MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-Second Session
March 27, 2003
The Committee on Government Affairswas called to order at 8:08 a.m., on Thursday, March 27, 2003. Chairman Mark Manendo presided in Room 3143 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.
COMMITTEE MEMBERS PRESENT:
Mr. Mark Manendo, Chairman
Mr. Wendell P. Williams, Vice Chairman
Mr. Kelvin Atkinson
Mr. Chad Christensen
Mr. Tom Collins
Mr. Pete Goicoechea
Mr. Tom Grady
Mr. Joe Hardy
Mr. Ron Knecht
Mrs. Ellen Koivisto
Mr. Bob McCleary
Ms. Peggy Pierce
Ms. Valerie Weber
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Mr. Rod Sherer, Assemblyman, District 36
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
Nancy Haywood, Committee Secretary
OTHERS PRESENT:
The Honorable Kenny C. Guinn, Governor, State of Nevada
James Richardson, Lobbyist, Nevada Faculty Alliance
P. Forrest “Woody” Thorne, Executive Officer, State of Nevada Public Employees’ Benefits Program
Scott MacKenzie, Executive Director, State of Nevada Employees Association
Gary H. Wolff, Lobbyist, Nevada Teamsters Local 14
Hugh Ricci, P.E., State Engineer, State of Nevada Division of Water Resources, State Engineer’s Office
Debbie Cahill, Director of Government Relations, Nevada State Education Association
James W. Penrose, Attorney, Dyer-Lawrence-Penrose-Flaherty & Donaldson, Counselors At Law
Sherry Grund, Second Grade Teacher, Churchill County, and President, Uniserve Council of Nevada
Martin Bibb, Executive Director, Retired Public Employees of Nevada
Dan Musgrove, Director, Office of the Clark County Manager, Las Vegas
Danny Coyle, President, State of Nevada Employees Association, Retiree Chapter 13
Robert L. Crowell, Lobbyist, Nevada Well Owners Association
Andy Belanger, Legislative Team, Southern Nevada Water Authority
Chairman Manendo welcomed all Committee members and visitors to the Committee on Government Affairs and called the meeting to order at 8:08 a.m. The roll was called, and he directed the secretary to mark Assemblyman Collins and Assemblyman Williams present upon their arrivals.
Chairman Manendo reviewed the agenda and, taking a bill out of order, opened the hearing on Assembly Bill 454.
Assembly Bill 454: Directs Legislative Auditor to conduct performance audit of Public Employees’ Benefits Program. (BDR S-1315)
Jim Richardson, representing the Nevada Faculty Alliance, chose to testify first on A.B. 454. The history of the bill included information that Assemblywoman Chris Giunchigliani introduced the bill but was unable to attend the hearing on it. The bill was thought to be one of the bills she took over from former Assemblywoman Bonnie Parnell. As the Committee on Government Affairs had been informed, Ms. Giunchigliani accepted the responsibility for several of Ms. Parnell’s bills. The bill itself called for a performance audit of the Public Employees’ Benefits Program, an audit that many people would receive with enthusiasm, he declared. One concern was that another bill in the legislative process was more thorough and complex than A.B. 454. A thorough interim study of PEBP was called for by the Assembly Concurrent Resolution (A.C.R.) 10. A.C.R. 10 was not referred to Government Affairs; it was placed with the Committee on Elections, Procedures, and Ethics. Both bills were attempting to cover the same issues, Mr. Richardson said, and were the results of two different people making a request to deal with a similar issue, one in one way and the other in a different way.
As Mr. Richardson read A.B. 454 and A.C.R. 10, it was clear to him that A.C.R. 10 did subsume all of the issues and questions mentioned on A.B. 454. He believed that others had come to the same conclusion. He suggested to the Committee that passage of A.B. 454 at that time might be redundant, but that was for the Committee to decide. A.C.R. 10 addressed what had been heard over and over in public testimony; a thorough study of PEBP was needed.
“Woody” Thorne, Executive Officer, Nevada Public Employees’ Benefits Program, spoke to A.B. 454 by declaring that the Public Employees’ Benefits Program (PEBP) was continually striving to improve its operations and would welcome the assistance of a legislative audit. PEBP received an executive audit last year that was found to be very helpful, and, he said, what was being suggested would be helpful as well. However, as Mr. Richardson had said, there was significant duplication of effort with A.C.R. 10, which PEBP wholeheartedly supported. Mr. Thorne stated that PEBP was a relatively small agency and stretching their resources for both the legislative audit and the interim study would be difficult. Again, he reported, PEBP supported the intent of both measures, but A.C.R. 10, because it was broader in scope, would be more appropriate.
Chairman Manendo agreed with Mr. Thorne that having to accomplish what both bills would require would be difficult. While he understood that there was, currently, an apparent duplication of effort, he determined that the Committee would continue to consider and take action on A.B. 454 in case A.C.R. 10 was not passed.
Assemblyman Hardy asked the Chair about the process of “Indefinite Postponement.”
Chairman Manendo explained that, when a measure was noted as “Indefinitely Postponed,” it would not be able to be heard again without a new “Jacket.” To bring A.B. 454 back for another hearing, the Committee would need to move the bill to Ways and Means where it would then become exempt from imposed time restraints and would have a longer life.
Scott MacKenzie, Executive Director, State of Nevada Employees Association (SNEA), Local 4041, supported A.B. 454. There was a concern, however, with the date that the report was due, February 7, 2005. Mr. MacKenzie believed that the report could be expedited by sending it to Interim Finance. It was his understanding that Assemblywoman Giunchigliani was also involved with A.C.R. 10. She would possibly be able to clarify where the bills crossed and the intent of each.
Gary Wolff, Nevada Highway Patrol (NHP), Teamsters Local 14, supported A.B. 454. He was also concerned about the length of time before a report was due. He, too, would like to see it expedited.
Chairman Manendo closed the hearing on A.B. 454 and stated that he would accept a motion at that time.
ASSEMBLYMAN HARDY MOVED TO DO PASS A.B. 454 WITH THE ADDITION THAT A LETTER WOULD ACCOMPANY THE BILL TO THE ASSEMBLY COMMITTEE ON WAYS AND MEANS. THE LETTER WOULD INCLUDE THE CONCERNS OF REPRESENTATIVES OF SNEA AND OF NHP ABOUT THE LONG LENGTH OF TIME BEFORE THE REPORT ON THE AUDIT WOULD BE FINALIZED.
ASSEMBLYMAN McCLEARY SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Collins was not present for the vote.)
Chairman Manendo opened the hearing on A.B. 403.
Assembly Bill 403: Revises provisions governing forfeiture of certain water rights. (BDR 48-818)
Rod Sherer, Assemblyman, District No. 36, sponsor of the bill, introduced to the Committee A.B. 403. In Nevada, because of the chronic state of drought, there was a need to avoid wasting water. Because of the regulations for maintaining one’s water rights, there were farmers who would grow and irrigate a crop, not intending to harvest and sell it, to keep their water rights. Mr. Sherer was basically concerned about the waste of water in such a situation. His initial intention was to declare a drought. After consulting with Hugh Ricci, State Engineer, State of Nevada Division of Water Resources, an amendment was drawn up, and Mr. Sherer presented it to the Committee (Exhibit C).
The amendment deleted Section 4 and added a subsection (d) to Section 2. The amendment stated:
(d) Any prolonged periods of less than average precipitation and any period in which soil moisture indices show that a soil moisture deficit has occurred within the hydrographic region where the right is located;
Basically, stated Mr. Sherer, the amendment gave the bill another provision that would allow farmers to pay a $100 fee, and they would not need to use water in that period of time, when there had been less than average precipitation, to preserve their water rights.
Assemblywoman Pierce was, she stated, unclear about how water rights were protected. If there was a drought, she queried, or used less water than was their allotment, the consequence remained unclear to her.
Mr. Sherer explained that water rights were allotted for five years. If one did not use that water within five years, the individual would forfeit the water rights. At the current time, what an individual was able to do was, within three years, should there be a drought, to show that the qualifications for drought existed, and to pay the fee of $100 to the state. By doing so, the person’s count of years would stay at year three and move on to year four the following year, as the drought year would not count against the five-year permit time frame. That person would not have to use up the water allotment during that year. Water rights had nothing to do with an individual’s well; water rights were allotments issued for growing, farming, and agriculture.
Assemblyman Goicoechea affirmed that A.B. 403 added additional criteria to what the state engineer must consider before determining that four years had passed since an individual had used the water at which time he would notice the permittee that he would be in violation and subject to forfeiture.
Hugh Ricci, State Engineer, State of Nevada Division of Water Resources, fully supported the amendments to A.B. 403 as written.
Chairman Manendo closed the hearing on A.B. 403 and stated that he would accept a motion.
