MINUTES OF THE

SENATE Committee on Government Affairs

 

Seventy-second Session

April 7, 2003

 

 

The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:11 p.m., on Monday, April 7, 2003, in Room 2149 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

COMMITTEE MEMBERS PRESENT:

 

Senator Ann O'Connell, Chairman

Senator Sandra J. Tiffany, Vice Chairman

Senator William J. Raggio

Senator Randolph J. Townsend

Senator Warren B. Hardy II

Senator Dina Titus

Senator Terry Care

 

GUEST LEGISLATORS PRESENT:

 

Senator Raymond (Ray) D. Rawson, Clark County Senatorial District No. 6

 

STAFF MEMBERS PRESENT:

 

Michael Stewart, Committee Policy Analyst

Scott Wasserman, Committee Counsel

Tara DeWeese, Committee Secretary

 

OTHERS PRESENT:

 

Antonio Gutierrez, Legislative Intern, University of Nevada, Las Vegas

Gary Peck, Lobbyist, American Civil Liberties Union of Nevada

Laura M. Mijanovich, Lobbyist, American Civil Liberties Union of Nevada

Gregory Roehm, Sergeant, Nevada Highway Patrol, Department of Public Safety

Mary Wilson, League of United Latin American Citizens, and National Association for the Advancement of Colored People

Marc Ashley, Staff Attorney, Washoe Legal Services

James J. Jackson, Lobbyist, Nevada Attorneys for Criminal Justice

Mark J. Nichols, Lobbyist, National Association of Social Workers‑Nevada

Leslie A. Mix, President, Hispanic Chamber of Commerce of Northern Nevada

Joseph H. Edson, Lobbyist, Progressive Leadership Alliance of Nevada

James Martin, President, League of United Latin American Citizens Council 11090

Dana Mathiesen, Deputy Director, Department of Motor Vehicles

Richard P. Clark, Executive Director, Peace Officers’ Standards and Training Commission

Stan Olsen, Lobbyist, Las Vegas Metropolitan Police, and Nevada Sheriff’s and Chief’s Association/South

Michael Cleveland, Lobbyist, Police Officers Research Association of Nevada, and Reno Police Protective Association

Michael Gillins, Lobbyist, Las Vegas Police Protective Association, and Nevada Community Oriented Policing Services

James F. Nadeau, Lobbyist, Nevada Sheriff’s and Chief’s Association/North, and Washoe County Sheriff’s Office

Gary H. Wolff, Lobbyist, Teamsters Local 14

Nancy Dunn, Deputy Director, Commission on Tourism

Brian K. Krolicki, State Treasurer

Robin V. Reedy, Deputy of Debt Management, Office of the State Treasurer

John Sande III, Lobbyist, Nevada Bankers Association

Patrick Foley, Executive Director of Prepaid Tuition Program, Office of the State Treasurer

John O. Swendseid, State Bond Counsel, Swendseid and Stern

James Richardson, Lobbyist, Nevada Faculty Alliance

Guy S. Hobbs, Lobbyist, Hobbs, Ong and Associates, Incorporated

Susan K. Moore, Executive Director of Millennium Scholarship Program, Office of the State Treasurer

Larry Gamell, D.B.A., Southern Nevada Minority Health Steering Committee, Community Health Center of Southern Nevada

Gale Thomssen, Health Advocate Program Director, Great Basin Primary Care Association

Jeanne Greene, Director, Department of Personnel

Nicole J. Lamboley, Lobbyist, City of Reno

Kami Dempsey, Lobbyist, City of Las Vegas

Wayne R. Perock, Administrator, Division of State Parks, State Department of Conservation and Natural Resources

Chris Knight, Deputy Director, Community Planning and Development, City of Las Vegas

 

Chairman O’Connell:

We will open the hearing on Senate Bill (S.B.) 360.

 

SENATE BILL 360: Revises provisions relating to eradication of racial profiling. (BDR 23-1201)

 

Senator Alice Costandina (Dina) Titus, Clark County Senatorial District No. 7:

Senate Bill 360 relates to racial profiling and you will recall Senator Neal had proposed legislation earlier in this session making racial profiling a misdemeanor. The Government Affairs Committee decided not to proceed at this time, as only two states have declared racial profiling a misdemeanor, Oklahoma and New Jersey. Senate Bill 360 requires three things: law enforcement agencies continue reporting as listed in section 3, peace officers train to avoid racial profiling, and the Department of Motor Vehicles includes information about racial profiling. The information should be found in the driver’s handbook, in registration materials, and on the Web site. The information should include what an individual could do if he or she had been racially profiled and who to contact.

 

Antonio Gutierrez, Legislative Intern, University of Nevada, Las Vegas:

The committee was handed a packet of information we compiled regarding racial profiling (Exhibit C. Original is on file in the Research Library.). The exhibit contains a list of those states with statutory prohibitions against racial profiling, mandatory collection for all local and state law enforcement agencies, mandatory collection for some law enforcement agencies, and voluntary collection for any law enforcement agency. The handout (Exhibit C) also includes comments from various legislatures across the nation concerning racial profiling, including those states with a similar law to the one we are currently advocating. Additionally, the exhibit includes a document from the National Conference of State Legislatures outlining state laws related to racial profiling. The final portion of the exhibit illustrates the Massachusetts model, which is reflected in S.B. 360. The Massachusetts model is a comprehensive law against racial profiling. The handout (Exhibit C) shows the posting on the Massachusetts Registry of Motor Vehicles Web site where Massachusetts residents could report racial profiling. Senator Titus stated the Nevada Department of Motor Vehicles Web site should include a similar link for the convenience of Nevada residents.

 

Racial profiling is a sensitive and controversial issue. For example, United States Senator Russ Feingold of Wisconsin once said,

 

The practice by federal, state, and local law enforcement officials … constantly targeting minorities for searches and the issuance of traffic citations is like a cancer that spreads, if not removed completely. If the problem of racial profiling by law enforcement at all levels of government is not addressed now, it will spread and continue to grow. If it is not removed completely, it will return and spread elsewhere. In order to stand united as one nation we must eliminate racial profiling.

 

As the introduction to a federal study conducted under the Clinton Administration reads:

 

It happens every day: at a seemingly routine traffic stop, a cop approaches your car with his gun drawn. You are checking some clothes in your favorite store and notice you are being followed by security. Dressed in a business suit with arm outstretched, you watch as dozens of unoccupied cabs pass you by. A woman clutches her purse and hurriedly crosses the street when she sees you walking down the sidewalk towards her.

 

For many African Americans, Hispanics, Muslims, Asian Americans, and other minorities, being racially profiled has become a reality.

 

Mr. Gutierrez:

To tackle racial profiling head-on, ex-President Clinton signed an executive order requiring certain federal law enforcement agencies to collect data on the race, gender, and approximate age of those individuals stopped for any reason. Both President George W. Bush and Attorney General John Ashcroft agree racial profiling is a major concern and have called for a ban on the practice. In a statement released in July 2002, President George W. Bush underscored the importance of eliminating racial profiling:

 

It is time to move beyond studying whether racial profiling exists. We know it exists. Now let’s take the right steps to eliminate it and protect the rights of all Americans to walk on our streets and drive on our highways free of discrimination. One hundred thirty years after the Civil War, African Americans still should not have to suffer scrutiny when they travel.

 

There are currently 12 states with a statutory prohibition on racial profiling, 6 of which possess a permanent mandatory data collection component for all state and local law enforcement agencies. A total of 23 states have an incorporated clause in law, to some degree, for the mandatory collection of pedestrian and vehicle traffic stops. Of those states without a prohibition of racial profiling, 11 have pending legislation to outlaw the practice. New Jersey and Oklahoma make it a misdemeanor for any officer proven, upon investigation, to have practiced racial profiling. Connecticut law stipulates state funds may be withheld from law enforcement agencies not complying with the law.

 

Mr. Gutierrez:

Massachusetts has entered its third year since the enactment of its antiracial profiling law. Since the law took effect, law enforcement-minority relations have improved, which is supported by studies and statistics from the state. Individuals of all races and ethnic backgrounds, including white Americans, have expressed thorough satisfaction with the new law and, when stopped, have statistically shown a greater respect towards officers.

 

The practice of racial profiling must be eradicated if public confidence and the integrity of the law enforcement community are to return. The systematic mistreatment of minorities cannot be tolerated and must cease. Robert A. Ficano, ex-sheriff of Wayne County, Michigan, explained it best, “Racial profiling is not only unconstitutional; more importantly, it is wrong. It is deeply corrosive to police and community relations.”

 

Gary Peck, Lobbyist, American Civil Liberties Union of Nevada:

The American Civil Liberties Union (ACLU) has been working on racial profiling issues for a number of years. The problem of profiling and racially biased policing, which the information collected through A.B. No. 500 of the 71st Session made plain, is a systemic problem in Nevada. In most instances, it does not involve the conscious targeting of people of color by racially biased or prejudiced police officers. We believe officers, like all of us, are part of a culture teaching us biases and prejudices often operating at a subconscious level.

 

We support any legislation which would enable law enforcement management to address the problem of racial profiling through remediation in the first instance, not punishment. We are not trying to overburden our police officers, but we cannot manage what we do not measure. Any legislation which does not include a mandatory requirement for data collection will be fundamentally flawed and not worthwhile.

 

We respect Senator Neal and his efforts, although we did not support the legislation he sponsored earlier in the session, but we do support the sentiments behind his legislation. Failure to pass S.B. 360 will undermine confidence in law enforcement among the segments of the community most alienated and distrustful. I urge you to pass meaningful legislation everyone in Nevada can support.

 

Laura M. Mijanovich, Lobbyist, American Civil Liberties Union of Nevada:

I support S.B. 360 (Exhibit D). The results of the study, mandated by A.B. No. 500 of the 71st Session, demonstrate that racial profiling is real, not just a perception. It is a pattern of behavior significantly affecting minority communities. The data-collection component of S.B. 360 is essential to eradicate the use of bias-based policing. Data collection is a proven method to respond to racial profiling. Data collection will ensure accountability and openness, and will provide a tool for self‑assessment. Most importantly, S.B. 360 conveys a message to minority communities that the Legislature is addressing its concerns.

 

Civil rights are a fundamental responsibility of police, just as the enforcement of laws is to the State. Racial profiling is unacceptable and a violation of civil rights. When law enforcement officers inappropriately consider race or ethnicity in determining with whom and how to intervene in an enforcement capacity, law enforcement is violating the civil rights of those affected individuals. Negative attitudes regarding race cause significant portions of our community to be targeted and victimized. The practice of racial profiling affects the attitudes of minority communities toward police and reduces the chances of collaboration with law enforcement. By helping monitor the use of police authority, data collection will help ensure policing is in accord with the rule of law.

 

If the State of Nevada is genuinely interested in deterring bias and ensuring law enforcement is conducted in a racially neutral way, Senate Bill 360 must be adopted with the data-collection component. The data-collection component will help monitor the effectiveness of other measures such as training and helping law enforcement to manage and redistribute its own resources. To produce valid information, the collected data must include officer identifier information and the times and locations of stops. The information will permit an accurate analysis of the data recommended by such organizations as the Police Executive Research Forum to survey actual traffic flows at particular locations and allow the determination of accurate benchmarks, against which to compare the data. Furthermore, it would prevent certain profiling patterns from being masked behind otherwise vague and general information. Additionally, the data should include pedestrian-stop information, because racial profiling is not limited to vehicular stops. The ACLU of Nevada advocates the education components of S.B. 360.

 

The American Civil Liberties Union of Nevada also supports providing information in the driver’s manual which could assist the community at large in understanding issues of racial profiling. Mr. Peck mentioned we do not believe police officers engage in racial profiling in a conscious or intentional way. It is not a consciously racist attitude. It is a subconscious attitude of which everyone is subject. Senate Bill 360 would not seek punishment as a response to racial profiling, it seeks remedial action which the ACLU of Nevada supports. I would like to note one concern. Section 9, subsection 2, stipulates no retaliatory or punitive action may be taken against a peace officer who discloses information concerning racial profiling. We believe the statement should be limited to initial profiling infractions.

