MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-Second Session
April 29, 2003
The Committee on Government Affairswas called to order at 8:15 a.m., on Tuesday, April 29, 2003. Chairman Mark Manendo presided in Room 3143 of the Legislative Building, Carson City, Nevada, and via simultaneous videoconference in Room 4406 of the Grant Sawyer State Office Building, Las Vegas, 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
Mrs. Ellen Koivisto
Mr. Bob McCleary
Ms. Peggy Pierce
Ms. Valerie Weber
COMMITTEE MEMBERS ABSENT:
Mr. Ron Knecht (excused)
GUEST LEGISLATORS PRESENT:
Senator Dennis Nolan, Clark County Senatorial District No. 9
Senator Randolph J. Townsend, Washoe County Senatorial District No. 4
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
JoAnn Aldrich, Committee Secretary
OTHERS PRESENT:
Ron Cuzze, representing himself and an informal group of disabled policemen
Rusty McAllister, Professional Fire Fighters of Nevada
Gary Wolff, Business Agent, Teamsters Local No. 14
Ron Dreher, Peace Officers Research Association of Nevada
Dana Bilyeu, Operations Officer, Public Employees’ Retirement System
George Pyne, Executive Director, Public Employees’ Retirement System
The Chairman extended condolences to Mr. Goicoechea who lost a family member over the weekend.
Chairman Manendo informed the Committee that he had received a letter from the Southern Nevada Regional Planning Coalition (SNRPC) that included regional trail, transportation, and right-of-way maps for Committee members.
Senate Bill 345: Provides direction to Public Employees’ Retirement System regarding payment of certain benefits. (BDR 23-88)
Chairman Manendo opened the hearing on S.B. 345, and Senator Nolan came forward to present the bill.
Senator Dennis Nolan, Clark County District No. 9, said he was presenting a one-paragraph bill on behalf of retired law enforcement employees who disputed the way the Public Employees’ Retirement System (PERS) calculated disability payments. Senator Nolan said the employees’ disability payments were taxed, although many states did not tax disability payments. He said that if any portion of the disability was covered by Workers’ Compensation, PERS retirees should receive split benefits, and workers should not be taxed on that portion of the disability payment.
When Senator Nolan presented the information to the Senate Finance Committee, he said he discovered that fixing the problem would not be easy. Changing the way disability was taxed in the Nevada PERS would require redrafting a great deal of the PERS statute. The Senate Finance Committee determined that there was an inequity, and, although it would take some effort to rectify the situation, they had passed the bill.
Senator Nolan introduced Ron Cuzze to talk about his personal experience and research regarding taxation of disability benefits.
Ron Cuzze, a disabled policeman, said that in October 2000, he was injured on the job and took disability in January 2001. He added that almost the whole squad retired on disability within a year. The sergeant had a heart attack. One partner broke his back, and the other broke his neck. After they began receiving disability payments, Mr. Cuzze discovered his disability check was subject to taxation. He said that his understanding was that disability payments were not taxable because he received disability payments from the military that were not taxed. Mr. Cuzze and former coworkers began to research taxation laws applicable to disability.
To date, Mr. Cuzze said, they had appeared before the PERS board on two separate occasions. When they asked PERS officials why the disability payments were being taxed, PERS responded that it was based on a letter they received from the Attorney General (Exhibit C). The letter reviewed information from the State of New Jersey that described why New Jersey had changed their laws to no longer tax disability payments.
Mr. Cuzze said that the Internal Revenue System (IRS) had been more helpful. IRS officials explained that disability was not taxable and provided the relevant IRS regulations, which Mr. Cuzze forwarded to Senator Nolan, and which were included in the exhibit packet submitted to the Senate Government Affairs Committee. Since then, when the disabled policemen filed their income tax, every year they had received full refunds from the IRS because they knew how to fill out the tax return forms correctly.
Mr. Cuzze explained that on Form 1099, which was received at the end of each year as backup for individual tax returns, the distribution code 3 had to be entered in a box on the back of the form to indicate the amount was received as “disability” income. Although this group of disabled policemen received full refunds for taxes paid on disability checks, Mr. Cuzze said their concern was for the hundreds of other disabled retirees who continued to be unfairly taxed, and who may, or may not, be receiving full refunds for the taxes they paid.
