MINUTES OF THE SENATE COMMITTEE ON LEGISLATIVE AFFAIRS AND OPERATIONS Sixty-eighth Session June 6, 1995 The Senate Committee on Legislative Affairs and Operations was called to order by Chairman Mike McGinness, at 2:00 p.m., on Tuesday, June 6, 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 Raymond D. Rawson Senator Mark A. James Senator Dina Titus Senator Bob Coffin Senator Bernice Mathews GUEST LEGISLATORS PRESENT: Senator Ann O'Connell, Clark County Senatorial District No. 5 Senator Jon C. Porter, Clark County Senatorial District No. 1 Assemblyman Douglas A. Bache, Clark County Assembly District No. 11 STAFF MEMBERS PRESENT: Lorne Malkiewich, Director, Legislative Counsel Bureau Robert E. Erickson, Research Director, Legislative Counsel Bureau Mavis Scarff, Committee Secretary OTHERS PRESENT: Elizabeth Fretwell, Strategic Issues Manager, Clark County Michelle Gamble, Lobbyist, Nevada Association of Counties Tom Grady, Lobbyist, Nevada League of Cities Barbara McKenzie, Legislative Coordinator, City of Reno Liz Breshears, Chief, Bureau of Alcohol and Drug Abuse, State of Nevada Judy Calker, Director, Center for Applied Research, University of Nevada, Reno Jan Myers, Northern District Manager, Division of Industrial Relations Ande Engleman, Private Citizen Leola Armstrong, Lobbyist, Executive Director, Common Cause Nevada John P. Sande, III, Lobbyist, Nevada Bankers Association John Adkins, Deputy Treasurer of Cash Management, State of Nevada Senator McGinness referred the committee to a request from Senator Jacobsen for an interim study of the Nevada Division of Forest and County Responsibilities (Exhibit C). Senator Raggio suggested that instead of getting a bill draft, that the committee consider it as a potential study without having a draft made, until the committee decides which studies to recommend. Senator McGinness agreed with considering the request, and placed it on the list of Senate potential studies. He asked for a committee introduction for Bill Draft Request (BDR) 17-1278 which was requested by Lorne Malkiewich, Director, Legislative Counsel Bureau (LCB). BILL DRAFT REQUEST 17-1278: Makes various changes concerning legislative counsel bureau. Senator McGinness distributed BDR 17-1278 (Exhibit D) for the committee's review. Mr. Malkiewich indicated that several months ago LCB took to the Legislative Commission a proposal to put into one bill draft various cleanup changes for LCB, and then received proposals for things that needed changing from the division and unit chiefs. He said the bill has nothing absolutely critical in it, but it contains a lot of changes that would help the functioning of LCB. The items in the BDR 17-1278 were discussed by the committee. SENATOR RAGGIO MOVED FOR COMMITTEE INTRODUCTION OF BILL DRAFT REQUEST 17-1278. SENATOR JAMES SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. ***** Senator McGinness open the hearing on SENATE CONCURRENT RESOLUTION (S.C.R.) 40. SENATE CONCURRENT RESOLUTION 40: Directs Legislative Commission to conduct interim study of laws which require counties and cities to provide specific services. (BDR R-2039) Senator Ann O'Connell, Clark County Senatorial District No. 5, said the bill originally came to the Senate Committee on Government Affairs as Senate Bill (S.B.) 183 submitted by Clark County, but the committee felt that S.B. 183 was a very broad undertaking, and that perhaps a subcommittee needed to look at the items that should be addressed by the state, by the counties, and by the cities. . SENATE BILL 183: Authorizes certain counties to enact certain ordinances. (BDR 20-161) Senator O'Connell indicated that the subcommittee took testimony concerning the areas that should be covered, including the fact that there should be an advisory committee attending the legislative committee members. She stated S.C.R. 40 is a bill requesting an interim study on the responsibilities of each governmental entity. Senator Jon C. Porter, Clark County Senatorial District No. 1, stated he is sensitive to local government concerns, and noted that there are a lot of things done at the state level that could be handled quite well at the local government, thus freeing up time both in the state, and in the next session. He commended the folks that met with the subcommittee for their genuine concern regarding the services being delivered, and indicated that the focus will mainly be in the duplication of services, noting that taxation will be discussed, but will not be one of their priorities. Senator O'Connell said the committee felt that a lot of the issues asked for by Clark County, are very simple items that really could be addressed on the local level, but for some reason the county has been advised by their district