 

Gregory Roehm, Sergeant, Nevada Highway Patrol, Department of Public Safety:

I support a specific training element of S.B. 360 and have provided an outline (Exhibit E) for a training program in compliance with S.B. 360.

 

Experts in racial profiling have concluded the training element is an important strategy to combat racial profiling. As a career law enforcement officer, my training was limited to how to complete the card required by A.B. No. 500 of the 71st Session. I understand some elements of biased-based police training are incorporated into other training courses, but a stand-alone racial profiling training curriculum is missing.

 

Based on my research, I have concluded law enforcement in Nevada lacks the proactive training to adequately address racial profiling. I have put forth a proposal, a 4-hour block of instruction in compliance with the requirements of S.B. 360. The majority of the training curriculum is taken from the Police Executive Research Forum, the authority in racial profiling research, and includes a discussion of the legal issues, a history of racial profiling from when police officers were trained in drug interdiction to look for specific vehicles and nationalities, and a training curriculum for handling complaints by those who feel they have been profiled. Additionally, the curriculum would include the recommendations of the Police Executive Research Forum (PERF). I have outlined the six training elements and a process for recruiting and hiring officers, which would help administrative personnel to be proactive in terms of recruiting officers to mirror the communities we serve.

 

The training elements include policies against biased-based policing, minority group outreach, an aspect of community-oriented policing, data collection, on which PERF has no position, accountability and supervision, and a certification exam which all Nevada peace officers would be required to pass. The new training elements would send a message to all prospective Nevada law enforcement personnel, if you want to be a police officer, you will annually complete the training curriculum. To provide easier compliance for law enforcement agencies with S.B. 360, I have proposed a “train the trainer”‑type program where representatives of all Nevada law enforcement agencies come together for a training program to instruct them on how best to teach the curriculum to all officers.

 

Regardless of how the matter is resolved, the mandatory training element would send a message to law enforcement and everyone in Nevada that biased-based policing is wrong, illegal, and not tolerated.

 

Mary Wilson, League of United Latin American Citizens, and National Association for the Advancement of Colored People (NAACP):

I urge the committee to pass S.B. 360, No. 1 on the list of mandates from the national organization for the NAACP.

 

Marc Ashley, Staff Attorney, Washoe Legal Services:

I support S.B. 360, which would help eradicate racial profiling in police work. We currently have statutes outlawing racial profiling, so you might want to ask what S.B. 360 accomplishes. Is it going to solve a problem or will it fill the books with unnecessary words?

 

With Washoe Legal Services, I work weekly at the Washoe County Jail to assist and advise inmates on noncriminal legal issues arising in jail. I meet with over 100 inmates every month, and I can assure you there is a real perception among many that racial profiling is rampant in Nevada. The number of racial minorities in jail is far out of proportion to their percentage of the general population. I believe such observations contribute to the perception that racial profiling is a real problem. I do not claim my observations provide scientific evidence; however, I do feel the number of minorities in prison presents cause for concern, which demands a reason. Data collection will start the process of providing the reason.

 

Senate Bill 360 calls for the collection of objective information concerning the reason for a stop or arrest and the circumstances surrounding the stop. Furthermore, S.B. 360 requires the Attorney General conduct an annual study to determine whether racial profiling is occurring. If the studies show a problem, then we can begin to solve it. Senate Bill 360 would also require training, which is a step in the right direction. I hope and expect the data will show racial profiling is not as widespread as some believe, but without data collection we do not have an answer.

 

James J. Jackson, Lobbyist, Nevada Attorneys for Criminal Justice:

Assembly Bill No. 500 of the 71st Session was a step forward in Nevada to identify the existence of racial profiling in some form or degree. The purpose of S.B. 360 is to gather and analyze statistical information to create a better training curriculum. The new training curriculum’s effectiveness cannot be measured unless we continue to measure when and how stops are occurring.

 

Mark J. Nichols, Lobbyist, National Association of Social Workers-Nevada:

I urge the committee’s support of S.B. 360, legislation consistent with the values of the profession. I am the son of Sergeant Jerry Nichols, a University of Minnesota police officer. My father believed in the core values and principles of law enforcement and would have seen racial profiling as lazy, ineffective, and a reinforcement of barriers with the minority community. Before entering social service, I was an auditor for a multibillion-dollar financial institution where we had a maxim, “You do not respect that which I do not inspect.” Applied to racial profiling it means the public has the right to expect fair, just, and unbiased enforcement of law and that the public has the right to inspect and make certain it occurs.

 

Leslie A. Mix, President, Hispanic Chamber of Commerce of Northern Nevada:

I urge the committee support S.B. 360. The Hispanic Chamber of Commerce of Northern Nevada strongly believes racial profiling is a problem in Nevada. Data collection allows for accountability, which will lead to equity for minorities. If people are accountable to the numbers and scientific data, then those people are prone to be careful with their actions.

 

Joseph H. Edson, Lobbyist, Progressive Leadership Alliance of Nevada (PLAN):

We urge your support and passage of S.B. 360. The key missions of the PLAN alliance are economic, environmental, and racial justice and dismantling racism. Overt actions of discrimination are easy to recognize, but cultural biases have become embedded in our culture and institutions, which make it harder to detect without a system for data collection of objective statistics. Additionally, we support the training elements contained in S.B. 360 because they are the only way to address the intentional and unintentional racially biased actions.

 

James Martin, President, League of United Latin American Citizens Council 11090:

I was on the board of the Nevada Association of Latin Americans, served on the Nevada Equal Rights Commission for 13 years, and am currently president of the League of United Latin American Citizens (LULAC) Council 11090. I have been a San Bernardino County, California, deputy sheriff and a law enforcement officer through the military police as a behavioral services investigator. I have personally witnessed bias directed at my peers. Most of us grew up with bias. I speak to the fears of my community and for those afraid to come forward and express their concerns, such as individuals in Reno who have been stopped for no apparent reason, even inappropriately, under most law enforcement officer rules. I support S.B. 360.

 

Dana Mathiesen, Deputy Director, Department of Motor Vehicles:

The department has no position on S.B. 360, however, sections 10 through 12 require the department to include material in registration and driver’s license notices as well as information in the driver’s handbook. To cover the expense, the department submitted a fiscal note for $82,400 in fiscal year 2004 and $85,531 in fiscal year 2005.

 

Senator Titus:

How did you calculate the additional costs to the department?

 

Ms. Mathiesen:

There is a $10-per-1000 insert fee to have the State mailroom insert information into the 1.5 million renewal notices mailed annually. In addition, there is a 4-cent-per-page charge to print the notices, totaling $1.6 million.

 

Senator Titus:

It would cost nothing if you only provided information in the driver’s handbook and on the Web site?

 

Ms. Mathiesen:

That is correct.

 

Richard P. Clark, Executive Director, Peace Officers’ Standards and Training Commission:

The Peace Officers’ Standards and Training (P.O.S.T.) Commission is the regulatory agency that oversees professional standards and quality of training for peace officers statewide. The organization sets the regulations for the selection, hiring, certification, and recertification of peace officers. There are some amendments extending responsibility of the commission to oversee the evaluation of academy training. Biased‑based policing directly conflicts with the core courses on interpersonal communication skills, traffic stops, ethics, cultural diversity, and patrol procedures already taught at academies. If the amendment solidifies existing courses into a biased-based policing core requirement, the chairman of the P.O.S.T. Commission and I stand in support of any required training or evaluation.

Senator Raggio:

Do we have the fiscal note that has been submitted?

 

Chairman O’Connell:

If it is not in our book, then we have not received it.

 

Senator Raggio:

Can we request one be obtained? Did the Attorney General’s Office submit a fiscal note?

 

Chairman O’Connell:

The committee has not received any fiscal note.

 

Stan Olsen, Lobbyist, Las Vegas Metropolitan Police, and Nevada Sheriff’s and Chief’s Association/South:

We are in opposition to S.B. 360 as currently drafted. Racial profiling is an inappropriate term; the correct term is biased‑based policing. Biased-based policing is wrong and against federal law. Profiling of different types may occur for various reasons, but in regard to S.B. 360, we would like to see “racial profiling” changed to “biased-based policing.” We oppose data collection. After the 71st Legislative Session, law enforcement was directed to gather data and it showed an issue existed. However, gathering more data is without merit. The issue should be how best to address the issues evidenced by the data. Conducting data collection as set forth in S.B. 360 will be significantly more expensive then the last data collection effort.

 

I have passed out a chart, “The Fiscal Impact” (Exhibit F), which shows the costs incurred by the Las Vegas Metropolitan Police Department (Metro) as a direct result of A.B. No. 500 of the 71st Session. Currently, the Metro has 1.7 officers per 1000 in population. The national average is 2.6. We have approached both the city and the county asking for 289 additional officers, but due to budget constraints we were denied. We then requested 117 officers and were again denied. We are now down to 100 additional officers to take care of an area continuing to grow by nearly 65,000 people per year. Officers in the department are retiring, dying, and leaving; each month we lose ground in the officers-per-1000 category. Assembly Bill No. 500 of the 71st Session was expensive for the Metro, both financially and in manpower hours. The total cost was $342,445, the equivalent of 5.17 additional officers.

I distributed the cost analysis from the Nevada Highway Patrol for implementing A.B. No. 500 of the 71st Session (Exhibit G). For fiscal year 2002, the cost totaled $243,375. With the expansion of documentation requirements on contacts, the costs are going to be significantly higher. We would face higher implementation costs, as the department is losing available man-hours and while we cannot get a budget increase to hire more police officers.

 

I have proposed an amendment (Exhibit H). We have a problem with data collection; it is time consuming and expensive. However, we support the idea of providing information in the driver’s handbook. Additionally, the amendment makes reference to training; we have no issue with training. Training is important, but could be done at a lesser expense than the process required in sections 1 through 6 of S.B. 360.

 

Chairman O’Connell:

How would the fiscal note change if the committee adopted your proposed amendment?

 

Mr. Olsen:

The amendment would reduce the fiscal note to nearly zero, because the changes could be done within the region. Based on an average of 2 minutes to fill out our forms for routine traffic stops, the Metro’s 229,000 traffic stops cost 3.67 additional officers. The figure does not take into consideration the time support staff spend collating and entering data from the Scantron cards.

 

Senator Titus:

If the Legislature takes action to address racial profiling, how will we know our actions were effective without continued data collection?

 

Mr. Olsen:

There is no point in collecting the data unless it is used. If the amendment is adopted, the P.O.S.T. Commission would be directed by the Legislature to review and change training procedures to make them better. What has to be addressed are the underlying prejudices people possess. With the participation in training of people with backgrounds in multicultural issues, some of the issues could be corrected.

Senator Titus:

Do you support leaving section 7 in the bill?

 

Mr. Olsen:

We have no issue with training and agree the information, making people aware of their rights, should be inserted in the driver’s handbook and on the Web site.

 

Michael Cleveland, Lobbyist, Police Officers Research Association of Nevada, and Reno Police Protective Association:

We are opposed to S.B. 360 as it was initially submitted. Last session, I favored data collection and statistical analysis. What we learned was the data could not be used for anything.

 

The majority of a police officer’s traffic stops are directed. They are told to go out to a specific area and stop all violators. If the area happens to be in a high‑minority area, then those stops represent a higher number of minority citations. The officers do not choose where they work; they are indirectly sent by the citizens through complaints to the traffic division. Traffic supervisors direct the officers to go to designated areas and write tickets. Without knowing the traffic flow and breakdown of the type of people in the area, statistical analysis cannot be properly connected to racial profiling or biased-based policing. One of the things you might try, while driving, is figuring out the race of the person driving in front of you. It is almost impossible. We do not know who we are stopping until we walk up to the vehicle.

