MINUTES OF THE

SENATE Committee on Legislative Affairs and Operations

 

Seventy-second Session

April 8, 2003

 

 

The Senate Committee on Legislative Affairs and Operations was called to order by Chairman Maurice E. Washington, at 3:40 p.m., on Tuesday, April 8, 2003, in Room 2144 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 Maurice E. Washington, Chairman

Senator Barbara Cegavske, Vice Chairman

Senator William J. Raggio

Senator Raymond D. Rawson

Senator Dina Titus

Senator Bernice Mathews

Senator Valerie Wiener

 

GUEST LEGISLATORS PRESENT:

 

Senator Randolph J. Townsend, Washoe County Senatorial District No. 4

Senator Bob Coffin, Clark County Senatorial District No. 10

Assemblyman Walter Andonov, Assembly District No. 21

Senator Margaret (Maggie) A. Carlton, Clark County Senatorial District No. 2

 

STAFF MEMBERS PRESENT:

 

Robert E. Erickson, Research Director

Brenda J. Erdoes, Legislative Counsel

Paul V. Townsend, Legislative Auditor

Johnnie Lorraine Willis, Committee Secretary

 

OTHERS PRESENT:

 

Christine Milburn, Lobbyist, Missile Defense Advocacy Alliance

Riki Ellison, Chief Executive Officer, Missile Defense Advocacy Alliance

Charles W. "Chuck" Fulkerson, Executive Director Office of Executive Director for Veterans' Affairs, Office of Veterans' Services

David Horton, Lobbyist, Committee to Restore the Constitution, Nevada Committee for Full Statehood, and Nevada Freedom Coalition

Janine Hansen, Independent American Party of Nevada, Nevada Committee for Full Statehood, Nevada Eagle Forum, Nevada Families Education Foundation, and Nevada Live Stock Association

Merritt K. Yochum, Lobbyist, Independent American Party of Nevada

Robert Broadbent, President, Transit Systems Management

Cam Walker, Executive Director, Las Vegas Monorail Company

John Haycock, Chairman, Board of Directors. Las Vegas Monorail Company

 

Chairman Washington:

We will open the hearing on Senate Bill (S.B.) 365 and Senator Townsend will explain the bill.

 

SENATE BILL 365: Names Legislative Building after former Senator Lawrence E. Jacobsen. (BDR 17-1123)

 

Senator Randolph J. Townsend, Washoe County Senatorial District No. 4:

I introduced this bill because the building in which we sit, particularly this room, I believe is reflective of Nevada, and more importantly reflective of the character of ex-Senator Jacobsen. I will leave materials with you chronicling his remarkable career, not just in the Nevada Legislature, but more importantly as an American and a Nevada citizen.

 

We happen to be one of three Legislatures that serve in buildings outside capitol buildings. Because of the design of our capitol, we were unable to accommodate growth for the Legislature in the Capitol Building. As a result, this building was conceived in the late 1960s. When it finally opened in 1970, the chairman of the Legislative Commission was Senator Lawrence Jacobsen. He presided over the ceremonies and when the building was dedicated June 9, 1990, the nature of why we do what we do and how we do it changed.

 

Let me quote from that dedication ceremony:

 

Knowing that we are now initiating a new building, it is imperative that each of us act as its guardian. Any misuse or abuse should be reported promptly. This new facility will offer many advantages that were not present in our Capitol Building. Adequate space for Legislators, staff, press, and the general public should lend itself to a more efficient session.

 

As you are well aware, ex-Senator Jacobsen is the longest-serving Nevada Legislator, having served 40 years. He is one of only four legislators and the only Republican, who has served as both the speaker of the Assembly and president pro tempore of the Senate.

 

Senator Townsend:

When researching this bill, I noticed a couple of things important to the understanding of why placing the name of Lawrence Jacobsen on this building is so appropriate.

 

During his 40 years as a Legislator ex-Senator Jacobsen represented the residents of all or part of six Nevada counties, Douglas, Lyon, Ormsby, Storey, Churchill, and Washoe. When looking at the subject matter for committees on which he has served, I glance only at the Senate. He served for 11 sessions on Finance, 11 on Natural Resources, 12 on Transportation, and the one I will always remember, 1 session on Commerce and Labor. That is important because it was my first session. I believe Senator Raggio, our majority leader, assigned Senator Jacobsen to keep an eye on this young guy nobody knew anything about.

 

It was wonderful to have someone like ex-Senator Jacobsen, who could provide the kind of character developmental mentoring we should all do for new Legislators who come to work here. Mentoring became important to me when the Legislative Commission met to determine how we were going to expand this building. Leadership, on both sides of the house, asked me to chair the construction committee. When I chaired that committee, one of the persons I consulted was Senator Jacobsen. I did so because of his commitment to Nevada and to this building. I have never seen anyone who felt so strongly about a public place as ex-Senator Jacobsen about the building in which we sit. The fact is, this building is the public's building; we are merely custodians of these seats for the terms we have been elected to serve. This building is going to be here long after ex-Senator Jacobsen or any of us will be around.

 

I will close by saying the reason I brought this forward is very simple, I think ex‑Senator Jacobsen is the kind of individual we would all like to be as Legislators. He is someone who is filled with integrity, a love of all Nevada, love of the process, and a respect for his fellow man. I think we could do no greater honor to the process, to the public, as well as to ex-Senator Jacobsen, than to honor him by placing his name on this building.

 

Senator Mathews:

When I first came here in 1995, Senator Jacobsen was the first one to show me around, and I served on his subcommittee in finance. He would sit up in the back row and look down at me over his glasses and say, "You don't have anything to say?" He is an ambassador for the people of the State of Nevada.

 

I went to an opening and said a few words for former U.S. Congresswoman Barbara Vucanovich when they named the main Reno post office after her. Her name, however, has never appeared on that building. I go to that post office every day. I want to make sure if you are going to name a building after someone, at least the name is put on the building.

 

Chairman Washington:

Senator Mathews, putting the name on the post office takes an act of Congress.

 

Senator Raggio:

I was pleased to cosponsor this bill. I think this is the time and the place for us to do what is suggested in this bill. I cannot think of any other individual who would be more appropriate to have this building named after than ex‑Senator Jacobsen. There will never be anyone else who will equal his record of service in the Legislature. Ex-Senator Jacobsen's service goes back to the old rooms in the capitol building.

 

Ex-Senator Jacobsen is one of the few people who have attained the position of speaker of the Assembly and president pro tempore in the Senate. That achievement will probably never be equaled again with the voters choosing term limits. No one has been more dedicated to the legislative process than ex‑Senator Jacobsen. If term limits last, no one will ever again be able to serve 40 years in the legislature. Beyond that no single individual has been more involved in the construction of the Legislative Building than ex‑Senator Jacobsen. He was also very active in the legislation that authorized the building. He was a leading force in ensuring the Legislature acquired a building large enough to accommodate the State's growth. He was active every day in the construction of the building, and not anyone, including those who service the building, knows this building better than ex‑Senator Jacobsen. In addition to being a Legislator, he knows every nook and cranny in this building and parenthetically, every other building in the state of Nevada including the prison camps and the state building in Las Vegas. I cannot think of anyone more fitting to have this recognition than ex‑Senator Jacobsen.

 

Senator Cegavske:

I echo the sentiments of the majority leader. As an Assemblywoman during three sessions I was fortunate to have Senator Jacobsen's guidance. He sponsored tours I was able to take, such as ranches devastated by the last flood. I also learned a lot about the prisons from Senator Jacobsen. He gave tours of the Legislature Building to most of the Legislators, and related the history of the building. It is with great honor that I also support S.B. 365 and want to thank the sponsors of the bill for thinking of this honor for ex‑Senator Jacobsen. I believe it is a great idea.

 

Chairman Washington:

The committee commends you for your efforts in recognizing ex‑Senator Jacobsen. I understand his contributions will never be matched. His generosity and kindness have been overwhelming to every member on both sides of the aisle.

 

Senator Townsend:

I have saved one or two ex-Senator Jacobsen stories hopefully for the dedication. I wish I had made them up, but I did not need to, they are the real thing, which is one of the great things about ex-Senator Jacobsen. 