attorney that these items need state approval before they could act on them. Senator Porter said they have received some information from other states identifying their logic for going to more of a home rule, as well as some of the specific steps that they have taken. Senator O'Connell indicated that this is an issue that is being studied all across the United States, and is not something that Nevada should just leap right into. She stated that it is going to require a lot of time, a lot of very complete and thorough studying, and they do hope to learn by taking information that other states have already gathered. Senator Titus indicated her support of the bill. Senator McGinness asked if this needs a separate study from S.C.R. 14? SENATE CONCURRENT RESOLUTION 14: Creates committee to study consolidation of governmental services. (BDR R-597) Senator O'Connell replied that the two bills seemed very compatible, and noted their focus was to look at service, and then look at the function, the finances, and the structure to see how the service impacted all three of those areas. She concluded that consolidation fits right into that. Senator Coffin said he thinks any study of local government needs to incorporate some discussion of the taxation system, and how it can work, be improved, or what it does to the government, and stated he does not see how this can be done without talking about taxes. Senator O'Connell said that when the committee was looking at this issue, it was specifically stipulated that they would prefer that taxes not be the focus of the study, other than as it will naturally come into the areas that are being looked at, but rather that they would be more concerned about the function of the governments as far as their responsibilities and the direction that they were taking. Senator Coffin asked how many meetings they anticipated having? Senator O'Connell replied she thought it would take a minimum of six. Senator Coffin conceded that it was all right if taxes are included tangentially. Elizabeth Fretwell, Strategic Issues Manager, Clark County, said she wanted to reaffirm that Clark County does support this interim study, and she, along with Senator O'Connell and Senator Porter, does agree that it will take a long time, and that they are willing to work with the committee to make this system better. Senator McGinness indicated that Ms. Fretwell has additional information that she will provide to those who wish it. Michelle Gamble, Lobbyist, Nevada Association of Counties, indicated that their association has been looking at the issue of service delineation between the state and local governments for many, many years, and they offer their full support. Tom Grady, Lobbyist, Nevada League of Cities, said they fully support the bill, and they look forward to working on the committee. Senator McGinness asked if a study like this can be done, and tangentially talk about taxes? Mr. Grady said he agrees with Senator O'Connell that taxes would not be the focus, but that taxes will be discussed when you are talking about the other services, because money is the driver. Barbara McKenzie, Legislative Coordinator, City of Reno, requested that Reno be specifically named as the other charter city that would be represented on the committee. She noted that there is still room for rural representation and two more city slots. Senator McGinness closed the hearing on S.C.R. 40 and opened the hearing on S.C.R. 41. SENATE CONCURRENT RESOLUTION 41: Directs Legislative Commission to conduct interim study of cost and effectiveness of programs for treatment of abuse of alcohol and controlled substances. (BDR R- 1254) Senator Rawson said that he understands that Nevada does not have the kind of information that is needed to apply for many of the grants, and some of the federally funded programs, and that this study identifies the cost-effective treatment options, and will put Nevada in a better position to be able to apply for some of those funding sources. He said there is not a fiscal note with this bill, and he has heard figures upwards of $100,000 to do a proper study. He stated they know that remediation programs and Medicaid health care benefits are a significant part of the budget, but that they do not really have anything to demonstrate the best way to spend the money that they have. He referenced the issues of detrimental health found with the crack babies, fetal alcohol syndrome, and other direct injuries. Liz Breshears, Chief, Bureau of Alcohol and Drug Abuse, State of Nevada, stated this particular study focuses on the most frequently asked question to those who work in the treatment field, and that is how effective is treatment? At this point, she noted, they are able to give a lot of information from other states, and studies have shown that a very small part of their money actually goes to treatment. Dr. Breshears discussed the many costs affiliated with substance abuse. She cited the state of California which recently spent $2 million to study their state-funded program, and they were able to determine that for every dollar they invested in treatment, they saved $7.14 in other costs, primarily out of the criminal justice system. She said it is her belief that this is probably one of the most cost-effective ways a state can invest tax dollars, but that right now she is limited to very small studies. Senator Rawson discussed two major pieces of legislation on which the state will spend significant amounts of money: sentencing reform and Medicaid. He stated that if they ultimately want to save any of the prison costs, they probably need to invest in some drug treatment programs. He indicated that Medicaid is going to a managed care program, from which they are only going to get a onetime savings, but here, too, a significant part of the cost is with substance abuse. He stressed that the thing that they should be looking at, is how can they save some of these direct health care costs by investing in substance abuse or treatment programs, and asked how extensive does this study need to be, and how much money are they talking about? Dr. Breshears replied that Assembly Bill (A.B.) 81 asked for $100,000 over the biennium to measure the effectiveness of treatment in Nevada. ASSEMBLY BILL 81: Provides for study of effectiveness of programs for treatment of alcohol and drug abuse. (BDR S-251) She noted they had proposed that the funds be allowed to flow through to the University of Nevada Reno, Center for Applied Research, indicating that the $100,000 budget primarily went into staffing and telephone costs, because it would be conducting 6-month and 12-month follow-ups of people who had been in treatment programs, to measure not only sobriety, but the other systems that apply when people do not access treatment. Senator Rawson asked Dr. Breshears which bill she prefers to use as a vehicle for this study, S.C.R. 41 or A.B. 81? Dr. Breshears answered the plus of using S.C.R. 41 as the vehicle, is that you have a much broader perspective in terms of input from the legislature body who will be using the information. Dr. Judy Calder, Director, Center of Applied Research, University of Nevada, Reno, complimented the writer of S.C.R. 41, because the scope of the evaluation that is proposed, provides the opportunity to save money and simultaneously improve treatment. She stated an evaluation of this scope would allow legislators to make some comparisons between cost-effectiveness and treatment outcome, to determine what kinds of treatment modalities, with their associated costs, work the best for Nevada. She discussed collection of data, standardization of interviews, and elimination of bias. She noted that only a comprehensive evaluation is going to produce the kind of data that will be useful in decision making, and that it needs to be data that are non-biased. She stated that with good reliable, valid data, the cost savings that can accrue from the ability to look at hard data that are appropriately collected, coupled with the ability to match patients according to their treatment needs, can produce great savings. She continued discussing the savings possible from these two areas. She recommended that the Legislature not take dollars from treatment, but stated that $100,000 or even $200,000 will wind up saving 10 times that amount, because it will provide the ability to use the hard data to make the kinds of decisions that are needed. Senator Rawson asked if the $100,000 would be used over a 2-year period or in 1-year? Dr. Calder indicated that she would want to survey for 18 months so that if there are trends that are atypical, they can be spotted, and the curves smoothed out to give a nice complete accurate picture, which leaves 6 months for analysis, report writing, and making recommendations. Senator Rawson asked If there was an adjustment in funding downwards, would she leave out areas, or cut the length of the study, and what would be given up if the study were not all funded? Dr. Calder said the issue is not length of time, but that it is making sure that the sample sizes for each type of treatment modality are sufficient, so that they are not drawing the wrong conclusion. She stated that they also need to make sure that people have been out of treatment long enough so that the individual has stabilized after treatment; if one measures too soon, success is falsely inflated. What gets sacrificed is sample size, which is not a good thing because sample