 

To require filling out additional forms, when the data cannot be used for anything without other statistical collection, is flawed. It cost Reno a great deal of money to enact A.B. No. 500 of the 71st Session. We filled out the forms and noticed a reduction in the number of stops officers were making, because they did not have the time. If you add 1 or 2 minutes to every traffic stop, you are taking the officer off the street for that length of time. An average police officer on a motor writes 10 to 15 tickets a day and handles a number of other accidents. If you added 2 minutes to each one of those citations, 30 minutes is removed from active duty time each day. Additionally, the officers are not receiving their regular breaks, because they do not have time. If we do not hire additional officers to put on the street, we cannot take the time away from our existing officers. If biased-based policing is a problem, internal affairs can handle it. They actively solicit and investigate complaints and hold people accountable if a violation of law occurs. Senate Bill 360 would have a definite negative impact on our ability to serve the people.

 

Chairman O’Connell:

Have you had the opportunity to look at the amendments Mr. Olsen proposed?

 

Mr. Cleveland:

Yes, the city of Reno already does the type of training found in the amendment very well. The amendment would not have any impact in Reno. I believe our officers are attempting to do the right job and when they intentionally or unintentionally make a mistake, they are held accountable. We have no problem with citizens being made aware of their rights to file complaints; the city of Reno already hands out brochures and has publications to that effect. We could support amendments.

 

Michael Gillins, Lobbyist, Las Vegas Police Protective Association, and Nevada Community Oriented Policing Services:

We do not support biased-based policing in any form and do support any measure to better train the already well-trained officers in Nevada. The loss of manpower would be significant with the cost of continued data collection and the lack of available funding. I would hate to see laws go unenforced or police officers receive unnecessary citations because of the paperwork they filled out. Law enforcement should be free to make those decisions unencumbered and good training would lead to those kinds of decisions. We support the training amendment as proposed by Stan Olsen.

 

Mr. Cleveland:

I have offered a letter from Ron Dreher of the Reno Police Protective Association (Exhibit I), who opposes S.B. 360.

 

James F. Nadeau, Lobbyist, Nevada Sheriff’s and Chief’s Association/North, and Washoe County Sheriff’s Office:

We went through significant efforts to fill out the forms required from A.B. No. 500 of the 71st Session. The cost of the program’s implementation and additional software updates would be significant. Furthermore, there would be a significant cost to rural counties if rural sheriffs were required to implement the program established in A.B. No. 500 of the 71st Session. We support auditing, and reviewing the training programs, and oppose biased-based policing We oppose certain elements of S.B. 360, but support the amendment.

 

Gary H. Wolff, Lobbyist, Teamsters Local 14:

In concept, we agree with part of S.B. 360. I had been an academy instructor for years before I retired. The training aspects of the bill are already taught in the academy. When you consider a trooper 1000 yards away holding a radar gun, I guarantee the trooper does not know who is driving the car when entering the radar screen. We would take severe disciplinary action against anyone found guilty of biased-based policing, but I think the survey showed we do not have a big problem with it. Police officers have a hard enough time without generating unnecessary paperwork.

 

Senator Titus:

All of you are against the continued data collection, but support the training and printing of the information in the driver’s handbook?

 

Mr. Nadeau:

We support training because it would have the broadest impact. We would like to work with you on the definition contained in the driver’s handbook.

 

Mr. Wolff:

I support cost-effective training and including information in the driver’s handbook.

 

Senator Raggio:

I understand the amendment directing P.O.S.T. to review the training practices of all law enforcement agencies and it seems all the law enforcement agencies have indicated they are already receiving the type of training described in the amendment. Are there any academies that do not employ this type of training?

 

Mr. Nadeau:

I am not aware of any, but I think it is important an audit be done to make sure the training is adequate.

 

Senator Raggio:

Do you support P.O.S.T. conducting a review to determine whether or not appropriate training is occurring?

Mr. Nadeau:

Yes.

 

Mr. Wolff:

I agree.

 

Senator Raggio:

I would like to know whether or not this training is currently being conducted by law enforcement agencies in Nevada.

 

Mr. Clark:

The courses I outline, ethics and cultural diversity, patrol procedures, traffic stops, and interpersonal communication skills, teach officers that bias or prejudice is not acceptable in modern-day law enforcement. These are core law enforcement courses taught in Nevada; we certify the academies teach those core courses.

 

Senator Raggio:

How long have the core courses been in existence?

 

Mr. Clark:

The core courses have been used for at least 20 years. The courses are certified by the P.O.S.T. Commission and taught at the academies. For example, by direction from the Governor’s Office, we established a core course on domestic preparedness on weapons of mass destruction because we realized basic academies should have that component. We try to audit the academies once a year, but due to resources and lack of administrative assessments this last year, we have fallen off.

 

Senator Raggio:

Is there a need to do what is in the amendment, a comprehensive review of the training practices of law enforcement officers? Have you already done this? I do not want to do something unnecessarily.

 

Mr. Clark:

Yes, we surveyed the instructors of these courses and checked the lesson plans, there are components in each one of the courses where these issues are taught. Sometimes management, supervision, or disciplinary issues get diverted. You can retrain someone who is biased or prejudiced several times and it would not clear the issue. The issue is of supervision and management’s ability to identify, investigate, counsel, and discipline people to send the message throughout the ranks that biased-based policing is not acceptable.

 

Senator Raggio:

This amendment will require P.O.S.T to direct all training facilities to develop a review committee. The review committee would report on the plans in place for this kind of instruction, no later than January 1, 2004. Would that be worthwhile?

 

Mr. Clark:

The material is already being covered. A review is nothing more than what we do now as far as auditing those academies and making sure those core courses are taught. If there was a desire to pull out aspects and do a core course specifically for biased-based policing, then certainly it can be done.

 

Senator Titus:

I think it is exactly what needs to be done; pull little pieces out from these other courses and create a core course. This would emphasize biased-based policing as important, cover all aspects, and create one course on this issue. Would that be an acceptable idea, Mr. Nadeau? Would it help us see if we are addressing the problem of biased-based policing?

 

Mr. Nadeau:

We have done that with other elements of law enforcement to certain extents, and if it is the pleasure of this Legislature, then we will.

 

Mr. Peck:

We have lots of these training components in various academies and yet, the data from A.B. No. 500 of the 71st Session makes it plain there is a systemic problem of racially biased policing, not just stops, but what happens to people after they are stopped. They are more likely to be cuffed, have stops of longer duration, and have their cars searched if they are people of color, despite the fact they are less likely to have contraband than white people. I do not mean to sound divisive, but do we care enough about the problem of profiling and biased-based policing to ask officers to spend an extra minute to record information to identify the problem and provide management a tool to address it. Failure to include a data-gathering component will make any legislation meaningless.

 

Chairman O’Connell:

We will close the hearing on S.B. 360 and open the hearing on S.B. 445.

 

SENATE BILL 445: Revises provisions governing grants of money from Fund for the Promotion of Tourism by Committee for the Development of Projects Relating to Tourism. (BDR 18-510)

 

Nancy Dunn, Deputy Director, Commission on Tourism:

The business office of the Nevada Commission on Tourism performs the accounting for the program mentioned in S.B. 445, a housekeeping measure. The program was created last legislative session at the request of Lieutenant Governor Hunt, chairwoman of the Commission on Tourism and the Commission on Economic Development. The program was introduced and created late in the session, because the funding was not included in the budget. The program has now been in existence for a couple of years; it is our understanding funding would be through the State Budget Act and subject to legislative authorization. The bill removes the requirement that funding for the program be approved by the Interim Finance Committee. It also removes the cap, because the amount of funding is subject to approval by the Legislature.

 

Senator Hardy:

Is this the room tax that goes to the convention and visitors authorities and the fair and recreation boards? Is this in addition to what goes to the Las Vegas Convention and Visitors Authority and the fair and recreation boards? How does this work?

 

Ms. Dunn:

There is a room tax or a lodging tax charged throughout the state. The State of Nevada collects 3/8 of 1 percent, deposits it with the State Treasurer, and then passes the funds on to the Commission on Tourism for the promotion of tourism.

 

Senator Hardy:

It does not impact the locals’ share. I get concerned the board seems to forget it is also the fair and recreation board. We seem to dilute those funds for everything except fair and recreation. I want to keep an eye on it and make sure those associated with the fair are getting their fair share.

 

Senator Raggio:

What is the rationale for removing the cap?

 

Ms. Dunn:

The cap was removed because the amount of funding for the program is like any other program within state government. It has to go through the State Budget Act and be initiated by the Governor and approved by the Legislature.

 

Chairman O’Connell:

We will now close the hearing on S.B. 445 and open the hearings on S.B. 446.

 

SENATE BILL 446: Authorizes State Treasurer to appoint and employ two Senior Deputies in unclassified service of State. (BDR 18-301)

 

Brian K. Krolicki, State Treasurer:

We have three bills in front of you today, S.B. 446, S.B. 447, and S.B. 448.

 

SENATE BILL 447: Revises provisions relating to investment by local governments and monitoring of collateral to secure certain deposits of public money. (BDR 31-302)

 

SENATE BILL 448: Revises authority of State Treasurer to invest money held in certain trust funds and to administer proceeds from certain settlement agreements and civil litigation between State of Nevada and tobacco companies and revises qualifications for millennium scholarships. (BDR 18-299)

 

Senate Bill 446 is simply housekeeping. It changes two positions within the office to unclassified status and names them Senior Deputy State Treasurers. The positions are not funded through the General Fund and are of equal status, but are administratively treated differently, because they are in the classified service. The reason we have the situation is because both are education program-related; one is a prepaid tuition creation and the other is from the college savings program. The programs were established by the Legislature, but the Interim Finance Committee created the positions.

This change will maintain salaries and duties, but will give the State Treasurer more flexibility and a better ability to appropriately utilize these individuals’ talents and showcase their responsibilities.

 

Senator Tiffany:

Usually these types of positions are put in classified-pay bills. Why are you doing it in a separate bill?

 

Mr. Krolicki:

The position has to exist to be put into the unclassified-pay bill. We have petitioned both the Senate Committee on Finance and the Assembly Committee on Ways and Means. We have talked about these positions, but from a statutory standpoint, if you look at State Treasurer statutes, the State Treasurer is able to employ these different folks in the unclassified service.

 

Senator Tiffany:

Why was it not in the Governor’s budget?

 

Mr. Krolicki:

We did not get it on the budget.

 

Senator Tiffany:

This is not part of the Governor’s budget, but you want it in a bill to put the positions in the classified-pay act?

 

Mr. Krolicki:

I would like them to be on the unclassified-pay act, but as I said, neither one is funded out of the General Fund. Both are self-supporting positions. With the changes we are making in personnel and programs, we save personnel costs. For flexibility, one could become an office manager in the Grant Sawyer State Office Building and the other could have the capacity and the responsibility far greater than the college savings program.

 

Senator Tiffany:

Usually we see these positions put into the budget, then the subcommittee gets to ask whether the individual had a change in job or position before you can re‑title, classify, or unclassify them. It looks like the positions have not gone through this process.

Chairman O’Connell:

Are you telling us their responsibilities have not changed?

 

Mr. Krolicki:

Nothing has changed and the Governor’s Office has no problem with S.B. 446.

 

Senate Bill 447 creates a statewide collateral pool. Any public funds deposited with financial institutions in the state need to be insured or collateralized. In some local jurisdictions and others, it becomes difficult to comply. We have people perform this task full time. Additionally, S.B. 447 would allow different banks taking public deposits in Nevada to pool those deposits, maintaining the current 102 percent limit, but allowing better utilization of the collateral posted to the deposits. Therefore, you would not have to adjust to each deposit; they are pooled together to ease the challenge. We will get a listing of those public deposits, just to make sure the public funds are properly collateralized and give an extra layer of protection to the local jurisdictions and Nevada residents.

 

Chairman O’Connell:

Does the statewide collateral pool have any parallel principles to those behind S.B. 141? It was a county bill to give the county more flexibility in pooling and collateralizing its money.