 

Chairman Washington:

Once we have passed this out, we will give you the charge to make sure ex‑Senator Jacobsen's name is on the building.

 

Senator Townsend:

I will not let Senator Mathews down.

 

Senator Mathews:

Due to ex-Senator Jacobsen's tours I have milked a cow and a fish. I want to make sure during the dedication that something is mentioned about milking cows and fishes.

 

SENATOR RAGGIO MOVED TO DO PASS S.B. 365.

 

SENATOR CEGAVSKE SECONDED THE MOTION.

 

Senator Titus:

Ex-Senator Jacobsen deserved a lot of respect. We have named the armory after him, we passed a resolution honoring him, and we put him in our hall of fame. I do not believe the Legislature Building should bear the name of any individual or any party, so I will be opposing the bill.

 

THE MOTION CARRIED. (SENATOR TITUS VOTED NO.)

 

*****

 

Chairman Washington:

We will close the hearing on S.B. 365, and open the hearing on Senate Concurrent Resolution (S.C.R.) 26.

 

SENATE CONCURRENT RESOLUTION 26: Amends Joint Rules of Senate and Assembly for 72nd Session of Legislature to clarify time by which Legislature must adjourn session sine die. (BDR R-1328)

 

Senator Bob Coffin, Clark County Senatorial District No. 10:

I am submitting S.C.R. 26 as a substitute for S.B. 56. If you choose to process positively S.C.R. 26, then we would not need S.B. 56. Senate Concurrent Resolution 26 amends the joint rules of the Senate and the Assembly for this session to end at true midnight of our current business time. Senate Bill 56 runs afoul of the Nevada Constitution as interpreted by the majority of our Nevada Supreme Court in June 2001. I am withdrawing S.B. 56 and replacing it with S.C.R. 26. The opinion of the Nevada Supreme Court was the law intended session to end at midnight, but due to the construction of the ballot language, the Legislature had to hold to a Pacific standard time closing. To make it midnight, as the public believed it was voting and what we believed we were passing, I commend to you this one-line resolution requesting a change in the joint rules for this session and this session only to midnight current business time.

 

SENATE BILL 56: Requires regular session of Legislature to adjourn sine die not later than midnight on 120th calendar day of session. (BDR 17-30)

Senator Raggio:

I am still not clear, Senator Coffin, why we did not say midnight Pacific daylight time or Pacific standard time?

 

Senator Coffin:

Senator Raggio, I have a perfect answer for you. I will defer to legal counsel two seats to your left.

 

Brenda Erdoes, Legislative Counsel:

There was a previous conflict with the Nevada Constitution legal division had to consider when drafting the legislation. If the legislation had not said Pacific standard time, we would not have had an issue. We were trying to avoid problems. There was an attorney general's opinion at the same time as the court case. The attorney general's office found the Legislature actually had another whole day. They read it as the Legislature started the 120 days on the second day, instead of the first day. We tried to say not later than midnight on the 120th calendar day in order to resolve those issues. The thinking there was that there really was no question as to when midnight occurs, as long as a specific time zone was not named. Pacific time could certainly be added to the bill.

 

Senator Raggio:

I do not think this clears up the confusion, what if someone said, "Well, if on the 120^th day you are observing daylight time, then midnight occurs on daylight time." I believed that is how it would be interpreted. If the intent is to make it midnight Pacific standard time, why not just say that in the rule?

 

Ms. Erdoes:

When the legal division started to draft the legislation, Congress had a consideration before it to do away with daylight savings time; that was the reason legal tried to stay away from documenting a specific time zone.

 

Senator Raggio:

We cannot change the Nevada Constitution. What did the Nevada Supreme Court hold in its opinion? Were we correct in observing midnight Pacific standard time or Pacific daylight savings time, or did the opinion even say?

Ms. Erdoes:

I do not think it was stated that way. It stated the Legislature had until 1 a.m. of the time it was using, which was daylight savings time. Again, what legal was trying to do was to stay away from all references as to the time zones, it just says midnight because legal believed that would be the normally observed time. If the committee wanted to insert Pacific daylight savings time in S.C.R. 26, it certainly could do so.

 

Senator Raggio:

This resolution is only for this session, and Congress is not going to do away with daylight savings time between now and the end of this session. We should make it clear we are talking about midnight of the time we are operating on and not 1 a.m. regular time. If we are going to do this, then let us make it clear so there is no question about the time intended.

 

Senator Coffin:

My suggestion was to have language similar to the resolution, but also to indicate midnight of the currently observed time. That would avoid a dispute, but I understood legal counsel's concern about inserting daylight savings time. You could be throwing another bad egg into the mix. The court was almost evenly divided. Nevada Supreme Court Chief Justice Agosti concurred because she disagreed the 120 calendar days were ambiguous. She felt the voters definitely thought 120 days was correct. Nevada Supreme Court Justices Leavitt and Maupin strongly dissented. It was an interesting debate and decision process. We do not want to reintroduce problems to the court for this next June. That is why this bill is for a rule and not a statute. If you wanted to state the time under which session is currently being observed, I think it would be satisfactory. I also believe the current language would work.

 

Senator Raggio:

How do we adjourn sine die if it is about 10 minutes to 12 midnight Pacific daylight savings time and one of our members is talking and that member does not stop talking until after midnight?

 

Ms. Erdoes:

The Legislature would adjourn sine die in contravention of its rules, unless it had already waived its rules.

Senator Raggio:

Last session, one of the members kept talking, preventing the continuation of business. We have to go through the motion to adjourn sine die. The way I read the Nevada Constitution is nothing done after midnight has any effect, is null and void, but the Legislature could still move to adjourn.

 

Ms. Erdoes:

When amending this resolution to name the time, you could add all business must be conducted by the time stated in the bill, and then have the ceremonial sine die after midnight.

 

Senator Mathews:

What time is sine die? I do not want to go on forever. Are we going to put midnight Reno time, Ms. Erdoes?

 

Ms. Erdoes:

The bill could state midnight Reno time or name any time you want to use. You can also conduct your business before midnight, which would allow you to have the ceremonial sine die after midnight.

 

Senator Raggio:

I think all the committee members want to sine die at midnight, however, I can see there might be a problem where someone could utilize this to filibuster for 2 hours before midnight, and no business could be conducted.

 

Senator Mathews:

The filibuster move was used without this resolution, was it not? I believe if there was a rule saying the Legislature was going to stop, some people would observe it.

 

Senator Raggio:

It is in the Nevada Constitution, however, it did not seem to bother anyone.

 

Chairman Washington:

Senator Coffin, would you meet with Senator Raggio and Ms. Erdoes to construct language that will work. Then we will try to adopt S.C.R. 26. We need to move quickly though, if we are going to do something with this bill.

Senator Coffin:

I brought this measure forward so we as a Legislature could look good to the public, while we do the hard work we do.

 

Chairman Washington:

Can you get it done by Friday?

 

Senator Coffin:

I can get it done by this afternoon if you want.

 

Chairman Washington:

We will close the hearing on S.C.R. 26 and open the hearing on Senate Joint Resolution (S.J.R.) 7.

 

SENATE JOINT RESOLUTION 7: Declares support of Nevada Legislature for America’s missile defense system. (BDR R-1221)

 

Assemblyman Walter Andonov, Assembly District No. 21:

Mr. Chairman, we recognize the world has fundamentally changed; and since September 11, 2001, we as a nation have become painfully aware our country is vulnerable, even on our own soil. The tragedy of that day 18 months ago robbed us of our peace of mind, our security, and disabused us of the idea our country is impenetrable.

 

Even before that terrible day on September 11, 2001, the world had changed. Two major geopolitical shifts had taken place in the world.

 

First, the classic arms control theories I studied as a cadet at West Point in the mid 1980s were simply no longer valid. Mutually assured destruction was based on the assumption the United States and the Soviet Union were mortal enemies, and the greatest threat to strategic stability was the prospect of a nuclear war between our two nations.

 

Frankly, this approach has outlived its usefulness. True, Russia is not an ally on par with Great Britain, but we are clearly no longer adversaries bent on mutual destruction.