IRS officials were of the opinion that, if disabled retirees were led to believe that state disability payments were taxable income, and if that perception was not corrected, they would end up paying tax on their disability income, perhaps forever, without realizing that the full amount may not be taxable. Mr. Cuzze said that the Senate had passed this bill because it corrected an unfair situation. Mr. Cuzze continued his testimony saying that some areas of PERS statutes would need to be changed if S.B. 345 passed, but he did not believe individuals should have to pay because the laws were not written correctly.
Mr. Cuzze said his group started arguing for changes to the Nevada Revised Statutes (NRS) two years ago. They researched the NRS statutes relating to PERS and found no statutes that addressed their concerns, which explained why S.B. 345 was only one paragraph. At the last minute, with the help of the Attorney General, Brian Sandoval, they discovered that the letter from the Attorney General, on which PERS based current policy, referred to different statutes. Mr. Cuzze said that the rewrite would not be difficult if everyone worked together to repair the inequity for PERS retirees on disability.
Rusty McAllister, Professional Fire Fighters of Nevada (PFFN), said that the PFFN supported S.B. 345, but not in the form it was currently written. However, he clarified that the PFFN supported the concept behind the bill. Mr. McAllister said that in conversations and in the Senate testimony, PERS had maintained they were not allowed to do what the bill would require, as currently written. The reason was that, over the years, the PERS industrial insurance portion of disability and the Workers’ Compensation portion of disability had merged within the PERS.
For example, Mr. McAllister explained that, if a public sector employee and a private sector employee both became disabled, the private sector employee would retire on disability and would not be in the retirement system. When he applied for Workers’ Compensation, his entire benefit would consist of disability payments and would not be taxable. On the other hand, for the public sector employee who became disabled and retired from PERS, part of the disability payment would come from PERS, and the other part of the disability payment would come from Workers’ Compensation. The part that originated from PERS would be taxable income, but the part originating from Workers’ Compensation would not be taxable.
Mr. McAllister said the merging that had taken place over the years would be difficult to separate, and that PERS was not sure how to do it. The other problem with the existing statutes was that PERS allowed employees to take disability for numerous reasons, including disease, injury, and injury on the job. Income in the form of disability payments received by a PERS retiree who qualified for disability because of an illness would be taxable. On the other hand, disability payments received by a PERS retiree who qualified for disability because of an injury received at work, or in the line of duty, would not be taxable income on the Workers’ Compensation portion of the disability check.
Mr. McAllister said the PFFN would like to see the inequity fixed, which might be difficult. However, he also stated that the Legislature had never shied away from “hard fixes,” once they were convinced the changes were necessary. Once an inequity was recognized, the Legislature would normally take steps to resolve the problem.
If the bill language did not allow enough time to make it work, Mr. McAllister asked for a commitment from the Legislature that they would direct PERS to work with the Attorney General’s Office to separate the issues, and to initiate the necessary statute changes at minimum. He said the PFFN would be satisfied if the repair process were implemented over the interim.
Senator Nolan stated that he agreed with Mr. McAllister’s testimony.
Gary Wolff, Teamsters Local No. 14, said he could not improve on what had been said and asked the Committee to repair this inequity, which had been an ongoing problem. He said he wanted to go on record as supporting the bill.
Mr. Cuzze asked if he could clarify one issue. He said that Mr. McAllister had analyzed one-half of the PERS problem, but not the other half. He stated that Mr. Cuzze said he did not personally receive any money from the State Industrial Insurance System (SIIS), but when a state employee retired on disability, he could be eligible for SIIS disability. There were two different possibilities. If an employee retired because of a heart attack, or because of an occupational disease, that person would be eligible for SIIS benefits and for PERS benefits. On the other hand, if an employee like Mr. Cuzze retired on disability because of work‑related injuries, he would be eligible for both PERS and UnumProvident Corporation (UNUM) benefits.