size directly affects reliability, and reliability directly affects validity. She explained the problems involved and concluded that "$100,000 would be the floor." Senator McGinness closed the hearing on S.C.R. 41 and opened the hearing on Assembly Concurrent Resolution (A.C.R.) 12. ASSEMBLY CONCURRENT RESOLUTION 12: Directs Legislative Counsel to reorganize and divide provision of chapter 616 of NRS. (BDR R-1467) Assemblyman Douglas A. Bache, Clark County Assembly District No. 11, talked about the need to reorganize chapter 616 of the Nevada Revised Statutes (NRS). He said his personal preference would be to have a benefits chapter, and administration, self-insured type chapter, and a chapter dealing with the system, but the bill drafter advised him that the LCB would be the best one to make that decision. Senator Raggio asked Mr. Bache if revising the chapter should be something that LCB can do, or do not they have the authority? Mr. Bache replied that he thinks they do, but passing this resolution will highlight this particular chapter. Mr. Malkiewich said one of the legislative counsel's duties is as statute reviser, and in the course of codification of NRS they occasionally will reorganize a chapter. What this resolution would do, he noted, would be to direct LCB to do it, and would provide more time than usual, because this is a very complex issue. He described the process of codifying NRS and concluded saying, if the committee wants this done, then this sort of direction is something to ensure that it is done. Senator Raggio asked if there are other areas that are under contemplation for chapter revisions? Mr. Malkiewich replied that the only other thing he can think of is looking at the banking titles, because of the similarities between banks and other financial institutions, but indicated that would probably take some substantive legislation. Senator Raggio asked if he can do this within his contemplated budget? Mr. Malkiewich replied that he could. Senator Raggio asked if he had any objection to this? Mr. Malkiewich replied he did not, and indicated that he had talked to the Legislative Counsel about this, and she has no objection. Jan Myers, Northern District Manager, Division of Industrial Relations, spoke in favor of this bill, indicating that chapter 616 of NRS is very complicated to work with. Senator McGinness closed the hearing on A.C.R. 12 and opened the hearing on A.C.R. 11. ASSEMBLY CONCURRENT RESOLUTION 11: Amends Joint Rules of the Senate and Assembly to provide for enforcement of requirements that all meetings of legislative committees be open to public. (BDR R-442) Mr. Malkiewich walked the committee through the individual subsections of A.C.R. 11. Senator Coffin indicated he has been comparing the language in A.C.R. 11 to S.C.R. 20, and the means by which a violation of that rule comes to the attention of the houses. SENATE CONCURRENT RESOLUTION 20: Amends Joint Rules of the Senate and Assembly to establish policy regarding sexual harassment and procedures for administration of related claims. (BDR R-1556) Senator Coffin said in S.C.R. 20 complaints go directly to the leaders of the house unless the complaint involved a leader, in which case it goes to the director; in this bill it goes directly to the director before it goes to leadership. He said it seems that it puts a lot of pressure on the director, and puts the director in "harm's way" because obviously all these complaints involve actions by his employers. He asked if Mr. Malkiewich had thought about that? Mr. Malkiewich replied that the sort of procedure the committee wants is a substantive decision. However, he noted, the director is not determining whether there was or was not a violation, just whether this really states a complaint; he is determining whether the allegation, if true, would be a violation; and if not, then the complaint would go no further. He said as far as being put in the middle, that is part of the job. Senator Coffin said no matter how hard one tries, the director cannot stay out of the political arena, as exemplified by the number of opinions and clarifications that were issued on the lobbyist disclosure bill. He asked if Mr. Malkiewich sees the same sort of problem occurring with this bill? Mr. Malkiewich stated he thinks that is an excellent example, though that is an area where the director has been charged with enforcement and will make judgment calls based upon his interpretation of the appropriate standard. He explained that in A.C.R. 11 the procedure is when someone alleges that something was done wrong in a hearing, and the director tries to explain to that person, and the person does not buy the explanation, then the complaint would be sent to the majority leader or the cospeakers immediately. He noted that there is a concern that people might see this as a procedure for just raising a general grievance concerning a bill. Ande Engleman, Private Citizen, indicated that she had been working on Nevada's open meeting law since 1983, and that this bill is a result of an interim study that was looking at public access to the Legislature during the last session. She said one of the things that happened during the 1993 session, was that there were a number of complaints about committees violating their rules regarding openness. She noted that in two cases, she filed complaints against the committees with the leadership, the majority leader in the Senate, with the speaker in the Assembly; the complaint was handled in the Senate, but in the Assembly, absolutely nothing was done. She said it suddenly came to her attention that there was no punishment, there was nothing that happened if a committee violated committee rules, Assembly rules, or Senate rules. She stressed that there needs to be some sort of process that people can follow who have a genuine grievance, or feel that they have been unfairly handled in violation of rules at the Legislature. She agreed that the process in A.C.R. 11 is lengthy, complicated, convoluted, and would be very difficult for the average person to follow, much less understand; and she said that she actually prefers the process that Senator Coffin referred to. However, she stated, at the hearing on open meeting law the other day in the Assembly, Legislative Counsel Brenda Erdoes said that she is going to be issuing a new opinion that the Legislature, during their interim, no longer falls under Nevada's open meeting law; so, Ms. Engleman noted, the Legislature is going to have to look at some enabling legislation under the constitutional amendment, that will address the Legislature in session and out of session. Senator McGinness asked if the Assembly committee addressed the issue relating to issuing a letter of reprimand or taking other punitive measures? Ms. Engleman stated that they did, and it can be determined by the committee or by leadership. She said she does not think the violations are substantive. Leola Armstrong, Lobbyist, Executive Director, Common Cause Nevada, read from Exhibit E, and stated she walked herself through the procedures after she read the resolution, and indicated the whole thing is far too complicated, and it should be boiled down to at least presenting the complaint, then having a hearing, and be done with it. She stated she would be very comfortable if they would give this to the director for screening, and then take it either to a committee composed of the leadership of both houses, or the Legislative Commission. She, too, agreed with Senator Coffin, that the sexual harassment process is a little easier for people to work with. Senator McGinness closed the hearing on A.C.R. 11 and opened discussion on Assembly Bill (A.B.) 563. ASSEMBLY BILL 563: Revises provisions governing reimbursement of certain expenses of legislators. (BDR 17-1901) Mr. Malkiewich said that during the hearing on this bill, the question arose as to whether a legislator, who is reimbursed for renting furniture rather than transporting it here, would have that expense made taxable, whereas a travel allowance might not be taxable. He noted that this expense would be taxable, but also would probably be deductible as a legitimate expense as a legislator. Mr. Malkiewich said he believes that the amounts that are shown as moving expenses are also reported as income and are deductible. He noted that rental costs could not exceed the cost of moving the furniture to and from Carson City. SENATOR RAGGIO MOVED TO DO PASS ASSEMBLY BILL 563. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR TITUS VOTED NO, SENATORS RAWSON AND JAMES WERE ABSENT FOR THE VOTE.) ***** The chairman opened the discussion on S.C.R. 32 and distributed Exhibit F pointing out the simplified version on the bottom of the page. SENATE CONCURRENT RESOLUTION 32: Amends Joint Rules of Senate and Assembly for 68th legislative session to require standing committees that review budgets of state agencies to require agencies to collect revenue through use of lock boxes when practicable. (BDR R-608) John P. Sande, III, Lobbyist, Nevada Bankers Association, said that at the hearing on lock box services, his association suggested that the language be broadened, since there are electronic, and also receivable processing services, that are coming into the modern era. From discussions with the treasurer's office, he stated that they would recommend the following changes in the simplified version at the bottom of Exhibit F: Strike the words in the third line from the bottom `contracting with the financial institution for' and add `utilizing' instead, so it would read `this may be facilitated within the agency or by utilizing receivable processing services which meet this time frame' Strike the remainder of that sentence that starts with `and deposit the funds in the appropriate state account.' Senator Coffin asked Mr. Sande to go over the concept of the bill once more. Mr. Sande said the concept of the bill was to insure that all deposits by state agencies were processed as promptly as possible, and indicated that the traditional way of using lock box services, is where the agency would contract with a financial institution or someone else, and the payment would be sent to a certain box, where they would immediately be deposited. However, he stated there are now numerous technologies, such things as electronic transfer, and they wanted them to be an alternative that agencies could consider, if it was cost-effective and made sense for the agency. Senator Coffin asked if it will be possible to deposit documentation and a check at a financial institution? John Adkins, Deputy Treasurer of Cash Management, State of Nevada, said that process is being contemplated right now in the Department of Taxation, and will be installed probably by September. He stated they are just trying to say that there are many cash management activities or facilities available, and not just limit the bill to one lock box. Senator Coffin asked if each agency would do a cost benefit analysis to determine if the interest paid by the financial institution minus the cost of handling the transaction would benefit the agency? Mr. Adkins agreed, and added that the treasurer's office does a cost analysis of the chosen procedure to show that it is a benefit to the state before it is agreed to. Senator Coffin confirmed that the institution would immediately start to pay some sort of interest earned, and have a charge? Mr. Sande said there will be a charge, and assuming that the deposit was held with that institution, assured that they would have an interest relationship with the state agency. Senator Coffin asked if Mr. Sande feels that this will benefit the state? Mr. Sande replied that this makes good sense, because the quicker the revenue gets in, the less float the state loses. Mr. Adkins said that with respect to interest earnings, most people, when they have money coming into the state, do not realize that when the money hits the lock box, or any of the operations, the money is in the state's banking system, and the state is investing those funds at that time. He said even though the money has not been reported into the accounting system, and the state does not have utilization of it in its budget or in its other processes, it is earning money at that time. He stated they are trying to look at days and hours of earning monies, rather than weeks as in the past. SENATOR COFFIN MOVED TO DO PASS S.C.R. 32 WITH THE ALTERNATIVE WORDING AMENDMENT READING AS FOLLOWS: TO EXPEDITE THE DEPOSIT OF STATE REVENUE, THE SENATE STANDING COMMITTEE ON FINANCE AND THE ASSEMBLY STANDING COMMITTEE ON WAYS AND MEANS SHALL, WHEN REVIEWING THE PROPOSED BUDGET OF A STATE AGENCY WHICH COLLECTS STATE REVENUE, REQUIRE, IF PRACTICABLE, THE AGENCY TO PROCESS ALL PAYMENTS OF REVENUE WITHIN 24 HOURS. THIS MAY BE FACILITATED WITHIN THE AGENCY OR BY UTILIZING RECEIVABLES PROCESSING SERVICES WHICH MEET THIS TIME FRAME. SENATOR TITUS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RAGGIO ABSTAINED FROM THE VOTE. SENATOR RAWSON WAS ABSENT FOR THE VOTE.) ***** Senator Mathews reported that she voted, indicating that her position on the board of a bank will not make any difference. Senator McGinness opened discussion on Senate Concurrent Resolution 38, and indicated that he had more information if any member needed it. Exhibit G was distributed. SENATE CONCURRENT RESOLUTION 38: Urges state and local governments to establish programs to encourage participation of residents of Nevada in development of public policy and operation of state and local government. (BDR R-1829) Senator Titus encouraged the members to do everything they could to have more participation of citizens within the process. SENATOR TITUS MOVED TO DO PASS S.C.R. 38. SENATOR COFFIN SECONDED THE MOTION. Ms. McKenzie distributed a copy of Exhibit H (Original is on file in the Research Library) and explained the material compiled in the exhibit. THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.) ***** Senator McGinness adjourned the meeting at 3:56 p.m. RESPECTFULLY SUBMITTED: Mavis Scarff, Committee Secretary APPROVED BY: Senator Mike McGinness, Chairman DATE: Senate Committee on Legislative Affairs and Operations June 6, 1995 Page