 

The second geopolitical shift was the monopoly of the superpowers over long‑range missiles had been broken.

In 1998 North Korea unexpectantly test fired a rocket over Japan. North Korea can now fire a ballistic missile that might hit Alaska. If the warhead were small enough, it might even reach Hawaii or California. North Korea is probably the world's most contemptuous weapons proliferator, and is willing to sell secrets and weapons components to anyone who will pay the price.

 

Iran is also in the process of assembling a new multistage missile, which could reach most of Europe. Illicitly acquired weapons technology has been slowly seeping to unstable regions in Asia, the Persian Gulf, and the Middle East.

 

Assemblyman Andonov:

The breath of terrorist groups, such as al‑Qaeda, and dangerous regimes, such as North Korea, that might launch missile attacks or use chemical or biological weapons against America is truly a frightening prospect. These are not threats that will just go away. We cannot simply wish them away. Once learned, the secret of how to deliver a nuclear bomb by fast-flying missile, as the secret of how to build the bomb itself, will not be unlearned.

 

The question is less about whether or not other new threats are emerging, but rather how to deal with these threats. I believe new thinking is required to take into account these new threats, including terrorism. As the threats change, so should the balance between offense and defense in our core military strategy. I believe a missile defense system has an important role to play.

 

As a nation, one of our great fears is sooner or later we will find ourselves "toe‑to-toe" with a risk-defying regime bent on aggression. It could threaten nuclear, chemical, or biological strikes against our bases abroad or against our citizens at home. Such vulnerability could invite the miscalculation aggression can cause. Building a limited-defense system does not suggest abandoning other tools, such as diplomacy or deterrents. Instead, we would strengthen these tools by making life more difficult for such troublemakers.

 

I recognize it would be a mistake for any country to rely only on antimissile defenses for protection. I am not suggesting we as a nation do that. Technology seldom works flawlessly; there are many other threats to national security, ballistic missiles, though very potent and dangerous, are only one of those threats. Obviously, a missile defense system cannot cope with all the potential threats the United States faces; however, we can no longer rely only on diplomacy or deterrents.

 

If traditional arms control and anti-proliferation efforts have broken down, I believe we must have other ways to protect ourselves. A missile defense system meets that requirement and must therefore be a core part of our future defense posture. It will serve as a necessary and very valuable insurance policy in a comprehensive national defense strategy.

 

The single most important function of the United States government is to protect the American people. To the extent a national missile defense system is technically and operationally feasible and fiscally affordable, I feel the United States government should strive to develop and deploy such a system. This system could serve as vital protection for American soldiers abroad, for our allies, and for our American families at home.

 

I urge you to support S.J.R. 7.

 

Senator Mathews:

Is the missile defense system already in place?

 

Chairman Washington:

I believe the next speaker will answer that question.

 

Christine Milburn, Lobbyist, Missile Defense Advocacy Alliance:

The Missile Defense Advocacy Alliance is a nonprofit organization that believes in educating people on missile defense systems throughout the world.

 

I will read "NFL Features" (Exhibit C) into the record.

 

I would now like to turn over the testimony to Riki Ellison.

 

Riki Ellison, Chief Executive Officer, Missile Defense Advocacy Alliance:

I am here today to ask for your support on Senate Joint Resolution 7, which supports a deployed missile defense system.

 

I will continue reading my testimony "MDAA Missile Defense Advocacy Alliance," (Exhibit D).

Chairman Washington:

Mr. Ellison would you please explain to the committee how the missile defense system would work, and what targets would be primarily vulnerable in the State of Nevada.

 

Mr. Ellison:

The missile defense system is an integrated system that stops a ballistic missile. Ballistic missiles have three stages of flight. First is the boost phase, where the missile is most vulnerable. The next phase is the midcourse phase, and the last phase is the terminal phase. A robust layered system will have platforms to attack all three stages of a ballistic missile. The suggested deployed system, of the President and Congress, has a naval ship platform on each of its Aegis class cruisers with standard missiles that attack the boost phase of a ballistic missile, within a 120-mile range.

 

There are other technological systems under development that are probably not going to be deployed, such as the airborne system. It is a Boeing 747 with a chemical laser that can fly 24 hours a day and uses a chemical that attacks a missile in the boost phase.

 

As missiles go into the midcourse range, there are land‑based interceptor systems, which were developed within the Anti-Ballistic Missile (ABM) Treaty under President Clinton's administration. This system would intercept ballistic missiles in the midcourse range of its flight in space with a kinetic kill capability. This system can also be based on ships with naval platforms.

 

Because of the high speeds, which are around 14 kilometers a second coming in, there is as yet no technology available to attack the terminal phase of a high‑velocity ballistic missile's flight.

 

Chairman Washington:

The terminal phase would be the down phase?

 

Mr. Ellison:

Yes, the Patriot systems, used in Iraq, work on the terminal phase, but are only effective because the speeds are very low, around 3 kilometers a second instead of 14 kilometers a second. Patriot missiles can intercept short-range missiles, and can only defend about 1 kilometer, which is about 2 to 3 city blocks. One system cannot defend an entire city or nation.

I believe in Nevada the Hoover Dam is certainly a target and I have listed target sites in your packet (Exhibit E. Original is on file in the Research Library.). I believe it documents what the damage assessment would be if the dam were targeted. Certainly any disruption to a West Coast city would disrupt the economy of Nevada.

 

Nevada citizens, just as the rest of the citizens of the United States, are not protected.

 

Chairman Washington:

Can this system be attributed to the "Star Wars" program we hear about?

 

Mr. Ellison:

This has nothing to do with Star Wars. There is no space-based system involved with the deployment of the missile defense systems. Our technology is not yet at that stage of development. We are strictly ground-based systems or naval-based systems at this point. Obviously, there will be continued development and research to eventually move into space, providing it is feasible.

 

The best way to eliminate a ballistic missile is to hit it at the boost phase of its flight. Obviously if you had space-based capability, you should be able to do that.

 

Senator Mathews:

I was wondering if this resolution did not pass, what effect it would have on Congress.

 

Mr. Ellison:

I believe it does have an effect, because this is a democracy and the show of support for the deployment of this system would certainly affect that.

 

Senator Mathews:

Where is this initiative in Congress now?

 

Mr. Ellison:

It has already been approved, authorized, and through the appropriations committee. Deployment of this system entails about 2 percent of the nation's defense budget. I am not here asking for funding or anything like that. I am just asking for your support.

 

Chairman Washington:

I was reading J.D. Crouch II's testimony (Exhibit E) made before Congress and was wondering whether he was the assistant secretary of defense?

 

Mr. Ellison:

He is the secretary of defense in charge of policy. The testimony, you are looking at, was his testimony in front of the armed services committee 2 weeks ago.

 

Chairman Washington:

Mr. Ellison can you summarize Mr. Crouch's testimony for the committee?

 

Mr. Ellison:

The secretary made a statement reconfirming North Korea is a threat to the western part of the United States, and has confirmed North Korea tested its missile system. He reinstated the President's deployment plan, which places 16 land-based missiles in Alaska, 4 land-based missiles in Vandenberg, California, and 20 missiles on Aegis cruisers. That is the basis of the 2004 deployment plan.

 

Chairman Washington:

What is the threat from systems deployed by North Korea, which were probably funded by China? What is the fear generated to the United States and other nations by North Korea having this capability, especially concerning Taiwan or Hong Kong?

 

Mr. Ellison:

There are a couple relevant aspects. In the mid-1990s, the country of China threatened Los Angeles if an altercation happened in Taiwan. North Korea is presently in a position of power since the United States cannot coerce, bargain, or negotiate until it has the ability to either take those weapons out, or to defend against them.

 

One of the troubling issues is North Korea proliferates and sells these portable systems, as well as China, such as the Scud missile. There were some of these missiles confiscated 2 months ago in Yemen on a container ship. These systems are portable and can be easily installed on container ships and be in international waters a hundred miles off any of our coasts. Being deployed off of our coasts would give them the ability to strike 200 or 300 miles inland.

 

Chairman Washington:

Mr. Ellison, the other concern has always been the treaty. Could you explain to the committee how the treaty worked and why the President negated it?