Mr. Cuzze explained that, because Nevada PERS employees were not eligible for Social Security benefits, the state was required to have a long-term disability carrier, which, for Nevada state employees, was UNUM. Mr. Cuzze said that both his PERS and UNUM benefits were taxable. His understanding was that UNUM benefits were taxable because it was a third-party provider, unlike social security, and that the SIIS regulations were different. He said there was a lot of confusion in this area. Yet, regardless of the confusion at the state level, the IRS had determined that if a public employee was disabled and had less than 25 years of service, whatever disability he received was nontaxable.
Mr. Cuzze concluded that 46 states had “gotten it right” and changed their laws, including New Jersey (Exhibit D), which had a retirement system almost identical to Nevada PERS. He said his group had tried to work with Nevada PERS but without results.
Ron Dreher, representing the Peace Officers Research Association of Nevada, stated that they supported S.B. 345 and asked the Committee to do the same.
Dana Bilyeu, Operations Officer, Public Employees’ Retirement System (PERS), stated that the PERS Board voted to oppose S.B. 345 at the April 2002 meeting. She said that PERS was opposed because they believed that the bill was unnecessary since PERS already reported disability income correctly. Should the bill pass, PERS would seek a private letter ruling from the IRS in support of the current procedure. She said this was the best way to ensure they were operating appropriately in respect to the disability program. PERS had received advice from the Attorney General’s Office and from a benefits consulting firm that they were reporting disability correctly. However, Ms. Bilyeu agreed that the final word should come from the IRS.
Assemblyman Hardy asked if there was anything to preclude PERS getting the private letter ruling prior to passing the bill. Ms. Bilyeu said that would not be possible because the process normally took about six months.
Assemblywoman Koivisto said she was confused. She questioned why, if the reporting was being done correctly, were taxes being withheld and then refunded at the end of the year. Something was not right because, if they owed no taxes, the taxes should not have been withheld in the first place.
Ms. Bilyeu said that IRS Code Section 1.104 required PERS to report disability income as taxable because the PERS disability program did not meet the definition of a “duty disability,“ or Workers’ Compensation, program. The reason was that the PERS program offered disability benefits for reasons that were not always work-related. She did not know how this was handled on individual tax returns.
Assemblywoman Koivisto said that Mr. McAllister mentioned that changes needed to be made to the NRS to enable PERS to change their reporting. She asked if Ms. Bilyeu could describe those changes.
Ms. Bilyeu said that Mr. McAllister referred to separating “duty disability” from PERS disability because they were two different benefit designs, but separating them would incur additional costs to the PERS. She said that designing a separate program for duty disability, because it was not related to retirement income in that it was not based on age or years of service, would involve a monthly rated payment or lump-sum payment, which was calculated differently than the current PERS. At this time the PERS was opposed to any benefit design changes that might incur costs to employers and to employees.
Assemblyman Grady said he was also confused. He asked if the bill was asking PERS to do what Ms. Bilyeu said they could not do. He said the bill was asking them to redesign their program, and he asked if that was correct.
Ms. Bilyeu said that the current draft of the bill asked PERS to report disability income appropriately per the IRS regulations. PERS officials believed they were reporting disability correctly and, therefore, had already complied with the proposed legislation. From the PERS perspective, the proposed bill asked them to keep doing what they were doing because they had confirmation that they were reporting disability correctly. Nevertheless, PERS officials were concerned about the confusion because individuals were receiving tax refunds for taxes paid on disability benefits. As a first step to clearing up the confusion, Ms. Bilyeu said that PERS would request a private letter ruling from the IRS to clarify whether they were reporting disability payments correctly.
Senator Nolan said he did not disagree with what Ms. Bilyeu had said. There were two different ways to report it. The way that Nevada PERS and other states reported disability income was one way. However, a majority of states made a distinction between “duty disability” and “disability” so that individuals did not have to pay, and then be refunded, taxes they did not owe.
People on disability were paying taxes on their disability payments, and at the end of the year, after filing a tax return, they received those taxes back. In the meantime, people who are on moderate incomes were losing that disposable income. They would rather have the money in their pocket for daily needs. That’s what this is all about.