 

SENATE BILL 141 (1st Reprint): Revises provisions relating to certain investments made by local governments. (BDR 31-458)

 

Mr. Krolicki:

Senate Bill 141 dealt with guaranteed investment contracts on bond proceeds. When the legislation was originally done for local governments, it was with the Southern Nevada Water Authority in mind, and its bond proceeds were larger than most local governments. I am comfortable with a reduction in the amount that can go through a local government. We suggested a $25 million amount, but the legislation processed was set at $10 million.

 

Chairman O’Connell:

Senate Bill 141 passed the Senate and is now in the Assembly.

Mr. Krolicki:

I will discuss it with the Assembly. These things can be very sophisticated. The providers of guaranteed investment contracts could take advantage of smaller jurisdictions, if a talented attorney is not paying attention. Ten million dollars in bond proceeds describes almost every local government in Nevada. We will pursue a $25 million amount.

 

Chairman O’Connell:

I should have explained a little further, but it seems like we are dealing with the same principle.

 

Mr. Krolicki:

We have most of the banks within and outside Nevada represented in the audience and we have spoken to the Clark County Treasurer’s Office. They are all comfortable with S.B. 447.

 

Senate Bill 447 represents another investment needing to be collateralized and is covered in sections 1 through 15. We have a couple of amendments (Exhibit J) concerning the collateralization section.

 

Sections 16 to 22 serve to eliminate unissued debt authorized in Nevada. Every time we issue debt and create an official statement when we access the markets, we have to list all of the potential authorized liability. We have over $226 million of authorized unissued debt. I equate this situation to having large credit from credit cards; the credit amount shows up on your report. Even though you are not taking it down, the potential access drags your credit. I look at sections 16 to 22 as a large cleanup of things currently on the books. Some of the authorizations go back 20 years. Our office has communicated with all the issuers and they give no indication of issuing debt under these old statutes.

 

Senator Raggio:

What language in the bill eliminates the unissued debt?

 

Mr. Krolicki:

The bill puts a calendar date of July 1.

Senator Raggio:

I see various provisions here saying, “No state obligations may be issued after a certain date.” Are you saying, even though they are authorized, the language in each of these sections would eliminate unused debt authority?

 

Mr. Krolicki:

Yes.

 

Robin V. Reedy, Deputy of Debt Management, Office of the State Treasurer:

Senate Bill 447 asks no state obligations be issued, meaning no new obligations under the authorization, but gives us the opportunity to refund those obligations should economic conditions indicate we would financially benefit.

 

Senator Raggio:

Do you have a list of the various authorizations to which these sections refer?

 

Ms. Reedy:

I can get you the list, but we do list the authorizations in every official statement. The list would come from the statement. We tell the people buying our bonds what we have available.

 

Senator Raggio:

The committee would like to see the authorization list.

 

Mr. Krolicki:

Authorized debt of $226 million is an extensive amount. We would be over our debt capacity if new obligations were issued without authorization.

 

Senator Raggio:

Is the authority no longer needed in each case?

 

Mr. Krolicki:

That is correct.

 

John Sande III, Lobbyist, Nevada Bankers Association:

Mendy Elliot and Greg Titus from Wells Fargo Bank, Wayne Nader of US Bancorp, and Pat Jones of Bank of America all support the bill.

 

Senator Raggio:

Mr. Sande is a member of the same law firm in which I am involved.

 

Senator Care:

In section 10, the contemplated reports are weekly, monthly, and yearly. How sophisticated should the reports be? How did you settle on the administrative fine amounts of $100 per day and $250 per day, and what would happen if an institution wanted to contest it?

 

Patrick Foley, Executive Director of Prepaid Tuition Program, Office of the State Treasurer:

The bill was drafted similar to other bills used in surrounding states. We are following the guidelines utilized by the financial institution divisions of Utah and California. The banks are in agreement with the fines; those institutions range from smaller community banks to the larger banks.

 

Senator Care:

How frequently would a fine be contested?

 

Mr. Foley:

We are going to track deposits on a daily basis to receive sufficient information from the banks on the total deposits maintained for public funds. We will match the numbers to the weekly reports delivered to us on the collateralized deposits. If there is underfunding on their behalf, we will track it and notify them of the daily requirement; first, to make sure we have sufficient collateral backing the deposits and second, to look at levying the fine.

 

Chairman O’Connell:

I need to declare my husband is the chairman of a small community bank. I did not realize they were going to be involved. Is the fluctuation of interest rates taken into consideration and what kind of an impact do the rates have on any of these?

 

Mr. Foley:

We mark to market daily on our investments. We have to have 102 percent collateralization and whatever the market closed at that day. The financial institution holding deposits or needing to make collateral must do that. Obviously, interest rate fluctuations tremendously affect fixed-income portfolios.

Mr. Krolicki:

We are changing the weekly report to the locals. The State Treasurer would provide the report; since we have the information, we would be the conduit.

 

Mr. Foley:

The significance of the first change under section 8, page 7, line 6, is it initially stated the banks holding the collateral must be located within the State of Nevada. We are changing that to be a trust department of a state, national or Federal Reserve Bank, so the banks can be located anywhere within the United States as long as they meet the qualifications.

 

Chairman O’Connell:

Are you taking out the other language or adding to it?

 

Mr. Foley:

We are replacing “trust department of a state or national bank located in this state“ with “trust department of state, national or federal reserve district bank.“ Currently, the state and many municipal accounts are being collateralized whether with the Federal Reserve Banks located in San Francisco or US Bank in Des Moines or Bank of America with the Bank of New York. For them, making the adjustment and locating within the state would be quite a sacrifice and a difficult situation.

 

Mr. Krolicki:

Those from the banking community and the Nevada Bankers Association are in concurrence with the proposed changes.

 

Chairman O’Connell:

Since we do not have the language you are taking out of these amendments, can you tell us, are we dealing with the entire sentence?

 

Mr. Foley:

The lines that are above in the section, “trust department of a state or national bank located in this state” would be replaced with “trust department.”

 

Mr. Krolicki:

Senate Bill 448 is the tobacco securitization bill. The bill deals with securitization and addresses changes we propose for Millennium Scholarship eligibility. This legislation securitizes half of the Master Settlement Agreement and those monies dedicated to the Millennium Scholarships, the 40 percent portion, and the 10 percent portion attributed to the Trust Fund for Public Health.

 

It is important to give a context of where we are today with tobacco securitization, and the Master Settlement Agreement. Many things have happened in the last 2 years since we spoke on the subject.

 

The Master Settlement Agreement (MSA) payments, as projected by the company hired by the National Attorneys General Association, have been reforecast for the next 25 years. Every time there is a securitization, we get new projections. The most recent projection we have is from a deal priced and sold in Virginia; although, because of the situation with Philip Morris and other tobacco market factors, the deal was pulled back. The offer was pulled from the market because the Illinois case severely affected Philip Morris. The new numbers with the Virginia transaction reduced the next 4 years of MSA payments by an average of 8 percent, which affects the projection made 2 weeks ago we thought we would be getting for the next 4 years.

 

Tobacco money now constitutes a cottage industry for the states, which we talked about 2 years ago; it is now a $20 billion industry. In the booklet (Exhibit K. Original is on record in the Research Library.), we report $20 billion in bonds have been sold. The most important thing to note is a case in Illinois, where Philip Morris was assessed a judicial penalty of $10 billion and required to post a $12 billion bond to appeal the decision. Philip Morris has indicated it is likely they would be unable to post the bond and suggested the possibility of bankruptcy. On April 15 the four companies make their payments and we receive our annual portion of the tobacco settlement. Philip Morris suggested their $16 million contribution due Nevada on April 15 is in jeopardy; Philip Morris’s contribution represents over 50 percent of the MSA payment. Since we did not securitize 2 years ago, we have lost an opportunity cost of over $100 million. We were looking at a $450 million securitization proceed pile when we originally talked about all of the money, not just half as this bill is asking. Today, the number would be about $350 million, so we have left over $100 million on the table.

 

The changes proposed in the MSA monies we receive, regardless of securitization, substantially and materially affects the testimony I gave to the Board of Regents 2 weeks ago. Within 2 weeks the ability to fund the Millennium Scholarships, as currently comprised, dramatically slipped from fiscal year 2009 to 2006. We believe we have lost 3 years in the ability to fund the Millennium Scholarships unless the numbers change. If we were to securitize as we had suggested 2 weeks ago, we would be able to sustain the Millennium Scholarships until 2016 without requiring assistance from the General Fund. Now with securitization we are looking at a 2013 sunset.

 

Chairman O’Connell:

Are you talking about help to the drug situation with this money? Is that money protected?

 

Mr. Krolicki:

The money is not protected. Again, fully complying with the MSA, these numbers are affected by consumption rates. If Philip Morris does not make its payment on April 15, half of our annual money will not arrive. Senior Rx and everything we fund with the MSA payments are in jeopardy. They could make a late payment with penalties. We have been working with the Attorney General’s Office to make sure we collect the penalties, but the Illinois case is troublesome because it is only a small jurisdiction assessing a $10 billion damage award for the company’s light cigarettes. The abilities around this country to pursue similar cases are great.

 

Chairman O’Connell:

With every state looking for new revenue, including raising cigarette taxes, will that have an effect as far as the tobacco companies’ sales?

 

Mr. Krolicki:

The elasticity of the drug market is probably greater than many commodities, but the higher you raise the price, the less people will smoke. Regardless of the tax plans I have seen, we are looking to raise the tobacco tax by two or three times. Last fiscal year we received $47 million from tobacco excise taxes. If doubled or tripled, we would receive $150 million. Add the MSA payments of between $40 million and $50 million. Tobacco would generate close to $200 million for Nevada. It is an untenable position. We now have 45 attorneys general in the United States trying to obtain leniency for Philip Morris so the company can make its April 15 payments. We should do everything we can to diversify ourselves from this revenue source.

 

Senator Raggio:

We supported this in the last session, and it died in the Assembly. On page 16 (Exhibit K), apparently you mentioned Virginia, California, and Missouri have abandoned or postponed utilization of the process?

 

Mr. Krolicki:

I do not believe they will, because of the uncertainty in the marketplace, and the potential bankruptcy of Philip Morris.

 

Senator Raggio:

If we pass S.B. 448, where are we? Do we wait and see whether or not we can realize the kind of revenue we anticipate from securitization?

 

Mr. Krolicki:

We have grappled with that question in the Treasurer’s Office and in discussion with the Governor’s Office, especially as it relates to the Millennium Scholarships. It is a tragedy not to have these potential resources available to the citizens of Nevada. I would not securitize right now, because it is too expensive and the market is not right. However, I would hope to have the ability in statute to proceed with securitization, should the market recover sufficiently. One of the amendments we would propose is a sunset clause or State Board of Finance or Interim Finance Committee approval, if that gave some comfort. We need the ability to move on behalf of Nevada should a second opportunity arise.

 

Senator Tiffany:

Do we have enough money in the bank today to cover the Millennium Scholarship youths now in college for 4 years?

 

Mr. Krolicki:

Assuming the four tobacco companies perform under the MSA, yes.

 

Senator Tiffany:

No, with what we have now excluding future MSA payments.

Mr. Krolicki:

The trust fund has approximately $15 million and added to the payments we will receive April 15, we will only have enough money to fulfill next year’s obligation.

 

Senator Tiffany:

What is each year’s obligation?

 

Mr. Krolicki:

It is hard to get an accurate number of students who will be utilizing the scholarship, but it is about $20 million to $23 million each year. The amount can grow, but those are the projections we have.

 

Senator Tiffany:

Without the payments on April 15, we could not meet our obligation. What is the state’s obligation to the Millennium Scholarships? Would we need to use General Fund money?

 

Mr. Krolicki:

There is no obligation from the General Fund. The funding comes completely from the settlement.

 

Look at it from a cash management side. If we are short, we could still fulfill much of the obligation. If Philip Morris is unable to make its payment, perhaps they can come up with some remedy in 120 to 180 days to comply with the MSA. The problems presented to us prove why we should have the ability to securitize.

 

Senator Tiffany:

Many scenarios could occur to negatively affect the state’s ability to continue the scholarship. I am not advocating we do not continue, but I see potential problems in the future.

 

Senator Care:

More than a dozen states have appeal bond caps, which we did this last session. As more states enact caps, the market would stabilize to some degree and it may improve conditions. I cannot see the damage awards from the Illinois case being upheld on appeal. Posting the bond is the problem. If the remaining states did what we did a few years ago, would it have an impact on the market?

 

Mr. Krolicki:

Illinois faced the same question and chose not to reduce the bond; it was denied in committee. The situation continues to linger out there because now they have to go back to the same court that did not grant them the original relief. At some point in time these companies cannot sustain judgments of a substantial size and volume. If you look at the 4 states that settled separately and the 46 states constituting the MSA at almost a quarter of a trillion dollars, how many industries can have a quarter‑trillion dollar assessment and still meet ongoing concerns? The tobacco industry could probably do another settlement that size and still be viable, but at some point in time, especially when not paid over 25 years, they cannot perform. We are in the awkward position of protecting these companies many of us try to drive out of business. It is a very precarious situation and rank with hypocrisy.

 

Senator Titus:

I recently read an article in The New York Times stating there are some hidden costs. If you remember, I am one of the people who voted against securitization last time. I seem to have more ammunition to vote against it this time. Maybe you could address some of these things. According to the article:

 

While it may be sound public policy to sell a risky asset, the relative price associated with such a sale must be taken into consideration and compared to the risks associated with the tobacco receipts before the value of such a trade can be determined. Based on our analysis, we have found that issuing tobacco bonds can cost a state or local government 250 to 500 basis points of added interest costs versus a traditional state [general obligation] GO or appropriations back financing … Although transferring the risk associated with receiving tobacco receipts could have merit, the current costs of such a transfer is quite staggering and may not justify such a transaction, particularly given the other revenue other state and local governments receive from taxing cigarette sales.

 

Third, another rationale for raising funds through the sale of tobacco receipts is that such a transaction might not adversely affect a state or local government’s bond rating. Those expressing this view argue that tobacco bonds are nonrecourse obligations and as such should be excluded from any analysis of the trustworthiness of the recipient. Although this concept is great in theory, the actual results have been to the contrary. The issuance of tobacco bonds is often viewed as an indication that a state or local government has run out of options and is now desperately selling its tobacco receipts as a last resort approach to filling a budget gap, as a result several states which have issued tobacco bonds have either been downgraded or are currently on a credit watch.

 

Mr. Krolicki:

I agree with everything you just read, although several things need to be placed in perspective. One is “running out of options.” It is a tremendous fiduciary failure for states and local jurisdictions to sell this 20- to 30-year revenue to balance today’s budget. We have seen many states do that as with the just‑postponed California deal worth a couple of billion dollars of tobacco bonds. We are not proposing this method here.

 

Assembly Joint Resolution (A.J.R.) 10 is another piece of legislation from the State Treasurer’s Office which is a constitutional amendment to preserve settlement monies for their originally intended purposes, education and health care.

 

ASSEMBLY JOINT RESOLUTION 10: Proposes to amend Nevada Constitution to provide requirements for use of proceeds from certain settlement agreements and civil litigation between State of Nevada and manufacturers of tobacco products and to provide for sale of right to receive those proceeds. (BDR C-300)

 

Mr. Krolicki: 

If we were to securitize and we have bond proceeds, assuming the market was there, you could only withdraw 15 percent of those proceeds on an annual basis. By putting a speed limit on the proceeds, you could not raid the money to balance your budget because it would take too long. I agree with you on the price of the sale. Some states, Wisconsin in particular, desperately needed funds within weeks to balance their budgets last year, and they paid the price. If the market knows you are desperate, it will take advantage of you.

 

We are not in a desperate situation, we are trying to preserve a resource. We do not want to pay too much cost in issuance of the coupon on the bond. As I said earlier, if I had to do it tomorrow, I would not because it is too expensive. There is a saturation point, whether it is Wisconsin, New York, California, or Nevada, the credit still belongs to four tobacco companies. At some point in time, the insurance companies and asset managers who buy the risk for their portfolios might reach a point where there is more supply than demand. This has already occurred with many states abusing what these monies were intended to do originally. Nevada has been one of the better states in terms of utilizing these monies, particularly for health care at 60 percent.

 

Reviewing future tobacco settlements, page 6 (Exhibit K) shows the record of cigarettes sold in the United States; the number dropped 3.7 percent in 2002 and continues to drop, which translates to less money for us. Over the next 25 years we are likely to receive over $300 million less than we are currently scheduled to receive under the MSA. Waiting to securitize could cost us. To respond to Senator Titus’s question, the cost was expensive 2 years ago, though not as expensive as today, and that $100 million we left on the table would have far more than paid the cost of issuance.

 

On page 10 (Exhibit K), you can see the decline between the California and Virginia deals and the branding pressures on the Millennium Scholarships. Page 11 shows the numbers we discussed 2 years ago when we considered securitizing all of the corpus; this is just half, so all of these numbers would be times two. If 2 years ago we had done half the Millennium Scholarships and half the Trust Fund for Public Health, we would have $228 million in proceeds. Today we are looking at about $178 million.

 

Page 19 (Exhibit K) shows what happens with the new numbers. The first page is from California. Two weeks ago we discussed where we were on funding for the Millennium Scholarships. As you can see, if we securitize at 40 percent, we get out to fiscal year 2016 before we get a negative number. Whereas the California number, without securitization, is insufficient to pay from a cash flow standpoint in fiscal year 2008 or 2009.

The Virginia transaction provides the most recent number. Using the same models, procedures, and transaction structure, fiscal year 2013 gives us a negative number under securitization. If you were not to securitize, the Millennium Scholarships would have a negative number in 2007, assuming all payments are made under MSA. We have lost 2 to 3 years on each transaction. The rest of the book (Exhibit K) describes more background and news articles.

 

In S.B. 448, sections 1 to 16 discuss securitization. Sections 17 to 22 deal with eligibility requirement changes we are proposing to the Millennium Scholarships, not securitization-related.

 

Senator Hardy:

What was the concept behind the standards change? Is it for fiscal savings and if so, how much of a savings would be made by increasing those standards?

 

Mr. Krolicki:

The Millennium Scholarship, when proposed and passed in 1999 had about a 10-year time limit projected on its funding ability. We took estimates of how many of our young people would actually partake, qualify, and stay; our baseline study will soon be available. The Legislative Counsel Bureau (LCB) Fiscal and State Treasurer’s Office all agreed between 2006 and 2009 the Millennium Scholarships would no longer be able to fulfill its entire obligation. The Governor’s Office and the Governor fully support the changes we proposed to fine-tune the scholarship’s standards.

 

We are reducing the current 8-year limit for access to the Millennium Scholarships to 6 years. We would like to place an exemption for our armed forces. If they have the ability to fund schooling after service, this exemption would be an important exception. We would like to change our grade point average (GPA) rates without changing the rules for people in the middle of the game. This would involve moving the 3.0 GPA standard to 3.25 on a 4.0 scale for those who would be freshmen this fall. For sophomores this year, we intend to change the standard to a 3.1 GPA. Those enrolled in a 4‑year university and currently benefiting from the scholarship must secure a 2.0 GPA, pursue a course of study, and carry a 12-unit credit load to maintain their eligibility. We would plan to move the GPA requirement to 2.6. With these changes, we are hoping to continue the scholarship for at least a couple bienniums, even though the changes out of Virginia have obviously shortened the time line.

Senator Care:

Would you explain section 2, subsection 1, paragraph (b) of S.B. 448 and can you also explain judicial determination?

 

Mr. Krolicki:

This is a prudent-person investment principle in the first half of the bill. You cannot loan or give credit to private enterprise because the Nevada Constitution prohibits General Fund monies from being invested in stocks. Therefore, we would like to get judicial confirmation for the ability to invest in the stock market. If we were looking at funds for 10 to 20 years out, then you would want a balanced portfolio. A fixed income has been great these last couple of years and the stock market has not been great, but when you have a 1.25 federal funds rate, those rates have to go up sometime. We wanted a balanced portfolio.

 

The constitutional amendment would preserve these monies in order to avoid judicial determination. By protecting the investment in a balanced portfolio, we would ask if we could invest these separate MSA monies in private enterprise. John Swendseid is one of the main architects of the language.

 

John O. Swendseid, State Bond Counsel, Swendseid and Stern:

Our constitution presently prohibits Nevada from investing General Fund monies to or in aid of a private corporation. We have seen an exception for trust funds like Public Employees’ Retirement System (PERS) or unemployment compensation. The rule does not apply to them and PERS can invest in corporate bonds or stocks. We are not sure if this fund is like PERS or more a general fund-type trust fund, so in order for the State Treasurer to be able to invest in stocks or bonds of a private corporation, S.B. 448 requires he seek a court order and only invest in those things if a court says this trust fund is like the PERS trust fund. If the court gives approval, the State Treasurer would be able to invest in stocks and bonds of a private corporation. If the court says no, he would be limited to the types of investments the General Fund can now make.

 

Senator Care:

Section 8 talks about the nonprofit corporation created in order to issue the bonds. Does that sound familiar? I remember discussing proceeds last session, but could you explain it again?

Mr. Krolicki:

We did have these discussions and I would argue the financial markets are safer with these instruments. If getting to securitization passage requires me to pull this, I will. The instruments are important tools to protect us to eliminate risk.

 

Senator Titus:

In regard to the qualifications of the Millennium Scholarships, I originally supported a much shorter period of time. I think 8 years for someone to go get his or her head together is too long. You need to go back to school after a shorter period of time after high school graduation. I think 6 years is too long, but I know you need to accommodate those who go on missions and such. As far as the grade point average, 2.6 is only a C. I think the minimum should be a B average. Finally, there are no consequences for not graduating. We give scholarships to many who may never graduate and never finish. Have you thought about putting something in place where if somebody does not finish, with some exceptions, the scholarship could become a loan instead of a gift. That might encourage people to be more serious about their studies and actually graduate.

 

Mr. Krolicki:

I think the Millennium Scholarships should be special, the changes we proposed here were the ones worked out with LCB Fiscal to get the Millennium Scholarships out to the decade. My personal opinion would be to give the Millennium Scholarships program longevity. Speaking with the Governor, he would make the eligibility duration shorter, 2 years or if you do not take it when you are a normal freshman it is gone. The second direction would concern obtaining the scholarship. At the high school level you need to perform better than a 3.25, if that is where you wanted to go. Lastly, one’s freshmen year would be the last place to yank on because, while 2.6 I know is not a splendid achievement, many have a tough freshman year. In recoverability the next year, you would just have to perform very well to get that average, or maybe have a special GPA just for the freshmen year until you are on a course of study and more serious about your college education.

 

Senator Titus:

That is how probation works, maybe we would be more tolerant the first year and then after that, raise the GPA.

 

Mr. Krolicki:

I think it is important not to change the rules in the middle of the game for current Millennium scholars and those now in high school, except for what we described.

 

Senator Titus:

I would like to see the money last longer, but when the resources are limited, you want to give it to the people who deserve it the most. If you are running out of money, these new changes would make it last longer.

 

Mr. Krolicki:

The Legislature made these decisions in 1999 and we are very happy to supply the most useful information in your debate. The baseline study is helpful, but between the chancellor, Dr. Jane Nichols, and the Board of Regents, who support the changes as presented here, and our office and the Department of Education, I think there is a tremendous amount of resources to help you make these decisions.

 

Chairman O’Connell:

Is there any other scholarship given for a C average?

