MINUTES OF THE meeting

of the

ASSEMBLY Committee on Constitutional Amendments

 

Seventy-Second Session

April 4, 2003

 

 

The Committee on Constitutional Amendmentswas called to order at 12:29 p.m., on Friday, April 4, 2003.  Chairman Harry Mortenson presided in Room 3161 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Guest List.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

Note:  These minutes are compiled in the modified verbatim style.  Bracketed material indicates language used to clarify and further describe testimony.  Actions of the Committee are presented in the traditional legislative style.

 

COMMITTEE MEMBERS PRESENT:

 

Mr. Harry Mortenson, Chairman

Mr. Bob McCleary, Vice Chairman

Mr. Don Gustavson

Mr. William Horne

Mr. Rod Sherer

 

COMMITTEE MEMBERS ABSENT:

 

None

 

GUEST LEGISLATORS PRESENT:

 

Ms. Chris Giunchigliani Assemblywoman, District No. 9

 

STAFF MEMBERS PRESENT:

 

Bob Erickson, Legislative Counsel Bureau Research Director

Michelle Van Geel, Committee Policy Analyst

Sheila Sease, Committee Secretary

 

OTHERS PRESENT:

 

Bob Price, Former Assemblyman

John Wagner, Nevada Republican Assembly

David Schumann, Independent American Party

Janine Hansen, President of Nevada Eagle Forum

David Horton, Representing the Committee to Restore the Constitution and Nevada Committee for Full Statehood

Lawrence Jacobsen, Former State Senator

Steven Hayes, Citizen

Merritt “Ike” Yochum, Independent American Party

Michael Brown, Vice President of Government Affairs, Barrick Gold Corporation

Janice Wright, Office of the State Treasurer

 

Chairman Mortenson:

[Called meeting to order.  Roll call].  We have a quorum.  [Opening remarks.]

 

Senate Joint Resolution 5:  Proposes to amend Nevada Constitution to allow Legislature to establish intermediate appellate court. (BDR C-607)

 

The work session will take about three or four minutes.  We’re going to open up S.J.R. 5 for a hearing [Exhibit C].

 

S.J.R. 5 was the intermediate appellate court bill.  We heard from Chief Justice Agosti as to how important it was.  There was zero opposition to the bill.  Is there any discussion?

 

ASSEMBLYMAN HORNE MOVED TO DO PASS S.J.R. 5.

 

ASSEMBLYMAN GUSTAVSON SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

We’ll close the hearing on S.J.R. 5.

 

 

Assembly Joint Resolution 7:  Proposes to amend Nevada Constitution to provide for limited annual legislative sessions. (BDR C-43)

 

Assembly Joint Resolution 13:  Proposes to amend Nevada Constitution to provide that special session of Legislature may be convened by petition by Legislators. (BDR C-313)

 

We’ll open the hearing on A.J.R. 7 and A.J.R. 13.  We’ll do them together.  We’ll hear from Assemblywoman Giunchigliani first.

 

Assemblywoman Chris Giunchigliani, Clark County District 9:

A.J.R. 7 was Mr. Price’s bill that I picked up when he was not re-elected.  One of the amendments that is being handed out to you [Exhibit D] is that Assemblyman Atkinson wanted to sign on even though he defeated Mr. Price.  They had talked, and he was very concerned about wanting to support this piece of legislation.  In the haste of trying to get our bills out at introduction, I did not get his signature.  If you do chose to move this, I would ask the consideration of the Committee to add Mr. Atkinson’s name to the list of sponsors.

 

The bill before you is of great import.  It is not one to be taken lightly.  This is probably the 16^th year that we’ve attempted to pass an annual session bill.  It usually passed the Assembly.  It’s not gotten out of the Senate.  Unfortunately, the year that the 120 days did get out of the Senate and the Assembly, an agreement had been made to make sure that, when we sent back over the annual session bill, it would be passed on out of the Senate, so that at least the voters would have a choice for a decision on how we should run government best.  That word, unfortunately, was not held to on the Senate side, and so we’ve not had an opportunity to put this before the voters since 1970.  In 1970 the difference was that we did not have a restriction on the number of days. 

 

This annual session bill, as the ones that we’ve offered in the past, has a restriction.  I believe it’s time, since 1970 was the last time we even brought anything to the voters—and it was in a different format—that we should have an opportunity at least to place the issue before the voters again.

 

This legislation is of importance, as well, because those of you who are serving know how difficult it is now to try to accomplish the people’s business in 120 days.  However, I do believe that, in order to be responsible, we should have a restriction on the number of days in our annual sessions, if that’s what we choose, but we need to be sensitive.  I’ve had some individuals who wanted to shorten it to 60 or 90 days, but I’m wondering now if they really want to do that after being here with 59 days left to go and feeling the frustration of how many pieces of good legislation that may not get considered because we haven’t had the time or how many pieces are not well-considered because of the time.  I think those are things that we have to take into consideration.

 

A.J.R. 7 anticipates a longer session in the first year because of the openness of the business that can be handled.  In the second year, it’s not restricted.  It’s not limited, but it really is focusing more on budget modifications, changes that have been made, mistakes that we made in passing one piece of legislation that presently you have to wait two years to go back and fix.  You can consider those types of measures.  But it does restrict the number of days in the second year to 60 days.  So, in half the time, there’s no way you can do a full budget.  That’s why there’s no recommendation from the Governor in the second year for a full budget recommendation.

 

[Assemblywoman Giunchigliani continues.]  I would point out page 2, Section 2, subsection 3.  I felt it was important for discussion purposes to say, “If we ever have facilities available, allow the Legislature to convene in the southern part of the state.”  This is not an effort to move the capital or anything along those lines, but just bringing access to government to where two-thirds of the population happens to exist.  I’m recommending in my amendment to delete that portion, because I don’t want to cause it to get a sidebar debate.  That is one of my recommendations.  We used to take, prior to the 120 days, a recess, and we’d have some committees go down to southern Nevada and hold hearings.  They couldn’t “vote,” but they could do a consensus vote and then bring it back and actually firm it in the body at the capital.

 

There may be other ways to do it without anybody feeling threatened changing the perception.  The idea was really just to bring some more input to the southern part of the state.  That’s for your discussion purposes, but I do believe that language in subsection 3 should be eliminated.

 

You’ll notice other ideas for discussion.  I do think we should explore calendar days.  Maybe this is something Mr. Erickson, Legislative Counsel Bureau (LCB), Research Division Director, can help me with.  A couple of the legislators approached me and said, “Maybe we should just say ‘no more than 120 days’ and allow us to actually take a break so that drafting can catch up for two weeks in between, or a week in between time.”  You don’t get paid during that time, so you’re still capped and restricted.  That’s just another thought for the Committee to consider.  I think Bob Erickson would be able to give any reaction that that would be not permissible.  I think that actually might help.  If anybody remembers just trying to get to the dates of getting the bill introductions, let alone committee introductions, our staff gets burned out very quickly.  I think that might be something to consider.

 

Another one was the idea that I already mentioned that maybe we’d just permit hearings to be held in the southern part of the state and then come back like we used to do, for a recess purpose.  I did not get a chance to speak to Speaker Perkins, but it’s something I’ll check into.  On page 3, this has always been, since we’ve actually had it in the Nevada State Constitution, they pay an extra $2.  I remember Speaker Dini used to complain about that, because none of them take it, but it forces them into a different tax situation that they have to file.  It’s just a lot of extra paperwork.  I’ll explore that to see if that’s still unnecessary language.  If so, you just might want to clean it up if we process anything.  It’s just one of those antiquated terms that has been there forever.  It does deal with special sessions.  Another key component on page 2 is that we’ve allowed the Legislature to also call itself into business, not just the Governor.  I think that’s a responsible approach.  We’re equal parties, but different categories.  We’re not the Executive Branch; we’re the Legislative Branch.  But we ought to have an opportunity to do that.  That’s what this language anticipates.  I know Ms. Lucille Lusk had a suggestion for capping the number of days.  I think she’s got some good ideas that the Committee might wish to consider.