Assemblyman Hardy observed that when a private individual had an insurance policy, they paid premiums and could choose whether to deduct those premiums, or to deduct the payments if they became disabled. He said he could see how PERS was set up to provide a retirement program, which was different than a disability insurance program. They were two different things, and there was an inequity in the system because PERS was not a disability program as such. The subject was larger than one paragraph.
Senator Nolan said that Mr. Hardy had “hit the nail on the head.” Part of the issue was that retirees could check a box on the reverse side of their IRS 1099 form, indicating that the income was disability and that they did not want taxes withheld. However, if they did so, because of way the PERS was set up, when they filed their tax return at the end of the year, they would still have to pay the tax and wait for their money to be refunded.
Assemblyman Christensen said that maybe George Pyne, Executive Director of PERS, could clarify how this related to qualified and unqualified money, how the IRS might view this issue, and the Attorney General’s opinion letter. He said if he had a few days to study this, he might have some ideas. Chairman Manendo asked Mr. Christensen to bring back some information to the Committee by May 16, 2003.
Mr. Hardy said he did not have a problem with the bill. It stated citizens must live by the law, and that was a reasonable concept.
Assemblywoman Weber asked if PERS had requested the letter from the IRS.
Ms. Bilyeu replied that they would have to go through the PERS Board to request a private letter ruling from the IRS. She said it would be processed along with another letter to the IRS, and that it was normally a six-month process to get an answer from the Department of the Treasury.
Assemblyman Christensen asked if the letter requested an opinion from the IRS on how the PERS reporting process related to the IRS code.
Ms. Bilyeu said it did, and that PERS would request a private letter ruling.
Mr. Christensen asked if the private letter ruling would use “shall” language or “may” language, and if it would be vague or black and white. Ms. Bilyeu said that the IRS required the party requesting a private letter ruling to set forth facts in the request letter. PERS would review the statutory language and explain the current benefits program. The IRS would opine as to what kind of program it should be. Mr. Christensen asked if the opinion would be paraphrased in “more likely than not” language, or if they might go as far as to offer a “shall” opinion.
Ms. Bilyeu stated that the private letter ruling was confined only to the given facts, and the ruling could not be used in a precedent-setting way for other taxpayers. She did not know how firm they would be, since a private letter ruling was directed only at a single tax-paying entity, or a single employer.
Mr. Christensen asked who had the Attorney General’s opinion letter and if he could get a copy. Ms. Bilyeu said she would be happy to provide it to the Committee (Exhibit C), as well as the letter from the benefits consulting firm. Mr. Christensen asked if it was a lengthy opinion. Ms. Bilyeu said no. The opinion was only a couple of pages long. The opinion letter was addressed to Dana Bilyeu, PERS Operations Officer, from Tina M. Leiss, Senior Deputy Attorney General, Civil Division, and was dated October 4, 2001. An Attorney General’s Opinion number was not identified or associated with this letter.
Mr. Cuzze stated that the packet he provided to Senator Nolan included the Attorney General’s opinion letter. He said it also included the New Jersey private letter ruling from the IRS. He said that, in general, the private ruling letters were very short, and the language was clear and precise. Mr. Cuzze added:
The IRS told us that it would be much easier, instead of having 500 disabled cops ask for 500 letter-rulings that say the same thing, for Nevada to simply change the law. If you want to see the letter rulings, they are in the packet I provided to Senator Nolan and to the Attorney General.
Senator Nolan said he would try to provide the packet to the Committee.
Chairman Manendo closed the hearing on S.B. 345.
Senate Bill 439: Makes various changes concerning Public Employees’ Retirement System and Judicial Retirement System. (BDR 23-563)
Chairman Manendo opened the hearing on S.B. 439.
George Pyne, Executive Director, Public Employees’ Retirement System, said that this bill was the PERS technical, or “housekeeping,” legislation this year (Exhibit E). He stated that there was a zero fiscal note and none of the 23 sections carried any additional cost. Mr. Pyne said he would only describe substantive changes to the Committee. PERS had changed the terms “fireman” and “policeman” to “firefighter” and “police officer” throughout the PERS statutes.
Section 3, page 2, would delete language relating to nonprofit corporations to which a public hospital had been conveyed or leased, pursuant to NRS 450.500, that would allow them to participate in the PERS. They discovered over the years that the current language conflicted with the PERS statute that precluded coverage in both PERS and social security. Currently, employees of nonprofit corporations were required by federal law to participate in social security. Deletion of that language would not impact any public employers currently participating in the PERS.
In Section 6, page 4, PERS requested that, in keeping with the requirement of a 4-year degree for executive officer, operations officer, and investment officer, that three additional executives, the assistant investment officer, manager of information systems, and the administrative analyst, must also be graduates of a 4-year college or university. Each of these positions were nonclassified and served at the pleasure of the executive officer. Mr. Pyne said those positions played essential roles in the PERS organization, and that those employees were likely to be asked to serve at higher levels in the future. He stated that from a succession planning perspective, a 4-year degree was critical for each of those positions. He said that it would not affect the current staff because the incumbents had all previously obtained 4-year degrees.
Section 12, page 7, line 38, proposed to delete language that had no meaning within the PERS statute. The bill asked that the word “occupant” be removed.
Section 20, on page 16, added language that referred to the PERS exemption from reemployment restrictions that passed in the 2001 Legislative Session and which dealt with critical labor shortage designations. In order to qualify, a member had to be eligible to retire in terms of age and years of service. Last session there was a problem with how the bill was drafted, and this was simply a technical correction. The bill requested a language change to clarify qualifications for the critical labor shortage designation.
Chairman Manendo asked if this bill conflicted with any legislation in process this session. Mr. Pyne said he did not think so and that it was just a technical change.
Section 20, page 17, line 3, would add a 2‑year limitation, after which an employer would have to redesignate the position as one of critical need. This recommended change was consistent with the rationale of providing an exemption in times of critical labor shortage. This limitation would be added to the other provisions in A.B. 450.
Changes to Sections 27, 28, 29, 30, and 31, starting on page 20, referred to the 2001 Legislative Session, where PERS had requested a change in the survivor benefit program in order to provide unmarried members with a survivor benefit for an individual of their choice should they die before retirement. Since the inception of this new benefit, PERS received several requests to allow for more flexibility in designating a single survivor beneficiary. The primary request was for named or for multiple-named beneficiaries. For example, an individual with three children might want to name all three as single survivor beneficiaries, instead of just one child. Since the benefits were annuities that paid based on the life expectancy of a member or individual beneficiary, it was impossible to determine annuity amounts based on numerous beneficiary lives. S.B. 439 would rectify that situation.
PERS recommended that the member continue to designate a single individual on whom the expected life benefits would pay out. At the same time, PERS would allow for alternate payees who could receive certain predetermined percentages of that benefit, as designated by the member. The benefit would cease upon the death of the named single survivor beneficiary, as was currently the case. There would be no financial impact to PERS, since the duration of the benefit would remain tied to the named single survivor beneficiary.
Section 33 of the bill dealt with the newly created Judicial Retirement System (JRS). When the Judicial Retirement Act was passed during last legislative session, they left out an important piece that was necessary to determine the contribution rate. Section 33, line 7, on page 25, added language to the JRS that was identical to contribution rate language in the PERS statute. This technical change would structure the JRS so that it mirrored the PERS in respect to the rate-setting mechanism.
Section 36, page 27, added language to address the critical labor shortage designation within the JRS. Mr. Pyne said the bill did not conflict with A.B. 450.
Section 37 corrected a technical problem with service credit accumulation in the JRS. Under the provisions of the JRS, members could accrue up to a maximum of 75 percent of their average pay after 22 years of service, which equated to 3.4091 percent benefit accrual for each year of service in the plan. If a judge served 22 years at that rate, he/she would be able to draw 75 percent of the average pay, which would be the maximum a judge could collect.
However, when some judges transferred to the JRS from PERS, they were required to transfer all their prior PERS service, which was credited at the 2.5 percent accrual rate, or at the 2.67 percent accrual rate that was effective in July 2001. Because of the lower multipliers, when those PERS members transferred to JRS, there was no way they could ever achieve a 75 percent benefit accrual in 22 years of total service. For example, a judge that transferred to the JRS with 21 years of PERS service, could only draw a maximum of 56 percent of average pay at retirement, with a 22-year cap.