ASSEMBLYMAN CHRISTENSEN MOVED TO AMEND AND DO PASS A.B. 403.
ASSEMBLYMAN KNECHT SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Collins was not present for the vote.)
Chairman Manendo opened the hearing on A.B. 388.
Assembly Bill 388: Authorizes creation of health and welfare benefit trust for employees of local government employers. (BDR 23-762)
Assemblywoman Koivisto, District No. 14, introduced A.B. 388 and stated that it was a companion bill to the Public Employees Benefits Program (PEBP) bill that was in Assembly Ways and Means. A.B. 388 authorized local government employers to establish a health trust fund so that the rated group would be a larger one than would exist without actually uniting with other entities for health insurance purposes. The intent was to allow the existence of a larger group to improve ratings and help with premium costs. Mrs. Koivisto requested the bill on behalf of Debbie Cahill, Nevada State Education Association (NSEA). She asked permission to bring Ms. Cahill forward for further discussion.
Debbie Cahill, Director of Government Relations, NSEA, thanked Assemblywoman Koivisto for introducing A.B. 388. Ms. Cahill had mentioned to her that she was working on a “rural health care project.” The 15 rural counties had affiliates in all of those counties representing the majority of the education employees. NSEA had been dealing with the impact of the increased cost of health care for them for quite some time, stated Ms. Cahill. It had been very problematic. Ms. Cahill reported that NSEA had begun working on “the project.” With Ms. Cahill was NSEA attorney, Jim Penrose, who drafted the legislation and who would explain the technical merits of the bill. He would also present some amendments to the bill because it did not come from drafting exactly as sent in. Also with Ms. Cahill was Sherry Grund, President of NSEA’s rural affiliate representing the 15 counties.
James (Jim) Penrose, attorney, Dyer-Lawrence-Penrose-Flaherty & Donaldson, Carson City, stated he was not an expert in the area of legislation, as most of his practice was devoted to litigation in the field of employment and labor law. He had been privileged to work with two gentlemen, one in Las Vegas and one in Los Angeles, who were experts and with whom Mr. Penrose consulted when drafting the legislation. Basically, the key section of the bill was Section 2. It allowed local government employers and employee organizations to create the same kind of trust that was provided for in the private sector under the 1947 Taft-Hartley Act. The Taft-Hartley Act was a provision of federal law that allowed entities in the private sector to create a welfare benefit trust to provide insurance coverage for employees. That act, however, was specifically not applicable to states and to political subdivisions of the states.
When asked to look at the feasibility of allowing that kind of entity to come into existence, Mr. Penrose read through the statutes and could not find any specific prohibition against the arrangement described in A.B. 388. Neither was there any statute that specifically allowed it. The Attorney General’s Office was asked for an opinion on the propriety of that kind of arrangement through the Carson City School District; the response received back was that the Attorney General’s Office could not issue opinions at the request of a school district. As a result of that response, Mr. Penrose drafted a bill that would allow that kind of entity to be created. The bill, as received back from the drafter’s office, was pretty much like what had been submitted with a few exceptions. The changes, according to Mr. Penrose, were significant (Exhibit D).
The first amendment brought forth by Mr. Penrose was for Section 2. He directed the Committee members’ attention to lines 35-36 on page 2. He stated that the word “employee” had been added in the drafting process, and it significantly changed the meaning of that provision. Under the Internal Revenue Code, for a voluntary employees’ beneficiary association to be exempt from taxation, it had to be independent of the entity that created it. Rather than simply deleting the word “employee” and leaving “organization,” Mr. Penrose believed that it would be clearer if both were removed and the word “entity” was used in their place.
The second amendment related to Sections 9 and 10 of the bill. Neither was included in the original draft. Section 9 was a provision that extended to the trust the reinstatement requirements of Nevada Revised Statutes (NRS) 287.0475. Reinstatement from the perspective of any health insurance plan created significant problems of cost. As explained in the handout (Exhibit D), the reinstatement option involved employees who opted out of the plan of benefits during the time when they were relatively healthy. They either did without coverage altogether, or they attempted to find coverage that was less costly, even if that coverage provided fewer benefits. Five or ten or more years later, when a health problem occurred, those people requested to reenter the original plan. Meanwhile, of course, they had not been paying premiums into the plan nor were the premiums paid on their behalf. The result was what the actuaries referred to as an “adverse selection” problem. The result would be increased cost to the health trust. Mr. Penrose, speaking for NSEA, stated that the preference was to allow the trustees of the trust the option to allow reinstatement or not and to determine the conditions under which that would occur. For that reason, the request was for deletion of Section 9.
Section 10’s amendment was easy to explain, continued Mr. Penrose. The bill, in its original form, extended the trust provisions to district court judges and Supreme Court justices. Those people were employees of the state; the local governments did not employ them, so it would not be appropriate to include them within the scope of the bill. The amendment was to delete Section 10.
Assemblyman Grady asked Mr. Penrose to explain the difference between what A.B. 388 proposed and what other local government insurance programs had developed. He used the plan of the Nevada League of Cities and what he referred to as the “self-insured” plan that other entities had as examples.
Mr. Penrose explained that when talking about a cooperative agreement like the Nevada League had or a casualty insurance pool that existed for local governments, there were provisions in statute that authorized local governments to band together in a cooperative arrangement to provide for insurance coverage. The key difference between A.B. 388’s arrangement and those plans was that the employee organizations actually became parties to that agreement. Under the cooperative agreement statutes, the only entities allowed to participate in such an agreement were public agencies. An employee organization, under existing provisions of NRS 277, the cooperative agreement provisions, could not be a party to a cooperative agreement. The provisions in NRS 287.010 that authorized a school district or any other local government employer to provide health coverage to its employees addressed a single entity as opposed to a group of entities banding together.
Mr. Grady was involved, he stated, with the Nevada League of Cities. What the League’s program did was to include cities, school districts, counties, and other entities that had come together as a cooperative group. It was not looking at any organization within the local government; it supplied insurance for the local government entities. Mr. Grady remained confused, he stated, in the difference between that approach and what was proposed in A.B. 388.
Mr. Penrose again affirmed that the basic difference was that employer organizations from each of the participating governments would be involved not just in the creation of the trust but also in the management of the trust. That was identical with what happened in the private sector. It was important, he stated, that both the government entities and the employee organizations were involved in managing the trust. It created a system of checks and balances that helped in the management of that trust.
Sherry Grund was a second grade teacher from Churchill County, President of the Uniserve Council of Nevada (UCN), and a member of the Board of Directors of SNEA. She reported that UCN, NSEA’s branch of the fifteen rural counties, had been dealing with problems of insurance’s skyrocketing prices, lessening benefits, and other concerns of the members. UCN decided to approach NSEA in search of possible means of banding together. Meetings were held with the school districts and the employee associations on several occasions. UCN hired a consultant to help gain a better understanding of insurances and insurance companies and sought ideas on how to work towards a cooperative arrangement. School districts would save money, and employee members would be able to cooperate with their school districts to manage their health insurance. UCN had put together a working group that was examining trust documents and trust language, and the consultant was putting together a template so districts would be able to identify savings if they continued to cooperate.
Chairman Manendo asked Mr. Penrose about a trust’s option of not allowing reinstatement of individuals when state and local entities currently had the provision that they must reinstate individuals.
Mr. Penrose stated that the issue of reinstatement was basically a policy issue. The concern was whether or not the trust could afford to allow individuals to rejoin once they had chosen to leave the trust seeking other health insurance options. It was a cost issue for the trust. Existing statutes did include a preexisting condition limitation, but even that might not be effective. For the trust to be effective, for any insurance program to be effective, cost was the key consideration. Depending on the size of the group, it would not take many catastrophic claims to drive the cost of coverage up significantly. There was no absolute legal prohibition against including the trust in the reinstatement requirement. In fact, the committee managing the trust could ultimately choose to do that. The concern was that costs would definitely increase if that were the case.
The Chair read on lines 24 and 25, Section 9, page 7, that insurers shall approve or disapprove the request for reinstatement in 90 days. That whole section was to be deleted.
Mr. Penrose, referencing the same section as the Chair read, stated that the insurer had the discretion to determine whether or not the employee otherwise met the requirements of the statute. Those requirements included whether the employee had been formerly covered by the policy, was he currently employed by the employer, and did he meet the requirements of that section; if he met those requirements, the insurer had the right to request reinstatement if that was the decision of the trust’s management team.
“Woody” Thorne, Executive Officer of the Public Employees’ Benefits Program, spoke in opposition to A.B. 388. He found it necessary to oppose the amendment to delete Section 9 of the bill. That would provide an inequity for that trust compared to the state and local entity programs. In essence, by removing themselves from the responsibility of reinstating individuals who elected to leave their program at an earlier time, they were differentiating themselves from the state and local entity programs. The Public Employees’ Benefits Program (PEBP) would have to take those individuals into their program, adding one more cost factor aggravating the overall cost of the PEBP’s plan.
Martin Bibb, Executive Director, Retired Public Employees of Nevada, questioned Section 9 also. His question was somewhat related to the section that had been referred to, Section 9. He believed, he said, that the previous bill introduced by Assemblywoman Koivisto would require the readmission of folks into local government plans. The Retired Public Employees of Nevada asked for clarification as to whether that would be in conflict with the proposal in the measure before the Committee currently. He stated, “We were not certain how that would impact, and, if there were any light to be shed on that, we would look forward to hearing it.”
Chairman Manendo closed the hearing on A.B. 388 but immediately reopened it, as he had not been aware of another witness who wished to speak.
Dan Musgrove, Director, Office of the Clark County Manager, raised a concern with the sponsors of the bill; he believed there was an unintended consequence in Section 2, subsection 2. In subsection 1 of Section 2, lines 23-29, it allowed that it was enabling, as it gave permission for people to put together a trust as discussed. However, line 30 read, “All contributions made to a trust fund established pursuant to this section must be held in trust and used….” On line 32, subsection (a), “To provide from principal or income from both… medical, dental, vision, hospital, death, disability or accident benefits…”
The folks that Mr. Musgrove worked with read that to mandate benefits. He thought that the benefits offered should be left up to the folks who put together that agreement. For example, dental insurance became so costly that the trust believed it could no longer be offered. As a negotiation, they decided not to have that particular form of insurance because it would be more important to have hospital, vision, or other coverage than dental coverage.
Mr. Musgrove and those he had talked with were concerned that, as they read the measure, the trust would not have the option of picking and choosing. He was speaking with Ms. Cahill just before the Chair began to close the hearing on the bill to see if she read it in the same way. That would not be their intent, he believed. The market changed from day to day, and the trust would need the ability to negotiate the best deals that they could to provide the cheapest coverage but most comprehensive coverage for the employees. The unintended consequence, as Mr. Musgrove saw it, could result in the inability of the trust to give up one type of coverage to continue other coverages at the best possible price.
Assemblyman Collins asked Mr. Musgrove to describe “cheapest and most comprehensive.” Mr. Musgrove complied with the request by stating that the reason behind attempting to put together large groups of people was to get the “most bang from their buck.” The only reason behind the measure would be to get comprehensive coverage that was as cheap as it could be. If ten employees looked for insurance, they would certainly not get the deal that would be offered to 10,000 employees. Each local government, each entity, had its own unique bargaining units that attempt to negotiate for themselves. The City of Las Vegas had a different coverage than Clark County had. The City of Henderson had a different coverage than Clark County. To come together to reach an agreement would be a tough proposition. When resources were pooled, however, the opportunity existed to get better coverage. If, at some point in time, they were handcuffed by the bill’s language, that would be a very real problem.
Mr. Collins stated that he appreciated the concept of effective coverage. When dealing with people and health care coverage, he was uncomfortable with and took exception to the word “cheap.” That was the whole point he wished to make. He saw it as an oxymoron to say “cheap and comprehensive.”
Assemblyman Goicoechea directed his question to Mr. Penrose. He wondered what would happen in the event that an entity participated in the program for several years, had paid money into the trust, and then decided to drop out. He assumed that, when the entity left, it would leave its investments in the trust.
Mr. Penrose responded that the trust agreement would clarify that process. The trust agreement was the agreement between all of the participating entities that laid out the structure of the trust, and it would spell out the process by which an entity would withdraw from it. Trust agreements he had looked at provided that, should an entity choose to withdraw, any money paid to that point stayed in the trust to pay claims that accrued to that point. There were also provisions in the trust document that dealt with the liability of an entity, once it withdrew, and dealt with the liability of the trust for claims of the entity after the entity had withdrawn.
Mr. Goicoechea questioned whether there was an anticipation of enough participation and revenue in the trust to cover those “tail end” claims that came in after an entity withdrew.
Mr. Penrose stated that it was key to the success of the trust that the reserves were built up enough so that the money already existed to pay the claims as they accrued. The actuaries had the ability to project, with a fair degree of accuracy, what those claims would be. That was the basis for setting up the contribution in the first place.
Mr. Goicoechea reaffirmed that, with the deletion of Section 9, there would be no requirement to reinstate a retiree who withdrew from the trust. There would be no requirement, but the trustees of the trust would be able to elect to allow reinstatement for some class of participants.
Mr. Penrose responded to comments made about Section 2 by Mr. Musgrove. The description of benefits as set forth in that section was in the disjunctive. That section talked about the kinds of insurance, medical, hospital, dental, vision, death, disability, or accident benefits. The basic idea was to give the trust the option of providing any of those benefits or any other benefits that would be permitted under the provisions of the Internal Revenue Code for an entity of that nature. The significance of the term “must” in the lead line of subsection 2 was to say, if one elects to form a trust pursuant to that section, any money contributed by the parties “must” or was required to go into a trust fund. That was key to the whole concept, because, without the creation of the trust, there were no fiduciary responsibilities and no way to guarantee the integrity of that fund.
Mrs. Koivisto clarified that by using the word “or” in subsection 2, the various forms of insurance coverage were optional. Mr. Penrose agreed that her interpretation was correct.
Assemblyman Knecht wondered if Mr. Penrose had checked his proposed amendment, especially the deletion of Section 9, with Mr. MacKenzie and Mr. Richardson, the representatives of two state employees’ organizations.
Mr. Penrose had not discussed the amendments with them and noted that the provisions of the bill would not govern the members of those organizations in any case, as they were employees of the state and not of local governments.
Mr. Knecht appreciated that but restated his concern. He noted that there was another bill that he was privileged to sign onto, which would unify the Public Employees’ Benefits Program for state and local government employees. He would be interested in knowing if the one-way return provision was acceptable to them or whether they thought it might have some unfortunate effect on state employees.
From an employee’s perspective, stated Mr. Penrose, there was a conflict. The employee was interested in reducing the cost of any required employee contribution; the employer was interested in reducing the cost of any required employer contribution. To the extent that reinstatement drove up that cost, it would be an issue. On the other hand, if someone wished to reenter the plan, not being able to do that was also a concern.
Mr. Goicoechea wanted additional information concerning the coming together of local government entities called local government employers. He asked about the requirement for inter-local agreements between those groups to form the trust.
The agreement provided for in A.B. 388, stated Mr. Penrose, was the only agreement legally required. It would be an alternative for the inter-local agreement provided for under NRS Chapter 277.
Danny Coyle, President, Retiree Chapter 13 of the State of Nevada Employees Association, responded to Mr. Knecht’s concern about the effect on state employees. From a retiree point of view, they would share the same concern as “Woody” Thorne raised about precluding the people who left that system not being allowed back into the plan.
Mr. Knecht wanted to know the concerns of other employee groups. He thanked Mr. Coyle for offering that opinion. Mr. Knecht wanted more information on how strongly those groups felt in opposition to that section of the proposal.
Mr. Coyle reported that he would see Mr. MacKenzie later in the day and would convey Mr. Knecht’s request to him.
Chairman Manendo closed the hearing on A.B. 388 and recessed the Committee for fifteen minutes. The Committee would return and move into a work session.
Chairman Manendo reopened the hearing briefly as Governor Kenny C. Guinn entered the hearing room. The Chair welcomed the Governor and invited him to speak to the Committee. The Governor declined, stating he was just visiting, and wanted to thank the Committee for its hard work.
Chairman Manendo opened the work session and directed the Committee’s attention to A.B. 213.
Assembly Bill 213: Removes prospective expiration of certain provisions regarding domestic wells and temporary permits for appropriation of ground water. (BDR S-654)
Susan Scholley, Committee Policy Analyst, introduced A.B. 213, which was sponsored by Assemblyman Mortenson. In its original form, A.B. 213 proposed the elimination of the July 1, 2005, sunset dates on the provisions that govern the revocation of certain temporary permits for groundwater appropriations. From previous testimony, the concerns originated in the Las Vegas Valley and applied to quasi-municipal temporary permits that were issued between 1955 and 1992. Amendments were proposed at the hearing by the state engineer to address a number of his concerns with the bill. Since then, a compromise proposal had been worked out between the state engineer, the Southern Nevada Water Authority, and the Nevada Well Owners Association. A mock-up of the proposed amendments was attached to the work session document along with a copy of the original bill. The original bill’s first page remained essentially the same, although two new sections would be added (Exhibit E).
Ms. Scholley stated that a new Section 3 would include the language, which would, over the interim, have the State Engineer review the extent of his administrative powers in the designated basins and determine whether or not he would require additional administrative powers to include the possible authority to levy administrative monetary penalties as necessary for the State Engineer to carry out his duties. That would set the stage for the State Engineer to return to the Legislature in 2005 and request legislation briefly outlined in his proposed amendments presented during the hearing on A.B. 213.
On page 2, as desired by the State Engineer’s Office, the language that was currently in the temporary permit revocation section regarding financial assistance, Section 4(c), at the request of the Southern Nevada Water Authority, had been deleted. At the bottom of page 2, Section 5(c) would be deleted. On page 3, Section 6 would be deleted.
Ms. Scholley continued to walk the Committee through the amendments for A.B. 213. On page 3, a new section, Section 7, would be added. The involved parties also agreed to the language in that section. Near the bottom of page 3, Section 4, new language would also be added. That addition, at the request of the Southern Nevada Water Authority, brought back into the bill the ability to request and receive financial assistance that had been removed from the “temporary permit” section.
Section 6, on page 3, was agreed to because the Southern Nevada Water Authority would help pay the costs of plugging and abandoning the wells of persons who were required to obtain water from a different source pursuant to NRS 534.120.
Those were the changes agreed to by the parties. Ms. Scholley did note that opposition at the hearing was received from the State Engineer and from the Director of Conservation and Natural Resources. That opposition had been addressed through the compromise amendments. There was a fiscal impact on local government. However, the fiscal note was rebutted since the Southern Nevada Water Authority confirmed that it would continue to offer its financial assistance program beyond 2005, even if not statutorily required to do so. There was no impact to state government. There were representatives from the Well Owners Association and from the Southern Nevada Water Authority present and able to respond to Committee members’ questions also.
Mr. Knecht pointed out that there was a mistake in the printing on page 1. In the reference to NRS 534.120, Section 1, the third line stated, “if additional administrative powers are, including monetary penalties, are…” Probably the first “are” should be eliminated.
Robert L. Crowell, attorney, on behalf of the Nevada Well Owners Association, stated that he and the association appreciated the Committee’s opportunity to work on the legislation and had reached complete agreement with all concerned parties. Again, the Nevada Well Owners Association heartily endorsed the compromise amendments to A.B. 213.
Andy Belanger, representing the Southern Nevada Water Authority, stated that he and the Authority were also in agreement with the proposal currently before the Committee. The only concern was in Section 6, page 3, on the mock-up work session document. He believed it was crossed out in error. Other than that, the Southern Nevada Water Authority was in agreement with the proposed document.
Mr. Crowell agreed with Mr. Belanger that Section 6 on page 3 should not have been crossed out.
Ms. Scholley reviewed the document and stated that both Mr. Belanger and Mr. Crowell were correct; Section 6 was crossed out in error. The section was to stay in A.B. 213.
Mr. Knecht complimented all parties for their cooperative efforts in working on the amendments to A.B. 213.
Chairman Manendo asked Mr. Belanger about the cost incurred by the Southern Nevada Water Authority to plug and abandon a well. The cost, according to Mr. Belanger, stated that the cost was between $3,000-$5,000. The Authority had the contract to do that. The authority had plugged about 70 wells since 1999, most of which were from people who voluntarily agreed to abandon the wells and connect to the municipal water system.
Mr. Collins challenged Mr. Belanger by asking about the costs that were offset to lower the actual cost to closer to $1000. Mr. Belanger responded that the cost to plug and abandon wells was paid for solely by the Southern Nevada Water Authority. The well user did not share that cost at all.
Chairman Manendo reported that he would entertain a motion.
ASSEMBLYWOMAN KOIVISTO MOVED TO AMEND AND DO PASS A.B. 213.
ASSEMBLYMAN CHRISTENSEN SECONDED THE MOTION.
Ms. Weber asked about the section on the work document in blue in Section 1. She wondered if an interim study would be appropriate, because she believed it was not enough to simply require that “The State Engineer shall review… and report to the 2005 Legislature…” An additional concern was the time frame during which Committee members were able to add to or subtract from bills and amendments under consideration. Ms. Weber wondered if it would be appropriate to make changes during the discussion time allotted before a vote on a motion was taken.
Mr. Collins, responding to Ms. Weber’s first concern, stated his belief that the State Engineer would come to the 2005 Legislature with a bill draft request to increase or modify the State Engineer’s administrative powers. Concerns would be resolved during the coming legislative session in 2005.
Mr. Christensen addressed Ms. Weber’s second concern. In the subcommittee working to compromise on the language of the amendments to A.B. 213, various concerned representatives were present. They included the State Engineer, the Well Owners Association, the Southern Nevada Water Authority, and the Legislature; all had concerns about the sunset date. The bill currently under consideration by the Committee was the culmination of all those people coming together, putting some of the differences aside, and figuring out the best course of action for the bill. Basically, all concerned entities had given themselves two years to come up with something that was viable, that would keep people accountable, and would satisfy conservation issues. In two years, Mr. Christensen stated, all would be resolved.
Ms. O’Grady clarified that the reference to the 2005 report would be moved to a transitory section at the end of the bill, not in the section it was currently a part of. The mock-up version, she reminded Committee members, would not be exactly like the final version of the bill.
Chairman Manendo reminded the Committee of the motion and the second. The Chair placed the question.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Manendo thanked everyone who had worked hard to reach the compromise on A.B. 213. As Assemblyman Mortenson was the sponsor of the bill, he would take it to the Floor. Should he be unable to do so, Chairman Manendo assigned Mrs. Koivisto and Mr. Christensen as backups.
The Chair opened the work session on A.B. 214.
Assembly Bill 214: Establishes requirements concerning state and local government publications issued in electronic form. (BDR 33-1078)
Ms. Scholley opened the discussion on A.B. 214, sponsored by Assemblyman Mortenson, and stated that the bill was related to electronic publications. Originally, A.B. 214 required the Administrator of the Nevada State Library and Archives to establish standards for state and local government publications that were issued in electronic form. The bill included a definition of “electronic form” and required state and local governments to provide one copy of an electronic publication. It also required the State Publications Distribution Center to make electronic publications available free of charge on the Internet and to periodically make available on the Internet a list of state publications, which were required to be published (Exhibit F).
Ms. Scholley added that amendments were suggested during the original hearing of A.B. 214, from Scott Sisco, the Interim Director of the Department of Cultural Affairs, Dan Musgrove, representing Clark County, and the Nevada Association of Counties. The local government representatives had concerns with the original form of the bill. They believed it would potentially allow the Nevada State Library and Archives to set up standards that would be difficult or prohibitively expensive for some of the rural counties to meet. They were able to work out their differences, and a mock-up of the proposed amendments was in the work session documents. Ms. Scholley directed Committee members’ attention to page 1 of the mock up. The language suggested would require the Nevada State Library and Archives administrator to consult with state and local governments to establish the type and form of publications transmitted to the State Publications Distribution Center. That would ensure that any standards were considerate of local government concerns and limitations. She also noted that Sara Jones, the State Librarian, pointed out that it was important to remember that local governments would not be required to issue publications in electronic form.
On page 2, the other amendment that local governments asked for and that was agreed to, was to strike “whenever possible” on line 2, thereby eliminating any inference of a mandate. That section of the bill would simply encourage state and local governments to issue publications in electronic form.
There was no local government fiscal note attached. There was a state government fiscal note, which was attached to the work session document.
Chairman Manendo informed the Committee that A.B. 214 was not concurrently referred to the Assembly Committee on Ways and Means. That would need to be dealt with, he stated. He thanked Ms. Scholley for walking the Committee through the bill. Hearing no further questions or thoughts, the Chair called for a motion.
ASSEMBLYMAN COLLINS MOVED TO AMEND AND DO PASS ASSEMBLY BILL 214.
ASSEMBLYWOMAN KOIVISTO SECONDED THE MOTION.
Mr. Goicoechea asked for a clarification as to the definition of “publication,” and Ms. Scholley directed attention to page 1 of A.B. 214. The amendment stated that “the State Library and Archives will consult with state and local governments to establish the type and form of publications transmitted…” That was, she said, one of the issues that would be addressed should A.B. 214 pass.
Chairman Manendo called for the vote.
THE MOTION CARRIED. (Mr. McCleary and Mr. Williams were not present for the vote.)
Chairman Manendo declared that the bill belonged to Mr. Mortenson so he would carry it to the Floor. The Chair excused Mr. Grady, as there were students from Fernley Elementary School waiting to be escorted to the gallery of the Assembly for the coming Floor session. The Chair wished them well. As there were no other items to come before the Committee, Chairman Manendo adjourned the meeting at 10:12 a.m.
RESPECTFULLY SUBMITTED:
Nancy Haywood
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman
DATE: