MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-Second Session
April 9, 2003
The Committee on Government Affairswas called to order at 8:24 a.m., on Wednesday, April 9, 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:
None
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
JoAnn Aldrich, Committee Secretary
OTHERS PRESENT:
Kathy Augustine, State Controller
Christi Thompson, Chief Accountant, State Controller’s Office
Shane Chasney, State Attorney General’s Office
Dennis Colling, Administrative Services Division, State Department of Motor Vehicles (DMV)
Birgit K. Baker, Administrator, State Employment Security Division
Dino DiCianno, Deputy Executive Director, State Department of Taxation
P. Forrest “Woody” Thorne, Executive Officer, Public Employees’ Benefit Program (PEBP)
John Yacenda, State of Nevada Employees’ Association (SNEA)
Dana Bilyeu, Operations Officer, Public Employees’ Retirement System (PERS)
Myla C. Florence, MPA, Director, Department of Employment, Training and Rehabilitation (DETR), and PEBP Board member
F. Martin Bibb, Retired Public Employees of Nevada
Scott MacKenzie, AFSCME Local 4041, Carson City
Doug Bierman, representing PEBP members in Lander, Eureka, and Caliente
Dan Musgrove, Clark County, Nevada
Mary Henderson, Nevada League of Cities (NLC)
Chairman Manendo opened the joint hearing on A.B. 457 and A.B. 481.
Assembly Bill 457: Makes various changes concerning collection of debts by state agencies and State Controller. (BDR 31-102)
Assembly Bill 481: Makes various changes concerning state financial administration. (BDR 31-101)
Kathy Augustine, State Controller, mentioned that A.B. 457 and A.B. 481 were companion bills and she would address her remarks to both bills (Exhibit C). Ms. Augustine stated that one of her top priorities had been collecting the state’s receivables, which now exceeded $118 million. She said they had developed a plan to collect debt owed state agencies. She supported S.B. 500 of the 70th Legislative Session, which set in motion a concentrated effort to meet the objective. The amount of money owed the state of Nevada at that time was “anyone’s guess.” Procedures were developed to implement consistent statewide policies, because timely debt collection was imperative to meet future funding requirements and to secure the state’s financial stability. In April of 2001, the Board of Examiners approved contracts between the State Controller and two private debt collection companies, OSI Collection Services, and RecoverMetrics, in association with Nevada-based Crisis Recovery, to assist the recovery efforts of money owed to the state.
OSI was the largest provider of accounts receivable management in the United States, servicing 26 states. Both Crisis Recovery and RecoverMetrics had extensive experience in the identification of fraud and the collection of institutional debt, using forensic loss recovery techniques to recover corporate debts of over $25,000. Fees in the contracts were based on the percentage of collections and were passed along to the debtor, not to the state, except when the debt was under $200.
Studies had shown that it was more cost-effective for states to use outside agencies for debt collection, which was also noted in the Government Finance Officers’ Association publication included in the handout packet (Exhibit D). There was currently a national task force exploring the feasibility of the Internal Revenue Service (IRS) using private collection companies to recover federal debt.
However, Ms. Augustine stated, the essence of Nevada’s debt collection efforts was contained in A.B. 314 of the 71st Legislative Session, which authorized the State Controller to act as a central point of collection for all state agencies. By centralizing revenue collections and accepting the responsibility for collecting delinquent accounts, Ms. Augustine had achieved the following goals:
To date they had 11 interlocal contracts that were signed by the State Controller’s Office, and a list of those agencies, boards, and commissions was included in the handout packets.
A.B. 314 of the 71st Legislative Session also mandated the State Controller to prepare and maintain a list of debtors available for public inspection and required the State Controller to remove debts designated as “bad debts” from the books. Additionally, it allowed contracts with private debt collection agencies to include cost of collection and fees for debt collection. The State Controller’s Office had taken the following steps to recover debts owed the state.
In December 2001, they mailed over 6,000 letters to citizens whose checks were returned to the DMV for insufficient funds, informing them the debt was being turned over for collection. Their driver’s licenses, permits, and vehicle registrations were flagged in the DMV system, and suspended if restitution was not made by December 31, 2001. The remaining accounts were turned over to OSI for collection. To date, the Controller’s office had collected $1,315,051 from that DMV collection effort, and the money was returned to the highway fund.
Ms. Augustine continued, saying that a warrant offset program was also initiated at the beginning of last year, in conjunction with the Department of Taxation and the Department of Employment, Training, and Rehabilitation (DETR) to flag the accounts of businesses or individuals who owe back taxes to the state. That program had been so successful that they made the program available to all state agencies. Ms. Augustine said that warrant offset and vendor-holds had resulted in almost $235,000 in cost savings and recovery in the past year.
The Controller’s Office was also involved in payroll overpayment recovery, which had yielded $34,400 from former state employees who were overpaid on termination of service or retirement. Ms. Augustine said recovery efforts had been lax in the past because the state had ample surpluses to cover expenses. The mandated, rather than permissive, centralization of debt in the State Controller’s Office would enhance the state’s ability to recover the outstanding debts.
Passage of A.B. 457 would mandate that all state agencies turn over their old debt to the State Controller’s Office for collection, with the exception of the Department of Taxation, which chose to recover their own debt using one of the Controller’s Office collection agencies. Included in the bill was the repeal of the $200 restriction for reimbursement of costs and fees, as mentioned earlier. Currently, the state was paying all costs and fees for collection of debts of $200 or less. Repealing that restriction would pass on the cost of collection to the debtor in all cases.
Currently, the state could not pass on charges incurred to collect delinquent money to the debtor, if the amount was $200 or less. The internal auditors stated that it was more equitable to charge the public uniformly for expenses incurred in debt collection, regardless of the amount, and that it would benefit the state to recoup all monies expended in collection efforts.
A.B. 457 would also increase the maximum pass-on charge from $25,000 to $50,000 and would eliminate the sunset provision on the pilot program of suspending driver’s licenses and registrations at the DMV and the Department of Wildlife, which was scheduled to sunset on October 1, 2003.
Finally, Ms. Augustine concluded that A.B. 457 would give the State Controller the authorization to write off uncollectable debts under $500, rather than go to the Board of Examiners, and debts where the cost to collect actually exceeded the receivable amounts.
In addition, A.B. 481 proposed creation of a statewide program of withholding drivers’ licenses and would allow the State Controller’s Office to develop consistent statewide standards for fees, fines, statutes of limitations, and the ability to charge a returned check fee. Currently, there were revenue-generating agencies within the state that had various charges for returned check fees. Ms. Augustine wanted to make returned check fees a uniform $25 all across the state.
Ms. Augustine introduced Christi Thompson, Chief Accountant of the Debt Collection Section.
Christi Thompson, Chief Accountant, State Controller’s Office, read from the table on pages 2-3 of Exhibit D, that gave summary descriptions of each proposed change regarding debt collection in A.B. 457 and A.B. 481, and listed the corresponding section numbers, relevant NRS statutes, and reasons for the changes.
Assemblywoman Koivisto asked what were the positions of the Department of Administration and the Attorney General’s Office on being excluded from the centralization of all agency debts.
Ms. Augustine answered that the Department of Administration was more than willing to avoid the reorganization. She said she had talked to the Budget Director and that he was fine with the exclusion. She said that Shane Chasney was present and would speak for the Attorney General’s Office.
Shane Chasney, Deputy Attorney General, said that the Attorney General’s Office had a neutral position on A.B. 457. He said that since he represented the Controller, it would be more appropriate for her to be the person in charge, formulating the regulations, because she was intimately involved in the debt collection process. However, the official stance of the Attorney General’s Office was neutral, and they were comfortable with the proposed legislation.
Ms. Augustine added that the language in the bill was permissive, and clearly stated that that agencies “may” turn over their debt to the Controller’s Office, instead of using “shall.”
Dennis Colling, Chief of the Administrative Services Division, State Department of Motor Vehicles (DMV), said that he would like to comment on Section 3 of A.B. 481. For the record, it was his understanding that Section 3.2 applied to the $25 fee charged for returned checks, and did not apply to various fees, penalties and fines that the DMV collected and which were in statute at this time. He said he had discussed this with Committee staff, with the Committee Counsel, and with the Controller’s Office.
Birgit K. Baker, Administrator, State Employment Security Division, stated that the Division was neutral on these bills, but did support coordinated debt collection. However, they had some questions regarding legislative intent and the potential impact on Nevada’s Unemployment Insurance Trust Fund. Ms. Baker said she briefly discussed the two proposed bills with Christi Thompson, Chief Accountant, before the meeting. She said that most of her points were for the sake of clarification. She was not sure if there would be any amendments until their legal counsel had received and evaluated the clarifications provided from the Controller’s Office.
Ms. Baker wished to clarify that Section 3.3 addressed the confidentiality of proven debts that were not in dispute. In talking to legal counsel, the legal definition of debt that was “owed and not in dispute” was debt that had been reduced to judgment by a court. In that case, the information was already public information, which could mean that the statute might not be necessary.
The second question concerned the applicability of the entire Chapter 353C. NRS 353C.090 provided that Chapter 353C applied only to an agency to the extent that no other specific statute existed that provided for the collection of debt due the agency. Furthermore, to the extent that the provisions of 353C conflicted with a specific statute, the provisions of the specific statute would control. They needed to clarify the applicability of the entire chapter and of the proposed amendments to have all agencies use the Controller’s Office for debt collection. Ms. Baker said that those were the only two points on A.B. 457.
Regarding A.B. 481, Section 2.5 regarding the definitions of license, permit, or registration that “includes, without limitation, a professional, occupational, or recreation license, permit, or registration.” She wanted to know what that meant, because the Department of Taxation, Employment Security Division, cities, and counties use the Nevada Business Registration form for all registrations. Ms. Baker wanted to know if that form would be included under that section.
The second question was that in Section 6 of A.B. 457 the Department of Taxation was proposed to be exempt, and in Section 3 of A.B. 481 “agency” did not include the Department of Taxation, Gaming Commission, or State Gaming Control Board. As the Committee may be aware, the Unemployment Insurance Trust Fund was an outside bank account, with very strict federal oversight. Their question was what criteria were used in determining who should be exempt from the proposed bills, and who should not be exempt.
Ms. Baker said that concluded her comments, and they would be happy to work with the Controller’s Office to obtain clarification and report to the Committee.
Chairman Manendo said the Committee members were looking forward to those clarifications.
Ms. Augustine wanted to mention that she had heard from the Administrator for the first time when she entered the Committee room this morning. The bills were published much earlier. She said she would work with Ms. Baker on the clarifications and try to resolve some misunderstandings. In A.B. 457, Section 1.3 was actually permissive language. On A.B. 481, the question on Section 2.5, regarding license, permits, and registrations, would have nothing to do with business registrations. Ms. Augustine said that the language was mirrored language from the Attorney General’s bill for the “dead-beat dad” legislation. Finally, the exemptions were made because the Department of Taxation had asked for them, and she said, “Of course, the Gaming Control Board and Gaming Commission were under separate laws. Anything that was mandated by the federal government to be held confidential would remain confidential, which we brought to your attention earlier.”
Assemblyman Collins said he had several questions regarding money owed to the state. He wanted to know how much of the state debt could realistically be captured. He asked if the money was already counted or credited in the state budget. He wanted to know how much the collection agency would take of the money they collected, and how that would be reflected in the state budget. He said that it seemed the state had enforcement power to collect taxes, but they were “not very clean.” Some money owed was recent debt, he said, and asked Ms. Augustine to “balance our budget on this debt.”
Ms. Augustine stated that the money they had recovered was not included in any budget solutions. She said they had been collecting at a rate of over $100,000 per month consistently. The reason why they wanted to contract out to debt collection agencies, as opposed to doing it in-house was that they had a hammer that the state did not have. One of the hammers the state possessed was with the DMV, such as suspending driver’s licenses, which had been very successful in getting people’s attention. Collecting debts from people who lived out of state was difficult, but a debt collection agency had more resources for that.
The Department of Taxation had already turned over $21 million to OSI, so it was possible that some of that would be used to balance the budget. However, none of the debts the State Controller’s Office had collected were included in budget projections. They had a target goal of collecting $1 million per month. So far, only about $7 million of state agency debt had been turned over to the Controller’s Office by the eleven agencies that signed interlocal agreements. She said that if they recovered at least $50 million of the total $118 million in agency debt, she calculated the Controller’s Office could expect an overall 25 percent recovery rate.
Regarding the percentage that the debt collection agency would charge, those costs would be charged to the debtors. Currently, the state only paid collection fees for debts under $200. To date, it had cost the state $2,000 and $3,000 per year to pay that fee to the debt collection agency. The proposal this session was to remove that restriction and pass the entire fee on to the debtors.
Assemblyman Collins asked why they were not seizing vehicles or taking liens on vehicles. He wanted to know why the state did not collect the debt, especially since they were raising taxes. “Why not collect the money owed? If they owe you money, go get it.” He suggested liens, foreclosures, and even closing businesses because they had broken the laws.