Mr. Pyne said they did not believe that the 71st Legislature’s intent was to cap anyone at less than 75 percent of average pay at retirement, but a careful reading of the statute limited the benefit accrual to 22 years of service. PERS recommended a change to the Judicial Retirement Act that would remove the 22-year cap, so that the maximum benefit accrual would be 75 percent of pay. That change would allow a judge transferring from PERS to achieve the same 75 percent maximum accrual as other judges and members of the JRS.
Assemblyman Goicoechea asked if 21-year member of PERS transferred to JRS and served one year there, could they then retire after 22 years at 75 percent of average pay.
Mr. Pyne said that the person would still be bound by the maximum of 75 percent of average pay. The legislative intent was not to prevent any judge who transferred from PERS from earning the maximum retirement. He said nothing would prevent them from serving 30 years. This change was mainly a technical correction to a drafting error during the last legislative session.
Mr. Goicoechea asked if a person had 18 years in PERS, and then served one year in the JRS, would that person still be able to earn up to 75 percent retirement. Mr. Pyne said the 18 years would be credited at the 2.5 percent rate, or at the 2.67 percent rate, and that would mean that one term in the JRS would not translate to a retirement rate of 75 percent of average pay. He clarified that it was not the legislative intent to allow the accrual rate for the years of service in PERS to change just because an employee transferred to the JRS.
There was no further testimony and no opposition to the bill. Chairman Manendo closed the hearing on S.B. 439 and allowed the Committee a short recess. The Chairman then reconvened the meeting at 9:20 a.m. and opened the hearing on S.B. 240.
Senate Bill 240 (1st Reprint): Revises various provisions relating to benefits payable to surviving spouses and children of certain police officers and firemen. (BDR 53-696)
Senator Randolph J. Townsend, Washoe County Senatorial District No. 4, stated that the purpose of S.B. 240 was defined by a serious tragedy: the loss of a spouse serving in a law enforcement capacity. Last legislative session, a bill was passed to accommodate surviving spouses’ needs for health, accident, and life insurance benefits. He said that the City of Reno, “showing a great deal of courage and class,” had provided police officer Keith Hashimoto’s widow with those benefits. Washoe County also provided similar benefits to the widow and children of Washoe County Sheriff Deputy Frank Minney. Mr. Minney was also killed in the line of duty in 1997.
Unfortunately, after the tragic death of George Sullivan on the University of Nevada, Reno (UNR), campus, his wife Carolyn Sullivan and their children did not receive those benefits. The purpose of S.B. 240 was to offer insurance coverage to Carolyn Sullivan and her children, and possibly to one other family within the state of Nevada. Senator Townsend said that this bill was not retroactive and was prospective in initiating benefits for those two families.
The original bill proposed to continue surviving-spouse benefits that normally would terminate on remarriage. That provision was removed from S.B. 240 because the fiscal note would be too costly.
Chairman Manendo said this bill was similar to legislation Assemblyman Collins passed about six years ago, which provided a free education in Nevada to the children of a fireman who was killed in the line of duty.
Assemblyman Grady wondered if he had heard correctly that the bill was not retroactive, because, in the bill, it stated that it would be retroactive to 1998.
Senator Townsend clarified that it applied for purposes of going forward to pick up Mrs. Sullivan’s health, accident, and life insurance benefits, but would not reimburse Mrs. Sullivan for the approximately $10,000 she had spent over the last 5 years.
Ron Dreher, Peace Officers Research Association of Nevada, thanked Senator Townsend and the other 20 senators who passed the amended bill in the Senate on April 3, 2003. He restated that the need for the bill came about because of the murder of George Sullivan on January 13, 1998, on the University of Nevada, Reno, campus. Mr. Sullivan had told his wife on several occasions that in the event of his death, she and her family would be taken care of. Subsequent to his murder, Mrs. Sullivan learned that neither she nor her family were eligible for state health, accident, and life insurance benefits (Exhibit F).
Other cities and counties had provided those benefits for at least two other officers killed in the line of duty in northern Nevada. In 1999, S.B. 404 of the 70th Legislative Session was passed, and that legislation provided health, accident, and life insurance benefit coverage for surviving spouses and their children. Nevertheless, because the legislation was not retroactive, Mrs. Sullivan and her family were not covered.
Section 1 of S.B. 240’s amended bill would allow for retroactive application of benefits to January 1, 1998, and would allow surviving spouses 60 days to apply for benefits from the effective date of this bill. If they did not apply during that period, they would no longer be eligible for that coverage. As Senator Townsend pointed out, this bill would not reimburse either family for expenses prior to the effective date of this bill. Other eligible persons were believed to be the survivors of Ross Peterson, a Las Vegas Metropolitan Police Officer who was also killed in the line of duty in 1998.
Mr. Dreher said he had attached a copy of the insurance expenses Mrs. Sullivan had paid over the last several years, and he said the proposed bill would add several hundred dollars per month to her income.
He pointed out that the first reprint of the amended bill showed a tremendous fiscal note, which was based on deletion of the remarriage penalty in the original bill. The amended bill did not figure the actual cost of what prospective insurance costs would be, but certainly much less, since remarriage would end the benefits. Mr. Dreher clarified that the fiscal note only applied to the elimination of the remarriage penalty, which was included in the original bill. The fiscal note was not relevant to the amended bill, which had reinstated the remarriage penalty.
On behalf of the families of professional peace officers in the state of Nevada, Mr. Dreher asked the Committee to amend and pass S.B. 240, so that the prospective insurance coverage would take effect as quickly as possible.
Chairman Manendo asked if making the bill retroactive to 1998 would limit coverage to the two families. Mr. Dreher replied that it would cover Mrs. Sullivan and her family, and possibly the family of officer Ross Peterson, a Las Vegas Metropolitan Police Officer, who was killed in the line of duty in Las Vegas in 1998. Neither family had benefited from the 1999 legislation because their spouses were killed prior to 1999.
Chairman Manendo said he was hearing that Mr. Sullivan’s family would be covered, but that the other family may not be covered. He asked if he was sure that both families were eligible, that the second family would be covered, and if there were other families who might be eligible for coverage.
Mr. Dreher said he had not confirmed the second family, because knowledge of that instance was limited to prior testimony. Obviously, Mr. Peterson’s survivors and family would be contacted. He based his opinion that they would be covered on the knowledge that Ross Peterson was killed in the line of duty in Las Vegas in 1998, and because he had heard testimony that the family did not currently enjoy health, accident or life insurance coverage that the other families had received after 1999. There were only two names that surfaced in testimony. He was not aware of any other families who might be eligible. He said that the 1999 legislation would extend benefits to survivors of most law enforcement officers killed in the line of duty subsequent to 1999.
Mr. Dreher clarified that the 1999 legislation only covered certain peace officers and firefighters and did not cover all of them. The difference was whether they were state employees or not. When Mr. Hashimoto was killed, the City of Reno provided the insurance coverage. In the case of Mr. Minney, the same thing happened: the Washoe County Sheriff’s Office assumed the cost. Unfortunately, the other counties and cities did not do the same until the legislation was passed in 1999. The original intent of S.B. 404 of the 70th Legislative Session was to cover state law enforcement officers because they did not have collective bargaining rights as did law enforcement officers employed by local governments. He said it was more difficult for state law enforcement personnel to get the same coverage as did those covered by collective bargaining. For that reason, S.B. 404 of the 70th Legislative Session was amended in 1999 to cover a certain group, which included all local government law enforcement officers and certain state law enforcement officers.
Chairman Manendo asked why the local governments did not cover it, and if it was a fiscal issue. Mr. Dreher said he could not answer that question and did not know if it was a fiscal problem.
Chairman Manendo asked if there were other questions or testimony. There was none. The Chairman closed the hearing on S.B. 240 and adjourned the meeting at 9:34 a.m.
RESPECTFULLY SUBMITTED:
JoAnn Aldrich
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman
DATE: