MINUTES OF THE SENATE COMMITTEE ON LEGISLATIVE AFFAIRS AND OPERATIONS Sixty-eighth Session March 2, 1995 The Senate Committee on Legislative Affairs and Operations was called to order by Chairman Mike McGinness, at 1:30 p.m., on Thursday, March 2, 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 Mike McGinness, Chairman Senator William J. Raggio, Vice Chairman Senator Mark A. James Senator Dina Titus Senator Bob Coffin COMMITTEE MEMBERS ABSENT: Senator Raymond D. Rawson (Excused) Senator Bernice Mathews STAFF MEMBERS PRESENT: Bob Erickson, Research Director, Legislative Counsel Bureau Brenda Erdoes, Acting Legislative Counsel, Legislative Counsel Bureau Alec Oltman, Intern, University of Nevada, Las Vegas Mavis Scarff, Committee Secretary OTHERS PRESENT: Coe Swobe, Private Citizen, Coordinator in favor of S.J.R. 13 Margo Piscevich, President, State Bar of Nevada Brooke A. Nielsen, Assistant Attorney General, Office of the Attorney General Leola H. Armstrong, Lobbyist, Common Cause/Nevada Dale A. R. Erquiaga, Chief Deputy Secretary of State, Office of the Secretary of State Ande Engleman, Lobbyist, Nevada State Press Association Chairman McGinness called the meeting to order and requested approval of two bill draft requests (BDRs): BDR 17-224 and BDR R-1800. BILL DRAFT REQUEST 17-224: Makes various changes relating to prefiling of legislative bills and resolutions. BILL DRAFT REQUEST R-1800: Commends and honors famed violinist Itzhak Perlman. Senator McGinness indicated that BDR 17-224 resulted from prefiling and will come back to this committee for full hearing. He noted that at that time the committee would revisit the entire prefiling issue. He indicated that Mr. Perlman would be in Reno on Monday. SENATOR RAGGIO MOVED FOR COMMITTEE INTRODUCTION OF BDR 17- 224 AND BDR R-1800. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAWSON AND MATHEWS WERE ABSENT FOR THE VOTE.) ***** Senator Raggio requested that for BDR R-1800, the Itzhak Perlman Resolution, the front desk prepare printed copies so that they would be available on Monday. Senator McGinness indicated he would handle that after the meeting. The Chairman opened the hearing on Senate Joint Resolution (S.J.R.) 13 and he introduced Coe Swobe. S.J.R. 13: Urges Congress to name new federal courthouse in Reno after late Judge Bruce R. Thompson. (BDR R-1433) Coe Swobe, Coordinator in favor of S.J.R. 13, thanked the committee and indicated he is one of the group trying to persuade the federal government to name the new federal building in Reno after Bruce R. Thompson. He noted his pleasure that all 21 senators were signatories and sponsors of the resolution and identified Exhibit C which shows support by the City of Reno, the City of Sparks, the County of Washoe, the Washoe County Bar Association, and the 17 other bar associations that support the naming of this building after Judge Thompson, as well as some news clippings (Exhibit D). He commented they started last August attempting to persuade Congress. After summarizing Judge Thompson's life and accomplishments, he stated they have collected over 2200 signatures on petitions asking Congress to support this measure (Exhibit E. Original is on file in the Research Library). He also submitted letters in support of this resolution from Chief Justice Steffan, William McGrath, and Frankie Sue Del Pappa (Exhibit F). He said they hope this resolution, presented by Representative Barbara Vucanovich at the beginning of this Congress, will be passed when it is considered in the next couple of weeks, and he noted that Senator Reid and the rest of the Nevada delegation are supporting this resolution. He then introduced Margo Piscevich, President of the State Bar of Nevada. Ms. Piscevich noted that the State Bar of Nevada passed a resolution in June, 1994, requesting that the courthouse be named after Judge Bruce Thompson. She indicated she could speak for all the lawyers that had appeared before Judge Thompson saying that they all have a great deal of respect for him, not only his intellectual abilities, but his good sense of humor. She said that these lawyers, as well as, the members of the State Bar of Nevada support this resolution. She noted that she thinks that this resolution would be the thing that would get the congressional resolution passed in the next couple of weeks, and she thanked the members on behalf of the State Bar of Nevada. Senator Raggio indicated his appreciation that all 21 senators had joined in this resolution and thanked Ms. Piscevich for her efforts in bringing this forward. He noted that he, too, had the opportunity of appearing before Judge Thompson and he said "there's no question that he was the preeminent jurist on the federal bench throughout this century." Chairman McGinness closed the hearing on S.J.R. 13 and opened the hearing on Senate Bill (S.B.) 169 and recognized Senator Coffin. SENATE BILL 169: Prohibits certain political contributions by lobbyist during legislative session and prohibits subcontracting by legislators. (BDR 17-31) Senator Coffin noted that a handout was being distributed (Exhibit G) and said that there is additional written support from the attorney general. He said that S.B. 169 came out of life experience, and is one of the reasons why they are citizen legislators, because when they encounter an area of life that needs correction, they are in a position to propose change. He stated that this bill tunes up two important parts of the statute that relate to their ethics: one being that portion of the law relating to their acceptance and/or solicitation of campaign work or money during a legislative session; and the other was a piece of the law the legislators thought they had corrected in 1987. Referring to S. B. 169's first provision dealing with legislators contracting, Senator Coffin recalled an incident whereby a senator said he could construct a sewage settling pond at one of the prisons for about 1/4 of what the Public Works Board indicated they should appropriate for it; however, since he was a Legislator receiving funds from appropriations, the situation became controversial, and he ultimately did not do the job. He said the 1987 session passed Assembly Bill (A.B.) 127 of the Sixty-fourth Session which carefully spelled out the conditions under which legislators could do business with the state. ASSEMBLY BILL 127 Of The SIXTY-FOURTH SESSION: Authorizes legislators to enter into certain contracts. Senator Coffin said that by building a legislative record that was so strong, which, in essence, said that a named contractor-legislator could not receive money, unless he or she qualified under certain exceptions, they opened up a loophole whereby someone who was essentially a named or unnamed subcontractor could participate and, in fact, bid on a job. He then exemplified the situation using the sample contained in Exhibit G. Senator Coffin said the other portion has to do with an incident that occurred in the last session when an approach was made to a legislator offering funds in an obscure fashion, either for immediate payment or for the next campaign. He stated that to create a level playing field, lobbyists should be under the same stringent rules for penalties that legislators are, and this was what this bill does. He concluded saying that others, who have seen S.B. 169, will be submitting amendments to correct a "real big loophole" regarding fund raising by lieutenant governors-elect and governors-elect in the period of time before and during the session, and noted his support of these amendments to strengthen the bill. Senator Coffin introduced Brenda Erdoes, Acting Legislative Counsel, Legislative Counsel Bureau, stating that she would explain the nuances of the statutes and the differences between the ethics codes and the lobbyist's portions of the statutes showing why the bill needs to be tuned up. Ms. Erdoes said that S.B.169 adds a provision to the lobbyist's section which would state that a lobbyist cannot make a contribution that is prohibited by Nevada Revised Statutes (NRS) 294.300. NRS 294A.300 currently has a provision in it stating that the Governor, Lieutenant Governor, or a legislator cannot accept or solicit a contribution: it does not have a provision that says someone may not make that contribution. She said that Senator Coffin has chosen to put a provision into the lobbyist act in chapter 218 of NRS bbyists from making such contributions. She indicated the penalty for violating the provision is a misdemeanor, as is the provision in chapter 294A.300 of NRS which applies to legislators. Senator McGinness asked that as long as he does not go out and ask somebody for a contribution, but if somebody came by his office and dropped off a check, would that be all right, because he did not solicit it? Ms. Erdoes replied he would still probably not be fined if he accepted it; the key being whether or not he accepted the check. She emphasized that a criminal penalty is put on the person who dropped off that check, making that person guilty of a misdemeanor. She confirmed that currently legislators are not allowed to accept or solicit a check, and that at the point at which they accepted the check, they would be guilty of a misdemeanor. Continuing, Ms. Nielsen noted that Senator Coffin had already spoken about the letter they submitted regarding S.B. 169 (Exhibit H), and affirmed that the attorney general's office does support both section 1 and section 2 of S.B. 169 . She stated that they believe both of these changes in the law are important in that they would expand the public policy with regard to preventing conflicts of interest by legislators, and also make it a criminal act for a lobbyist to offer a campaign contribution during the session, during the 30 days before, or the 30 days after the session. Leola Armstrong, Lobbyist, Executive Director, Common Cause, Nevada, spoke from Exhibit I. Dale A. R. Erquiaga, Chief Deputy Secretary of State, Office of the Secretary of State, noted Senator Coffin had mentioned that the secretary of state's office is pleased to support section 2 of the S.B. 169; however the secretary takes no position on section 1 as it is not an area over which he has jurisdiction. He said that Mrs. Armstrong had already pointed out one of the items which he wanted to bring to their attention which is the need for this statute to address lieutenant governors-elect and governors-elect, and, he added, the secretary of state's bill that amends chapter 294A of NRS will contain that language. Mr. Erquiaga stated: The other amendment that the secretary of state will be proposing ... which I would suggest that this body consider, comes at line 1 on page 3 of Senate Bill 169. The current period established by [NRS] 294A, and would be extended here, begins 30 days before a regular session. As the committee is familiar, campaign reporting ends 30 days after a general election. What that causes is a period of anywhere from 6 to about 13 days where no reporting can occur until 2 or 4 years later. It's the secretary of state's position that this dark period during which you not receive or solicit any monies and now under which lobbyists not offer you any monies, ought to coincide with campaign contributions. So that language would be amended to read 30 days after a general election and ending 30 days after the final adjournment of a regular session. That means that the reports that are issued on January 15th are accurate, and they will contain all of the monies that you receive prior to the start of session, instead of having that little 8 day window where they could have given you a little bit more money that won't be reported for 2 or 4 years depending on when you all choose to run again. Senator James asked why they do not just extend the reporting time to cover the black area? Mr. Erquiaga replied that the reporting period covers all offices, not just the legislators. He said legislators are the only people in the state who have this time during which they cannot accept contributions. Senator James continued, asking why they cannot just move the date so a legislator reported everything that he had gotten up till the time that he could no longer solicit or accept campaign contributions? Mr. Erquiaga replied that they are certainly welcome to do that as they are the only people to whom a limit applies, but it seems more sensible to the secretary of state's office to change the legislator's date rather than everyone else's date, because the 30 days after reporting period applies to every public officer and every candidate. He said the legislators are the ones who are affected by this time frame and they were welcome to move the reporting date to any period they see fit. Senator James asked if the secretary's bill addresses the fact that there is this limitation on legislators, the Governor, and Lieutenant Governor but not on other public officers of the state? Mr. Erquiaga replied that it does not. Ande Engleman, Lobbyist, Nevada State Press Association, indicated that the press association fully supports S.B. 169 as presented by Senator Coffin as well as the amendment discussed earlier. She explained that in December she received a faxed copy of a letter from Lt. Governor Lonnie Hammargren. After checking with the secretary of state's office, she learned the fund raising letter was exempt from the ethics law forbidding the requesting of campaign funds within 30 days of the Legislature, and she urged that the loophole covering the Governor-elect and the Lieutenant Governor-elect be plugged. Senator McGinness closed the hearing on S.B. 169 and opened the hearing on Senate Joint Resolution (S.J.R.) 2. SENATE JOINT RESOLUTION 2: Urges Congress to propose constitutional amendment to limit power of courts to levy or increase taxes. (BDR R-88) Senator Raggio said that in 1993, Missouri State Senator Walt Mueller brought S.J.R. 2 to his attention, by identifying an effort that the country was dealing with the untenable situation of federal courts directly, through their actions, imposing taxes and thereby evading the legislative process. He stated: This came about as a result of a 5-4 decision on April 18, 1990, where the U. S. Supreme Court extended the power of the legislative branch beyond most of what most of us feel were defensible bounds. The decision was Missouri vs. Jenkins and in that case, as I said by a split 5-4 decision, the U.S. Supreme Court held that a federal court had the power to order an increase in state and local taxes. And I'm quoting now from Senator John Danforth, United States Senator from Missouri, who in commenting on this said, `This unprecedented decision violates the fundamental tenet of separation of powers. Those who serve for life answerable to no one, should not have control over the powers of purse' (Exhibit J). The resolution before you is one that is now being considered by other legislative bodies and I think is extremely important today. One of the arguments that those who voted in the U.S. Senate against the balanced budget amendment, believed, particularly United States Senator Sam Nunn of Georgia, was that if they imposed the balanced budget amendment that it might set up the situation where the federal courts would in turn be levying taxes. So this is ironically extremely timely that we have it scheduled for today. Four states have enacted similar resolutions, as I indicated; Missouri, New York, Tennessee, and Colorado, and over 20 other states are presently considering this same legislation. Now I realize it's only a resolution urging Congress, but I think Congress these days is listening more intently, not only to citizens, but certainly to legislators around the country. This would urge Congress to propose a constitutional amendment which would clearly limit the power of courts to levy or increase taxes. Senator Raggio introduced his intern from UNLV, Alec Oltman, noting that Mr. Oltman would tell the committee all the reasons why this is a good measure and one that should be endorsed by this body. Mr. Oltman said this resolution stems from the court case of Missouri vs Jenkins where, in September, 1987, District Court Judge Clark ordered that the Kansas City, Missouri, School District along with the state of Missouri, increase their tax in order to provide for a magnet school. He indicated the problem is that the Kansas City School District was limited by the Missouri constitution and statute as to how much they could tax, and the Eighth Circuit Court ruled that what is important, is that the tax be raised and the program continue, not the Missouri Constitution or the Missouri statutes. He noted that the circuit court actually raised the amount to be levied over what the lower court had said the amount should be: the lower court had originally suggested that the fee be $1.70 increase in property tax, but the district court recommended that a $1.95 increase in property tax would be more appropriate, and instead of the fee ending in the 1991-1992 fiscal year, the district court said that tax should continue as long as the program continued. Mr Oltman said this is an example of a completely unchecked judicial branch; that once the court took the power to tax and the power of the purse for itself, there are no constitutional safeguards to limit this power and the court could continue a tax for as long it wants. S.J.R. 2 goes hand-in-hand with S.J.R. 1 , dealing with the 10th amendment and unfunded mandates, in that the courts have taken the power to fund any type of federal mandate that they feel is necessary. He emphasized that S.J.R. 2 and a constitutional amendment by Congress would help to prevent that. SENATE JOINT RESOLUTION 1: Claims sovereignty of State of Nevada over all powers not enumerated and delegated to Federal Government by Constitution of United States. (BDR R-428) Senator Titus asked that was it not true that the case was appealed and that there was decision handed down by the supreme court that did not allow the court to impose the tax, and made the court order the school district to impose the tax? Mr. Altmann said that is correct. He amplified, stating that the case was appealed to the supreme court and that resulted in the split decision: The majority for the supreme court said that all the lower court was doing was ordering the school district to increase the tax, that the circuit court was not increasing the tax itself, and the majority thought that was a major distinction. Continuing, he said, the dissenters, the minority, including Justice Kennedy, felt that the distinction was not there, that whether they ordered the school district to increase the tax, the state to increase the tax, or if the court increased the tax itself, the end result was still that the tax was raised, and they did not see the distinction. Senator Coffin agreed, saying they have been in complicity with the courts in some respects because they have not revolted before when federal judges have literally increased their budgets forcing taxes up because certain standards in prisons or in jails were not met. He asked if it was possible, that if Congress were to make a move in this regard, in any other fashion other than in a constitutional amendment, they would strike it down: Do we have to do an amendment? Senator Raggio noted this is a resolution urging Congress to pass such an amendment, that it has support from both parties, both at the congressional level and across the country, and it is the firm feeling that unless that amendment is in place, the courts will continue to do one of the three things to which Mr. Altmann alluded, and Senator Raggio felt that it is form over substance, because the end result would be that the courts, acting in that situation were, in fact, creating a levying of tax, or causing the tax to be levied. He said some courts have done it directly, as indicated and some have ordered, under penalty of sanctions, that the taxes be raised. He declared, that unless the amendment is enacted, there would be no ability to restrain that action on the part of courts which, he and everyone who is behind this, firmly agree, was never intended under the separation of powers, to be within the province of the court. Senator Raggio thanked Mr. Altmann for the time and effort he expended getting the information which was the backup for this resolution. Chairman McGinness closed the hearing on S.J.R. 2, and indicated he would entertain a motion on S.J.R. 13 unless there was further discussion. SENATOR RAGGIO MOVED TO DO PASS S.J.R. 13 . SENATOR JAMES SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAWSON AND MATHEWS WERE ABSENT FOR THE VOTE.) ***** Senator Titus said Larry Struve asked her if she would request, on his behalf, a resolution out of this committee which would be a follow-up to the Gold Hill Gathering that met last year which was composed of public officials from the north to discuss the importance of public input into decision making. She said this is a resolution to urge every governmental body, public agency, and public support institution to encourage citizen participation in the process of governance (Exhibit K). There being no discussion, Chairman McGinness requested a motion. SENATOR TITUS MOVED THAT THE COMMITTEE REQUEST A BILL DRAFT REQUEST FOR THE RESOLUTION. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAWSON AND MATHEWS WERE ABSENT FOR THE VOTE.) ***** Chairman McGinness asked it there was further discussion on S.J.R. 2? SENATOR TITUS MOVED TO DO PASS S.J.R. 2. SENATOR RAGGIO SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAWSON AND MATHEWS WERE ABSENT FOR THE VOTE.) ***** There being no further business, Chairman McGinness adjourned the meeting at 2:32 p.m. RESPECTFULLY SUBMITTED: Mavis Scarff, Committee Secretary APPROVED BY: Senator Mike McGinness, Chairman DATE: Senate Committee on Legislative Affairs and Operations March 2, 1995 Page