Ms. Augustine said Mr. Collins could feel free to amend the bill, if he wanted to give them more power. She said before she was elected to the office, no debt recovery was taking place because there were budget surpluses. She said that a whistleblower at DMV presented them with all the bad checks that were not being pursued, not even with a letter. She said they still expected the agencies to try to collect their receivables, including sending out the initial bill and a follow‑up letter requesting payment, before they turned it over to collection. They did not want the debt until it was at least 60 to 90 days old.
She said they did not have the power to do much. A collection agency could at least put the bad debts on debtors’ credit reports, which the Controller’s Office could not do. Ms. Augustine said that the District Attorneys and the counties were pursuing many bad checks, but the state had not, until recently. Several items were turned over to the Attorney General’s Office. She said when she had to ask an attorney to collect an $11 bad check; it was not an equitable use of money.
Chairman Manendo asked what kind of power they thought they needed to adequately perform the job.
Ms. Augustine said they were not asking for more than was contained in A.B. 457 and A.B. 481. What they wanted was to have the agencies’ debts turned over to the Controller’s Office, in order to be able to aggressively pursue it. As shown in Exhibit D, so far, all that had been turned over to her office was $7.5 million of agency debt, out of the $118 million owed to the state. She said that about $26 million of that debt was in the Department of Taxation from bankruptcies, which they could not touch. Out of the $7.5 million of debt, the Controller’s Office had collected $1.6 million.
Assemblyman Collins asked what she meant when she said we used to have lots of money. Ms. Augustine said it was cyclical: every 10 years they ran out of money, but in the mid-1990s there were adequate surpluses. She did not know why it was not addressed earlier. Until the Legislature authorized quarterly reports to the Controller’s Office, they had no idea how much was even owed to the state. Neither was she sure that the agencies were turning in accurate numbers. They were just “trying to get a handle” on it. In the three months between the September report and the report in December, the receivables increased another $3 million. There was evidence that the debt was growing, not decreasing.
Assemblyman Collins said he expected it would grow larger with the depression. In addition, he said that he did not believe there were legitimate surpluses in the 1990s. He said it was more likely that the surpluses were adequate because they failed to adequately fund programs, perhaps even the Controller’s Office.
Ms. Augustine said that one problem they discovered in the DMV was that vehicle registration fees were being forwarded to the counties before they had collected the money. They raided the highway fund to make the counties whole. Since then, that “hemorrhage” had stopped, and they were recovering some of those monies, but when the Genesis system took over, all that money was lost. Ms. Augustine had discussed finding a way to collect monies they sent erroneously to the counties, when the state was losing money.
Assemblyman Collins asked if they “bought a bad program” when they voted for the Genesis program.
Mr. Colling said that there were a couple of issued raised. The year 2003 was the third year that they had collected in fees and penalties more dollars than were written in bad checks. This year the total debt would be about $1.3 million and the total collections would be about $1.8 million. The DMV included penalties in portions of the budget. The DMV collected about 5,000 bad checks per year. They collected about 60 percent in the first 60 to 90 days, then turned the debt over to the Controller’s Office, and they worked with OSI to collect the remaining 40 percent. They had been very pleased with the Controller’s Office and with the debt collection companies. He said he had been with DMV for about four years, and he thought the debt collection program was outstanding.
Assemblyman Collins asked Mr. Colling if he could contract directly with OSI. Mr. Colling indicated that was not possible.
Ms. Augustine said that they signed an interlocal agreement because the Controller’s Office wrote the Request for Proposal (RFP) document. The entire process took about a year. The Controller’s Office currently had signed contracts with the following agencies: DMV, Department of Business and Industry, Department of Agriculture, Department of Conservation and Natural Resources, Department of Taxation, Private Investigators Licensing Board, Commission on Economic Development, Department of Transportation, Public Employees’ Benefits Program, Commission on Ethics, and Human Resources Welfare Division.
Assemblyman Collins asked how the collection agency fees were structured, and if they were charged on a tiered fee or flat fee basis.
Ms. Augustine said that Recover Metrics’ fees were based on a negotiated sliding scale. Big debts would garner them a greater percentage. On a $1 million dollar settlement from a bankrupt mine, they expected to recover about $500,000, but it was dependent on the Judicial System. OSI collected for a flat fee, but they charge the debtor for that fee. Any revenue-collecting agency, like DMV, had the capability to contract with a collection agency. However, no agency had done it before they started the RFP process, which was a long, arduous process.
Dino DiCianno, Deputy Executive Director, State Department of Taxation, applauded the State Controller for her efforts. He said that he did not believe that the “Tony Soprano method of debt collection” worked in the real world. Due process requirements were the main reason it was difficult to collect certain debts. A sure way to get in trouble with a taxpayer was to violate his right to due process. The agency would be subject to civil liability, which was the last place they wanted to go.
To Assemblyman Collins, he said that he would like to clarify some of the numbers that were floating around. The total uncollected debt owed to the Department of Taxation was $66 million, which was comprised of taxes, penalties, and interest owed. Once a business went inactive and the debt was not paid, the computer program continued to calculate interest at 1 percent per month. Some of that debt was nearly 20 years old. The possibility of ever collecting it was rare. Over 50 percent of that amount was made up of penalties and interest that even a debt collection agency might not be able to collect.
Of the $66 million, $26 million of it was in bankruptcy proceedings. They could not touch that debt until litigation ended. If a court dismissed the case, the debt would then become collectable. If the court discharged the debt, the debt would not be collectable, and could be written off, which the Tax Commission had the power to do. There was a bankruptcy Attorney General for the Department of Taxation, and a revenue officer in southern Nevada, who acted as a conduit to the bankruptcy courts for those collections. They collect $1‑2 million per fiscal year from those bankruptcies, but it was a slow process.
Currently, they had inactive accounts under payment plans that were valued at around $100,000, and they expected to collect that debt. With the remainder of the debt, which was around $40 million, $21 million had been transferred to OSI for collection. They had chosen OSI because of their rate of 11.75 percent, which was added onto the debt billed to the debtor, and the debtor paid that fee. They were still operating on a trial basis, and would like to transfer an additional $20 million of debt, but they were waiting to see how well OSI performed.
Regarding A.B. 457, Mr. DiCianno wanted to make clear that there were confidentiality restrictions with respect to sales tax, use tax, and business tax. He read Section 3 of the bill, and then restated that under sales tax and business tax provisions, there were very stringent confidentiality requirements. If they were ever to release, or misrelease, confidential information to the public, they would be subject to civil penalties. That was why they were very careful about this information.
Assemblyman Collins said, “I appreciate your finally addressing the bill. Sounded like the first part of your testimony was defending the Tax Department. It was. Wasn’t it?” Mr. DiCianno replied, “Yes.”
Assemblyman Collins said that in unrelated legislation, he proposed to collect existing revenue owed to the state of Nevada, and one of those vehicles was a port of entry loophole. He had talked with research staff and with the Departments of Agriculture, Taxation, Transportation, DMV, and five or six other agencies in the state regarding a tremendous amount of revenue that was not being captured because of Nevada’s open borders.
Among other risks, open borders brought health risks with especially great impacts on rural communities, such as fire ants, noxious weeds, and tuberculosis in cattle. Everything from building materials coming into the state, to landscape products carried directly to projects, there were millions of dollars in taxes being lost in Nevada because the state was not pursuing collection of those taxes. Mr. Collins said there were not enough books in schools, not enough to do the right things for our citizens, yet we were being asked to raise taxes. The only department that could not give him even an estimate of the money that they were not collecting was the Department of Taxation.
Assemblyman Collins continued:
Perhaps the Department of Taxation was in the same boat with DMV, without computers and the ability to collect – My question is [why] we’re changing the law here so you can do a better job of collecting taxes, if that is the intent, or to turn them over to a collection agency because you aren’t doing it, and because you can’t identify what is owed.
Thank you for allowing me to get off the bill a little, but if you could find an answer in there as to why we are not collecting taxes, and why we need to keep passing more laws, and raising taxes, possibly because we are not collecting those existing taxes, including those owed to us, as in this bill. Thank you.
Mr. DiCianno asked if that was a question. First, he said it was important to understand that it was very difficult for the department to try to estimate the total amount due in taxes. For example, with use taxes, clearly some of it escaped taxation. The difficulty for the Department was that with the manpower and staffing they had, it was impossible for them to estimate what was missing. They would be the last ones to know. No one would come forward voluntarily and say, “By the way, I owe taxes, and where can I drop the check?” – especially if it was in their best interest to avoid the tax.
Mr. DiCianno stated, with respect to the ports of entry problem, in order to collect money, it cost money. That was the same issue as deciding to transfer debts to OSI. It was more cost-effective for them to transfer to OSI, while they focused on the active businesses that they knew owed money on a monthly basis. Mr. DiCianno said that was the best way he could explain it.
Assemblyman Collins said he agreed that the Director of the State Department of Taxation came to the Legislature for money, for staffing, and for the tools to do the job. Evidently, someone was not asking for what they needed, and that bothered him because as long as he had been involved in government, it was always easier to find new revenue, than to collect what was owed. He added,
To go back to your testimony, you said that if everything was collected, you would get $20 million, and 11 percent [of that] would go to the collection agency. . . You know, if you haven’t got enough horses to pull the wagon, you need to get the horses.
Mr. DiCianno said he appreciated his support. He had been “singing this song for years.” There was no question that they could be a better and more efficient department. They strove to do that, but their caseload had become so significant, that they were buried. That was the problem.
Chairman Manendo closed the hearing on A.B. 457 and A.B. 481, and brought the bills back to the Committee. Then he opened the hearing on A.B. 249.
Assembly Bill 249: Makes various changes concerning Public Employees’ Benefits Program. (BDR 23-549)
P. Forrest “Woody” Thorne, Executive Officer, Public Employees’ Benefits Program (PEBP), presented A.B. 249, which was requested by PEBP. Mr. Thorne said he would outline what the bill was intended to accomplish, rather than go through it section by section.
Mr. Thorne stated that the main goal of A.B. 249 was to establish PEBP as the agency of record for payroll deductions. Currently, there was a requirement that the payroll centers should maintain records of what the deductions and the authorizations were. Since PEBP was the organization required to administer and determine what the deductions should be, they wanted to be the agency of record for the information, and relieve the payment centers of that responsibility, which would also eliminate the current duplication of record-keeping.
In addition, Mr. Thorne said the bill would seek to obtain timely notification of changes in employee status from the agencies. If an agency failed to make the notification within the specified time frame, the agency would then be responsible for any premium shortfalls that resulted from their negligence. For example, if an employee went on leave without pay, and was gone long enough so that the employee should have been on “direct bill status,” if PEBP was not aware of that and continued to bill the agency, by the time they discovered the facts, there could be arrears. When a new employee came on board, if the agency did not notify PEBP in time to make the enrollment, a premium could be owed, or the employee could be denied coverage, which would mean that employee would have to wait until the next open enrollment period.
Mr. Thorne said that the third goal was the elimination of the evidence of insurability for reinstating retirees. PEBP’s intent was to bring the statute language into compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
One very important section would limit the state retiree subsidy to years of state service only. Current language in statute stated that if a person retired from the state, then that person would receive the retiree subsidy based on total years of service, which was currently interpreted to mean “years of service with PERS.” However, that language did not communicate that the intent was to count only the person’s years of service in the Nevada state government. On the other hand, there were also individuals who had worked 20 years with the state of Nevada, and then left state employment and worked one year in local government. When those employees retired, they would not receive retiree subsidies, because they did not retire directly from state PERS.
PEBP was trying to correct those inequities in A.B. 249. Although those situations were likely to be “a wash” from a cost standpoint, because of the impact on PERS, PEBP and other agencies would determine what were the actual years of state service. The effective date for that determination was July 1, 2004.
Mr. Thorne said that there were two private sector members of the PEBP board, and their input had been invaluable. Initially, the statute called for those two positions to sunset, or to end, as of June 30, 2003. PEBP would like to repeal that section of the statute to allow the PEBP board to remain a nine-member board with two seats being private sector representatives.
Finally, Mr. Thorne said that A.B. 249 would repeal the biennial open enrollment for pre-1994 retirees, who retired from local entities and did not have a chance to enroll in PEBP because it was not an option at that time. They had offered the biennial enrollment for 10 years and were seeing a declining number of participants. PERS sent out notices to 7,500 retirees. Subsequently, 600 of those requested enrollment information. Out of the 7,500, only 20 actually enrolled.
PEBP proposed to have a final open enrollment period from fall 2003 through January 2004, and make it clear that this was the final opportunity for pre-1994 employees to sign up for benefits. This would not have an impact on the reinstatement provision, which happened every other year. Some additional clarification was needed in the bill, and the Committee’s legal counsel was working on that. Definitions of “local entity,” “participating agency,” and “participating state agency” were included.
Assemblyman Goicoechea said he understood that pre-1994 retirees could not enroll unless they had not yet started to draw a pension, and then they could still sign up during an open enrollment period. He asked if that was correct.
Mr. Thorne said that those who currently collected PERS retirement, and who retired pre-1994, might have coverage elsewhere. Those persons did not have an opportunity to enroll in PEBP as a retiree, unless their agency was participating; but they had a chance to enroll now. Because of the declining number of people who were interested, PEBP thought they had reached the point of diminishing returns and should end that program soon. For those who retired and had not yet selected coverage, they could still apply for coverage every other year during open enrollment period. That opportunity would continue.
Mr. Goicoechea said he was not surprised at the decline in those who wanted to enroll, since the rate structure was going up. He was comfortable as long as they still had an opportunity to enroll.
Assemblywoman Koivisto asked if it was correct that this would add to the non-state retiree pool. Mr. Thorne said that was correct.
John Yacenda, representing the State of Nevada Employees Association (SNEA), described his proposed amendment. Mr. Yacenda said that in general the changes proposed by PEBP in A.B. 249 were favorable, and they supported them. In addition, they would like to propose an amendment to the bill that would establish an advisory committee (Exhibit E). The reason for an advisory committee was to restore trust to the workers or users, when problems were causing doubt or confusion. In the PEBP, there was high “user-dependence.” Advisory committees fostered communication and understanding among the workers, users, spouses, dependents, and administrators. They also provide a slow deliberate process for developing policy and program recommendations, arising out of the concerns of the users.
Mr. Yacenda said there were many advisory committees that existed in government. In fact, Assemblywoman Koivisto had recently set up a Native American advisory committee to the Children’s Health Insurance Program. Many of the advisory committees — the AIDS Advisory Task Force, the Maternal and Child Health Advisory Board, the Cemetery Advisory Committee, the Statewide Transportation Technical Advisory Committee, Substance Abuse Advisory Committee, Mental Health Developmental Services Commission, and so on — these advisory committees existed to provide assistance and input to programs. Most of them had no real authority; they simply advised the programs or institutions about the concerns of the populations they served.
The proposed amendment was also an advisory committee that had no power and had no enforcement ability, but simply had the ability to provide input and information to the board, as well as to the staff. The committee would have certain activities and responsibilities and would be comprised of eight members, as stipulated in the amendment (Exhibit E):
· Three would be state employees enrolled in the program.
· One would be a representative of the greatest number of active and retired state employees and of the employees’ association.
· One would be a representative of the non-state active employees.
· Two professional health care advisors, with experience in program evaluation, quality control, and health insurance, would represent all the members of the program.
· One would be an ex-officio member from the staff of the PEBP.
The key was that the Board itself would adopt regulations related to the conduct of the advisory committee, frequency of meetings, reporting schedule, and interface with staff. The members would serve at no cost to the PEBP.
Mr. Yacenda asked the Committee to consider the amendment an important step in bringing users closer to the activities and in providing the program with the opportunity to have an ongoing dialogue with the users they served.
Dana Bilyeu, Operations Officer, Public Employees’ Retirement System (PERS), testified in opposition to the bill (Exhibit F). She said the Retirement Board had voted to oppose A.B. 249 as currently drafted, and she directed staff to offer an amendment (Exhibit G). They were technically opposed to Sections 2, 3, and 7, dealing with the PERS. Ms. Bilyeu said they met with the PEBP staff on March 13, 2003, to review their concerns with the bill, including some proposed language modifications that were designed to assist the PEBP with correct information from the PERS. She said that the current system was working well and they were offering the amendment in the spirit of cooperation. She understood that the PEBP wished to treat all the pay centers equally, but she said the PERS currently took payroll deductions for about 80 different vendors, one of which was the PEBP. She said the payroll deductions were a service to benefit recipients, as well as to the vendors themselves, which facilitated payment.
Section 2 proposed modifications to the Retirement Act, part of which they wanted clarified so PERS would understand exactly what information they needed to convey to the PEBP. Looking at the proposed amendment from PERS, to Section 2 they would add the word “payment” before the word “status.” This could potentially affect insurance eligibility, and they currently provided this information to the PEBP.
PERS wanted to delete references to “member” and “dependence of members,” because that language had specific meaning in the PERS Act and did not describe retirees or benefit recipients of the system. It described active employees.
PERS wanted the format of any reporting to be mutually agreeable to the two agencies, which was currently the case. The extension of time from 15 days to 30 days, with respect to the PERS benefit recipients, had to do with their pay cycle. Benefit recipients were paid once per month, and so they reported once per month on those individuals. She said that cycle was in place and working well for the two agencies.
They requested that the language relating to “other records” disclosure be deleted because it conflicted with the PERS privacy statute. They would work with PEBP to facilitate payment of premiums; however, as fiduciaries to members and benefit recipients, they were concerned about the broad access to PERS’ members’ and benefit recipients’ records.
Finally, PERS proposed that the penalty provision be eliminated because they only deducted premiums as instructed by the PEBP. Under this section, PERS notice to them of a change in payment status would result in the ceasing of the payroll deduction, as it usually had to do with the death of a recipient, or the premium would actually exceed the PERS benefit check, so it could not be deducted. If a mistake was made in the process, the language prevented PERS from seeking reimbursement from their benefit recipient, if a premium had to be paid on their behalf. PERS statutes, as well as the Constitution of the State of Nevada, prevented paying anything out of their trust for nonretirement purposes. While insurance was very important to retirees, it was not a retirement purpose, under the PERS Act. The provision also conflicted with the language in Chapter 286, which enabled PERS to recoup funds owed to the trust directly from benefit recipients.
In Section 3 of the bill, amending Chapter 286.615, they proposed that the phrase ”public local government agency of the state of Nevada,” which was a non-defined term in the PERS statute but was defined in Chapter 287, be replaced by “groups as defined in Section 5 of this bill.” They thought that the reference to the definition was better, because the phrase was not defined in Chapter 286.
In Section 7 of the bill, PERS requested deletion of the language “without limitation” when referring to PERS and the University System. They believed that the language had been chosen to ensure that the two separate institutions created in the Nevada Constitution were treated as if they were state agencies. PERS believed that a simple listing of the two institutions clearly indicated that they were separate entities within Section 7. If new agencies would be created in the Executive Branch, Ms. Bilyeu believed they would be created, or covered, under the more global Executive Branch designation.
Mr. Thorne addressed the two proposed amendments. Regarding the PERS amendment, they met with PERS officers and reviewed their concerns. He said that PEBP had no problem with the changes in terminology in subsection 1. He said they had worked hard with PERS for a cooperative approach to providing information on payroll deductions and reconciliation of that, and they had seen a significant reduction in discrepancies between the two systems. They were currently on a 30-day cycle with PERS, and were fine with that change. As to the remainder of the changes in Section 2, they would use the same language to be consistent with all of the pay centers. He said PEBP considered noticing requirements as an administrative expense, which would be subject to a legal opinion by Legislative Counsel as to what was appropriate, and what was not. PEBP would abide by the Legislative Counsel’s opinion.
