MINUTES OF THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session June 12, 1995 The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:00 p.m., on Monday, June 12, 1995, in Room 227 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Ann O'Connell, Chairman Senator Randolph J. Townsend, Vice Chairman Senator Jon C. Porter Senator William J. Raggio Senator William R. O'Donnell Senator Dina Titus Senator Raymond C. Shaffer GUEST LEGISLATORS PRESENT: Assemblyman Doug Bache Assemblyman Mike Schneider STAFF MEMBERS PRESENT: Dana Bennett, Principal Research Analyst Teri J. Spraggins, Committee Secretary OTHERS PRESENT: Irene Porter, Executive Director, Nevada Homebuilders Association Laura Wallace, Officer, Public Employees Retirement System (PERS) George Pyne, Officer, Public Employees Retirement System Robert Gagnier, Executive Director, State of Nevada Employees Association Marty Bibb, Lobbyist, Retired Public Employees of Nevada (RPEN) Doug Byington, Lobbyist, Nevada Association of School Administrators Perry Comeaux, Director, Department of Administration Jim Richardson, Lobbyist, Nevada Faculty Alliance Adair Dammann, Executive Director, Service Employees International Union (SEIU) Gary Wolfe, Legislative Representative, Nevada Highway Patrol Association Warren Hardy, Lobbyist, Virgin Valley Water District Mary Henderson, Government Affairs Director, Washoe County Senator O'Connell opened the committee hearing by asking members of the audience to indicate on which bill they were prepared to present testimony. She opened the hearing with Assembly Bill (A.B.) 489. ASSEMBLY BILL 489: Revises provisions governing actions against certain planning and zoning agencies. Irene Porter, Executive Director, Nevada Homebuilders Association, testified the bill states when statutes do not authorize a fee, then an aggrieved party can sue to recover the fee along with attorneys' fees. She stated governmental precedence exists. She said the homebuilders association is having problems with monetary charges that are not in the statutes. She said they have gone to court to recover the fee. She said the law is debatable whether the aggrieved party can recover their attorney fees. She testified this bill will declare nothing illegal. She said it does not affect changes to the statutes. She stated if the court finds the fee, tax, or other monetary charge to be illegal, then they have a right to get their fee and the attorney fees refunded. She noted the party has 25 days to bring the matter to court. She explained how conditions can be imposed upon applications. Senator O'Connell asked if this is where extractions and exactions occur. Ms. Porter responded this was the time. She said the exaction process is part of the condition process. She said not all of those are exactions. Many conditions imposed upon an application are a repeat of what is already in ordinances. Senator O'Donnell asked about the language on page 2, line 9. He asked if the protest has to be in the minutes, on the tape, or in writing before it can be a protest? Ms. Porter responded yes, but it has to be during the actual public hearing. Senator O'Donnell asked if that would be the cause for the court action? Ms. Porter explained that the developer can go back and negotiate or else go to court. Senator O'Donnell inquired what would happen if nothing is on the record? Ms. Porter responded then they deem that the developer agreed to all of the requirements, conditions, or restrictions. Ms. Porter explained at most city council or county commission meetings now, they do ask if the applicant agrees with all the conditions that they impose. She cited the example of a developer who agreed, but discovered one of those conditions is going to cost $10 million on a $5 million project; the developer literally has to dump the project. She reminded the committee that the developers put out much money up front by the time they get to this stage in the process. Senator O'Connell closed the hearing on A.B. 489 and opened the hearing on A.B. 459. ASSEMBLY BILL 459: Makes various changes regarding committee established to administer a program of deferred compensation for state employees. ASSEMBLY BILL 359 OF THE SIXTY- SEVENTH SESSION: Makes various changes regarding administration of program of deferred compensation for state employees. Assemblyman Doug Bache testified A.B. 459 is the "son" of A.B. 359 of the Sixty-seventh Session. He explained the Governor objected to a section of the bill last session and therefore he vetoed the bill. He stated they removed that section from A.B. 359 of the Sixty-seventh Session and the bill is now A.B. 459. Senator O'Connell asked which section of the bill the Assembly had removed. Mr. Bache responded that the mandating of an outside consultant, because of the cost. He said the bill now states that the committee will do requests for proposals every 2 years. Senator O'Donnell asked which entities' payrolls someone, other than the controller, administers. Discussion followed regarding which entities the controller's office does not pay. Mr. Bache provided a summary of the bill. He testified this is not a new committee; it is a restructuring of the old committee. Laura Wallace, Officer, Public Employees Retirement System (PERS), stated it was an $80 million program. She testified the program has about 3,000 participants. She said the bill gives structure to the oversight committee and explained it is a 457 deferred savings plan for public employees. She said it supplements their PERS' benefit. George Pyne, Officer, Public Employees Retirement System, concurred with Mr. Bache and Ms. Wallace in support of the bill. Senator O'Connell closed the hearing on A.B. 459 and opened the hearing on A.B. 555. ASSEMBLY BILL 555: Revises amount of transportation allowance for public employees. Robert Gagnier, Executive Director, State of Nevada Employees Association (SNEA), said this bill is a response to the issue regarding travel allowance for state employees. He stated this bill will take the mileage rate out of the travel expenses for state employees and establish a floating rate. He said every session SNEA comes to the Legislature to seek a change in the mileage rate to keep up with costs. He said when the bill was drafted 2 years ago, the Internal Revenue Service (IRS) rate for mileage was 27 cents. He told the committee that when session ended, the IRS raised the rate. He said this bill gives the board of examiners the opportunity each July to set the rate at the current IRS-approved rate. Senator Porter asked Mr. Gagnier to explain the rate for personal use of vehicles. Mr. Gagnier explained under current law and regulations, an employee can decline to use a state vehicle that is available. If he or she does decline, then he or she is paid a much lower rate. He cited the current rate at 15 cents per mile. Senator O'Donnell asked if this money comes from the travel budgets for departments? He asked if the fees increase, will the agencies come back to the Senate Committee on Finance to have more money allocated to budgets? Mr. Gagnier responded the bill cites a fiscal note, although one has not been created. He said a fiscal note is rarely created for this bill. He stated that historically whenever the Legislature has increased the mileage rate, the Legislature "has required every agency to `eat' the increase." He added no adjustments or appropriations are made. Senator O'Connell closed the hearing on A.B. 555 and opened the hearing on A.B. 586. ASSEMBLY BILL 586: Revises provisions governing committee on benefits. Marty Bibb, Lobbyist, Retired Public Employees of Nevada (RPEN), testified first on A.B. 586. He explained their agency represents 6,500 retired city, county and state, and other local government employees. He said this bill would recompose the Committee on Benefits to change it from five to seven members. He testified the members would be chosen more consistently. He explained the composition of the committee and how each of the members are chosen. He provided an handout to the committee (Exhibit C.) Mr. Bibb stated he believes the bill brings consistency to the selection process. He said the Governor should appoint everyone in the same manner. He said the enactment of this bill will give uniformity to the process. Doug Byington, Lobbyist, Nevada Association of School Administrators, testified next. He stated support of the bill. He noted the bill restructures the existing committee by adding two members. He added there is a nominal fiscal impact, which will not seriously add injury to the budget. He said the bill will allow the Clark County members to have input into the committee. He said presently they attend meetings and voice their concern, but this bill would allow them to submit three names to the Governor for possible inclusion. He said it does not mean that they would get the position, but they would have the chance. Senator O'Connell asked if Mr. Bibb and Mr. Byington attend the meetings held by the Committee on Benefits. She asked if the agenda provides for public testimony? Mr. Byington stated he cannot answer her question; he does not attend the meetings. Continuing her questioning, Senator O'Connell asked if a problem perpetuated this bill? Mr. Byington responded an overload on certain areas in the committee created this bill. Mr. Byington stated that the whole purpose behind group insurance is to have one group and bid. Presently, some groups within that large insurance pool are being rated separately because the Committee on Benefits has that authority. He stressed, "At least the other groups would have a chance to have some input on why they shouldn't be rated separately." Mr. Bibb stated under the proposal in A.B. 586 the groups would submit lists of names from which an appointment or appointments would be made. He said there is no requirement that the committee member be a member of the Retired Public Employees of Nevada. He said this would create more uniform appointments. He explained there are 6,500 members in the Retired Public Employees of Nevada, and 1,500 of them are participants in the group insurance program in the state. Senator Porter asked how many groups are involved in the process, not on the board, but members in the system. Mr. Bibb stated there are about 23,000 to 24,000 persons enrolled in the state group-insurance program. He said about 18,000 of those are active state employees; 4,000 are retirees; and there are some nonstate agencies in the plan as well. He explained there are local government types in the plan. Senator Porter asked if the committee should open it up for all groups to have representation on the board. Mr. Bibb stated the intention of the bill is to give more groups who are participants in the program an equal footing with others who are representing people covered in the plans as well. Clarification and discussion of the bill followed. Mr. Bibb testified group insurance is changing and a broader range of people is enrolled in the plan than ever before. He stated the intent of the legislation is to recognize that and would reflect those covered by the insurance. Senator Townsend noted the committee size change and then the specific nature of who is picked to sit on the committee. He asked if enlarging the number is appropriate, would Mr. Bibb be opposed to eliminating the specific groups and saying the Governor may choose six persons? Mr. Bibb stated he preferred the proposal's approach. Perry Comeaux, Director, Department of Administration, testified in support of the bill because it increases participant representation on the committee. He said it would allow the Governor to appoint another active state employee who is not a member of the State of Nevada Employee Association. He said the bill will allow him to have someone to represent him when he is unable to attend meetings. Discussion ensued on how membership on the board is selected. Mr. Comeaux explained they compose the board of five members. The Board of Directors of SNEA appoints two members. One appointment is a retired individual. The last appointment is open, but traditionally the Governor has appointed someone from the university system for that position. Senator O'Connell asked if SNEA represents most of the employee groups? Mr. Comeaux stated that SNEA would probably say that. He said SNEA represents 23.7 percent of state employees. He stated other unions represent 13 or 14 percent of state employees, with Service Employees International Union (SEIU) representing 7 or 8 percent. Senator O'Connell asked if SNEA represents the interest of the other state employees. Mr. Comeaux stated he would not offer an opinion on that, but he is sure that SNEA would think so. Jim Richardson, Lobbyist, Nevada Faculty Alliance, stated his support of the bill. He reiterated three points of the bill. The bill changes the way they appoint the committee. He stated SNEA represents 40 percent of the membership on the board, but there would be sharp disagreement about whether SNEA represents the interest of all state employees. He said this bill will change the committee so that the Governor appoints all members, as opposed to the Governor appointing three out of five. Mr. Richardson explained the second point of the bill enlarges the membership of the committee, changing it from five to seven. He explained the Legislature has allowed nonstate public entities to become part of this insurance plan if they could not get good rates elsewhere. He said there are protections in the law for separate rating of such groups if there are more than 100 members. He stated the committee has never been representational of these entities. He said a local government representative, recommended by the groups, and appointed by the Governor, could be on the committee. He stated it would add a position for the SEIU group that has shown remarkable growth in recent years. He suggested they deserve representation. He stated he approves of the part of the bill that says, by law, one position on the board would go to a professional employee at the university system. He reminded the committee they have done this by custom, but it is defined in law as an "at large" position. He said there are almost 5,000 employees at the university and college system who participate in the plan and they deserve representation. Mr. Richardson stated this bill gives Mr. Comeaux the ability to appoint someone to attend meetings if he is unable to attend, or appoint a permanent appointee from his office. He stated the absence of the director of the Department of Administration impedes the functions of the committee. He said the committee would function better if Mr. Comeaux could send someone if he is unable to attend. Adair Dammann, Executive Director, Service Employees International Union (SEIU), testified next in support of A.B. 586. She cited the expansion of representation, and the consistency in how members are appointed as the reasons that SEIU supports this bill. She stated the Committee on Benefits has a lack of credibility with state workers. She said a roller coaster effect on rates and benefits has occurred over the last couple of years. She testified there is a health care crisis nationwide. She said anything the Committee on Benefits can do to increase the credibility of the fund and the committee will serve the interest of the taxpayers of the state. Ms. Dammann stressed that having a clear voice on the Committee on Benefits is important for all constituencies. She advocated adding a representative from SEIU, RPEN, and a representative from local government entities is important for the long-term credibility of this committee. Senator O'Donnell asked if there are identity problems with the committee? Ms. Dammann stated the committee has a credibility problem among state workers. She testified: I participated in a round of open hearings surrounding the actions of the committee in raising rates about 18 months ago. A total of 700 state workers showed up for an open hearing in Las Vegas and Carson City. It was a very ruckus, very intense experience. One state worker, who has since become a vice president of our union was gavelled out of the room. There was an attempt to adjourn the meeting in the midst of his testimony because the level of anger and suspicion among state workers was so high. Most of those workers were not members of either organization that we have talked about. Senator O'Donnell asked, "Was there a particular issue?" Ms. Dammann responded, "Rate increases and dependent care costs and benefit cuts. The problems we are having in the state fund are very similar to the problems going on in the nation right now." Senator O'Donnell asked, "The decisions of this committee affect state employees. And the decision that was made wasn't to the liking of you guys?" Ms. Dammann responded, "Yes, it was rate increases and benefit cuts. Employees don't like rate increases and benefit cuts. I don't think any state workers like rate increases and benefit cuts." Senator O'Donnell asked, "So we have a bill to change the makeup of the board, and subsequent to that you said there are going to be tougher decisions that are going to have to be made down the road?" Ms. Dammann answered: I believe the restructuring in the health care industry is pretty profound. We are in the midst of it. There's many rounds of decisions and debate yet to come in terms of what is the best, most cost- effective way to provide quality services. Cost- effective and accountable to the taxpayers since the Legislature funds a good proportion of the health benefits provided to state workers. Unfortunately, state workers provide a lot of their own funding and that becomes the issue -- the out-of-pocket rate increases for state workers. I believe that broadened representation is going to assist all of us get through the next many years of debate over health care reform and health care restructure. Senator O'Donnell cited all of the groups in the state health insurance plan. He asked Ms. Dammann if the government affairs' committee will be expanding the board even farther so other people can have a voice on the board? He suggested there will be this giant conglomerate trying to run the state health insurance plan. Ms. Dammann cited all of the members of SEIU who are represented as separate entities on Senator O'Donnell's list. She said that designating two seats for SNEA and one seat for SEIU is proportionately appropriate. Gary Wolfe, Legislative Representative, Nevada Highway Patrol Association, testified in favor of this bill. He said it is time that other constituents have a say in the Committee on Benefits. He agreed with Senator O'Donnell that the committee cannot have excessive members, but he said the process will work better so that other people have a voice. He said the retirees, the school teachers and one other source should be added to the committee. He suggested the committee should become "an in- house thing with our unions and our membership." Mr. Gagnier testified against A.B. 586. He stated: ...Let me just go through some history. First off, SNEA does, in fact, appoint two members to this board. We appoint them, we don't recommend to the Governor. Our board of directors, by law, makes that appointment. We had to represent state employees for 14 years before the Legislature agreed to allow us to do this. We have made our own appointments and we feel that if we had to nominate five people to get two on there, that we certainly would not get the kind of people appointed that we really want. Our members consistently disagree with the incumbent Governor. This session has been a good example where the administration has proposed one amount to go in the budget and our two members on the committee proposed a different amount. I think one thing needs to be cleared up, because this was an incorrect statement. I was at the hearing of the committee that was held in the auditorium downstairs that was referred to a few minutes ago. You would be left with the impression that the chairman of that committee tried to adjourn the meeting and that is not true. What he did do was recess the meeting because he was so angry after having to listen to 20 minutes of personal attacks on himself. For 20 minutes a speaker droned on, attacking Howard Barrett. I don't blame him, he was so angry that he said, `We're recessed.' He went outside and lit up his pipe. I don't blame him for doing that; it was a personal attack. We don't need that sort of thing. The Committee on Benefits has had to make some very difficult decisions since the 1991 session of the Legislature. The 1991 session did not appropriate enough money for the health insurance program. Faced with drastic increases in medical inflation, the Committee on Benefits . . . they did make those tough decisions. One of the members of this committee was present at that meeting. But after the committee acted and did in fact propose to reduce benefits and increase the dependent rates, Senator Townsend left the meeting and told the media that that committee had `Bit the bullet.' The SIIS [State Industrial Insurance System] board of directors had not and that was what many of us believe led to the problems we have had with workers' compensation since then. For taking the drastic action that was necessary, this committee has been attacked and vilified. I'm telling you, those hearings were terrible. ...Quite frankly, most employees want to have a health insurance plan that pays 100 percent of benefits and doesn't cost them a dime. That is what they want. It is not what they are going to get. It is not feasible anymore. There may have been a time when it was. We have other problems with the bill. Under this bill the director of administration would be able to send a substitute. We don't mind a provision in the law that says the director of administration or his designee. What we would object to though is if that could change so that at this meeting of the Committee on Benefits you have Perry [Comeaux] and at the next meeting you have Don [Hataway] and the next meeting you have . . . whoever. Either the director of administration or his designee should serve on the committee full-time. If it is not going to be that way, why not let the other members of the committee also have alternates that they could have attend whenever they want to? Now we come to a very important policy issue which has been touched upon; that is whether our health insurance is a state employee program, or a public employee program? Here's a case of giving a little to those who want to take a lot. When this plan started out, it was, in fact, a state employee health insurance plan. Then we had a few small local governments who could not get health insurance and they asked to come into the state plan. That was then expanded, and we objected and we said at the time, `This is just a start.' I believe I said to the chairman of this committee at that time, Senator Gibson, that this was the start and he used the analogy of the camel's nose under the tent. We said, `If you let these local governments come in, pretty soon they are going to want a member on the committee.' The legislators said, `Well, that will be up to us,' and it is, because here they have come and they want a member on the committee. Why don't they get their own program? Why don't they go into the League of Cities plan? We have never wanted local governments in our plan because it is a state employees' plan. We do not have the option of going and joining the Clark County classroom teachers' plan. We don't have a chance to go into any local government's plan, but they want to come into ours. Already, now we heard it, and it was heard here today. Under the current law, the Committee on Benefits can separately rate the larger local government entities that come into the plan. They want to get rid of that and this is the start. There is a bill in the Assembly to do it. They want to get rid of that separate rating so that they will pay the same as state employees, whether they cost the plan more or not. ...If you are inclined to pass this bill, what we would like to ask for is an amendment to this bill to allow unions to set up their own health insurance program for their members. We would like the ability to go out and set up our own health plan for our members rather than be in a plan with local governments and retirees from all other local governments. They can all come and join our health plan whenever they want, and you will see that in A.B. 328. So give us the opportunity to do what they want, and that is have another plan, have an option available. There is a bill working its way through the Assembly, A.B. 144, it will allow the university to set up their own health insurance plan. I am not sure that was the original intent of the legislation, but that is one of the things that it does. If they set up their own health insurance plan, and A.B. 586 they would still have a member on the Committee on Benefits, we would object to that. ASSEMBLY BILL 328: Provides annual period of open enrollment during which certain retired public employees may join state's program of group insurance. ASSEMBLY BILL 144: Broadens permissible investment of money polled by public agencies or nonprofit medical facilities for insurance. We have never had a problem with retired state employees selecting their retired member. If the retired employees want to appoint somebody, they should have that opportunity. Senator O'Connell closed the hearing on A.B. 586 and opened the hearing on A.B. 608. ASSEMBLY BILL 608: Revises provisions governing Virgin Valley Water District. Warren Hardy, Lobbyist, Virgin Valley Water District, testified in favor of the bill. He explained the Virgin Valley Water District is the geographic area of Mesquite and Bunkerville. He told the committee the bill that formed the Virgin Valley Water District last session, gave the district the ability to annex the Bunkerville Water District. He said these two entities merged. He said this bill will clean up the language from the bill from last session with one substantive change. He explained the assets, obligations and membership of the two entities merged. He stated the substantive change allows the board members to receive salary for their work on the board. He stated this is consistent with other boards of this type in the state. Senator O'Connell asked if the pay for the board members will come from the ratepayers. Mr. Hardy responded this is correct. Senator O'Connell asked Mr. Hardy to provide a copy of his section by section analysis to Senator Porter since this is his district. Senator O'Connell asked if there was opposition to this bill in the Assembly. Mr. Hardy responded, "No, there was not." Senator O'Connell closed the hearing on A.B. 608 and opened the hearing on A.B. 369. ASSEMBLY BILL 369: Authorizes governing body to direct hearing examiner to take final action on matters relating to variances. Mary Henderson, Government Affairs Director, Washoe County, stated this bill does two things. She said there is a change of obsolete language, but the heart of the bill is section 2. She noted it will streamline the hearing examiner process on zoning matters and said it will allow the hearing examiner to make final decisions. She said an ordinance will establish policy that requires public hearings. She drew the committee's attention to the appeal process and stated there is an appeal process to the governing board. Senator O'Connell closed the hearing on A.B. 369 and opened the hearing on Senate Bill 303. SENATE BILL 303: Makes various changes concerning purchasing by state and local governments. She told the committee there is a proposed amendment from the Assembly and the committee needs to vote to concur or not to concur. She said the Assembly changed page 2, section 3, line 2. The Assembly has deleted a misdemeanor and inserted gross misdemeanor. A discussion followed. SENATOR TOWNSEND MOVED TO CONCUR WITH THE ASSEMBLY AMENDMENT. SENATOR SHAFFER SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAGGIO AND O'DONNELL WERE ABSENT FOR THE VOTE.) ***** Senator O'Connell closed the hearing on S.B. 303 and opened voting on the Assembly bills heard in the meeting. There was no further discussion on any of the following bills before the committee cast votes. SENATOR SHAFFER MOVED TO DO PASS A.B. 489. SENATOR TOWNSEND SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAGGIO AND O'DONNELL WERE ABSENT FOR THE VOTE.) ***** SENATOR TOWNSEND MOVED TO DO PASS A.B. 459. SENATOR SHAFFER SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAGGIO AND O'DONNELL WERE ABSENT FOR THE VOTE.) ***** SENATOR TOWNSEND MOVED TO DO PASS A.B. 555. SENATOR SHAFFER SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAGGIO AND O'DONNELL WERE ABSENT FOR THE VOTE.) ***** SENATOR SHAFFER MOVED TO DO PASS A.B. 608. SENATOR TOWNSEND SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAGGIO AND O'DONNELL WERE ABSENT FOR THE VOTE.) ***** SENATOR TOWNSEND MOVED TO DO PASS A.B. 369. SENATOR SHAFFER SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAGGIO AND O'DONNELL WERE ABSENT FOR THE VOTE.) ***** Senator O'Connell closed the voting on the Assembly bills and opened the hearing on A.C.R. 37. ASSEMBLY CONCURRENT RESOLUTION 37: Recognizes square dance as American folk dance. SENATE BILL 81: Designates square dance as official folk dance of Nevada. Senator O'Connell asked Assemblyman Mike Schneider why the Assembly did not amend Senate Bill 81, instead of creating a new bill? Mr. Schneider responded no one in the committee wanted to make the bill a regular law. He said Mrs. Segerbloom was the subcommittee on this bill. He related that Mrs. Segerbloom had never, ever danced a square dance in Nevada, despite her many years here. He said she researched the dance and its history in Nevada. He said she suggested it become a resolution instead of a law. Senator O'Connell closed the hearing on A.C.R. 37 and hearing no further testimony, she adjourned the meeting at 3:40 p.m. RESPECTFULLY SUBMITTED: Teri J. Spraggins, Committee Secretary APPROVED BY: Senator Ann O'Connell, Chairman DATE: Senate Committee on Government Affairs June 12, 1995 Page