 

[Assemblywoman Giunchigliani continues.]  We’ve been paid $60 for postage since 1864.  I felt that a reasonable dollar amount was $500.  It probably could go a lot higher.  Why I picked that was arbitrary and capricious.  Maybe there could be some kind of application of COLA [Cost of Living Adjustment], but I wanted to be reasonable.  Most of us have already gone far beyond the $60 allocation to communicate with our constituents.  I think that’s a responsible part of our office and an obligation of our office.  We don’t get paid well in the first place.  You should not have to go out-of-pocket to at least respond to your constituents during the legislative session.  You might want to kick around the $500, but I do think, if we’re going to be honest and upfront, then we put it in the legislation at the same time.

 

I will point out that, because you would go to annual sessions, you would be compensated.  Your legislative salary would only be for those days you work.  It’s not a salary increase, but it is an increase because it’s more days.  I think people need to be cognizant.  The public totally supports legislators being paid for days they work.  This would make it very clear.  Therefore, if this passed, you’re not doing an increase.  It’s the people saying, “Yes.  That makes sense.  I support annual sessions, and I support the notion that you’re actually going to get paid for days of work.”  I don’t think anybody should hide or be concerned about that part of it, because it’s not increasing the $130 a day that you receive.  That’s currently in statute and that has nothing to do with the constitutional change.  If we actually wanted to increase our salaries, you’d have to take a different type of action than this.

 

It just brings our initiative petition dates in line with annual sessions.  I believe that’s really the synopsis of the legislation.  I’ll try to answer any questions for you.

 

Bob Erickson handed out for you Exhibit E.  Because Lucille Lusk e-mailed me this morning and I did not have this information, I thank Mr. Erickson for pulling this together.  A concern is that maybe in the second session, you would limit it.  Out of 44 states with annual sessions, only 6 states actually limit what you can discuss or vote on in the second session.  But that’s for your information and for your consideration.  They’ve listed for you all the dates when they come into office, when they actually convene, and so forth.  In addition to that, there’s polling data.  Public opinion has consistently supported annual sessions in the state.  We’ve never been able to have an opportunity to put it before them on a ballot.  I think that is their choice.  The voters are much smarter than we sometimes give them credit for.  In my opinion, we should have had 120 days and an annual session, so that there was a counter to it for discussion purposes, but we were not afforded that opportunity, unfortunately.

 

Assemblyman McCleary:

What are the dates that you have proposed for the 60-day session?

 

Assemblywoman Giunchigliani:

Page 2, Section 2, line 2, “Except as otherwise provided in subsection 2, the sessions of the Legislature shall be annual and shall commence on the first Monday of February.”  And then you see all the lined out language.  It would still begin on the first Monday in February, as we currently do.  It would be the same for both years, just different number of days.

 

Assemblyman McCleary:

Ms. Giunchigliani, that’s going to be an election year.  Do you think we should move it to sometime in January on that particular one?  When would that put us out?  April?  [Assemblywoman Giunchigliani said, “Yes.”]  So the first week of April, we would be done for the 60-day session?

 

Assemblywoman Giunchigliani:

I think that it’s fine to discuss when you might want to start it so that it’s not as bad in the winter.  You have to think that you have the Governor, in the first year, giving you the budget within a certain time period.  That’s why we generally do it in February, and that way we can at least have time to review the budget prior to coming in and convening.  If, in the second year, you wanted to say the Monday in March, that’s your decision. 

 

Assemblyman McCleary:

I like the idea of having a two-week break in the middle of the session.  That would be a good idea, because it would give us all a break.  I’m exhausted right now.  Are you opposed to a one-week break in the 60-day session for the same purpose?

Assemblywoman Giunchigliani:

I hadn’t even thought about that.  You’re going to have the same type of time period that you’re going to have to deal with, so that would make sense—two weeks in the longer one and a week in the second one.  Maybe staff could give us some indication, but I think that would give drafting plenty of time to catch back up.

 

Assemblyman Sherer:

I have a question.  As far as the amount of legislation on the 60-day session, could we look at getting that half?  Did you get a look at that?  It would still be kind of tough to get through all the same amount of bills that we do in the 120‑day session.

 

Assemblywoman Giunchigliani:

Absolutely.  Even though only six states limit it, I think that’s worthwhile to look at budget amendments.  Maybe we would restrict how many bills legislators could request for the second year.  Instead of the ten that we get, we could perhaps cut that in half or even less; and I’m the bill queen, so I would have no objection to that.  I think there are things we could do mechanically that would assist with that part of it.  I think that that would be something very worthwhile for discussion purposes.  Even though the majority of states don’t do it, that doesn’t mean we have to be that way.  [She invited Bob Erickson and Bob Price to join her at the witness table.]  I don’t want to misspeak.  If Mr. Price agrees or disagrees with any of what I’ve said, he’s certainly entitled to agree or disagree.  I would ask Bob Erickson to explain a little bit of what they do in some of those states.  You might have a little bit more of an opportunity for discussion, if that’s okay, Mr. Chair.

 

Bob Erickson, Research Director, Legislative Counsel Bureau:

I’m here to provide information.  As always, the staff of the LCB [Legislative Counsel Bureau] doesn’t have any opinion on the various things before you.

 

To go back to something that was raised earlier: the difference between “calendar” days and “legislative” days.  A number of states do specify in their constitutions that the length of the session is a “legislative” day as opposed to a “calendar” day.  That might be something the Committee may wish to consider.

 

The next point was that there are 44 states that have annual sessions.  Twelve of those states provide for a shorter second session, or at least one of those sessions is shorter.  In those 12 states, 5 of those, Connecticut, New Mexico, Wyoming, and couple of other ones, restrict the kinds of measures that can come forward in that second session.  It’s primarily things like budget bills, maybe revenue adjustments.  The members would be severely restricted.  The Governor’s vetoed bills would come back to that session, emergency measures, but primarily, it would be a budget and supplemental appropriations session.  Perhaps it would accomplish some of the things that are now handled by Interim Finance Committee.  But again, that’s in, I think, five of the states that restrict that second year.

 

Assemblywoman Giunchigliani:

I’ve long felt, and I think Mr. Price can comment on that, that our Interim Finance Committee is really unconstitutional.  This would at least allow us to properly take care of business with 63 members making decisions on budget changes, rather than two committees, with which I have never felt comfortable.  If you look at the language on page 3, it does say in an even-numbered year, any proposed appropriations or proposed revisions to the executive budget could be considered.  It didn’t limit it, but it did suggest.  I think Mr. Price can comment further on that part of it, but also, if you had interim committee working in between the first one, if there were measures recommended, you could bring those forward as well.  There might be some ways to massage this a little bit.

 

Assemblyman Horne:

We’re talking about the scope of the second session, if we were to do this.  Would we define that scope now or when it came later?  I think it would be important to have it defined, instead of speaking in generalities, for what that scope would be before it was put to the voters.

 

Assemblywoman Giunchigliani:

I tend to agree.  If you’re going to limit it, you would probably want to tighten up that language on page 3(b) and come to a conclusion of what measures could be introduced.  I think that might assist the voters with the comfort level that we’re not going to open up a full-blown session, considering everything that didn’t get passed in the previous session.  Maybe the types of things that Bob Erickson suggested:  interim committees, emergency resolutions, revenue enhancements or adjustments, and the limited budget discussion that was included here.  Restrict the number of bill drafts that legislators could even request for the purpose of this second session.  We can do that by statute.  We could even do that this year, because, in Elections [Elections, Procedures, and Ethics Committee] we would have that authority.

 

Assemblyman Horne:

That goes into my second part on restricting the number of bill drafts.  One of the arguments is that they complain about the number of bill drafts we have for 120 days.  Are we going to have the same thing in the next year, regardless of the days, either 120 or 60, if we throw in a whole gaggle of bill drafts?  We would be listening to the same complaint every year.

 

Assemblywoman Giunchigliani:

If we did not make that adjustment, yes, we would run into that.  Maybe part of the strategy is, if we were able to move this forward, to make a change now, at least put it in anticipation, so that we can refer back to the public, “We’ve already anticipated this, and here’s the number of bill drafts that will be allowed to be introduced in the second year or of the annual session.”  There are ways we could do that statutorily even now in anticipation of that, if that was the wish of the body, separate from this piece of legislation. 

 

We looked at it over the years.  I think all standing committees ought to have a sunset, so that we’re not just meeting for the sake of meeting, because the committee has always been there in the interim.  There are approximately 26 of those.  I think that all organizations and groups should have to come through a legislator, instead of getting ten of their own for this local government, and five for them, six for this, and five for that.  We’ve debated that.  We’ve opened it up, and restricted it, opened it up, and restricted it.  It’s opened up a little bit more in my opinion.  There are things we can do statutorily even now to fix some of those things.

 

Assemblyman Gustavson:

This is addressed to any one of the three of you up there.  This doesn’t deal directly with annual sessions.  Part of it does.  On the last page of the bill, it has “to repeal Section 12 of the Constitution.”  The section is not really needed right now, but my own personal opinion is, for historical value, I’d like to leave that in there, although it does mention to have annual sessions.  Is this the reason it’s being taken out or because of the annual sessions or just because it’s not really needed?

 

Bob Erickson:

If I may address that, Mr. Chairman, in 1960, Nevada did hold an annual session.  The Constitution was amended in 1958, so there were back-to-back sessions: 1959, 1960, and 1961.  Then it went back to the voters again through an initiative and then they said, “No, let’s not do annual sessions anymore.”  Part of the reason was they were still about 60 days apiece, so it felt like it was just almost like doubling the amount of time.  But, I guess my point would be, on this question here, I would have thought that if this was standing in the way of doing annual sessions, it would have been removed from the Constitution at this time.  So, now, perhaps, it is nothing more than that historical piece in there.  We would have to consult with our Legislative Counsel Bureau to make sure, but perhaps it would be possible to leave it in for historical purposes, if that was the wish.

 

Assemblyman Gustavson:

That would be my wish.  But we’d have to take out the last line, because it does say biennial sessions.  Other than that, for historical value, I’d like to leave that in there.

 

Assemblywoman Giunchigliani:

Maybe Ms. Van Geel, Committee Policy Analyst, could e-mail Scott Wasserman, of the Legal Division, LCB, and just have him review that.  Is drafting language unnecessary?  If they did go to biennial for historical purposes, then that phrase could remain.

 

Chairman Mortenson:

I’m going to introduce Mr. Bob Price, because he may want to question all three of these guests here.  He sat where I’m sitting in the last two sessions and really initiated this Committee.

 

Bob Price:

I’m just going to make some comments since Ms. Giunchigliani has covered everything so well.  There was mention of the Legislative Commission.  I would add the Interim Finance Committee.  For members who are new, you might not be aware, but basically there are many people, myself included—although it has not been challenged in the court—who feel that the actual actions of the Legislative Commission or the Interim Finance could be declared unconstitutional.  If that were actually challenged, they are doing the job that we are elected to do, to make those types of decisions, including money, actions, and so forth.  It’s never been challenged, but it’s been discussed a lot of different times.  I feel that the Legislature is “the people’s branch of government,” and we, basically, should be the ones calling the shots, as it is in most cases around the country. 

 

Some of the states, as indicated by Bob Erickson, have various ways of operating.  Texas always comes to mind for me.  It is a large state and is biennial.  But, what they do is, at a given time, they recess their existing session and then readjourn the next year.  Under the law, it’s the same session.  They go about doing their business, but they actually recess from this year to that year.  That may have happened on occasion with other states.  People have looked at ways around having annual sessions.  You don’t always see it at first glance.

 

[Bob Price continues.]  As was indicated earlier, all the polls that have been looked at over the years have shown that the citizenry favors annual sessions.  The new people are oftentimes surprised when they realize we do not have annual sessions.  To me, it seems very logical, when you have a state that has been growing as we have over the years and have issues that should be attended to, to have annual sessions.  It’s not too surprising that the annual sessions concept appears to be accepted by the citizenry.  The other thing is that anybody who really thinks about it, 90 percent of our constituency really doesn’t pay much attention to what politicians are doing, unless it’s some high‑profile thing.  They are a little bit surprised to learn that we’re still meeting every other year.

 

Going back and talking about the 1960 session of the Legislature, there was an old-time lobbyist who worked for the “movers and shakers” and tried to do away with the annual sessions during that period of time.  In later years, when we started looking at annual sessions again, he was an extremely strong supporter.  The man’s name was Pete Kelly.  He did everything he could to help us get the ball rolling again.

 

Restriction of bill drafts doesn’t enthuse me too much, but I think, realistically, we, as individuals, would want to do that.  However, there should be procedures so that if something comes up that needs to be dealt with, we can, through a committee or the permission of the body as a whole, get a bill draft done up.

 

The subject matter of what we allow the counties, the cities, and the other branches of government to bring forth needs to be addressed.  By the way, that’s not done in all of the states.  I’m not even sure if it’s in many of the states, because, again, the legislature likes to think of itself as the people’s branch of government.  Entities come through the legislative process to start the ball rolling on whatever the problem or subject matter is.

 

Thank you for considering this again this year.

 

Chairman Mortenson:

I’d like to ask Mr. Price a question.  I have grave concerns about making five changes to the Constitution of the State of Nevada.  If we were to put out one ballot question with five different changes in the Constitution of the State of Nevada, these items would be included:

 

• annual sessions,
• raising the postage,
• number of days paid,
• special sessions, and, possibly,
• breaking the current session into 120 days with possible adjournments in between.

 

[Chairman Mortenson continues.]  What would be the chance of success?  With five constitutional amendments, if there is at least one thing in here for everyone to object to, I don’t think it’ll go.  My feeling is that you make it really, really simple and have five constitutional amendments.  That way, people can say, “I like this one.  Yes.  This one, no.  This one, no.  This one, yes,” instead of checking one “no.”  I’d like to hear some discussion on that.

 

Assemblywoman Giunchigliani:

Bob Erickson was just reminding me that we probably shouldn’t have the period of adjournment in here.  We should just have it in statute, and we already have it in.  We repealed it because it didn’t get over to the Senate to get passed.  That can be handled.

 

What this bill encompasses, I don’t see as five, or even four, separate pieces.  It goes hand in glove as to how we implement annual sessions.  These pieces are all part of that pie.  The Chair and I have discussed the issue of the Legislature calling itself back into session.  However, that directly relates to the issue of how you do your business, which includes the length of days, what you’re considering, and so on and so forth.  I think it would be worse to have it broken into five separate parts as five separate questions.  I think that would totally confuse the voters.  In fact, that happened with the postage.  We voted out and put on the ballot just the postage.  Then no one talked about it, and it got voted down.

 

I think people need to see the whole picture of how it’s all integrated.  I believe we should call ourselves back into session, but if that gives you great heartache, I’d rather not have that piece hold up the rest of the legislation regarding the annual session and length of time and what your premise would be.  I think the Legislature felt it was very important.  I think it goes with the whole issue, because, as Mr. Price said, we are the people’s house.  What business will we be taking care of?  We shouldn’t just be called in by the Governor.  We should be allowed to call ourselves in by two-thirds of the legislators signing a petition if we believe that something has happened.  I just see them as integrated, to some extent, but that’s for your discussion, Mr. Chair.

 

Chairman Mortenson:

Regarding the postage, perhaps, Ms. Giunchigliani, people are so tired of getting mail, that they intentionally voted it down.  They weren’t confused.

 

Assemblywoman Giunchigliani:

I think that the focus includes these things:

 

• How do we do annual sessions appropriately?
• How do we run our business, our house, appropriately?
• How do we try to anticipate the need of the citizens?”

 

If the postage is a nonissue, then don’t deal with it this time around.  There’s never been any debate from the public that we shouldn’t be able to call ourselves into session.  I think it goes fine with the annual session component.  Maybe the postage thing shouldn’t be dealt with, and we can come back and deal with that separately.

 

Chairman Mortenson:

We have so many potential constitutional amendments that, if we do one every session, we are going to be 100 years behind before we ever get done what we might want to do in a couple of years.

 

Assemblywoman Giunchigliani:

Maybe the postage issue could be dealt with by having drafting establish that statutorily, but amend it out of the Constitution of the State of Nevada and allow the Legislature to deal with it statutorily.

 

Chairman Mortenson:

For the Committee, what’s your feeling about the issue of combining many constitutional amendments or having separate ballot questions?