As to the proposed amendment that would establish an advisory committee, the Board would welcome input from an advisory group. In fact, PEBP authorized two informal advisory groups. One included active employees, both state and nonstate employees, and the other was a retiree advisory group, with both state and nonstate representatives. The feedback was very valuable from both groups, and the meetings were less frequent as they approached the legislative session, but they anticipated having regular meetings again by midyear. Mr. Thorne had not reviewed that amendment with the Board, but he felt that the response would be positive, and that they would welcome the input. The question was if it was required to exist in statute, or whether the existing groups, or expanded groups, might work just as well.
Chairman Manendo asked when he might have an answer.
Mr. Thorne said that the Board would not be meeting in time to respond to the Committee prior to the legislative deadlines.
Mr. Yacenda said he had initially reviewed the amendment with the chairman of the PEBP Board, Terry Johnson, to look at the concept and discuss it. The amendment included modifications that were suggested by Mr. Johnson, and which he thought would make the advisory committee a viable entity.
Myla C. Florence, MPA, Director, Department of Employment, Training and Rehabilitation (DETR), and PEBP Board member, said she was just handed a copy of the proposed amendment for an advisory board. She said that the PEBP Board was the advisory board for the benefit program. As Mr. Thorne indicated there were outreach efforts with various groups to solicit input. Their meetings were open and were broadcast over the Internet when the Legislature was not in session. She said she had a problem with creating another board in statute, although the concept was good, and she thought that Board members would continue to urge staff to have working groups. However, she felt it would be superfluous in statute. She said she spoke as a member of the Board, not on behalf of the board.
F. Martin Bibb, Retired Public Employees of Nevada, said that they supported A.B. 249, although there were some technical provisions that previous witnesses had addressed, mainly relevant to the withholding and mechanical processes that affected the group insurance bill. He said that there were other bills, several from this Committee or its members, relative to group insurance, which, as this bill worked its way through the process, could potentially come into some conflict. Specifically, he referred to A.B. 286 which addressed commingling, local governments paying into the plan, subsidization, and local government requirements that they readmit their retirees into their plan, just as the state program readmits its retirees.
Down the road, there was the issue of eliminating the reenrollment of state retirees into the program in the future. Mr. Bibb stated that Chairman Manendo and other senior members of the Committee were here during the 1993 and/or 1995 Legislative Sessions and had worked hard on bills to permit open enrollment for retirees into this group insurance plan, which were heard, addressed, and enacted.
Mr. Bibb said they were not overjoyed with the elimination of that provision, but as Mr. Thorne stated, there was a diminishing return in terms the number of potential enrollees. On the other hand, they were glad to see that the measure provided one more open enrollment period for pre-1994 retirees. Noting the concerns regarding privatization, he stated that in recent weeks some state group health insurance programs which, after having been self-funded for many years, turned to privatized health coverage, and were now returning to self-funding again because the private firms who had bid to fund those programs now refused to do so. Once it returned to being self-funded, legislators and others had to come up with reserve monies to pay claims for a newly created self-funded program.
Regarding retaining the two positions for nonmembers on the Board, he said their vision had been extremely important to the Board, and they wholeheartedly supported leaving their seats on the Board.
Mr. Bibb said he had not seen the amendment regarding setting up an advisory board but said it made sense. Last fall the PEBP managers put together focus groups of active employees, retirees, state, and nonstate employees, to lend their concerns and advice relative to the rate structure and benefits. That was very productive and helpful.
Chairman Manendo said he would make sure Mr. Bibb received a copy of both the amendments.
Scott MacKenzie, AFSCME Local 4041, Carson City, stated that there were about 17,000 classified state employees statewide. PEBP tried to achieve a consensus before making health insurance decisions. However, the time line for searching for consensus and presenting the issue to the PEBP Board, and then to the Committee prior to voting, was not possible. He said that the advisory board would create a system to understand what state workers were saying regarding changes to their health insurance. Because they did not have a system like that, it had created an adversarial position, which was not desirable. Yet, input from those about to be affected was critical.
The Board hearings were usually held when state workers were working, so state workers could not attend the hearings. Quite often when they [AFSCME representatives] attended, there were no state workers in attendance. Although AFSCME represented state workers, they were not always certain what state workers thought about the issues. The whole time frame situation regarding notification and passing on consensus to the Board was an impossible situation. That was why they supported the amendment to establish an advisory board, because they felt the Board would have a chance to be more responsive to state workers, even if the news was bad.
Doug Bierman, Intertech Services Corporation, representing PEBP members in Lander, Eureka, and Caliente, spoke in opposition to A.B. 249 because it referred to segregating various groups of people, which conflicted with testimony on other bills, such as A.B. 222 and A.B. 165. He said it appeared that there was some appetite for an interim study of PEBP. Some changes were quite significant, and they felt changes might be best left to an interim study group.
Specifically, PEBP members he represented opposed Section 23, subsection 5, on page 17 of the current bill, which referred to nonstate retirees as a segregated group and would allow PEBP to set rates independent of any other groups within the PEBP. They fully supported the idea that all public employees should be treated equally. If they were members of the PERS program, they should be welcomed into the PEBP program, under some of the conditions mentioned in previous testimony.
Assemblyman Goicoechea asked if Mr. Bierman realized that the enrollment period would close before the interim study committee would have an opportunity to issue their findings or take action. That was his main concern with the bill.
Mr. Bierman said he was also concerned that there was no real attraction for retired people to come into the system at this time, mainly because of the rates being charged.
Mr. Thorne wanted to make a clarification on the section referred to. As with any bill, the proposed amendments were to existing statutes. No changes were made to the section regarding segregation, other than language clarification changes. He said that if this bill and A.B. 286 were to pass, those bills would be merged when the statute was rewritten.
Chairman Manendo closed the hearing on A.B. 249, and called for a 5-minute recess. Chairman Manendo called the meeting back to order at 10:33 a.m. and initiated a work session to discuss A.B. 84 and A.B. 86.
Assembly Bill 84: Revises provisions concerning certain town advisory boards. (BDR 21-119)
The Chairman asked Susan Scholley, Committee Policy Analyst, to summarize the status of A.B. 84. Ms. Scholley stated that A.B. 84 was sponsored by the Committee on Government Affairs on behalf of Assemblywoman Giunchigliani. In its original form, it set limits on the terms of members of town advisory boards, and it was, in some respects, a skeleton bill. Assemblywoman Giunchigliani proposed amendments, and after the hearing, amendments were proposed by other members of the Committee. A conceptual mock-up of the amendments (Exhibit H) was attached to the work session document. She recalled that several town board members from Las Vegas had testified in opposition to the original bill. The bill had no fiscal impact at the state or the local level.
Looking at Section 1(b) in the mock-up, Ms. Scholley stated that that provision had reverted to its original form, with the exception that the second sentence was removed, thereby eliminating the existing term limits for town advisory boards. If passed, there would be no limits on the number of terms a town advisory board member could serve.
Ms. Scholley then reviewed the other two conceptual amendments, outlined in text-boxes at the bottom of the “Proposed Amendments” page (Exhibit H).
The amendment to Section 2 would add clarifying language requiring notice of a vacancy upon the expiration of a member’s four-year term, in order to encourage recruitment. The intent was to also include a letter to Clark County, suggesting that as vacancies occurred they notify the Assemblyperson or Senator in that district of the vacancy, to assist in recruitment, appointments, or nominations.
The second conceptual amendment, Section 4, would add a provision regarding the election of chairmen to town advisory boards, requiring that the term of the chairman be limited to two years, and requiring that a new chairman be elected from among the members of the town advisory board, someone who had not previously served as chairman. This would, however, allow a member to decline serving as chairman.
Assemblyman Atkinson asked how the 2-year rotating chairmanship would be handled. Ms. Scholley stated that it would not be proscribed in the statute, but would be up to the members of the town advisory board. No particular order would be specified in the statute, just that the new chairman would be elected by the board.
Mr. Atkinson asked if the existing chairman could be reelected for another term. Ms. Scholley said that the term of a chairman would be limited to two years, and a new chairman would have to be elected from among members of the board who had not previously served as chairman. A board could not simply reelect the previous chairman again. They would have to elect someone who had not served and rotate the chairmanship through the other members of the advisory board. Although, if everyone on the board had served as chairman, they would have to start over.
Chairman Manendo said that the concerns the Committee heard were related to trying to give everyone a chance, and that everyone supported that concept. He suggested they might want to add language requiring a secret ballot, since chairmen would be elected by other board members. The Committee had heard about intimidation and fear of repercussions when voting, and they did not want board members to have to deal with that. The Chairman said he had an e-mail from a constituent, a town board chairman, who said he did not want the job forever, and so had primed, groomed, and mentored, so others would be ready to serve.
Assemblyman Atkinson said that was his point: that some chairmen had served so long that members did not want to challenge them. Having an open vote during a meeting could be a problem. His thought was that the chairmanship would move to the next senior member, or would be offered to them without a vote, or by secret ballot. Voting in an open meeting might be difficult because some members were intimidated by the current chairmen.
Assemblyman Goicoechea said that because of the population cap, it was a southern Nevada bill, but that there were some things that should not be legislated. One of those things was who should be the chairman. The board should be strong enough to vote for whom they want or they should not be there.
Assemblyman Hardy said, because of term limits, everyone would soon have served as chairman, so the conceptual amendment would run into trouble as Ms. Scholley mentioned. If they inserted at least one new chairman in between a “dynasty,” perhaps that would help. He thought a secret ballot would be difficult in today’s open-meeting-law atmosphere. He said, as public officials, they liked secret ballots, but in reality, they had to stand up and say what they believed. Not only did they need to be tough enough, but also the open meeting law might preclude voting by secret ballot. Having a mandatory term with a new chairman, to break up a long-serving chairman’s dominance, would allow a well-beloved and well-trained chairman to continue to serve.
Mr. Hardy continued saying that the Southern Nevada Regional Planning Coalition had rotation by municipality, but it was still an elected position. They had to vote on whether to continue the rotation as planned.
Chairman Manendo said that if there were an intimidation factor and someone was next in line to serve but declined, if the current chair was not allowed to serve another consecutive term, then someone would eventually have to take the position. He was sure someone would step forward.
Assemblywoman Koivisto asked to go back to the secret ballot idea. She said that counting of the ballots was usually public, but the actual vote could still be secret. Print a form and have members check a name.
Chairman Manendo said that because of the open meeting law he was not sure if that would be allowed.
Assemblyman Atkinson said that the vote could take place during the meeting, the members would write their ballots and give them to the liaison, who would count the votes right there during the meeting.
Dan Musgrove, Clark County representative, stated that he appreciated the fact that the Committee had listened to the folks who testified during the hearing and had removed the term limits. That was the best thing that could have happened because it was their one main concern to retain institutional memory on those boards. Secondly, the revolving chairmanship idea had not been discussed much. He said he agreed with Mr. Goicoechea that board members should be allowed to express their opinion, but he also understood Mr. Atkinson’s concerns that folks were elected, and often stayed, which prevented new ideas from surfacing. There needed to be a balance. He appreciated the debate because entrenched interests and people were exactly what town boards faced.
On the other hand, there were some people had more time to invest, like M.J. Harvey, who was so dedicated she made it a full-time job. He said he did not have an easy answer. Revolving chairmanship was a good idea, but if a chairmanship was declined, it should not preclude that the current chairman might remain chairman, because many people just did not have the time.
Chairman Manendo stated he had clarified they could not include a secret ballot provision in the statutes. It had to be an open vote. Mr. Atkinson said he wanted to see it. Chairman Manendo replied, “NRS 241.035 (1)(c).”
Assemblyman Atkinson said that if that language did not fly, the only reason he was agreeable to that language was to eliminate term limits. However, if Mr. Musgrove believed that this might be a potential problem, then he would want to retain term limits.
Assemblyman Goicoechea wanted to know if they could leave out term limits and not address the revolving chair issue. He said he would move to indefinitely postpone, if it were a northern Nevada bill.
Assemblyman Hardy said that in the conceptual amendment, it would allow for more noticing and therefore more public input, which was good.
Chairman Manendo said that the bill would still change the 90-days notice requirement to 30 days, which was important. Obviously, there was interest in removing term limits.
Mr. Atkinson asked Ms. Scholley and Ms. O’Grady if they made it an open vote every two years, would members be voting for one of the remaining board members, excluding the existing chairman.
Ms. Scholley and Ms. O’Grady said that was correct.
Assemblyman Goicoechea asked what would happen if all members declined. Mr. Atkinson said the last sentence would take effect, meaning that the chairmanship would go back to the current chairman, which was already in effect in the current statutes.
Chairman Manendo said that they could take out the “option to decline” language, but, regardless, someone would have to step forward besides the chairman whose term just expired. The Chairman would be fine with that, as long as the chairmanship was rotating.
Dan Musgrove noted that if all four of the remaining members declined, that was a problem, unless they all got together and decided they were happy with the current chairman. Chairman Manendo said the person would not be eligible. Mr. Musgrove said they would then obviously have a problem as long as the declining portion was allowed to take precedent over the rotation portion. That situation, except in the situation where all eligible members declined, would mean that the chairmanship would rotate. Mr. Musgrove explained that they did not want to lose members’ participation because they were afraid they might have to serve as chairman. He urged the Committee to “go for rotation, and if members refused, the fallback would be status quo.” He appreciated the Committee’s efforts and, as long as term limits were removed, said he would work with the Committee’s direction.
Assemblyman Hardy said that the county was in the driver’s seat because the county commissions appoint the town board members. He suggested they use permissive language to authorize county commissions to appoint town board chairmen in extenuating circumstances. They had a vice chairman, so if the chairman had a problem, the vice chairman would fill in. Perhaps they could just let the vice chair automatically become the chairman. That way the vote would be for the vice chairman, instead of voting for the chairman. So the chairman would be out, but could be elected the vice chairman during the same election, meaning that in two years he would become the chairman again.
Assemblyman Goicoechea said that many boards operated that way: everyone moved up one slot at election time.
Chairman stated that if you have a board of five, one chairman, with four members, someone would step into the chairmanship. On the other hand, vice chairmen would normally want to serve as chairmen because they were being groomed for the positions. Some folks just wanted to participate and would not want to hold office.
Assemblyman Atkinson emphasized that there was a desperate need for this in southern Nevada, because there are problems with the town boards. The power that some town board chairmen felt they had was a problem. He said it was damaging to the boards, because of some of their comments during meetings. He understood where Mr. Hardy was going, but he thought that the mock-up language actually accomplished what they needed. He would not have a problem allowing vice chairman to move into the chairman position, because it would eliminate some of the pressure on members who would be reluctant to vote against a sitting chairman.
Chairman Manendo asked how the vice chairman was selected.
Mr. Atkinson clarified that the vice chairman was elected, as well. The secretaries were paid staff and were not elected.
Assemblyman Goicoechea said they had town boards in northern Nevada that functioned the same way, but they did not have populations of 400,000, as did southern Nevada.
Chairman Manendo said the Committee would think about this bill and discuss it again tomorrow. He then closed the hearing on A.B. 84 and opened the hearing on A.B. 86.
Assembly Bill 86: Revises provisions concerning purchasing contracts of certain local governments. (BDR 27-338)
Ms. Scholley stated that A.B. 86 was sponsored by the Assembly Committee on Government Affairs on behalf of the Nevada League of Cities (NLC) and Municipalities. In its original form, A.B. 86 was going to revise provisions concerning purchasing contracts for counties whose populations were less than 100,000 by making those procedures consistent with larger counties.
At the hearing, the NLC proposed amendments to the bill that would effectively make the advertising and bidding requirements for counties under 100,000 the same as for counties over 100,000 in population. Opposition was presented by Kent Lauer, representing the Nevada Press Association, and there was no fiscal impact.
In rewriting the bill to include the proposed amendments, Ms. Scholley stated that the outcome would be to repeal NRS 332.035 and NRS 332.036, attached to the mock-up (Exhibit I), and then amend NRS 332.039 to strike the population cap. This would have the effect of putting all the counties in the same boat and would eliminate the distinction between counties under 100,000 population with annual appropriations under $1 million, and counties under 100,000 with annual appropriations of over $1 million. Everyone would be subject to the same advertising and bidding requirements.
Assemblyman Goicoechea asked if deletions might also be necessary in NRS 180. Ms. Scholley said that Mr. Goicoechea raised a good point and that her crude mock-up draft would be cleaned up by Committee Counsel.
Assemblyman Collins said he had a problem going to $25,000. He would rather have the limit at $15,000, to keep it ”above a load of lumber and under the cost of a compact car.”
Assemblyman Goicoechea said that in existing statute the only place you get between the $15,000 and $25,000 was if you had an expenditure of under $1 million. Presently, if you have a budget of over $1 million, “you get to play like the big boys.”
Mr. Grady said that it was all tax dollars and they were all elected officials. If the people did not agree with what they were doing, they could change it at the polls. Mr. Collins added, “If they know about it.”
Chairman Manendo asked if anyone had addressed the concerns of Mr. Lauer, Nevada Press Association.
Mary Henderson, NLC, said that the change was made in 1999 that anything under $25,000 did not require advertising, but some compromise was made by some local governments to publish the notices. There was an interesting debate about what people knew in small towns. Car dealers in a smaller community in northern Nevada, who did not have their names on a list and lost a bid, would only do that one time. She thought that in smaller communities you knew more about what was happening at the local level. She remembered that Mr. Lauer said it was a 50/50 issue for them: 50 percent the public’s right to know, and 50 percent revenue. They had concerns about small town newspapers, but they did not understand what would be accomplished by this. In 1999, they allowed flexibility, but she did not know if it had provided a good public service since then. They would like to have equality with the larger counties, and the counties had no opposition to this. It would just streamline the ability to do business.
Assemblyman Grady said that the press covered what happened at meetings better than in rural areas, so “right to know” of public and press would work. He thought that objections from press would be probably strictly economic ones. There were only two locally owned papers in Nevada anyway.
Mr. Collins said that conglomerates would not always cover rural issues, without revenue. Yet, many local governments dealt seriously with notices in the newspaper. He did not think that small communities needed more secrecy.
Ms. Henderson said that having been married to a large conglomerate for 27 years, she assured him that most large papers would not be buying small newspapers if they did not think they could make money. There was a difference at the rural level and the coverage was more intense. This was not a big issue for larger papers. In a smaller community, they paid more attention because those were bread and butter issues.
ASSEMBLYMAN GOICOECHEA MOVED TO AMEND AND DO PASS A.B. 86.
ASSEMBLYMAN GRADY SECONDED THE MOTION.
In discussion, Assemblyman Collins said he would not support the bill unless the limit was lowered to $15,000. There was no other discussion.
THE MOTION CARRIED, WITH MR. CHRISTENSEN, MR. COLLINS, AND MS. PIERCE VOTING NO.
Chairman Manendo assigned the bill to Assemblyman Goicoechea to present on the Floor of the Assembly.
The Chairman reminded the Committee they would probably continue the work session after the Assembly Floor Session on Friday, April 11, 2003.
Chairman Manendo adjourned the meeting at 11:17 a.m.
RESPECTFULLY SUBMITTED:
JoAnn Aldrich
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman
DATE: