not be filled by anyone.  If there is an 
injury they make it up by the existing employees.  As far as the fiscal impact, 
presently SIIS provides a workmen's compensation benefit to the employee.  This 
comes out to be approximately sixty percent of their wage, it is based on the 
average state worker's wage, and it is about twenty eight thousand.   He stated 
officers are in the thirty to thirty five thousand dollar range.  They have to put in 
their personal leave time in order to make that up.   If they take the SIIS 
contribution and help pay it off through salary when he is off.  Then salary savings 
will be achieved.  SIIS will achieve savings, by not paying the disability rate.  

Ms. Krenzer asked what would be the cost to the Highway Patrol.

Major Hammack replied it would be the normal rate they pay them now.

Mrs. Segerblom asked for clarification in that they will not "replace" any employee 
who is out on an injury, and they will not increase their budget.


Major Hammack, replied "no" not to his knowledge.

Mrs. Segerblom asked if this meant they will just be doing a more difficult job.

Major Hammack replied if an officer is injured and takes personal sick time, he is 
still paid, but it is deducted from his pay.  This administrative leave time, which 
would be paid by the state, out of the salary budget which would be the same 
dollars if he was on sick leave.

Major Hammack has worked in the SIIS system and has been a benefactor of it. He 
then gave an article for the committee to read regarding a personal injury he 
incurred.  (Exhibit E).

Susan Dent, Risk Management Division, testified they have concerns about the bill 
 being too broad.  With the recent amendments, it will help clear up some of the 
concerns, but they have four areas of concern.   The first area would be the early 
return to work program.  They attempt to bring employees back to work during the 
time they are convalescing from their injuries.  The regulations as written allow 
them to give them their full pay for ninety days during the recovery. If they need 
to be operated on, the regulations extend them another 90 days of full pay during 
the course of time they would be recovering from a surgery.  If there were multiple 
surgeries, this could be extended.  They feel they have addressed part of this issue 
by doing a modified duty work program.    The second area is where it would 
expand to other peace officers.  She then elaborated on all different types of peace 
officers.    She mentioned over the past three years they average sixty six injuries 
per year with the Highway Patrol Division, and an average of seventeen of those 
were loss time injuries.  If these officers had to be replaced, the fiscal impact would 
be approximately 2.6 million dollars in payroll costs.  She then gave an example of 
numerous agencies with peace officer status and stated they average four hundred 
and eighty seven injuries per year, and an average of ninety one loss time injuries 
per year that could potentially qualify for this.   In the area of management's ability 
to grant this, what would be the determining factor to make it fair to employees to 
allow others leave without pay.  This might cause personnel problems with other 
employees.   They feel the Department of Prisons would be greatly impacted by the 
potential of this bill. At the maximum security prison in Ely they average one 
hundred twenty eight injuries per year, and 25 loss time injuries per year.   With the 
return to work program, it is in the best interest of the employee to continue 
working during the course of their recovery, it enhances them physically and 
psychologically.  If they are out a year without being connected to the work force, 
it could pose problems.  This was the purpose of the early return to work program. 
 

Ms. Dent pointed out the technical terms to this bill had posed some questions. 
 Would the employer still be required to pay the SIIS premium on the employee who 
is off for a year. Who would be responsible to monitor that employee's activities, 
would it be SIIS's responsibility or would it be turned over to the employer to 
monitor the medical progress.  Currently under state benefits, after nine months of 
a person being on SIIS leave, they then have to start paying the state's portion of 
their regular health insurance.  They are curious how this situation would be 
handled.  They also have supplemental disability insurance which is at an 
economical price that employees can choose to supplement their regular health 
insurance which would protect them against the catastrophic nature of a serious 
injury.  For those reasons, they have asked the committee to look at this from a 
broader perspective.  

Chairman Bache interrupted to say they would have to re-schedule S.B. 180.

Mr. Bennett asked Ms. Dent if currently an injured employee can receive full pay 
for ninety days, if they require surgery it can be extended to 180 days.  
Subsequent surgeries can keep extending another 90 days.

Ms. Dent replied "correct."

Mr. Bennett commented that theoretically they have this already.

Ms. Dent mentioned under the guides of the return to work program, and the way 
the regulations are written with personnel, if the employee is performing the 
majority of their job duties, that being fifty one percent, that modified duty work 
period can be extended beyond the ninety days.  The ninety days is specifically in 
there to deal with classification issues.  She gave an example of an employee who 
is not doing their job, but still getting full pay it eliminates some issues that may 
arise.  

Mr. Bennett asked how this would apply to a catastrophic injury to a police officer. 
 
Ms. Dent stated if the person is capable of working, and they find an appropriate 
position, they will allow it.  They have developed a "pool" of modified duty 
positions, which allows them to accommodate  any type of injury.        


Major Hammack pointed out the ninety day status that is cited is when you are able 
to do and function and are returned to a light duty status.  The highway patrol  
makes light duty assignments available for the employees, they encourage return 
to work, and office work is often assigned.  It is not fully paid the first ninety days 
from the date of injury.

Gary Wolf, sergeant of the Nevada Highway Patrol, testified he has been a 
policeman for twenty eight years.  He has been personally involved with many 
injuries sustained by fellow officers.  He expressed when men and women give 
their all for the state, the Legislature should show some responsibility and give this 
bill support.

Ms. Tripple stated the discussion has been all about the highway patrol.  The piece 
of legislation before the committee is much broader, dealing with peace officers. 
 She asked if the bill could or should be changed to talk about only highway patrol.

Mr. Healy read subsection four. If the duties of a peace officer are not primarily to 
enforce the law, that would be an eliminating factor.

Ms. Tripple asked why the highway patrol was the only one testifying for the bill, 
yet the bill includes many other people.

Mr. Healy replied when the bill was formulated, it was at the behest of the Nevada 
Highway Patrol Association.  They did not want to approach it from the point of 
view that other peace officers should be excluded.  When the bill was written, it 
was for non-selfish reasons.  

Eric Cooper, Washoe County Sheriff's Department testified this is a highway patrol, 
and a problem within the state system.  It is designed to deal with the state 
problem.  The objection local government has about this bill is it forces local 
government employers to provide a benefit that is subject to collective bargaining. 
 Local government is under Nevada Revised Statutes 288.  They suggested all 
references to peace officer within the bill be changed to indicate a peace officer 
employed by the state of Nevada or peace officers employed by the Nevada 
Highway Patrol.  This way it would not be put on local government.  Most local 
governments in the state of Nevada are under collective bargaining agreements, 
and would not like to see a benefit created in a law that they are required to 
provide through collective bargaining.  They suggested researching another way of 
stating this such as "peace officers employed by a governmental entity not eligible 
for collective bargaining under NRS 288."  They feel this should be worked out 
between employees and management.


Mary Henderson, Washoe County, agreed with Mr. Cooper's proposed amendments 
to the bill.  Currently Washoe County Sheriff's Department is covered under 
collective bargaining.  The contract has provisions to address this issue.  With the 
broadness of the bill the way it is presently, it would cause a conflict with the 
collective bargaining.

Bill Cavagnaro, Las Vegas Metropolitan Police Department, testified they "echoed" 
the sentiments of Mr. Cooper and the proposed amendments. 

Tom Grady, League of Cities, testified they will go on record supporting the 
amendments as suggested by Mr. Cooper.

ASSEMBLY BILL NO. 282-	Authorizes preference for disadvantaged business 
in public works and in state and local government 
purchasing. (BDR 27-337)


George Cotton, Clark County Affirmative Action Manager, testified they were there 
to support A.B. 282.  They stated they had a problem and hoped the committee 
would be able to help.  Clark County and regional governments in southern Nevada 
engaged in an economic disparate study which took place over the last two years. 
 In this study it set forth certain areas and indicated there had been passive 
discrimination in the past as related to parturient and purchasing programs.  This 
was put in place without a statutory mechanism to cure the discrimination once it 
was set forth for counties.  Cities can do so through their charters.  Counties are 
limited in scope by what the NRS states.  The district attorneys' office has 
indicated they need to have some clarification in state law, to allow them to cure 
this.  With the study in place and certain omissions in the study, they were unable 
to do with affirmative means, to have an affirmative defense through good faith 
efforts. They face the possibility of federal litigation to force them to comply with 
certain aspects of the study.  They feel they can do this without using 
discriminatory means or the need to go to any "set asides."  They are not asking 
for authority to do this.  They are asking for authority to ask the 
contractors/subcontractors to help them comply with the shortfalls set forth in the 
economic disparate study which was done by a builder for the county.  In 1989 the 
Supreme Court case J. Crosin v. The City of Richmond set forth certain standards 
that employers and entities need to use in order to contract out certain preferences 
as relates to minorities and women owned businesses in the procurement areas. 
 They are precluded by federal law from discriminating against primes of majority 
contractors, but their provisions set forth good faith efforts to allow an entity to 
get compliance with the law.  They are not trying to amend NRS 388.125 which 
prohibits discrimination, as well, the county board of commissioners also on May 
16th of this year adopted an equal opportunity policy statement which reiterated 
a policy of non discrimination to insure they would not move to some type of 
program that would go to a set aside and cause problems from a non-offense point 
of view.  He pointed out they are in dire need of help to get some sort of statutory 
authority to cure those deficiencies that were set forth.

Mr. Morse Arberry, Assembly District 7, spoke on behalf of A.B. 282, which 
authorizes, not mandates, preference for disadvantaged businesses in the public 
works and in state and local government purchasing.  It also directs gaming 
licensees to establish goals with the respect to contracting with disadvantaged 
businesses.  He pointed out these are goals, not mandates.  This is a bill that 
allows local entities and states to address the problems that persist in Nevada and 
throughout this nation.  Businesses owned or operated by ethnic or racial minorities 
or by women, continues to be prejudiced against which impairs their ability to 
succeed.  He stated the bill speaks for itself.  He said the "bottom line" is they are 
trying to open doors for minorities and women to be able to participate in the 
process of business and make sure they are in the main stream of life.

Mrs. de Braga asked what the incentives are since this bill is not mandated.

Mr. Arberry replied the incentive is trying to open the door to get something 
started.  As it stands presently, women and minority businesses are at times being 
discriminated against.  He stated in California the governor signed a statement 
saying there is no discrimination, and they need to eliminate that.  This statement 
is not true.  These businesses need to have flexibility like any other business, not 
special treatment, but at the same token be able to participate in the process.  
They want to get something on the books saying they do support small businesses, 
women and minorities in their process in trying to succeed in business.

Mrs. Segerblom asked if there was a federal mandate we are trying to live up to for 
this.

Mr. Arberry replied "no," there is no federal mandate.

Mr. Bennett asked if they were trying to "mirror" the Federal Acquisition 
Regulations."

Mr. Arberry replied he was aware there are some federal requirements that a 
business has to solicit bids from.  As far as this being an existing law, he has not 
seen or heard of anything saying that is a mandate.


Mr. Cotton interjected saying in regard to federal programs, the Congress set forth 
certain requirements for federal entities, and those entities that receive federal 
contracts to set aside a certain percentage of procurement dollars for minority and 
women owned businesses. 

Glen Taylor, city of Reno, spoke in support of A.B. 282.  They "echo" the 
sentiments of Clark County.  He stated they were hopeful they will not have to go 
through all the various things southern Nevada has gone through if this particular 
bill is passed.  Currently they do have a policy in force which was established by 
 their local city council, for the city of Reno with respect to women and minority 
business enterprises.  Unfortunately, they do not have a state law in place which 
supports what they are doing at the local level by policy alone.

Tom Tatro, Administrator of Purchasing Division, testified he was not taking a 
position on the bill.  He signed in because he had submitted a fiscal note to the bill 
at the request of the LCB.  The fiscal note would only apply should this state 
actually conduct a disparity study.  He mentioned this fiscal note is not appropriate 
to this bill, but more appropriately attached to a bill that would require the state to 
perform a disparity study itself and then those costs would be incurred.  

Chairman Bache commented there was no fiscal note for A.B. 282 in the book, and 
asked what the amount was.


Mr. Tatro replied they had submitted a fiscal note in January.  He said the Clark 
County cost was the basis of it, their total cost for their disparity study was six 
hundred eighty thousand.  This included the implementation contract as well as the 
preliminary study and the study itself.  This was the combined cost for each of the 
entities involved, which was information given to him by local governments within 
 Clark county.  They projected an estimate of 150% of that for taking the state of 
 the whole, adding that would put it at one million twenty thousand dollars.  This 
was on the assumption this was an accurate basis.  They did a nationwide research 
project to find out if another state had done a disparity study.  They did not find 
one that had.  

Mrs. Segerblom asked if they needed to do a disparity study.

Mr. Tatro felt there is not a fiscal note to this bill.  This bill does not call for the 
state to do it.  It would require a separate piece of legislation.

Mr. Williams stated it was not Mr. Arberry's intent to pursue a disparity study from 
the state.  He knows Clark county has done that.  Most of the local governments 
in Clark County, except North Las Vegas has completed disparity studies.  


Mr. Cotton interrupted saying North Las Vegas did not participate in the disparity 
study, but they anticipate using the data from the base of the study.

Mrs. Freeman asked Mr. Taylor if Reno has done a similar study.

Mr. Taylor replied "no."  What the city of Reno did, was enjoin Washoe County, the 
Regional Transportation Committee, the Washoe County Airport Authority, and  
Reno/Sparks Convention Authority as well as one other local entity in the city of 
Sparks in pursuing technical assistance relative to what they are doing in northern 
Nevada.  The consortium has been meeting for the last two years to determine 
what direction should be taken with respect to their public works programs.  
Unfortunately a decision was reached stating they need something on the books 
from the state level to ensure they go about setting policies and programs 
correctly.  This is the position they have been in for the last two years.

John L. Balentine, Public Purchasing Study Commission, signed in opposition of the 
bill, meaning they have questions to be answered.  They asked the committee to 
realize the bill does affect local governments.  He stated the Clark County disparity 
study was in excess of five hundred thousand dollars.  They also are concerned 
about the bill not having a "sunset" provision along with not having a definition of 
ethnic minorities, no registration process and again no penalty for fraudulent 
registration.  The bill addresses sub-contractors and specifics for NRS 333 and 332 
which are state and local purchasing procurement and in the over 800 contracts 
they administer, less than fifteen of them would have any type of sub-contracting 
provision available to them.  Where they do exist is under NRS 338, the bill talks 
again about sub-contractors and fails to talk about prime contractors who may be 
of an ethnic minority.  

Rod Johnston, Assistant Director of Operations, Department of Transportion,  
testified since they are recipients of highway funds, they have administered 
disadvantaged business programs for the last twelve years.  He stated there are a 
great deal of "loop holes" in the definitions and clarifications of the bill.  He stated 
the definitions need to be strengthened, because it will cause problems when it 
comes down to dealing with one issue.  He stated the disparity studies will be 
costly.   They also want to know what the criteria under which disadvantaged 
business is established.  If each entity out there puts together their own definition 
of what constitutes a disadvantaged program, there will be problems when one 
business goes from one state agency to another.  They feel there will be problems 
on both the state and federal level.  He mentioned they need to have a set of rules 
and guidelines so it clarifies what qualifies and does not qualify.


James Crawford, Contract Compliance Manager for NDOT, testified he administers 
the disadvantaged business enterprise program on a day to day basis.  Their 
biggest concern is certification and making sure the businesses listed as 
disadvantaged, truly are.   They have a very complex program in place to make 
these determinations.  They only certify businesses for one year.  After that they 
must renew.  They ask for documentation, they have onsite visits, find out who the 
owners are and their level of expertise in the business.  

Mr. Bennett asked if they are required to follow the Federal regulations as far as 
dealing with federal highways.

Mr. Crawford replied if they are doing construction, for example on U.S. Hwy. 95 
that involves federal funds, they will review the contract and determine whether 
or not they should set goals, that a certain percentage of that contract bid amount 
must go to disadvantaged businesses.  He stated they have an annual goal, that ten 
percent of all federal dollars will go to disadvantaged businesses in this state.  On 
a particular contract they could set a goal above that, or below that, depending on 
the size of the contract or if it was too specialized.

Chairman Bache asked if he would work with Mr. Cotton on amendment language.

Mr. Rod Johnston suggested they look at the federal wording.  It is more specific 
with regard to the determiner of economical and social definitions.  They should 
pattern those after that wording.  Also, they need to look at having a guideline for 
good faith effort.    They offered to supply federal regulations.

Mr. Cotton appreciated the comments from the state.  He pointed out this 
legislation gives them the authority to develop plans that will cure some of the 
problems that were identified in the economic disparity study.  They have an 
extensive program for certification of disadvantaged businesses that "mirror" the 
federal program dollars.  They are prepared to deal with it and can cure it with the 
program in place as soon as they acquire the statutory authority.  They would 
address each, contract by contract.

Chairman Bache asked if they felt there was a need for any amendments.

Mr. Cotton replied "no."

Chairman Bache closed the hearing on A.B. 282.


There being no further business to come before the committee, the meeting 
adjourned at 10:45 a.m.          



RESPECTFULLY SUBMITTED:

                                            
Kelly Liston,
Committee Secretary

Assembly Committee on Government Affairs
June 9, 1995
Page