 

Assemblyman McCleary:

I’m comfortable with combining most items.  It was my thought, too, to handle the postage statutorily.  If the voters see a dollar figure, they might go negative on it.  The one that I would suggest is the portion concerning calling ourselves into annual sessions.  I think that should be a separate question.  I see that as one that the Legislative Branch of government might want to fight.  We might get the biggest fight out of that.

 

Assemblywoman Giunchigliani:

If you decide to look at the postage, you may want to be sure you cap it, so that if we do deal with it statutorily, they won’t think it’s an open end.

 

Secondly, I would be fearful that, if we had the annual session bill and calling ourselves back into session running at the same time, we probably would lose both.  I don’t have a problem with it being in this because I think it is part of the charge of the Legislature.  We are so far behind in what we do.  There are only five other states that don’t even have annual sessions.  That would be my caution.  If you wanted to take it out, I wouldn’t run it parallel.  It would tend to confuse the message.  If you want to take it out completely and start it up next session, so that it’s not on the ballot at exactly the same time as the annual sessions, that might be a better approach.

 

Chairman Mortenson:

Mr. Erickson, how could you statutorily deal with postage when it’s specifically says $60 in the Constitution of the State of Nevada?  You couldn’t change that statutorily, could you?

 

Bob Erickson:

As I recall, when this went on the ballot as a single item about ten years ago, the issue was to remove the $60 from the Constitution of the State of Nevada and say the Legislature shall, by law, provide for a postage allowance.  I know, since I work on the arguments for and against, the argument “against” was something to the effect that there’s no limit set forth in the measure.  Perhaps that sealed the fate of that ballot question.  But it’s true; you would have to take that $60 out of the Constitution of the State of Nevada first.  The question is, “Do you then just say, ‘and the Legislature shall by law set that,’ or do you set a new number in the Nevada State Constitution?”  You’re going to have to think about the ramifications, because by saying “set it by law,” it did not go over very well with the voters 10 years ago.

 

Chairman Mortenson:

I thought that someone was saying that we could change the number statutorily, but you can’t do that because it’s in the Constitution of the State of Nevada.  [Assemblywoman Giunchigliani agreed that it had to be removed first from the Constitution of the State of Nevada.]

 

Assemblyman Horne:

I agree with Ms. Giunchigliani on the manner in which to place it before the voters.  I think it’s better as a whole instead of broken up.  If I go buy an automobile, I don’t want to go somewhere else to buy the tires.  This is all one item we’re proposing to the voters.  We should present it to them as such.

 

John Wagner, Nevada Republican Assembly:

[Introduced himself.]  I agree with A.J.R. 13.  I don’t believe the Governor should be the only one that can call in a session.  He’s not a dictator.  He’s a governor.

 

In regards to A.J.R. 7, I’m not crazy about the annual sessions.  There are changes that can be made to the Nevada State Constitution.  You’ve got 120 calendar days.  That means you lose two days a week.  You’re not doing any work.  If you added up those two days a week, that would be almost a month more of the session.  You can get more done in that particular time. 

 

[John Wagner continues.]  I think the idea of having a recess is a good idea.  A good time to have a recess would be when the bills go from one house to the other.  I also agree with Mr. Mortenson’s idea of putting them on the ballot separately.  I think people will see five things, but if there is one they don’t like, they will reject the entire bill.  As far as putting one on the bill now and one in two years, since it’s a constitutional amendment, it has to be passed twice.  If you postpone it, you’re still going to be behind.  For the record, I still think you legislators should get a good salary increase.

 

David Schumann, Independent American Party:

[Introduced himself.]  I think you could better handle this by simply changing the “calendar” days to “legislative” days.  If that requires a constitutional amendment, make a simple amendment that states you are in session for 150 calendar days for one year.  Ms. Giunchigliani stated that she thought we were “behind” because we don’t have annual sessions.  I think we’re keeping up with what the founders initially thought of this republic, which is that we have a limited government.  They set that in clay to be limited.  California has a professional legislature that meets as long or longer than the Congress of the United States.  The result is a “Parkinson’s Law.”  You can find work to increase your workload when you’re in session. 

 

This state is very attractive to people.  I don’t believe it’s true that, when people move here, they aren’t aware that there is only one session every two years.  I certainly was when I moved here from California, as were my fellow former-Californians, and we considered it a real benefit.  I think you should get paid $20,000 for the year that you’re here.  I have no problem with you folks getting paid properly for what you do.  It’s happened in Congress and it’s happened in those states that have gone to annual sessions.  When you have folks sitting there, they begin to believe that they need to be writing more laws.  It’s just the nature of humans.  We’ve already got more government than we need.  I would ask that, instead of going to annual sessions, you simply increase the length of this session.  I’ve never heard anybody advocate that the Legislature should meet more often.

 

Chairman Mortenson:

I would like Michelle Van Geel to work up all the potential amendments for a work session.

 

Bob Erickson:

I misspoke earlier.  When we had that two-week period of adjournment in 1991, 1993, and 1995, it was the fifth and sixth weeks of the session.  That’s when Nevada was still operating under “unlimited legislative sessions.”  The clock kept ticking.  The way the Nevada State Constitution is written now, I believe, if you were trying to interject a period of adjournment into a legislative session that has a fixed limit, the clock would still keep ticking.  If you were to want to have that, you would need to specify something in the Constitution of the State of Nevada that stated you could recess at a convenient time.  We would have to leave that to our Counsel.

 

Chairman Mortenson:

I’m quite sure the Constitution of the State of Nevada says when we start and when we end.  If we wanted to take a vacation in between, we’d lose that time.  The clock would be ticking.

 

I have some potential amendments [Exhibit F] from Lucille Lusk, who was unable to attend this meeting.  I would like to read them for the Committee to consider and for Michelle Van Geel to list as potential amendments for our work session.

 

Regarding the annual sessions, Ms. Lusk is very unhappy with the “no limitation on the scope of the session.”  She feels that another 600 to 1,300 bills could be introduced, and we would go through the calamity we do already in 120 days.  She asks for it to be limited in some manner.

 

She supports the Legislature being able to call itself into special session.  If we have the ability to call ourselves into special session, the topics should be limited so that we do not turn this into a regular session.  I think both bills do limit it to 20 days.

 

Mr. Erickson, Ms. Lusk feels very strongly that the present situation, wherein the budget is received 14 days before the session, is much too short.  The legislators and the budget committees should have a much longer time to look at that.  Is there some constraint, working backwards, that would disallow having more than 30 days, instead having 60 days?  Are there date constraints?

 

Bob Erickson:

Until we had the 120-day session, the budget was not delivered to the Legislature until the time of the Governor’s State of the State address, which was after the session had already started.  But, again, the sessions were unlimited.

 

[Bob Erickson continues.]  Part of that constitutional amendment that was approved says that the Governor must submit The Executive Budget to the Legislature 14 days before the start of the session.  The measure before you proposes 30 days, is that correct? 

 

Chairman Mortenson:

It is 14 days now, and the bill suggests that 30 days would be a good time period to have.  My question is whether there is some constraint that would prohibit that?

 

Bob Erickson:

I can’t really respond on behalf of the Executive Branch, but I think that would certainly make it very difficult for the Budget Office to have something right around the first of January.  We would have to change a number of laws on the submittal of budgets to the Budget Director, and the meetings of the Economic Forum, and so forth.  What we’re taking about here is another two weeks earlier.  The other option would be to start the session two weeks later.  If you keep the start date on the first Monday in February, it would affect the whole budget process.

 

Chairman Mortenson:

I’m going to read a little bit of the preamble to A.J.R. 13, which is a bill that I submitted.  It is germane to a potential amendment that I would request that we consider.

 

Whereas, 34 state legislatures have the ability to call a special session; and

Whereas the Nevada Legislature is one of only 16 bodies that may not call a special session; and

Whereas the Nevada State Constitution is grounded on the principle of three equal branches of state government, with ultimate authority and responsibility residing in each one; and

Whereas Nevada’s current constitutional language, which allows only the Governor to call the Legislature into session, impedes and is contrary to the constitutional provision that vests the legislative authority in the Legislature.

 

Mr. Price’s bill suggests that the way we call ourselves into session is that we petition the Governor, and the Governor then calls us into session.  In my opinion, we are the Legislative Branch, and we should have independence from the Governor.  The Legislature should call itself into session without that extra step of petitioning the Governor to call us into session.  Ms. Giunchigliani has said that she is perfectly amenable to that kind of change in language.  [Mr. Price, who was in the audience, indicated that he would also be amenable to that change.]

 

[Chairman Mortenson continues.]  It would be a potential amendment that we change the language so that we don’t go through the Governor, we just call ourselves into session.  That would not change the Constitution of the State of Nevada.  The Governor would still be able to call the Legislature into session exactly as he is able now.

 

We’ll close the hearing on A.J.R. 7 and A.J.R. 13 and go through the amendments in a future work session.

 

[Chairman Mortenson then apologized for not realizing that Janine Hansen wished to testify.]

 

Janine Hansen, State President of the Nevada Eagle Forum:

[Introduced herself.]  I wanted to be here in support of A.J.R 13.  I like this whole concept of the Legislature being able to call itself into session.

 

Last year, I spent a whole year during the interim going to committee hearings for the health committee.  They were discussing a model Emergency Health Powers Act.  I don’t know if many of you are familiar with that, but it is one of the pieces of terrorist legislation.  It was a model act, and it was given to the states in the hope they would pass it.

 

This piece of legislation was very far-reaching.  In fact, it included such things as confiscating food, fuel, clothing, guns, and property without any kind of just compensation.  It made the governor a virtual dictator.  It’s interesting that I became, as part of my work in Eagle Forum, a national coordinator for what was going on.  I spoke at our national meeting regarding it. 

 

Although this was introduced in almost every state, only one state passed it in its original form.  One of the reasons for that was because it simply vested in the governor total and absolute dictatorial power.  One of the provisions of the original piece of model legislation stated that the legislature couldn’t even review anything the governor had done for 60 days after he had done it.  There was no legislative input or oversight with regards to this.  There were a lot of draconian provisions.  For instance, they could forcefully quarantine people with no appeals process.  They could separate parents from children.  They could force people to have medical treatment and vaccines they did not want.  The reason I just talked to you about this is because I feel it’s so important in Nevada, where we only meet every other year.

 

[Janine Hansen continues.]  There could be an emergency of a catastrophic nature when the legislature would not be in session.  There could be a governor doing things that might be of concern, that may step over the line, that may usurp people’s constitutional rights and trample on their individual liberties.  You, as the Legislature, may be concerned about those actions, but you can’t call yourself into session at the present time. 

 

I think this particular part of A.J.R. 7 and A.J.R. 13 is now more imperative than it has ever been.  We need checks and balances.  We need separation of powers.  We need oversight by the Legislature of what the Governor does.  These things are important to maintain our liberty.  That’s the whole philosophy underlying what our founding fathers did with the separation of powers, not only between the three branches of government, but also between the states’ governments and the federal governments.  I really do support this whole concept of allowing the Legislature to call itself into session.

 

Let me speak as to why these either both go forward or that one ought to go forward.  Every time the annual sessions have gone before the Senate, it has been killed.  If you send annual sessions along with calling the Legislature into session together to the Senate, they’ll kill it.  There is a possibility that, if you amend A.J.R. 7 to be just the same as A.J.R. 13, and you send both resolutions to the Senate, A.J.R 13 may actually get through.  That would be, in my opinion, extremely important for the Legislature to be able to call itself into session. 

 

If the Senate passes the annual session resolution, they have to come back to the Legislature next time, don’t they?  If they actually passed both of them in the Senate, when it came back to the Assembly, you could stop A.J.R. 13, and allow the whole package to go forward.  It would be like an insurance policy of making sure that you can have the opportunity to call the Legislature into special session.  It is so important for you to be able to have the oversight in these volatile times.

 

I would also suggest to you that one thing you might need to look at in calling the Legislature into session is the issue of continuity of government.  We know that the Constitution of the State of Nevada deals with a site for the continuity of government.  Also, Assemblyman [Speaker] Perkins brought forth a bill that was discussed in Judiciary about the continuity of government.  That portion of his bill has a tremendous amount of merit. 

 

On page 2, line 10, it talks about “upon the petition signed by 2/3 of the members of each house of the Legislature.”  You need to take this language into consideration in crafting the continuity of government section.  If we have some kind of a catastrophic problem, and 15 members of the Legislature are dead or incapacitated, I don’t know if this would address that.  You may need to look at the fact that it does need to be addressed, because, if you have a catastrophic problem and you have an absence of 20 or more because of the disaster, you may need to call the Legislature into session.  But you would be prohibited from doing so because you wouldn’t have two-thirds of the members as identified by this bill.  I’d encourage you to look at the issue of continuity of government.

 

Chairman Mortenson:

What type of language would you use to imply that two-thirds of the existing legislators could call a session?

 

Janine Hansen:

I think in Assemblyman [Speaker] Perkins’ legislation, there are some specifics about what happens with a certain number.  You may want to look at that specific language.  In the Nevada State Constitution, it simply provides that the Legislature will provide the means for continuity of government.  It doesn’t have any kind of specifics.  You may need something broad enough to go into the Constitution of the State of Nevada without the specifics.  But “of the existing members” might be all you need.  Since I’ve been listening to all these terrorism bills, which I’ve been doing for the last year, this issue of continuity of government has really been on my mind.  The Legislature is a very important part of that.

 

Chairman Mortenson:

We’ll close the hearing on A.J.R. 7 and A.J.R 13.

 

We’ll open the hearing on A.B. 532.

 

 

Assembly Bill 532:  Directs issuance of Nevada silver coins. (BDR 31-1297)

 

David Horton, Committee to Restore the Constitution and the Nevada Committee for Full Statehood:

[Introduced himself.  Mr. Horton read from written testimony Exhibit G].

 

If you go through Exhibit H, the second exhibit that is the description of original jurisdiction, it shows that, if we assert our position as a sovereign party of the constitutional compact, we can greatly limit the capability of anyone who wants to derail this project.  First of all, if it goes in under the original jurisdiction, you have to have a party plaintiff to complain, if we are to be a party defendant.  It is by no means certain that the Supreme Court would entertain such jurisdiction, but if not, we win.  This puts the ball in the court of those who want to keep Nevada from enforcing the Constitution of the United States of America and rescuing its economy from further taxes that will tend to deplete the already fragile economy.

 

[Dave Horton continues.]  It has been asked about the start-up time with regard to getting these coins available.  I have a memorandum here that comes from the Nevada Coin Mart on Sahara Avenue in Las Vegas.  They strike a lot of the casino tokens.  Quoting Scott Martin, “A three-week start-up time is required.  It would take two presses one month to produce two million coins, business strike.”  That was without getting any extra material. 

 

There is another outfit in northern Nevada that makes some of the metal work for the slot machines.  Their vice-president in charge of tooling and equipment has a brand new 800-ton hydraulic press that he says will knock six of these things out at one time.  He would be interested in bidding on the business strike.

 

There are a lot of other spin-offs that can be considered.  It says in this memorandum, for example, that proof coins could be made, too, from basically the same dies, but they would be limited in the number.  He says about 100,000 per month could be produced.  The cost would be considerably higher because there are extra processes that have to be gone into when you start double striking a coin and making sure that it is a good proof-set coin.  It would pass at a premium.  There are other embellishments that can further increase the collector’s value of these coins.  For example, the use of the CC [Carson City] mint mark could be incorporated on a limited number of the coins because the press overlay has a limited capacity.  A CC mintmark could be included on some of the coins, which would increase the collectors’ value of those few coins and also produce an additional source of revenue.

 

With regard to other considerations that have been suggested, there is a question of other states having issued their own currency.

 

Chairman Mortenson:

Mr. Horton, I wonder if we could pause your testimony for just a minute.  I would like to mention a couple of things.  I don’t want to limit you in any way.  I want to tell the Committee that the reason this is a Committee bill is because Mr. Horton approached me and asked me if we would accept this bill.  This was an exact duplicate reprint.  The Legislative Counsel Bureau didn’t have to spend a nickel.  They just resurrected an old one and put a new number on it.  The older bill was about five sessions ago.  It was a similar bill.  Two of the very, very strong advocates of this bill were Joe Dini and Jim Gibbons.  They were very strongly for this bill.  With the evidence, and much of what I’d read in the past, I agreed to accept this bill. 

 

[Chairman Mortenson continues.]  Mr. Horton was just about to talk to the legality of this.  I do want to inform the Committee that we have an opinion from Brenda Erdoes from our Legal Division  [Exhibit I].  I am not going to go through it because I’m going to let you read it.  It is the opinion, and we have to consider the word “opinion,” because, as Mr. Horton says, “It is always ‘opinion’ until it goes through the courts.”  It is the opinion of the Legislative Counsel Bureau that this is unlawful.  I will let Mr. Horton continue with his opinion of why it is legal.  It will be up to this Committee to decide if we think it’s illegal, or if we think it needs to be heard, or if the courts need to make that decision.

 

David Horton:

I would be interested in seeing the memorandum.  I would ask the Committee to respond.  If it says something similar to what it said before, I think I can make a constructive response.

 

Chairman Mortenson:

Also I wish to inform the Committee that Mr. Horton has told me, and we have double-checked it with LCB, that the state of Idaho has a similar bill running at this time.  They are treating it very close to the chest.  They refuse to give us provisions of it at this time.  For some reason, they want to keep it quiet.

 

David Horton:

I think it had to do with the legislative drafting needing to be confidential.  The sponsor has cleared the release of the information that I have provided the Committee [Exhibit J].  Basically, this amendment for “Finding Number Seven” is what has already been incorporated into the Idaho bill.  With this amendment, the two would be identical.

 

This relates to the general question of asserting original jurisdiction.  If you can only have one court to hear it, then you have to look at what you need in order to get into that court.  You’d have to have a party challenge Nevada’s act.  But who could that party be?  It probably wouldn’t be Idaho, because they’re thinking of doing the same thing themselves.  If you look at what the requirements are for getting into the court at all, whether it’s original jurisdiction or otherwise, they have rules that are rather restrictive.  But the more restrictive the rules they have, so far as getting into the court, the better off we are.  In using a legislative rather than a litigating remedy, you put the legislation on the books.  It’s up to those who want to upset that to figure out how to do it. 

 

[David Horton continues.]  Turning to the example of other states, out of the Standard Catalogue of Money, Fifth Edition, Volume One, it shows that in addition to the numerous Civil War issues, which deal with a little different situation, Missouri issued its own currency.  Alabama issued its own currency.  Minnesota issued its own currency, and this went on for several years, as did Arkansas, Kansas, Louisiana, Mississippi, and South Carolina.  Texas, prior to joining the Union, issued currency from 1836 to 1845, as did several states prior to the formation of the Union. 

 

There is a question of the effect of this type of thing on our emergency preparedness.  There is another exhibit [Exhibit K] that I would like to attach to my remarks having to do with new concepts in defense.  It is the bulletin that the Committee to Restore the Constitution published in July 1988, in which it’s looking at this one cataclysm problem of what we would face with either a nuclear or a biological attack.  We’re all using plastic currency to buy all kinds of things.  We have a lot of our purchasing power wrapped up in that.  But what happens if New York ends up being a hole in the ground?  There goes all the plastic money.  By having already deployed a currency in our economy with which to support local exchanges, we have a means for conducting post-recovery operations.  The details of that and the solutions include the concept of a local legal tender currency that would be able to support the recovery operations in Nevada.

 

Another concept that is referred to is the fact that Nevada, in spite of its characteristically rural character, is turning out to be the most highly urbanized state in the country, percentage-wise.  This means that our present money system that exports a lot of our bank capital outside the economy of Nevada is congesting our population in the two locations where most of our money is available.  In doing so, it is creating both nuclear and biological targets.  A study has been done on the anthrax threat showing 150 possible cities of which Las Vegas is number four.  We have been doing precious little to protect against that.  There are some things that could be done, and some things that could be funded, if we had a source of local currency to do it with.

 

It has been asked what the effect of a local currency would be on an economy.  As an example, I have some pamphlets [Exhibit L] that can be distributed to the Committee having to do with when a local currency was used in the midst of the 1930s depression to break the back of the depression.  It was a local currency used only in a municipality.  But they found that, instead of people being in jeopardy of losing their homes for lack of payment of taxes, by circulating a local currency, they were paying their taxes in advance.  They hired a new schoolteacher.  They started paving the roads.  They built a bridge.  They hired another schoolteacher.  That municipality turned the poor economy into such a “spark of prosperity” in the darkness of the depression that it turned this community into a tourist attraction.  A former premier of France, Daladier, came to this community just to see what was going on.  “What are they doing here that allows them to have prosperity when we don’t?” 

 

[David Horton continues.]  If you have a form of local currency melded into the overall purchasing power, it is difficult to predict how much beneficial effect there will be, but it is not difficult to predict that there will be beneficial results.

 

Assemblyman Horne:

Is there a Supreme Court ruling addressing your issue that the current procedure on issuing currency the way that Congress has it now is unconstitutional?  We have that first hurdle.  If Nevada is going to challenge under the theory of sovereign immunity that we are protecting our own economy by doing this, currently it’s unconstitutional.  There’s got to be a ruling from that branch of government to say as much.  We don’t have that.  We can’t just say it’s unconstitutional.  We’re going to do our own thing.  That’s not how things work.

 

David Horton:

I think you may want to look at the attachment [Exhibit M].  It has to do with the fact that it is not necessary for the Supreme Court to make decisions on issues of constitutionality.  We get used to the concept of litigating rather than legislating.  When you are litigating, it’s helpful to have these precedents that you’re referring to.  When you’re legislating, you don’t need that.  As the Kentucky legislature pointed out [Exhibit M]:

 

The General Government assumes undelegated powers, its acts are unauthoritative, void, and of no force:  That to this compact each State acceded as a State, and is an integral party, its co-States forming as to itself, the other party:  That the Government created by this compact was not made the exclusive of final judge of the extent of the powers delegated to itself; since that would have made its discretion, and not the Constitution, the measure of its powers; but that as in all other cases of compact among parties [or sovereignties] having no common Judge, each party has a equal right to judge for itself, as well of infractions as of the mode and measure of redress.

 

This is what Nevada would be doing as a party to the constitutional compact, saying that the provision of Article 1, Section 8, Clause 5, are not being carried out by the Congress.  By taking a process of law to enforce the United States Constitution, we then do what has been done many times in the history of both the Constitution of the United States of America and the Magna Carta:  Redefine the law and then enforce it.

 

Assemblyman Horne:

One flaw with that, Mr. Horton, is that we don’t answer to the Kentucky legislature.  This is their opinion, and I see it’s dated 1799.  We answer to the United States Supreme Court when we’re dealing with matters of constitutionality.  We’re not dealing with the matter of the Nevada constitutionality.  We’re dealing with the U.S. constitutionality.  This would have no bearing on that, and I believe that the U.S. Supreme Court would say as much.  We can disagree on that.

 

I think the reason why the United States Constitution says that the power to coin money will rest with Congress is because…well, I can think of one:  counterfeit.  I can’t see any way, if we were to start coining a Nevada silver dollar, to prevent those not authorized to coin the exact same thing.  We’re talking a precious metal.  We have what is called a commerce clause that deals with interstate commerce.  If we’re talking about the economy of just the state of Nevada, what’s to prohibit these from coming in and out of the state?  With your depression argument, travel interstate was much less common than it is today.  I think that alone would preclude us from coining our own money for legal tender.

 

David Horton:

With regard to the question of counterfeiting, we already have statutes against counterfeiting, forging, and uttering counterfeit items.

 

Assemblyman Horne:

The United States Government has measures in order to prevent that from occurring.  If we were to do that, and let’s say Idaho does that along with five or six other states, where is the mechanism to prevent it?  Now we have the federal government that does it.  We’ve got a few locations where they control the type of currency that is going to get out, that we are going to say is legal tender.  That is very secure.  We’ve seen the new bills.  They’ve taken great pains to prevent counterfeit.  A state coining its own money undermines that and will continue to further undermine the federal government reserve.

 

David Horton:

I don’t see that the measures that are already in place to prevent counterfeiting of the federal currency are at all conflicting with our objective in preventing counterfeiting of Nevada currency or anything else that Nevada does.  With regard to the ease of which you may feel this can be done, I have here a Coin Comparitor Model CC-16-C [Exhibit N], which is used in many slot machines to keep people from counterfeiting casino tokens.  In free fall, they can determine whether you’ve got a genuine or a nongenuine coin or token.  On the concentric rings of the Great Seal of Nevada that would go on one side of this coin, there can be put enough information with contemporary technology to tell you what the minter had for breakfast.  That is not easy to counterfeit. 

 

Assemblyman Horne:

But could a merchant see that?  If I took it to 7-Eleven or Walmart or to buy new tires, and I used the coin, could they see that?  It’s different if you drop it into a machine, and the machine is detecting it, like slot machines.  That’s why we have it.  But if we’re talking about using it for legal tender, any merchant who is taking money for service would have to be able to do that.  I can hold up one of the new bills, and I can see that watermark, that metal strip down one side.  But can you do that with a coin?

 

David Horton:

We didn’t have any trouble doing it with the “cartwheels,” the $1 silver coins that circulated quite freely in Nevada 40 years ago.  With many of the locations having slot machines with Comparitors in them, it is very easy to convert it to a silver coin detector.  All you have to do is lift the top off, put one of the Nevada genuine silver coins in there, and it will reject anything else.  It is a very simple matter for whoever wants to screen the silver coins coming in.  In addition, it is a very difficult matter to get something that will pass even the ring of silver coin on a glass.  It is a characteristic that people can get tuned to.  You drop one of these on a glass next to the cash register and it will characteristically ring.  But if there is any doubt, you can drop it through a Comparitor and that will tell you instantaneously whether it is genuine.

 

Lynn Chapman, State Vice President of the Nevada Eagle Forum:

[Introduced herself.]  We do support A.B. 532, the Nevada silver coin bill.  I have a hands-on exhibit that you will be able to look at, but I don’t have 13 copies and you can’t keep them.  Years ago, my mom would come up to Reno for fun and gambling and come home with silver dollars.  That’s what sparked my interest.  I love silver dollars.  I started collecting silver coins years ago.  I not only collect them, I purchase them for investments and to give as gifts to people.  Everyone loves to receive these.  They are a beautiful gift, and it’s a lot of fun to have a collection.

 

Right now people are collecting state quarters that are currently being minted and distributed throughout the United States.  There will be 50 different quarters minted and people are snapping them up.  They’re very hard to come by.  I believe that a Nevada silver coin, with our great seal on it, would be an asset to Nevada, as well as to my collection.  I urge you to vote “yes” on A.B. 532.  There is one coin that I’m passing around that is a two troy ounce coin.  It has the great seal on it, so you can get an idea what it would look like.  I wanted you to look at and enjoy my collection.  I have many more, but these were some of the fun ones.

 

Chairman Mortenson:

I have had a phone call from an international coin organization that is interested in coin collecting and is in that business, and they were very interested in the potential for a Nevada coin.

 

John Wagner:

Several years ago, when I was living in Sacramento, I was usher in a church.  We were counting money.  One day we got a funny looking coin.  It wasn’t a dollar, but it did have “United States of America” on it, and it said “one troy ounce.”  How are we supposed to put that into the bank?  Basically, we had the treasurer evaluate how much it was worth.  There were two of us who wanted it, and we bought it for $6 to $10.  Several years later, while I was working, I went to a training class.  At the end of the class, I got another one of these coins.  It said “one troy ounce,” but it had no monetary amount on it.

 

Whether coins are used for currency or not, I think it would be good for the state of Nevada to coin these, because people will buy them for souvenirs.  By having these coins minted, whether they are for currency or not, I think it’s good business for Nevada just from the standpoint that we can sell them.  Now, if the casinos wanted to actually use these in their slot machines, that’s something else again.  As far as coining, I think that’s a fairly good idea.  We are the Silver State.  I wouldn’t mind the possibility of coining gold coins, again perhaps in a one ounce or a half-ounce size, without any monetary value.  I think this would be good for our mining industry.  It would bring revenue into the state of Nevada, which we are all interested in doing.  Hopefully, it will pay your salaries, too.

 

David Schumann:

I was told directly by economist Milton Friedman that the Federal Reserve System caused the Great Depression.  I asked him why and he said it was because they artificially restricted the money supply.  That alone is the power that the Federal Reserve doesn’t know how to exercise.  I heard Dave Horton mention the economic effects of this.  Everything he said can be backed up by solid economists.  This would have a very beneficial impact on the economy of Nevada.  There wouldn’t be a Federal Reserve that could shrink our economy.

Steven Hayes, Citizen:

I’m 53 years old and remember handling silver money in the currency and hearing it ring on the table.  As someone interested in the history of money, I have a unique understanding of how complicated the subject really is.  I don’t want to lecture you on the history of money.  It is noteworthy, however, to point out that since our currency has been decoupled from species precious metals in 1971, our economy has been rocked by upheavals in commodity prices, we’ve had inflation, stagflation.  We’ve had a lot of our loans held by foreigners.  We’ve seen the price of gasoline go up.  More importantly, for people like my parents who are on fixed incomes, the value of the purchasing power of their saved money has eroded.

 

If you pass this measure, you’ll probably all experience a lot of pressure.  It may be the most important thing you ever do as statesmen, because I really believe that a hard rain is going to fall someday because of fiscal irresponsibility.  This is just a step to bring awareness in the world that it’s time to get back to honest money, to sound dollars.  “Good as gold,” “sound as a dollar” used to mean something.

 

Most people aren’t aware of where money comes from.  Basically, it’s borrowed into existence when the Treasury issues T-Bills and instruments of credit.  They are then purchased by the Federal Reserve System, so that instead of a store of value, the currency is evidence of debt.  There’s pretty much no limit to how much debt can be created.  I appreciate your attention.  Thank you.  I think this is very important, and I’m in favor of it.

 

Merritt “Ike” Yochum, Representing the Independent American Party:

[Introduced himself.]  The Independent American Party, with over 18,000 registered voters, supports this bill wholeheartedly.

 

Janine Hansen:

I’ve had an interesting experience.  I often send out, during the Legislature, a lot of alerts on different bills to inform people and allow them to respond to those bills.  I’ve sent out approximately two dozen this time.  On no alert that I’ve sent out have I had the incredible response that I received in regards to this bill.  It was absolutely unexpected.  I have had people contacting me from all over the country.  My brother, who lives in Las Vegas, got my alert, but then he received copies of it from 15 other people, because they were so interested in this bill and wanted him to know. 

 

There’s tremendous interest in this bill all over the nation.  I would suggest to you that there are some real significant reasons for the interest.  That is because we have, which they’ve alluded to today, something called fiat money.  What does that mean?  It means, essentially, that it’s as good as we believe it is.  It doesn’t have any backing of any kind, like silver or gold used to.  All fiat currencies, like we have, eventually reach their intrinsic value of zero, just as much as the piece of paper is worth.  If the Federal Reserve admits that today’s dollar is worth the equivalent of five cents in 1913, that’s how far our money has dropped.  We have lost 95 percent of the purchasing power of the fiat currency, or paper money.  That’s one of the reasons why people are very interested.

 

[Janine Hansen continues.]  I don’t know if you’re interested in the money markets, but I had a securities license, so I’m very interested.  I watch what the Euro is doing.  Right now, our dollar is really being battered on and off by the Euro.  That’s very interesting, because, of course, if we had some kind of alternative to our fiat dollar, we would be safer in terms of protecting ourselves from those kinds of fluctuations. 

 

I really appreciated Assemblyman Horne’s question.  I want to respond to his concerns about the constitutionality.  If the United States were fulfilling its constitutional responsibilities to give us constitutional money, this bill wouldn’t even be here, would it?  We wouldn’t even be discussing it, because we would have constitutional money.  One of the reasons why this bill is so important is because it will provide for a constitutional challenge to the unconstitutional money and the unconstitutional activities of the U.S. Government. 

 

Now how does this take place?  It would be between a state and the federal government; it would come under original jurisdiction.  It would immediately be the purview of the Supreme Court.  If the Federal Government felt that we were doing something that was unconstitutional, they would have to sue us.  Then this issue would go to the Supreme Court, and they would make their decision.  But they wouldn’t be making their decision before the challenge took place and it went to court.  Really, to find out what the Supreme Court would say, you’d have to pass the bill and then allow the process to take place.  You can’t decide it in advance.

 

It’s interesting to note that the U.S. Supreme Court of late has been very open to protecting the rights of the states and protecting the state legislatures.  They did that in 1992 in the Lopez case and the Prince/Mack case regarding Sheriff Mack from Arizona who challenged the enforcement of the Brady bill.  There have been many other issues that they have been very open on and decided in favor of the states, particularly when the states haven’t had their hand out and taken the federal money and then said they didn’t want to do what the federal government said.  In these cases, there is a great opportunity for a constitutional challenge that might really bring this issue to the forefront of what is happening.  I think that would be very well worth it.

 

[Janine Hansen continues.]  One of the most important issues is the stimulating effect to our economy.  Look at the example of Mineral County.  Although I don’t have the exact figures, years ago they were bringing in about $26 million in taxes because of the mining activities.  Now it’s down to $1.6 million.  You wonder why Gabbs has been “disincorporated,” and you wonder about the tremendous impact.  This is because our mining industry has been so incredibly decimated by federal regulation, and also by other things in the international economy.  This bill would be a tremendous stimulant to the economy in the state of Nevada.  With the monetary uncertainties that we face because of the international circumstances in which we find ourselves right now, I think this would be a great way for our Legislature to protect us from some of the monetary uncertainties, as well as having nontax revenue.  It’s really a great idea to have nontax revenue, since I’m a taxpayer.

 

Lawrence Jacobsen, Citizen and former State Senator:

I fully support this.  I think it’s a shot in the dark, and I have to give Mr. Horton credit for it, because it indicates where his heart is; it’s in Nevada.  I want, for instance, to use this ring.  This ring came from the USS Yorktown in 1939.  It doesn’t have a great deal of value.  I paid $36 for it when the Navy salary was $21 a month.  I can’t tell you how many times I hocked this ring.  It always got me home and where I wanted to go and today is one of my most prized possessions.  I think all of us enjoy having some kind of a keepsake in our pocket.  A lot of times we spend our pocket right down to the bottom, but if there’s something special there, you don’t spend it.  You hold it because it has some kind of a value that is “unrewardable.”  I think this bill is really something we should capitalize on and realize that Nevada has enough notoriety, some good and some bad.  This would be on the good side.  We all think about Yucca Mountain and what that might do to us.  It might not hurt to have a replica of Yucca Mountain on one side of the coin.  I support it.

 

Michael Brown, Vice President of Government Affairs, Barrick Gold Corporation:

[Introduced himself.]  When this legislation was introduced, there were some news reports that it was being advanced by the mining industry.  I just want to clarify that this was not something the mining industry put forth.  The mining industry has no position but appreciates all the sympathies that have been expressed today. 

 

From 1981 to 1989, I served in the Reagan administration as Assistant to the Director of the United States Mint and press secretary.  This hearing brought back a few memories.  I worked with Senator Laxalt and Senator Hecht at that time on an initiative to create what is now known as the American Eagle Silver Bullion coin, which was a way to dispose of the 140 million ounces of silver in the National Defense stockpile in a way that would not affect the silver market.  By 2001, we had exhausted that supply, and I got called back by the Mint and assisted them in 2001, with United States Senator Harry Reid, with legislation that requires the Treasury to buy market silver to continue the American Eagle Silver Bullion Coin Program, which consumes about 10 million ounces of silver a year.

 

[Michael Brown continues.]  I also worked with Senator Laxalt on legislation in the early 1980s.  When you look around a casino, you may see a sign that says, “Casino tokens cannot be used as currency.”  This regulatory initiative was something we worked out with the Senator, because the Treasury didn’t want the casino tokens being used as currency.  The casinos didn’t want to use the small Susan B. Anthony dollars in the slot machines.  So those were my two Nevada ties.  I had the great privilege of meeting Eva Adams, the Chief of Staff to Senator Alan Bible, who helped shepherd through the coin edict in 1965 and who was also from Nevada.  I also met the current director, Henrietta Holmes [last name unintelligible], who is also a Nevadan. 

 

In closing, Mr. Chairman, I’ll tell that when I got to the Treasury in 1981, there hung in my office a picture of the Carson City Mint.  Here, 22 years later, I sit in Carson City and can look out the window of my office at the Carson City Mint.  It’s kind of always with me.

 

Chairman Mortenson:

You didn’t mark on the guest list whether you were for or against.  [Mr. Brown indicated he was neutral on the bill.]

 

May I ask you a question, Mr. Brown?  If this bill were to go forward, would it be an asset to the mining industry?  Would it be favorable?

 

Michael Brown:

Any new use or new creations of demand for precious metals ultimately has an effect somewhere.  In 2001, the silver from the Defense Department had been spent.  This was silver that had actually been used in the Manhattan Project and was very historic.  As a scientist, you’d appreciate this; it was used in Tennessee at Oak Ridge for electrical work that was done to support the nuclear project in World War II.  This silver was eventually turned into coinage that is out there today.  The Treasury had to debate in 2001 whether to shut the program down.  From our perspective, it was 10 million ounces of silver that would eventually be pulled off the market.  The United States mines about 80 million ounces of silver a year. 

 

[Michael Brown continues.]  I would have to say, as a Treasury alumnus, that you will probably get a call from the Treasury Department at some point if the Legislature proceeds after reading Brenda Erdoes’ memo.

 

Janice Wright, Office of the State Treasurer:

[Introduced herself.]  My testimony will not be nearly as eloquent as that of Senator Jacobsen.  Treasurer Krolicki would like to share with you the fact that he does appreciate the intentions of the sponsors of this bill [Exhibit O].  However, it is a complex issue and Treasurer Krolicki has taken an oath to uphold the United States Constitution and the Nevada State Constitution.

 

Article 1, Section 8, Clause 5, of the United States Constitution does state that Congress has the power to coin money.  In addition, Section 10 states that no state shall coin money.  The clause is clear, it is unambiguous, and we believe the United States Constitution is supreme in this matter and that Nevada is directed not to take this action.  If Nevada were to take this action, no doubt there would be litigation, and it would be resolved at that level, possibly something that would be fairly expensive at a cost that we could ill afford during the current times.

 

I note that there is no fiscal note on this.  My question would be how would we be paying for the cost of minting the coin?  The other section I would like to call to your attention is Section 3, paragraph 3, which states that, if the number of coins subject to the control of the State Treasurer diminishes to $500,000, the State shall make successive issues up to a face value of $50 million.  Our question would be how would the State Treasurer be able to implement that?  Under the language of the bill, the State Treasurer would have no control over these coins and would also not know how many would exist.  Mr. Chairman, thank you very much for allowing me to make these comments.

 

Assemblyman Gustavson:

I read this testimony you just gave from our Treasurer, Brian Krolicki, whom I respect very much as well as his opinions.  He doesn’t state that as an opinion.  He states that as a fact.  I was just wondering if Mr. Krolicki has researched the information that has been presented to us as far as to why some people believe that this would be constitutional because what the United States Congress has done is unconstitutional?  Is he aware of all the information?

 

Janice Wright:

I am not legally trained.  I am not an attorney.  I would not like to speak on behalf of Treasurer Krolicki with a legal opinion.  I would like to have a copy of the information that was provided to your Committee by Brenda Erdoes, because I believe we would rely on some legal counsel in order to make that determination.  My comments are merely that the face value of the United States Constitution states that we shall not coin money.

 

Assemblyman Gustavson:

I understand that, and I’ve read the United States Constitution.  Through the research I’ve done over the years, I pretty much tend to lean the other way because of what’s happened with our federal government.  I would appreciate it if you would take back the other information also, besides just the letter from LCB [Legislative Counsel Bureau].

 

Chairman Mortenson:

This bill is our only bill so far that is literally subject to the time constraints.  Our Assembly Joint Resolutions are not.  I am not going to take action today, but we have to take action soon.  We aren’t going to have a meeting next Friday so will take action on this bill somewhere, sometime.  I hate to do it, but we may call a meeting behind the Bar.  I would like everybody to consider this and then we’ll take a vote.  I’ll close our hearing on A.B. 532.

 

[The meeting was adjourned at 2:37 p.m.]

 

 

 

 

RESPECTFULLY SUBMITTED:

 

 

 

                                                           

Sheila Sease

Committee Secretary

 

 

APPROVED BY:

 

 

 

                                                                                         

Assemblyman Harry Mortenson, Chairman

 

 

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