 

Senator Titus:

There are very few; you could get financial aid from one of the campuses, but there are not many. There are certainly not any who have an 8-year provision before you collect and there are provisions that if you get the scholarship, you have to keep your grades up even if there might be a probationary period.

 

Chairman O’Connell:

Jim Richardson, could you provide the committee with that information?

 

James Richardson, Lobbyist, Nevada Faculty Alliance:

Yes.

 

Mr. Krolicki:

One of the changes in S.B. 448 would provide a better definition of core curriculum, which the Board of Regents could establish, to be eligible for the Millennium Scholarship. Currently, core curriculum is everything they take, but I think there needs to be an apples-to-apples approach where a certain grade for this class in one county is not comparable to the same grade for a different class in a different county. If they determined a tighter core curriculum still calculated on all classes completed and grades received, the scholarship would require a certain amount of English or math or courses toward a true core curriculum to meet a benchmark.

 

We do have some technical amendments to make that would take care of some details of the bill.

 

Guy S. Hobbs, Lobbyist, Hobbs, Ong and Associates, Incorporated:

We have been in communication with the Treasurer’s Office since the inception of the notion of securitization, and as far as the concept is concerned, we have felt all along there were some tremendously positive features to have securitization in the State Treasurer’s arsenal. I agree with the State Treasurer’s comments that should the market turn, having the ability to go when the opportunity presents itself would be a very positive thing for the Treasurer to have, even though the market conditions would not necessarily support going to market today.

 

Mr. Krolicki:

We have a letter from the board of the Trust Fund for Public Health (Exhibit L), who fully support securitization. Referring to the fiscal analysis on page 22 in your booklet (Exhibit K), remember these folks can only spend interest earned on the 10 percent portion they acquire every year, and securitizing their portion of the bond proceeds for the end of the year would be approximately $31 million. In fiscal year 2004, they would have to invest, but fiscal year 2005 would be better because they would have a full year. They would have $3.8 million to support their programs. If they did not securitize, they would have just over $500,000. They are receiving principal overnight to earn interest to fund their programs; otherwise they are acquiring it piecemeal over the next decade before they have the same principal amount to generate interest.

 

Susan K. Moore, Executive Director of Millennium Scholarship Program, Office of the State Treasurer:

We have three minor amendments clarifying the language used. The first one is in section 17, subsection 1, paragraph (b), subparagraph (2). We are proposing to change the language from:

 

Not more than 6 years before he applies for the scholarship except for students on active duty serving in the Armed Forces of the United States who are exempted from this requirement pursuant to criteria established by the Board of Regents.

 

We are proposing to revise the language to say:

 

… if the student graduated from high school after May 1, 2003, not more then 6 years after such graduation provided that the Board of Regents may establish criteria for exceptions to this secure requirement for students who have been on active duty serving in the Armed Forces of the United States of America.

 

The second change is also in section 17, subsection 1, paragraph (d), subparagraph (1). The original language said, “For the graduating classes up to and including the school year 2005-2006, a 3.1 grade-point average on a 4.0 grading scale; and … after the school year 2005-2006, a 3.25 grade-point average on a 4.0 grading scale.” We are proposing to make it clearer by stating:

 

A 3.0 grade-point average on a 4.0 grading scale, if he was a member of the graduating class of 2003 or 2004; a 3.1 on a 4.0 grading scale, if he was a member of the graduating class of 2005 or 2006; or a 3.25 grade-point average on a 4.0 grading scale, if he was a member of the graduating class of 2007 or a later graduating class.

 

For instance, a student who graduated after May 1, 2003 would need to maintain at least a 2.6 GPA on a 4.0 grading scale.

 

Mr. Krolicki:

We have presented two final changes. One is an amendment to sunset the ability to securitize. Section 7 would be amended to read:

 

Until but not after December 31, 2006, the State Treasurer may execute a sale of the right of the State to receive 50 percent of the tobacco proceeds by entering into a contract of sale with the nonprofit corporation, without any recourse, legal, moral or otherwise, to the state or retention by the state of any risk collection.

 

That prevents things from being open-ended and I suspect December 31, 2006, would be one of my last weeks as State Treasurer.

 

We have the ability to assess a 2 percent administrative fee on these funds if we were to securitize 2 percent. Two things, there is already a change for the Millennium Scholarship, but we want to make sure it goes from 2 percent to 0.5 percent, only if securitized. Then on the Trust Fund for Public Health, we would change the language from 2 percent to 0.5 percent if we were to securitize.

 

Mr. Richardson:

I register our support for both parts of this bill; we supported securitization last session and regret the bill did not get through the Assembly. We also support tightening up the criteria recommended. We thought it was too flexible last time, but it is now obvious we need to tighten the criteria.

 

chairman O’connell:

We close the hearing on S.B. 446, S.B. 447, and S.B. 448 and we will open the hearing on S.B. 462.

 

SENATE BILL 462: Creates Division of Minority Health within Department of Human Resources. (BDR 18-1061)

 

Chairman O’Connell:

A letter and a booklet, Cancer Facts & Figures for African Americans 2003‑2004 (Exhibit M. Original is on file in the Research Library.), were submitted for the record by Buffy Gail Martin, Lobbyist, American Cancer Society of Reno.

 

Senator Raymond (Ray) D. Rawson, Clark County Senatorial District No. 6:

I am here to introduce S.B. 462, which creates a division of minority health within the Department of Human Resources. The bill describes the purpose and objectives of the division and allows the division to accept gifts, grants, or donations. In section 12, there is a provision requiring the administrator to submit a report on March 1 of every odd‑numbered year. The report would show the Legislature how minority services have been provided, although March 1 might be too late because it was near our legislative deadlines. It sets up the appointment of a large advisory committee, to include one Senator and one Assemblyman. Essentially, there is recognition of the poor access to health services for three primary groups: minorities, those with low income, and the disabled. Oftentimes minorities fit all three categories. When we look at health care access, we set up the programs for those people in the three categories. The programs do not serve many. Four years ago when we looked at dentistry in Nevada, there were 50,000 children insured for dentistry through Medicaid, but only 15,000 of them received service. We have taken significant steps to change the situation, but it is difficult for the minority populations to gain the access to the care we fund.

 

Chairman O’Connell:

Will the state be responsible for the per day, per diem payment for the advisory committee?

 

Senator Rawson:

There would have to be a budget and fiscal note, which I do not have at this time. They have tried to cover the payment to the extent appropriations will allow. We will have to consider if there is a cost and what that cost will be; the larger the advisory committee, the greater the cost.

 

Larry Gamell, D.B.A., Southern Nevada Minority Health Steering Committee, Community Health Center of Southern Nevada:

There is little difference between S.B. 462 and Senate Bill No. 4 of the 70th Session. The history and mission of the legislation has not changed, however, it has been enhanced by continued investigation and reporting by such agencies as the Nevada Public Health Foundation. In their publication The State of Public Health in Nevada, the statistical trends show a persistent disparity in key health indicators among minority populations, relative to the overall population. We are moving as a nation towards a 50 percent minority population. In Nevada, population growth data tells us our minority population is our fastest growing segment. The report also restates the need to create a division of minority health.

 

Since 1999, things have remained the same. Have disparities in health outcomes among minorities stagnated or reversed? No they have not. On the contrary, they have escalated. African Americans are dying from heart disease at a disparity of 40 percent more than whites. African-American women are at even more of a risk than African-American men and are dying from heart attacks at an even greater rate. Hispanics are experiencing diagnosed diabetes in epidemic proportions. Our citizens of color represent the state’s highest percentage of new acquired immunodeficiency syndrome (AIDS) cases. Teenage pregnancies among Hispanics are 3.5 times higher than white teens.

 

In February 2002, the State Health Division published its report, “Healthy People 2010.” Our state adopts the national goals of healthy people to increase the quality and years of healthy life and to eliminate health care disparities. It reported Nevada was below the national average in access to quality health services. The cancer death rates remain significantly higher than the 2010 objectives and in the area of diabetes, both the state and nation are lacking in positive interventions. When we consider the Hispanic population is the nation’s fastest-growing population and represents the highest rate, 27 percent of those tested with diabetes, the impact on the health care delivery system could be devastating. The report further states reducing diabetes-caused deaths to meet the 2010 goals will be a challenge for the State of Nevada. Diabetes is a major contributing disease to cardiovascular disorders and a major cause of amputations and blindness. This could be a contributing factor to the report’s conclusion that Nevada appears out of reach of meeting the 22 goals of reducing coronary heart disease deaths.

 

Dr. Gamell:

The same projection is given in the area of preventing first-time smokers, many of who belong to our minority population. The 2001 annual survey of the United Health Foundation ranked Nevada No. 42 on the list of healthy states. Three out of four states rated most improved had established offices of minority health. The problems caused by not addressing health disparities are increasing at a rapid rate, however, the resources and policy changes required to eliminate the problem remain the same.

 

In 1999, the Senate Committee on Government Affairs asked what a division of minority health meant in the overall scheme of things and how it could be funded. I believe the latter question caused the bill’s death in the Finance Committee. Those of us who support this legislation understand the need and must deal with many of the negative health care consequences of not having a division of minority health. As to its place in the state’s health care needs, the division’s importance should be self‑evident. The current system does not provide policies and practices which address the basic causes of unequal care among minorities. The division would assist with the education of health care providers in the area of culturally competent care needed to increase health care access. The division would work directly with insurers, both private and managed care, to reduce the numbers of uninsured among minorities. The impact of the uninsured on the bottom line of our public, private, and community-based providers is at the breaking point, as evidenced by the financial woes of our local University Medical Center of Southern Nevada. The division would strengthen the networks between state programs and ethnic communities to provide the capacity building, training, and technical assistance to those community-based organizations that work on the front lines in promoting preventative health care. The division would act as an advocate for policies and practices with the Department of Human Resources to increase the effectiveness of department services to the minority community. The need for the division has been exacerbated by new information on the reasons for health disparities.

 

Dr. Gamell:

Congress has asked the Institute of Medicine to determine the reasons for health disparities between minorities and whites. Their report last year confirmed what most minorities have always known, minorities receive an unequal level of care. The reason for the unequal care was reported to be racism. The body of literature supporting these findings is growing at a rapid rate. The American Journal of Public Health reported research which found a disturbing body of scientific evidence of inferior medical care for black Americans compared to whites occurred even when socioeconomic factors were controlled. This means the care was unequal when both races were at the same socioeconomic level and had insurance. The Centers for Disease Control and Prevention recognized the need for race-and ethnic-specific programs in research with its “Racial and Ethnic Approaches to Community Health (REACH) 2010” initiative. The goal of this program is to eliminate health disparities in the United States by direct intervention with specific minority groups. There are now approximately 39 funded programs operating around the country. A group of Harvard researchers documented a 1 percent increase in racism translates to an increase of 350 deaths per 100,000 African Americans. Racism contributes to other factors such as stress, depression, and factors which can lead to heart disease. Considering the enormity of the problem, we must conclude the current resources of the state are inadequate to properly address this issue. The division of minority health would be tasked with specifics to reduce the disparities and their impacts on the state health system.

 

On funding, S.B. 462 still represents an opportunity to establish an entity that would have the ability to become self-sustaining and revenue neutral. A division on minority health would have the ability to raise funds through grants, donations, and gifts. The national Office of Minority Health is committed to assist state offices with technical and financial assistance through direct and indirect grants.

 

The time has come for the establishment of minority health. It takes the will on the part of this Legislature to do what is right; I for one am convinced good men and women will find a way to make this a reality. The bill is written in a way that simply asks for a start, an opportunity to make a difference in the lives of a population that will soon represent 50 percent of this state. I urge your support and passage of this bill.

 

Gale Thomssen, Health Advocate Program Director, Great Basin Primary Care Association:

I would like to share some reasons why Great Basin is in favor of this bill. It will help in providing recommendations to the Governor and the Legislature regarding the health status of Nevadans, in working to increase health access for minorities, and in increasing participation for minorities in the health care profession. It will examine the impact of demographic features, health behaviors, financing of health care, and other factors on minority health status. It contacts local health departments and community-based organizations to help minorities learn about the services to improve minority health. This bill will promote communications among state agencies that provide service to minority populations and will build coalitions with minority community leaders to encourage recruitment and retention of minority health professionals.

 

Senate Bill 462 will improve access to care for minority populations in underserved rural and urban areas, break down barriers for non-English speaking residents, and serve as a liaison to other state governments and national organizations. This division will coordinate the development and dissemination of culturally appropriate and sensitive educational material, public awareness messages, and health promotion programs for minorities. Funding will be secured from other national resources to help carry out this bill’s objectives.

 

In basis, S.B. 462 will help increase the access to health care for minorities throughout Nevada. We urge the committee’s support and passage of this bill. I have submittedan outlined version of my testimony (Exhibit N) for the record.

 

Dr. Gamell:

I would like to read a letter by Merlinda Gallegos, president of Nevada Public Health Foundation:

 

It is imperative that S.B. 462 be enacted to ensure that the health disparities gap between minorities and nonminorities be eliminated. The establishment of a division of minority health within the Department of Human Resources is the first step towards ensuring the fastest growing populations in our state are being addressed in a proactive manner. By promoting health awareness and preventative health care, lives and resources will be saved. The Nevada Public Health Foundation recently completed a statewide assessment as part of the nationwide Robert Wood Johnson Foundation Turning Point project. The disparity gap that continues to widen between minority and nonminorities is identified as a major issue that must be addressed as a public health issue. Senate Bill 462 will allow Nevada to join 39 other states to ensure minority health issues are being fully addressed.

 

Chairman O’Connell:

We will now close the hearing on S.B. 462 and open the work session. The sponsor of S.B. 215 has withdrawn the bill because a number of bills in the Assembly already address the issue.

 

SENATE BILL 215: Revises provisions relating to Public Employees’ Benefits Program. (BDR 23-878)

 

SENATOR HARDY MOVED TO INDEFINITELY POSTPONE S.B. 215.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR TOWNSEND WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman O’Connell:

We will now move to S.B. 331, Mr. Wolff, would you like to address your amendment?

 

SENATE BILL 331: Makes various changes to employment practices governing state personnel. (BDR 23-983)

 

Mr. Wolff:

The amendment before the committee (Exhibit O) explains what we would like to change. We worked out the language and removed sections 5 through 10. We are in full agreement with section 1, the subpoena power for the Employee‑Management Committee. I thought we were okay with section 4, but apparently there is a slight problem and Jeanne Greene has offered language which I believe is acceptable. The reason we put section 4 in place the way we did was to add the word “investigations.” In the past, we ended up in management committees often over minor issues that were not investigations. If a supervisor wanted to question an employee and give a verbal or written reprimand, all too often, if we are not there, a grievance is made to the Employee-Management Committee. That is why we put the language in Section 4. However, we are fine with Ms. Greene’s provisions if the committee sees fit to use them.

 

Senator Care:

In the amended section 4, subsection 2, rather than “48 hours,” perhaps the language should read, “2 full business days.” If you discover the information on a Saturday morning, you may not get an attorney over the weekend.

 

Mr. Wolff:

That is fine.

Senator Tiffany:

Ms. Greene, I did not like section 4 and there were major problems with the amendments in sections 5 and 6. Did you feel sections 4, 5, and 6 were okay with the amendments or did you still have problems with those sections?

 

Jeanne Green, Director, Department of Personnel:

With section 4, I have a few additional amendments (Exhibit P), and sections 5 and 6 are being removed. Additional amendments then delete sections 5, 6, 7, 8, and 9. I was reminded section 10 should be removed also, because it repeals Nevada Revised Statutes (NRS)284 and NRS 385, which needed to stay because of the changes.

 

Senator Tiffany:

After the removal of sections 5, 6, 7, 8, and 9, what are the major changes left in the bill with the amendments?

 

Ms. Greene:

The first is the subpoena powers for the Employee-Management Committee (EMC), and the second is notice before presenting an individual with charges of disciplinary action.

 

Senator Care:

How will you know which people have direct, firsthand knowledge? Maybe they will, maybe they will not, but you will not know until you have actually subpoenaed them and heard their testimony.

 

Ms. Greene:

I was the one who asked Mr. Wolff to include that language in the bill. When an agency or an employee organization requests the EMC to subpoena an individual, they would have to indicate why a subpoena was issued. That person would have to have direct knowledge of the issues coming before the committee.

 

Senator Care:

You would have to say, upon information belief, this person does have direct or firsthand knowledge, was a witness, and did not hear it from somebody else.

Ms. Greene:

That is correct.

 

Scott Wasserman, Committee Counsel:

I agree with your change, which should be at least “direct personal knowledge” rather than “firsthand knowledge.” We can incorporate the language Senator Care suggested.

 

Senator Raggio:

Are the amendments from both the personnel office and the division?

 

Chairman O’Connell:

No, they are from Gary Wolff.

 

Senator Raggio:

Then they are in addition.

 

Chairman O’Connell:

Ms. Greene, how do you foresee this working?

 

Ms. Greene:

An agency could gather information and talk to individuals regarding an employee, but when the time came to actually talk to the employee, present the charges, or question him or her, they would have to give the employee 2 business days’ notice. The employee would have the right to have a representative or an attorney there during the questioning phase.

 

Chairman O’Connell:

How do you foresee this working with your division? Will it work?

 

Ms. Greene:

Yes, this would be at the department level, though not necessarily within our department. Most departments are doing this now. The new part would be the 2 business days, but the majority of departments do allow representation of the employee at the time they present the charges.

 

Chairman O’Connell:

Do you feel this is workable for you?

Ms. Greene:

Yes, I do. There would be no additional cost for this section. There are some slight costs for the subpoena powers.

 

Chairman O’Connell:

You feel section 10 needs to remain in the bill?

 

Ms. Greene:

Yes, it does. Section 10 is the statutory authority, which allows us to dismiss, demote, and suspend employees.

 

Chairman O’Connell:

Mr. Wolff, as far as your people are concerned, do you feel this is going to diminish the need for collective bargaining? I want to get you on the record.

 

Mr. Wolff:

We would love to have collective bargaining, especially in these areas, because we would not be in here with all these bills. This bill is extremely necessary, not only for employee rights, but we believe it would save the state tens of thousands of dollars in Attorney General costs. As I testified before, the problem is in section 4. If we are not included, often we come after the fact and have to file the actions to protect the employee. Had we been there in the beginning, we would know what was going on. Many times we take the employees out and say, “You are all wet on this thing,” but if we are not there and able to participate, then we are obligated to take it to the Employment-Management Committee or hearing officers. This activity costs our association and the state thousands; S.B. 331 is very workable. The subpoena power has been needed for a long time, because if a complaint comes in from an outside source, we have absolutely no way of introducing that complainant. I think this relates to what Senator Raggio was saying the other day on the officer complaint bill. A person who is going to be reprimanded certainly has a right to face an accuser. All too often, we are sitting in there just looking at a bunch of paperwork from an internal affairs unit without the ability to question anyone. The bill will benefit the state because they will now have the opportunity to subpoena someone. The main two parts of this bill are essential; there will be a cost savings to the state in the long run and also to the Employment-Management Committee.

 

Chairman O’Connell:

Ms. Greene, would you agree with the comments Mr. Wolff made?

 

Ms. Greene:

Yes, I would.

 

SENATOR TIFFANY MOVED TO AMEND AND DO PASS S.B. 331 BY INCLUDING SECTION 2 CONCERNING SUBPOENA POWERS AND SECTION 4 RECEIVED BY MS. GREENE, AND ELIMINATING SECTIONS 5, 6, 7, 8, AND 9.

 

SENATOR RAGGIO SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR TOWNSEND WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman O’Connell:

We will close the hearing on S.B. 331 and open the hearing on S.B. 342.

 

SENATE BILL 342: Makes various changes concerning complaints filed against peace officers and other public officers and employees. (BDR 23-1144)

 

Michael Gillins, Lobbyist, Las Vegas Police Protective Association, and Nevada Community Oriented Policing Services:

We have had discussions and are most happy with alternative No. 3 (Exhibit Q). This puts us back where we were before, in a position we are certainly happy to support.

 

Senator Hardy:

As a sponsor of the bill, alternatives No. 1 and 2 (Exhibit Q) are not acceptable alternatives because they have the net effect of making it a felony, which was never my intent.

 

SENATOR HARDY MOVED TO AMEND AND DO PASS S.B. 342.

 

SENATOR RAGGIO SECONDED THE MOTION.

Senator Care:

It is with a great deal of reluctance that I cannot vote for S.B. 342. I am immensely uncomfortable with the criminalizing aspect. It says “misdemeanor.” Saying something knowingly false about a public official or officer has defamation, but I am reluctant to say it qualifies as a misdemeanor. I am looking at S.B. 342 strictly as a legal matter and not one of public policy. I doubt this can actually be done. I have read the attached case and it is not content‑neutral. This applies to public officers and public employees, and I am uncomfortable with the amendment.

 

Senator Titus:

This goes back to the racial profiling bill. We did not make racial profiling a misdemeanor because there were other ways to get at the problem and it is too difficult to prove. I think this would do the same thing, criminalizing it on the other side would be just as bad as criminalizing it for police officers. I will vote against S.B. 342.

 

THE MOTION CARRIED. (SENATORS TITUS AND CARE VOTED NO. SENATOR TOWNSEND WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman O’Connell:

We will close the discussion on S.B. 342 and open discussion on S.B. 402.

 

SENATE BILL 402: Revises provisions governing distribution of certain property tax revenues to redevelopment agencies to exclude revenue from taxes levied by or for benefit of school districts in redevelopment areas in certain counties. (BDR 22-577)

 

Michael Stewart, Committee Policy Analyst:

This is one of our redevelopment bills governing the distribution of property tax revenues to exclude revenue from taxes levied by or for the benefit of school districts in redevelopment areas. There were no amendments offered specifically to the bill, however, Ms. Vilardo did recommend the Senate Committee on Government Affairs might want to send a letter to the Legislative Committee for Local Government Taxes and Finance encouraging that committee to continue its efforts in studying and reviewing tax increment financing and other redevelopment matters. It is similar to an amendment she had proposed for S.B. 335.

 

SENATE BILL 335: Increases maximum amount that may be paid to redevelopment agency in small community. (BDR 22-1172)

 

Senator Tiffany:

Senate Bill 402 was the bill to force the Washoe County School District and the City of Reno to talk. I would like to go with Ms. Vilardo’s recommendation and send a letter to the Legislative Committee for Local Government Taxes and Finance to encourage them to review this in the next interim because I did not feel it was the appropriate vehicle to force the situation.

 

Chairman O’Connell:

Senator Raggio, the school board asked me if we could introduce this bill and since this is your district, they also had a bill in taxation trying to force the same issue. Evidently they feel this is one way to try to attain more funds for the Washoe County School District, now that they are having money troubles. I personally cannot support this because I know there is one pot of money and if we get into taking any money out of those redevelopment agencies, it will cause a lot of problems with the current debt issued.

 

Senator Raggio:

I think they indicated their capital budget is not impacted in the redevelopment district, but their operating budget is affected and they feel they are being encroached upon more and more as these redevelopment districts proliferate.

 

SENATOR TIFFANY MOVED TO INDEFINITELY POSTPONE S.B. 402 AND TO SEND A LETTER TO THE LEGISLATIVE COMMITTEE FOR LOCAL GOVERNMENT TAXES AND FINANCE REQUESTING THEY LOOK FURTHER INTO THE ISSUE.

 

SENATOR TITUS SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR TOWNSEND WAS ABSENT FOR THE VOTE.)

 

*****

Chairman O’Connell:

Senate Bill 424 adds people to the redevelopment agency.

 

SENATE BILL 424: Revises provisions relating to composition of membership of redevelopment agency. (BDR 22-1270)

 

Senator Raggio:

This affects the City of Reno and I would like to move this over to Wednesday. There might be a compromise composition that could be worked out. I think they do need some resident electors. The concern I have is the bill makes it a large number.

 

Chairman O’Connell:

If I remember correctly, they wanted to include some business people who were involved with the redevelopment area.

 

Senator Raggio:

It is comprised entirely of the members of the Reno City Council. In deference to Senator Townsend, I think we should hold the bill until Wednesday.

 

Nicole J. Lamboley, Lobbyist, City of Reno:

I know there was concern about the 11-person board. The discussion among the city council was they could have seven members of the city council serve, six council members and the mayor. In addition, they could add up to four resident electors. They wanted to write the four resident electors into statute, but we did not want to tie the hands of other redevelopment agencies in the state. This creates enabling legislation. The Reno City Council sits as the redevelopment agency and they would like to add to the board the expertise of either local financiers or people who serve in the community.

 

Senator Raggio:

I think we should defer until Wednesday.

 

Chairman O’Connell:

We will close the hearing on S.B. 424 and open discussion on S.B. 444.

 

SENATE BILL 444: Authorizes transfer of certain real property owned by State of Nevada to City of Las Vegas. (BDR S-517)

Chairman O’Connell:

This bill transfers Floyd Lamb State Park to the City of Las Vegas and both the parks and the city are represented today. Have all of you come to any kind of agreement?

 

Kami Dempsey, Lobbyist, City of Las Vegas:

Since the hearing we had last week, there have not been any additional discussions. As you may recall, Patrick Smith said these discussions have been ongoing; we have held some neighborhood meetings and it may take some additional time. I think until a piece of legislation actually exists for us to take over the park, we are unable to enter into official discussions because we do not have the capability now to have the State retransfer the park.

 

Wayne R. Perock, Administrator, Division of State Parks, State Department of Conservation and Natural Resources:

We are comfortable with the bill as it is written and when legislation is passed, we will step up to negotiations with the City of Las Vegas.

 

Senator Raggio:

If we are going to authorize the transfer, there should be two conditions. The state should not incur any expense in the operation or maintenance of the park, carving out the little part necessary for the nursery, and the name should not be changed without legislative approval.

 

Senator Tiffany:

Ms. Dempsey, do you want this bill?

 

Ms. Dempsey:

To be honest, I do not have any specific direction from the council. It will be fairly expensive for us to maintain and bring the structures and the park up to the level of standards the City of Las Vegas expects. We were not going to keep the rural preservation because of concerns from neighbors. We still do not know where we are going in the future, but in terms of renaming Floyd Lamb Park, we agree.

 

Senator Tiffany:

From the impression I am getting, timing is probably not good for you right now.

 

Ms. Dempsey:

I think there are a lot of unknowns; what exactly we would get, how we would afford to take over and maintain the facility, how long we would retain the property, and what water rights exist are some of the details we have to negotiate. Until we have the right package, I think it will be difficult. Our council has to be responsible to the taxpayers, so we want to be sure to address everything before assuming a huge burden.

 

Senator Raggio:

I am assuming we are authorizing the division to go ahead and conduct the transfers, but the City of Las Vegas needs to agree to the details. Do you want the state to have the authority for this or do you just want to put it off for a couple of years? I will defer to the City of Las Vegas, if that is what they want.

 

Senator Titus:

I want to know why the state wants to get rid of the property. The state does not want it; the City of Las Vegas does not really want it, so who is going to be responsible for paying for its maintenance and upkeep? Is this burden why we want to get rid of it, because it is just too much trouble and too expensive for the state?

 

Mr. Perock:

We look at the park, with the City of Las Vegas growing around it, the predominant use is by the residents of the Las Vegas Valley. Tourists from out of the area are the majority of visitors to the other state parks. With resident use as a need in the valley, for possibly urban‑type recreations, the property makes it suitable. One thing to note is the City of Las Vegas has put out requests for proposals (RFP) to consultants for a master plan. We were part of the review of the top four RFPs which cite Floyd Lamb State Park as an integral park of the master planning for outdoor recreation in that part of Las Vegas. Also, with the Southern Nevada Land Act, providing provisions for the sale of those federal properties, the county and the city qualify for funds to do development; the state does not have that opportunity. City ownership provides the City of Las Vegas the ability to get money from the Southern Nevada Land Act, whereas the State is disqualified. This is a positive for the park to remain an outdoor recreation area and have a potential revenue source that the state does not have.

 

Senator Titus:

That makes sense to me and I think we should move forward and let the parties start negotiating; I would support this.

 

Ms. Dempsey:

The language written with the current legislation allows us to have negotiations, but if those negotiations did not work or if we had a severe impact due to the war where we could not afford the transaction, we could negotiate some sort of package.

 

Senator Tiffany:

Does this impact the budget for the state parks? I do not want to approve the enabling legislation and then have the City of Las Vegas not pick up the option. We have not built the maintenance into the budget.

 

Mr. Perock:

The budget does not reflect a change or reduction in the operating funds for Floyd Lamb State Park; those remain in the Governor’s recommended budget. The actual transfer could take place in 6 months or a couple years out, but the state still has the commitment to continue to operate the park as a state facility until the time when the City of Las Vegas assumes responsibility. At the time the transfer would take place, existing funds would be used elsewhere within the division.

 

Senator Tiffany:

I do not have a compelling reason to process the bill unless you say you really need to have this legislation, because the park remains in our inventory, we are paying and have the maintenance in the budget.

 

Senator Titus:

If this item were minimally funded, would it be better to develop the park with the possibility for local funds? I hate to see this park struggle along because the state certainly does not have any money to continue the funding when there is such a need for recreational opportunities in the south.

Chris Knight, Deputy Director, Community Planning and Development, City of Las Vegas:

The issue of recreational need and open space is a very pertinent issue. Floyd Lamb State Park is part of a much bigger picture and the City of Las Vegas will be hiring a consulting firm to take a look at the northwest regional open space plan that encompasses all lands in the northwest portion of the valley; we hope to jointly do the evaluation with Clark County. The City of Las Vegas is going to pay for the study, but will conduct it with Clark County, North Las Vegas, the Bureau of Land Management (BLM), and U.S. Fish and Wildlife Service under the federal legislation enacted this year that expanded disposal boundaries for the BLM disposal area. It is possible the City of Las Vegas will abut the Desert National Wildlife Range and then you have the Clark County Shooting Range.

 

A much bigger picture for open space and recreation in the northwest exists and the City of Las Vegas is performing due diligence on how Floyd Lamb State Park fits into that, and how the city fits into the Floyd Lamb State Park situation. We would like to continue to do that planning so this legislation enables us, at some point in time, to enter into negotiations or decide what can be done with the park. Floyd Lamb State Park is going to be there and needs to be a part of this recreational picture. There is not a set decision because we are in the process of doing the planning, but we recognize the need for the open space and intend to complete the planning so we may have a better answer.

 

Chairman O’Connell:

Are you telling us you would appreciate the passage of this bill so you have the opportunity to negotiate?

 

Mr. Knight:

Yes, as long as the bill allows for the negotiations and is enabling, I think the city can then complete its due diligence in this planning effort, looking at the finances, the big open space picture, how it all fits together, and the city’s role in the process.

 

Senator Hardy:

That stance gives mixed signals from what Ms. Dempsey said and what I have heard from others. I get the sense this is a tool to force somebody to the table and as such is a very poor use of legislation. I would hate for there to be a perception, unless both parties have decided in advance this is something they would like to pursue, that the Legislature is advocating one way or another. I am afraid it might be used to the advantage of one party or another in negotiations if we were to process the bill. I would rather see the parties get together, work it out, and then come and ask the Legislature for the legislation.

 

Senator Raggio:

I think we are all getting off the track, because this park originally was in the City of Las Vegas and transferred to the state. The state assumed the entire obligation. What I understand is we are enabling the city to give the Division of state Lands the authority if they reach such an agreement. Without the authority, there is no use negotiating because if the city and the state reach an accord, they cannot proceed. My only concern, whatever the parties decide, is the state not to be asked to carry on costs after the transfer. I believe it is prudent to give the parties the authority to do this, if they can reach some accord. A motion would be appropriate to have them come before the Interim Finance Committee or the Legislature for final approval if they reach such an agreement, otherwise if they do not have the authority, they might as well not even talk to each other because there is nothing they can do. I cannot see any harm in enabling them to continue planning.

 

SENATOR RAGGIO MOVED TO AMEND AND DO PASS S.B. 444 ON THE CONDITION THAT ANY AGREEMENT WILL NOT OBLIGATE THE STATE TO PROVIDE CONTINUED MAINTENANCE SUPPORT AFTER THE TRANSFER, THE NAME OF THE PARK NOT BE CHANGED WITHOUT LEGISLATIVE APPROVAL, AND ANY FINAL AGREEMENT BE SUBJECT TO APPROVAL BY THE LEGISLATURE OR THE INTERIM FINANCE COMMITTEE IF THE LEGISLATURE IS NOT IN SESSION.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATOR CARE VOTED NO.)

 

*****

Ms. Dempsey:

I apologize for the vagueness, if it seemed to the committee we do not know where we are headed. I think it is a difficult position because we do not have direction from our council.

 

Chairman O’Connell:

We will now close the hearing on S.B. 444 and open discussion on S.B. 450.

 

SENATE BILL 450: Makes various changes to provisions governing Nevada Equal Rights Commission. (BDR 18-475)

 

Mr. Stewart:

There were a couple of amendments attached, one regarding the effective dates.

 

Mr. Wasserman:

Section 7 of the bill amends a section of the NRS and does not come into effect until the future. That section was effective October 1, as explained by Lynda Parven of the Nevada Equal Rights Commission and their counsel, Deputy Attorney General James C. Smith. It was argued the amending legislation made the underlying section effective October 1, 2003. We do not believe this is the case, but the technical amendment would clarify when it becomes effective.

 

SENATOR TIFFANY MOVED TO AMEND AND DO PASS S.B. 450.

 

SENATOR HARDY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman O’Connell:

We will close the hearing on S.B. 450 and open the hearing on S.B. 145.

 

SENATE BILL 145: Makes various changes concerning counties. (BDR 20-172)

Mr. Wasserman:

There are powers in section 2 given to the board of county commissioners to adopt regulations relating to the development of affordable housing, the control and protection of animals, rehabilitation of rental property in residential neighborhoods, and the rehabilitation of abandoned residential property. Another provision says the board of county commissioners, in lieu of a criminal penalty, provide a civil penalty for a violation of an ordinance enacted pursuant to that section. Relocating the language to a new section expands the authority of any ordinance adopted by the board of county commissioners to provide a civil penalty in lieu of a criminal penalty for a violation of the ordinance.

 

Chairman O’Connell:

You are telling us section 2, on page 2, rather than narrowed to paragraphs (a) through (h) will now cover the entire chapter 244 of NRS?

 

Mr. Wasserman:

That is correct.

 

Senator Raggio:

I still do not think we solved the problem, I think it is too broad.

 

Chairman O’Connell:

Actually the amendment broadens the issue and gives the county commissions the ability to have the civil penalty for the entire chapter 244 of NRS. The previously addressed concern was the bill allowed the county to collect these penalties rather than the penalties going to the state.

 

Mr. Wasserman:

That is correct, if you adopt Amendment No. 90.

 

SENATOR RAGGIO MOVED TO AMEND AND DO PASS S.B. 145 DELETING SECTIONS 1 AND 2, AND RETAINING SECTIONS 3 AND 4.

 

SENATOR HARDY SECONDED THE MOTION.

THE MOTION CARRIED. (SENATOR TOWNSEND WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman O’Connell:

We will close the hearing and adjourn the meeting at 6:00 p.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

                                                           

Joseph Bozsik,

Committee Secretary

 

 

APPROVED BY:

 

 

 

                                                                                         

Senator Ann O'Connell, Chairman

 

 

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