 

Mr. Ellison:

The treaty you are referring to is the 1972 ABM Treaty, which came about at the height of the Cold War, and was the cornerstone of arms control. Negotiators felt in talks at the beginning of the Strategic Arms Limitation Treaties, SALT I and SALT II, that defensive arms needed to be limited to prevent an arms race. The treaty was amended in 1974 to a very strict system that allowed only one site per each country to be defended. It could be the country's capital or the country's offensive missiles site. The United States government chose not to do either. The government of the Soviet Union chose to defend Moscow. Russia and Israel currently have deployed missile defense systems. The ABM Treaty also did not allow space testing or development of portable missile defense systems.

 

In June 2002, as a result of the September 11, 2001, terrorist attack on the World Trade Center, the U.S. Congress, and the U.S. Senate announced the intent to withdraw from the treaty because the treaty prevented us from protecting ourselves against rogue nations or terrorist organizations. In December 2002, the President and the Congress withdrew from the ABM Treaty and the country has moved forward to legally developing a limited defensive missile system. The intent is to deploy defensive missile systems capable of stopping up to four or five missiles fired toward our country.

 

Charles W. "Chuck" Fulkerson, Executive Director, Office of Veterans' Services:

I am speaking today as an individual and not in my capacity with Veterans' Services. I am in favor of S.J.R. 7. The world is a far different place than it was in 1972. There are so many countries that have or are developing the capability to build missiles that can reach inside the shores of this country, that this country now needs a missile defense system.

 

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

I am a former radiological defense officer and civil defense instructor in nuclear survival techniques in Lander and Lincoln counties, where we enjoy 100 percent survival capability against nuclear attack.

 

The Israeli civil defense chief spoke at the American Civil Defense Association's conference in Las Vegas. His theme was that only what is deployed by way of defense before an attack is effective.

 

Oakridge National Laboratories compares casualty prospectives from a nuclear exchange, such as Russia versus the United States. Russia would have fewer casualties than it suffered in World War II with the deployment of its population and industries. The United States with its urban populations, and its shelter plan abandoned, would suffer approximately 165 million deaths. With a missile defense plan and restored fallout shelter program, the projected death toll would be around 7000, which is less than we suffer each year in traffic accidents. Therefore, S.J.R. 7 is a good move.

 

The book War Scare by Peter Vincent Pry says on July 25, 1995, we came within 20 minutes of absorbing a Russian first strike. A meteorological rocket was being launched from the northern tip of Norway. The Russian foreign office had been informed; however, the Russian rocket forces had not. The rocket forces assumed it was our "first strike." Fortunately the trajectory arched northward toward its intended target, not toward Russia and the switch was turned off.

 

Russia has three people with switches, not one.

 

While the Soviet Union was supporting the elimination of chemical and biological weapons, that country was secretly manufacturing tons of such agents. This is documented in the book, Germs: The Ultimate Weapon by Judith Miller, Stephen Engelberg, and William Broad. The Soviet Union violated the treaty for years.

 

The book Nuclear War Survival Skills: What You and Your Family Can Do, by Cresson H. Kearny, shows what can be done locally to survive nuclear attack. If we are protected against nuclear attack, we have most of the work done for protection against biological attack. Biological attack is the "poor man's atom bomb."

 

Using less resources than for the World Trade Center attack, terrorists in one night, could wipe out 35 percent of the United States' population.

 

On the Internet at usdpi.org, United States Disaster Preparedness Institute, there is a reference under Preparing for Terrorism in America in the frequently asked questions section that says preparedness prevents disaster; lack of preparedness invites disaster.

 

I commend the committee for supporting this vital link in our overall defense.

 

Janine Hansen, Lobbyist, Independent American Party of Nevada, Nevada Committee for Full Statehood, Nevada Eagle Forum, Nevada Families Education Foundation, and Nevada Live Stock Association:

I am here to support this measure. I have been involved for many years in promoting the idea of a defensive missile plan and attended conferences about strategic missile defense initiatives.

 

I handed out, for your information, some pages from America at Risk: The Citizen's Guide to Missile Defense by The Heritage Foundation (Exhibit F). Those pages help to express the dangers we face. I think if we are able to defend our nation, we are much less likely to have to defend our nation. As a mother it is important to me to have defensive preparations so that we can avoid war rather than encouraging those that may think that we are vulnerable.

 

I appreciate your consideration of this measure and encourage you to pass S.J.R. 7.

 

Merritt K. Yochum, Lobbyist, Independent American Party of Nevada:

I wanted to express gratitude that this issue has finally come before this body. This resolution was a part of our party long before this became a resolution here. I am happy to say we will definitely support S.J.R. 7.

 

 

SENATOR CEGAVSKE MOVED TO DO PASS S.J.R. 7.

 

SENATOR RAWSON SECONDED THE MOTION.

 

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

Chairman Washington:

We will close the hearing on S.J.R. 7 and open the hearing on S.B. 361. This bill requires disclosure of names of Legislators who file bill draft requests (BDRs).

 

Senator Raggio, I understand you wanted to amend this bill.

 

SENATE BILL 361: Requires disclosure of name of Legislator who requests preparation of legislative measures on list of requests. (BDR 17-1220)

 

Senator Raggio:

Yes, but with the time constraints I was unable to pursue those changes. I cannot support the bill as it is written. There are situations where we should be allowed to request a bill and not have to disclose the name of the requestor. I do not agree with the comments that not publishing the requestor's name prohibits the public from knowing what is happening. I think a Legislator still has the right and should have the opportunity to request a measure and be able to review and evaluate that measure before identifying himself or herself. That was the intent when we prepared the rules on this and I do not see any reason to change those rules.

 

I feel we have operated very well with the rules as they are. If a Legislator wants to disclose he or she has requested a bill, fine, it is an individual decision. We get requests from all kinds of people for bill drafts and I believe we should have the opportunity to review those requests after they are written. The subject matter is out there; the public knows something is being requested. I do not think it is essential to any operation of the legislative process to make Legislators disclose who requested a bill. I think it does not serve any real purpose and the present rule is adequate.

 

Senator Mathews:

When I request a bill, I would like the opportunity to see what the Legislative Counsel Bureau has done with it before my name goes on it. A lot of times that is exactly what I do, just so I have a rough idea of what the content is going to look like. I do not have a problem with my name going on the bill, once I see what it is going to look like. However, my name will go in the book before I see it.

Senator Raggio:

That is my point, and I agree with Senator Mathews, I think the present rule accommodates it.

           

SENATOR RAGGIO MOVED TO INDEFINITELY POSTPONE S.B. 361.

 

SENATOR RAWSON SECONDED THE MOTION.

 

THE MOTION CARRIED. (SENATORS TITUS AND WIENER VOTED NO. SENATOR MATHEWS ABSTAINED FROM THE VOTE.)

 

*****

 

Chairman Washington:

The hearing on S.B. 361 is closed and we will now open the hearing on S.B. 311.

 

SENATE BILL 311: Prohibits persons subject to regulation by occupational licensing board from refusing to provide service to current or former legislator based on vote or abstention of that legislator. (BDR 17-922)

 

Senator Margaret (Maggie) A. Carlton, Clark County Senatorial District No. 2:

Last session I brought a piece of legislation before this committee dealing with issues involving legislators. Another issue arose involving legislators and the result is S.B. 311.

 

I believe the bill is a basic straightforward bill. As citizen legislators we are part of the public when not in session. Associations were created to protect the professions, but boards are to protect the public. I believe it is wrong for a legislator to be denied care because of the way he did or did not vote on an issue. No one should refuse to give care to my husband, my family, or myself because I made a decision I thought was the State's best public policy. If there were only three specialists I could access through my insurance, and all three of them refused me care, where would I get that care?

Senator Mathews:

In the news, the U.S. Supreme Court ruled health management organizations (HMOs) have to allow participants to use any physician they need, and do not have to stay strictly to the provider list.

 

Senator Carlton:

I am not involved in an HMO; I have a different kind of coverage. Each health care system is a little different from other systems. You can get into health and welfare trusts, which are different from HMOs. They might appear to be the same as far as having a provider list, but are not actually HMOs.

 

Senator Raggio:

The U.S. Supreme Court on April 2, 2003, issued a decision in a case involving a Kentucky health plan. The decision said a state could require a willing-provider provision. It did not say a state had to have such a provision, but a state could legislate such a provision if the state so desired.

 

Senator Wiener:

That is good information, but the bill says any profession not just health care professionals.

 

Senator Carlton:

Yes, we could address other professions. We should apply this to every board regulated by the State. Since we are citizens and go back to normal lives when we leave here, those are the boards that should protect us.

 

Section 2 of the bill addresses violations with no penalties involved. This bill only directs state boards to treat a legislator's complaints as they would any other complaint registered with one of those boards.

 

I do not believe the state boards believe they have the authority to address complaints from legislators. I would like state boards to understand my complaint should be treated like any other complaint and should look at that complaint in the venue of the profession that board regulates. All legislators are members of the public and state boards should take my complaints seriously. This bill would allow state boards to decide within its authority what action it felt was appropriate.

 

Last session a care provider contacted Senator Coffin and told him because of his vote on an issue, that provider would no longer provide care to him. I feel strongly that is wrong. If I make a decision based on what I believe is good for this state, not necessarily good for any one individual, then that individual has the right to voice his or her opinion at the ballot box, with campaign contributions, with mailers, or with televisions adds, whichever way he or she would like to do so, but to deny care to me or my family I believe is very wrong.

 

The relationships we develop with different professionals in our lives, especially health care professionals, are integral parts of our families; sometimes those professionals know us better than our families. For a professional to use undue pressure to influence how a legislator votes on an issue is wrong. I believe they have a right to their opinions, but should not be threatening or coercing us with the lack of care or service.

 

Senator Raggio:

I do not think anyone disagrees with the fact this kind of coercion should not happen. We have statutes preventing anyone from threatening or coercing a legislator to pass a bill or to vote in a specified way. This bill refers to a situation occurring after a vote. I would hope this is a rare occurrence.

 

This could happen to city councils, county commissioners, it could happen anyplace where people make decisions, and I am a little concerned about passing a statute that refers just to a legislator. There is a fine line between a professional and a person or a business refusing to provide service. A person has the right to refuse service. I am a lawyer and I do not have to take every client who walks into my office. The dentist does not have to take everyone who wants to be a patient. I believe there is a real problem in passing a bill such as this; because a person might not say specifically he or she is refusing service as a result of the way a legislator voted. A legislator might think that is what happened, but the refusal was not actually stated that way. If the legislator filed a complaint, would that not open every professional to these kinds of reviews whether or not the complaint was valid?

Senator Carlton:

I struggled with this issue and built safeguards into this bill by having the various state boards consider a legislator's complaints the same as any other complaint. I would hope a reasonable person would not file an unjustified complaint. I would just like that board to look at the complaint and decide whether or not the complaint was serious. To look at complaints is what those boards are for, to protect the public. I am a member of the public and I feel as if I have been wronged. I feel there might be a problem with the board taking my complaint seriously.

 

Senator Raggio:

How would a person prove he or she had been refused service because of the way he or she voted? How often would someone actually say to you, "I am not going to serve you because you voted the wrong way?" I believe this would be a very rare occurrence, and believe it should be a matter of censure, not legislation. 

 

Senator Carlton:

I would hope it would be a very rare occurrence, but at this point I have no venue to pursue the issue. This bill would give legislators the opportunity to pursue these matters. If it happens once, it could happen 50 times. We want the opportunity to present to boards that regulate professions incidences of unprofessional behavior of the practitioner.

 

Senator Raggio:

You want to allow a person to file a complaint if he believed the reason he was refused service was because he voted a certain way?

 

Senator Carlton:

I do not believe splitting hairs or wordsmithing is going to benefit anyone.

 

Senator Raggio:

I am trying to be objective about this issue, and have you convince us. This bill creates a statute that applies only to a legislator. I am not demeaning your bill or your intent. I am asking because we are responsible for what we pass here. I think this bill could be a problem, if left as written, because it opens up people in business to possible unjustified complaints.

Senator Carlton:

I respectfully disagree with you, senator. I believe my complaints should be taken seriously. As far as referring only to legislators, I think other elected officials should be considered also. I do not think that would be a problem.

 

When I told staff what occurred and asked whether there was a way to address the issue, I received this bill.

 

Senator Cegavske:

What happens to a person's right to refuse service? Can legal division staff answer? Does this bill impede that right? With the bill's language, how does it affect someone's right to refuse service?

 

Ms. Erdoes:

This bill would abridge that right. By statute, the right to refuse service to a legislator for the reason the legislator voted in a way you did not like would be taken away.

 

Senator Titus:

I would come at this from a different angle. I want to know if a dentist does not like the way I voted before I sit down in his chair. I do not really want to get service from someone who thinks I voted the wrong way.

 

Senator Carlton:

The opportunity for all 63 members of the Legislature to present a problem to professional boards is truly important. I do not want to be treated by someone who does not want to treat me. I also do not want them to apply undue pressure either. I have no avenue for recourse at this point. I honestly do not believe the regulating boards believe this issue is within their authority. If a legislator or any other elected official felt he or she had been mistreated, this bill would give him or her an avenue to have their concerns addressed. That is all I am trying to do here, have someone listen and take a good look at that complaint.

 

Senator Rawson:

I have served with abusive legislators who sat in committee and behaved inappropriately to people who testified. I can understand someone saying he did not want to deal with such a legislator. These kinds of incidences point to the fact it is very difficult to legislate this kind of personal behavior. I think the situation you related to the committee is despicable, unprofessional, and certainly unethical.

 

After the Legislature passed the business activity tax, my veterinarian sent me a letter telling me not to bother bringing in my pets because he would no longer service me. This was a person I went to college with and served in a fraternity with; I thought we were good personal friends. This was very hurtful, however, it is part of holding office. We have to meet a different standard for libel or slander. I believe what happened to Senator Coffin is despicable, but I do not think it is appropriate to write a law against it.

 

Senator Carlton:

I do not want you to believe I submitted this bill because this happened to me. I am very happy to say that this did not happen to me. I heard these stories from other legislators, and I wanted to give them an avenue of recourse.

 

Senator Rawson:

I think Senator Titus said it better than I did. I wrote a long list of personal services including such things as dental, haircuts, toenails, or physicians. If someone indicates he or she does not like me, I do not want him or her anywhere near me. Sometimes it is just best to cut your losses.

 

Senator Carlton:

I have never been one to back away from an issue, and I believe legislators, as citizens, should have the opportunity to voice how they feel to professional boards. We are all members of the public and should not be treated any differently. If we have a problem, I believe we should be able to present it to the controlling board just as any other citizen. I had the same concerns everyone has voiced here. I was merely trying to find an avenue in which to address these concerns.

 

Senator Titus:

I believe it is a problem. I agree with Senator Rawson and with you. Is there some way short of legislation we could encourage the boards to make these kinds of reviews part of their standard policies? Do they not have policy manuals or regulations or something that could state this kind of behavior is not acceptable? Could we send a letter to the boards encouraging them to address these concerns at that level?

 

Senator Rawson:

I think it is an outrage that something like this happens. I believe you could express this is inappropriate behavior. There are professions that are somewhat self-regulating and I believe we should allow them to be professional.

 

In this country, we sort of speak with our feet; we walk away from something we do not like. We do not buy things we think are overpriced. I cannot imagine someone like this having a successful practice. Word gets around about this kind of behavior.

 

Senator Carlton:

Working with the boards as closely as I have over the last 4 years, I know they take a lot of direction from the Legislature. The regulatory process is totally different for the legislative process. We spend a lot of time legislating things and then have to fight the same battles in the regulatory process. Those boards take their cues from us, and will not step outside their bounds in fear someone will accuse them of working without legislative authority. This bill would give them permission to look at these occurrences.

 

Chairman Washington:

We will ask staff to prepare a letter requesting the various boards to look into these unprofessional incidences.

 

We will close the hearing on the tooth and toenail bill, S.B. 311, and open the hearing on S.B. 362, which requests an audit be conducted on the Las Vegas monorail system.

 

SENATE BILL 362: Requires Legislative Auditor to conduct audit of Las Vegas Monorail Company. (BDR S-573)       

 

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

I am handing out an information packet about the monorail (Exhibit G). The packet also contains an article from the Las Vegas Sun about the monorail contractor, Bombardier Incorporated.

 

In 1997, the Nevada Legislature enabled Clark County to franchise the development of a privately financed monorail system in the Las Vegas Valley. In 1999, Clark County issued a franchise to the Las Vegas Monorail Company to construct the monorail which would serve the major resorts on the east side of The Strip. Today the project is completing construction. In November 1999, the Las Vegas Monorail Company sold about $650 million of debt through the State to obtain the funding to construct the monorail. The debt issuance was accompanied by a number of independent studies including an evaluation conducted by the Department of Business and Industry. The study was conducted to evaluate the risk of paying back the debt from fare box receipts. In other words, they were going to pay off the bonds with tickets sold to people riding the monorail. At the time, the findings of those evaluations showed the debt was high quality and the fare box was a solid source of income for the repayment of the principle and interest.

 

The bondholders do not have recourse to the State in case of default, which was an important part of the whole process. Yet, the fact the State was used to issue the bonds means the State has a vested interest in ensuring the project proceeds properly and the bondholders receive their principal and interest payments in a timely manner. If this does not occur, the State of Nevada's bond rating could suffer, causing taxpayers to incur a premium through higher interest rates which would result from a lower rating. The State must be diligent about this concern during a time when major tax increases are being debated. In fact, all of the State's public/private partnerships should be carefully reviewed to protect the ability of Nevada to respond effectively to the current economic crisis and financial shortfalls.

 

The Las Vegas Monorail Company is a not‑for‑profit entity with a board of directors appointed by the Governor, and the Governor approves the budget. The question I believe the Legislature should be investigating is whether those approved expenditures are appropriate, in the public interest, and occur in the way they were intended.

 

Senator Titus:

The monorail company entered into several recent agreements to build, manage, and operate the monorail system. One of those agreements was with Bombardier Incorporated of Canada. That company is facing severe financial difficulties, as stated in the article (Exhibit G). In light of those difficulties being faced by the primary contractor, in light of world events that have a great impact on tourism, in light of local economic conditions and the fact that the monorail is backed by the State's name as well as other local governments, I believe it is prudent for the Legislature to conduct an audit. This is a very expensive massive project with a huge image on the Las Vegas landscape. Yet, few people really know what is going on. I believe an audit would be appropriate, and would not cost the State anything; the monorail company could pay for it. The audit should review cost estimates versus budgets, and contingency expenditures to cover overruns and internal controls. We are talking about $650 million and the State's reputation. I do not think it is unreasonable to have a little oversight into what is happening.

 

The people from the monorail company are opposed to having an audit. They feel it is duplicative because they already do an audit. The monorail company's audit was by Arthur Andersen, and we know how much trouble Arthur Andersen got into recently. Now they are using Deloitte and Touche LLP, however, that audit is a number‑crunching kind of audit without performance indicators. They plan to present an amendment suggesting they report to the Legislative Commission or the Legislature periodically about some of the things with which I am concerned. I think that is great, however, I believe the initial in‑depth audit should be performed first and then require those periodic reports in order for the Legislature to stay on top of this issue. The monorail people also have an amendment having to do with advertising, which I do not see as a problem.

 

Senator Cegavske:

Did you say you agreed with the amendments as written?

 

Senator Titus:

No, what I said was they have a proposal to give periodic reports to the Legislature. Those reports would address some of the questions I have raised. I believe that is fine and we should do those reports, but those reports should follow the in-depth audit performed by the Legislative Commission.

 

Senator Mathews:

Is that a function of the audit commission, when we back them for bonds?

 

Chairman Washington:

The bonds came from the Department of Business and Industry.

 

Senator Mathews:

If that is true, then it is not a function of the commission.

Senator Wiener:

Senator Titus, the difference between your proposal and the monorail people's proposal is the initial audit performed by the legislative auditors, right? Was there a reason the monorail people objected to the initial audit by the Legislature?

 

Senator Titus:

They will tell you it duplicates the audits the company already has performed. I think when you are talking about this much money and a project this extensive, audits should be performed by an outside entity such as the Legislature. Accounting audits only give you spreadsheet numbers. I think we need to look at some performance issues, policy questions, and more coordination with federal, local, and state governments. I think an initial audit would still be a good idea.

 

Senator Wiener:

Mr. Townsend, what would be the difference in an audit you performed and one performed by an accounting firm?

 

Paul V. Townsend, Legislative Auditor:

A good example of the difference between a performance audit and financial audit is when the school district identifies a deficit in a fund, we go beyond ascertaining the numbers are correct. A performance audit would look at why that deficit occurred and what steps could be taken to prevent it from happening again.

 

Senator Wiener:

Do not the auditors present an agreement of compliance when a performance audit finds a solvable problem and then performs another compliance review in 6 months?

 

Mr. Townsend:

Yes, Senator, the bill has clauses indicating the Las Vegas Monorail Company would be deemed a state agency for the purposes of the audit. That would get the monorail company into the audit process and then they would follow the legislative audit process, which would include a draft report from us. They would examine the report, meet with us, and then provide a response in 10 days. Sixty days later they would be required to prepare a plan of corrective action. Six months after that they would give us another report.

Senator Wiener:

For the purposes of the audit, would the Las Vegas Monorail Company be treated as a state agency?

 

Mr. Townsend:

Yes, that is the reason for the language in the bill.

 

Senator Titus:

You will hear from the Las Vegas Monorail Company that periodic audits have already been performed. However, those audits apparently did not alert them their contractor was about to go bankrupt. Maybe if we had a little more accountability, a little more input, and a different kind of audit, some of those kinds of problems could be addressed. Lack of accountability was the problem with Arthur Andersen and Enron.

 

Chairman Washington:

Mr. Townsend, how much time would you need to perform this audit, and how far off schedule would your other audits be? Could this and your other audits be done in a timely fashion?

 

Mr. Townsend:

I have not looked closely at the bill. I provided the committee with the handout 2003 Audit Legislation Estimated Audit Division Staff Requirements (Exhibit H). The handout shows the audits currently being requested.

 

Senator Titus:

Mr. Chairman, I want to clarify that the amendments are to do away with the audit, not to change what is required by the audit. It is either this bill or nothing.

 

Chairman Washington:

Your request, Senator Titus, is to do the audit prior to them giving us periodical reports?

 

Senator Titus:

My bill is to do an in‑depth performance audit. The handout (Exhibit H) indicates it would take two legislative staff members 5 months to do this audit. The Las Vegas Monorail Company's amendment is to do away with the audit and give the Legislature only periodic reports. I believe we still need to do the in‑depth performance audit, and then have the monorail people provide us with periodic reports.

 

Senator Mathews:

Senator Titus, are you looking for a base from which the Legislature can review the performance and efficiency of the Las Vegas Monorail Company?

 

Senator Titus:

Exactly, I am not trying to replace their annual auditing system. I think the Legislature needs one hard look at this company to see what is going on. We are talking about $650 million in bonds the State has its reputation behind, with a contractor facing serious financial problems, and an economic crisis requiring the raising of taxes. I believe we need to tell the public we are watching every penny out there. Auditing this mammoth project in southern Nevada is one way to do that.

 

Mr. Townsend:

Legislated audits are very important to our division and are the most valuable service we provide the Legislature. The audits let us address current concerns. This kind of audit goes through the process of legislation including testimony and exhibits, which help the division perform the audits. Testimony also provides the information you need. Legislative audits do tend to be more complex and require more resources. Documented on the handout (Exhibit H) is this session's possible legislated audits that would impact the audit program, which was approved by the Legislative Commission in September 2002. The second page of the handout (Exhibit H) shows the audits currently in progress and the ones scheduled to be performed. The unbolded audits would be subject to some delay if all the legislative audits go forward. We are happy to do whatever provides Legislators with the information they need.

 

Senator Titus:

I would like to ask you to look at the listed audits and consider the priorities. Compare how much is spent on those audits compared to the responsibility of $650 million worth of bonds of which we have very little oversight.

 

Robert Broadbent, President, Transit Systems Management LLC:

Transit Systems Management has the responsibility of building and operating the monorail for the Las Vegas Monorail Company. We were the company that developed the idea and proposed the monorail system to the Legislature in 1997. Metro Goldwyn Mayer Incorporated (MGM) and Bally's formed a limited liability company in order to develop a monorail system.

 

I have mixed feelings on this issue. Our attorneys told us there might be some legal problems with the passing of this bill. We are very strictly regulated by the franchises we have with the county, the bill passed in 1997, and with responsibilities to the bondholders. We sold $650 million in bonds to build this facility. In September 2000, this project was completely funded. After funding was in place, we entered into a design-build contract with Granite Construction and Bombardier Incorporated to build and operate the monorail for 5 years. Bombardier is in some financial difficulty and Cam Walker will explain that to the committee. We have been monitoring the problem.

 

Bombardier owns the present rail system that operates in McCarran International Airport and many other systems all over the country. We do not think there are any problems with Bombardier. Bombardier has so far delivered two of the contracted vehicles and will deliver the rest. They are also responsible for installing the control system. We do not believe there are any problems; it is funded, it is planned, and it is ready.

 

The company has tough responsibilities to bondholders and tough responsibilities to everyone else. None of our money can be used for other purposes. It all has to go for the construction and operation of the monorail.

 

We are not in favor of this bill. We do not believe it is beneficial to the State, and it might be prejudicial to the monorail. I do not know any of the qualifications of the legislative auditors, I suppose they are good, but we are doing all that is required by law. We have a yearly financial audit. We make quarterly reports to the bondholders and to the Department of Business and Industry. We even give reports to the county. I believe the Legislature would be better informed if it let us give signed reports twice a year on the operation of the monorail.

 

Senator Cegavske:

I want to clarify a couple of things. What is your budget, is the construction on schedule, and when will the monorail open for business?

Mr. Broadbent:

Our budget is to spend the $650 million over a period of 4 years with enough to operate the system on start-up. Our yearly budget varies due to the construction. We will spend about $380 million for construction. The remainder of the money will be to get through the first couple of years of operation.

 

Our opening date is January 20, 2004.

 

Cam Walker, Executive Director, Las Vegas Monorail Company:

We are under budget at this point. The $20 million contingency account the owner holds has not yet been touched. The $7.5 million contingency account for the contractor to use has not been used. We are also $10 million to $12 million under budget at the moment.

 

Senator Mathews:

Are all of your audits in Canadian dollars instead of U.S. dollars? The article, (Exhibit G) from the Las Vegas Sun says it is in Canadian dollars.

 

Mr. Walker:

If I spoke French Canadian, I could go to Canada and meet with them. Bombardier is a Canadian firm and is based in Canada, and that is where the trains are being manufactured. Bombardier's quarterly report was released on Friday. Our representatives met with them a week prior to the report so we could get a preliminary report on their financial situation. We are pleased with the company's report to us. They are divesting themselves of industries that are not their main business. They are focusing on trains and planes. Their company is a Canadian company, but our contract is an American contract involving U.S. dollars.

 

John Haycock, Chairman, Board of Directors, Las Vegas Monorail Company:

We are a nonprofit corporation, and the Governor appoints the board of directors. It is a very active five-member board. Our mission is to help Transit Systems Management to succeed in the construction and operation of the Las Vegas Monorail Company. It has been a great project that took a lot of effort and planning. I am very proud of the job we did to get this project off the ground.

 

I see the prudent use of dollars in the construction and operation of the monorail on the board of directors. The board of directors is for oversight. We have oversight contractors as well as for the financial end of things. I think we are doing a very good job overseeing and ensuring the prudent use of the funding.

 

From the beginning, the Governor was very supportive of this project. One of the things that came out of the early hearing was the Governor noted the State had no recourse as far as the bonds were concerned. In response, the Governor and the Department of Business and Industry developed a policy that we would hold a public meeting annually to present the budget, and answer questions regarding the project and the expenditure of funds in the budget. We have done that every year of the project and invited the public to come and look at our budget. We believe that policy was put into place to address the issues Senator Titus voiced.

 

Chairman Washington:

In reading through your proposed amendment (Exhibit I), I was wondering if your bonds are State bonds, can the Department of Business and Industry request an audit from your board?

 

Mr. Haycock:

Yes, sir. They are actively involved in the process. They review the books quarterly.

 

Chairman Washington:

Mr. Townsend mentioned a performance audit. Can the Department of Business and Industry request a performance audit?

 

Mr. Haycock:

Yes, Mr. Chairman, absolutely and the bondholders want performance audits too. When this project was financed, all the $650 million were accounted for and verified. Also, there is an independent oversight consultant that answers directly to the board. All of the funds are appropriately dealt with in an orderly fashion and independent consultants have oversight.

 

The public resources advisory group for the State reviewed the contracts including the ones to the independent oversight groups, to make sure everything was covered in case of delays in construction and other such unforeseen occurrences.

 

We have not gone over budget at this point. This is a very visible and high‑profile project. You will start seeing money move back and forth when the monorail starts to operate. That might be a time when questions come up needing to be addressed, but again that would go through the Department of Business and Industry.

 

Senator Mathews:

It seems your books are in order, so I would think you would be happy to have someone new look at them, especially if it costs you little to nothing. If the State were backing me as a businessperson, I would be happy to have it audit me.

 

Mr. Walker:

I think you raise a good point, Senator. I am not here as an attorney, but no recourse bonds is a very important element to this project. Those bonds were very heavily discussed at the beginning of the project. One of our concerns about this bill is making us a state agency. What happens if the bondholders want to make the monorail company a state agency to pay off the bonds? We do not want to get caught in the quandary of the bondholders demanding the use of State dollars to pay off these bonds.

 

The controls for this project are in place and rather than have a state agency audit our company, there are professionals in the industry the board saw fit to have audit us. Business and industry recognized the need to have those professionals audit the company, and that contract is significant to oversee the construction and the operation of the project.

 

Senator Mathews:

He just said what I said. What is the big deal about the State auditing? When I hear this argument, it sounds like you are hiding something. It seems to me there is no big deal about having the State audit. I would welcome the State to come in and perform an audit. If I had a business with that much money going through it, I would say come look, help me out. I welcome your advice. Arthur Andersen has gone up the creek with whatever he has gone up the creek with, we however are in good standing, because we have nothing to hide. I believe all of you are above board, and have good reputations. The Las Vegas Valley needs the monorail, and I do not see what the big debate is about an audit.

 

Senator Titus:

I would like to point out that in this article (Exhibit G), it says Bombardier's class B stock has tumbled from over $25 on the Toronto Stock Exchange less than 3 years ago to a low of $2.58 today. The article also says Bombardier is embroiled in legal disputes in Europe and the United States, including a disagreement with Amtrak over defects in high-speed trains it supplied. Its pension fund has a large deficit. The financial sales unit of the company holds a large portfolio of risky debt. Investors criticized the corporate governance, including changes in accounting methods. Bombardier has changed its accounting methods in a way that makes it difficult to compare past and present performance. It also has a two-tiered share structure that allows the owners to own certain percentages of the company. The announced write-offs have reduced shareholders' equity by almost $2 billion Canadian. This article documents a company very risky to do business with, and I believe the State should be looking into the situation.

 

Mr. Broadbent:

I understand your concerns about Bombardier, Senator. We have been concerned about them also. However, we pay them for only what they do. We have the money and want them to finish the trains. We know the facts, and have not paid in advance. Our concern is to make sure the train runs. If we have to go get another operations and maintenance company to run the trains, because Bombardier goes broke, we can do that.

 

The trains are built and almost ready to be shipped. We want to get the trains and control system in place. We have read the same articles and have asked our bond consultants and our financial people the same questions as you are asking. This will all be decided in another 2 or 3 months. Our audit will be out next month. By the time the legislative auditors get to it, all of the decisions will be completed. It will be paid for, and will be operating. Bombardier already operates the monorail at McCarran International Airport and should operate the Las Vegas one. The foremen at McCarran International Airport will be the same foremen that will be operating the Las Vegas monorail.

 

Senator Titus:

There are plans to add a monorail downtown, which will need more funding. I think you mentioned $7 million more. You will be coming back to the Legislature, as you said yourself, probably every session from now on. This is not something that is going to end; this is ongoing, especially if it goes downtown. The State should have some oversight.

 

Mr. Broadbent:

If the monorail goes downtown it will be the regional transportation commission, we will only be agents.

 

Mr. Walker:

The monorail company has a bigger concern with the insurance industry than with Bombardier. We have requirement levels of insurance and insurance carriers. Those requirements are very strong. The insurance carrier is required to be A-status, but the insurance industry is moving our policies down below the required status. Our main focus right now is on the insurance industry.

 

We were on the phone with Bombardier for more than an hour today, because Bombardier holds insurance on part of the project that now does not meet the minimum qualifications. We do have some recourse.

 

I think the Department of Business and Industry has done a very good job seeing we remained true to the bonds issued. The bonds are nonrecourse to the State, which would present no repercussions back to the State. The image of the monorail and its dealings with Bombardier is something to deal with, by the same token we would not create a bill to go after another entity just to do it, and make it a state agency just for this specific purpose.

 

I think we put this idea of the monorail forward in the interest of the public. The nonprofit status has several purposes. To pay back the bonds and to fund the project is first and foremost. If there are excess revenues, it goes to transportation in southern Nevada, which is a primary focal point. The bylaws set up by the Governor of the State are narrowly focused. We would really hate for someone else to get involved in the process when we are succeeding in our objectives.

 

Chairman Washington:

This is your proposed amendment (Exhibit I) to the bill and the monorail handout?

Mr. Walker:

Yes, Mr. Chairman. We have a couple of other things we agreed to when speaking to the sponsor of S.B. 362. We provide a quarterly report to the bondholders, which could include semiannual reports to the Legislative Commission.

 

Chairman Washington:

I understand you are concerned with the legislature doing an audit prior to putting your amendment in place?

 

Mr. Walker:

Certainly, Mr. Chairman, and we could come back 2 years from now and look at the operations. But the State Board of Finance put all of the resources in place. The monorail company is being overseen in a prudent and judicial fashion.

 

Chairman Washington:

We will give you the opportunity to work with the authors of the bill in order to come to a compromise or recommendation for the committee so the bill can move forward prior to our deadline.

 

Senator Mathews:

Two years from now will be too late. I thought the trains were going to start running in 2004, and we will not be back here until 2005.

 

Mr. Walker:

The current $650 million will operate the system for 41 months.

 

Chairman Washington:

We want to ask you to work with staff and the bill's sponsor to come up with a compromise.

 

Senator Raggio:

The law firm of which I am a partner/shareholder I believe is representing the monorail company. I will not participate in any discussions or votes on this measure.

 

Senator Rawson:

Ninety percent of the State budget goes toward audits that are either scheduled or proposed. Those are State funds, and we have a fiduciary responsibility to these agencies scheduled for audit. I do not believe those should be delayed. We are already on a tight audit schedule. If we are going to put resources toward an audit, we need to address the financial requirements. I am not willing to put off audits for welfare, education, or prisons.

 

Senator Titus:

Funding to pay for the audit is included in the bill. It is to be paid by the monorail company. It seems they have enough money to run for 41 months without income from the fare box. I think there is plenty of money to cover the $50,000 cost of the audit.

 

Chairman Washington:

We will close the hearing on S.B. 362 with the understanding the monorail people and the sponsor of the bill will get together and present a compromise for amending this bill.

 

We have a bill draft for introduction.

 

BILL DRAFT REQUEST R-1320: Commends Sonny King for his lifetime contribution as an entertainer. (Later introduced as Senate Resolution 7.)

 

Senator Raggio:

This request came from Lieutenant Governor Hunt. I think this would be a wonderful opportunity to acknowledge Sonny King's contribution to the State. He is a long-time resident of Nevada and lives in Las Vegas.

 

SENATOR RAGGIO MOVED TO INTRODUCE BDR R-1320.

 

SENATOR RAWSON SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Senator Raggio:

Also, Mr. Chairman, our legal counsel has come up with an amendment I feel is appropriate to S.C.R. 26, Senator Coffin's proposal.

Ms. Erdoes:

I would propose you remove lines 7 and 8 and instead put, "The Legislature shall not take any action on a bill or resolution after midnight daylight savings time on the 120th calendar day of session." Also, there should be a subsection 2 saying a Legislator shall not take any action to impede the progress in completing its business by the time specified in subsection 1. Then in subsection 3, any action in violation of subsection 2 shall be deemed out of order.

 

Chairman Washington:

You have heard the proposed amendment, so what is the pleasure of the committee?

 

SENATOR RAGGIO MOVED TO AMEND AND ADOPT S.C.R 26 AS AMENDED.

 

SENATOR RAWSON SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman Washington:

Senate Bill 216 remains on the agenda. That bill is for oversight of the Tahoe Regional Planning Agency, Marlette Lake, Colorado River Commission, and the Southern Nevada Water Authority. There are several proposed amendments to this bill. Robert E. Erickson, Research Director, will explain those proposals to the committee.

 

SENATE BILL 216: Creates interim legislative committee to review Tahoe Regional Planning Compact and oversee Tahoe Regional Planning Agency and other federal, state, interregional and interstate governmental entities within State of Nevada. (BDR 17-175)

 

Robert E. Erickson, Research Director:

I summarized the proposal for the committee (Exhibit J). When this bill was heard, the sponsor recommended the bill be approved as submitted. One of the other options discussed was to delete the provisions relating to the Colorado River Commission and Southern Nevada Water Authority.

Another proposal was to remove those provisions related to the continuing oversight of the Tahoe Regional Planning Agency and address the oversight of the Tahoe matters through a separate concurrent resolution, which included four meetings for that committee per interim. There was also a recommendation from ex-Senator Jacobsen to remove those provisions referring to the Marlette Lake water system and continue the existence of the current Marlette Lake Water System Advisory Committee, even though the Legislative Commission recommended the Marlette Lake committee be rescinded and its functions combined with the Tahoe oversight committee.

 

SENATOR RAWSON MOVED TO AMEND S.B. 216 BY REMOVING THE PROVISIONS RELATED TO THE COLORADO RIVER COMMISSION AND THE SOUTHERN NEVADA WATER AUTHORITY, AND HAVE THOSE AGENCIES SUBMIT A BIENNIAL REPORT TO THE LEGISLATURE.

 

SENATOR MATHEWS SECONDED THE MOTION.

 

Chairman Washington:

The sponsor of this bill had a request concerning the bill. I would like to confer with him before taking final action on the bill.

 

Senator Rawson:

I would like to get a sense of the committee's preferences. I feel an obligation to keep the Marlette Lake water system separate from the rest of the entities in the bill, however, if I have to choose, I think the motion I made is of primary concern. I would like to address the issue of the Marlette Lake system while we wait for Senator Amodei.

 

Senator Mathews:

My inclination is to remove the Marlette Lake system from the oversight of this bill's committee.

 

Senator Titus:

I do not think the Marlette Lake system should be removed from the oversight of this bill. As long as ex-Senator Jacobsen was here and he was active it was great for him to do that oversight. I do not see any reason to have two separate oversight committees. Now the person who represents that district, Senator Amodei, thinks there should only be one committee, and Lake Tahoe and Marlette Lake have more in common than they have differences. Why would we create another standing committee? I think Lake Tahoe and Marlette Lake should be together.

 

Senator Mathews:

Part of the problem about Senator Amodei representing that district is he also wanted all the rest of the entities in this bill. I feel if they are going to give Marlette Lake only 1 day to discuss the systems concerns, its oversight should be separate from all other entities.

 

Senator Rawson:

Marlette Lake is a state resource and I feel a fiduciary responsibility. The State has the water rights and I cannot easily relinquish those responsibilities. There is some precedence for the State having separate control of that lake. If we simply turn it over to the people in the Tahoe Basin, everyone else has less control.

 

Senator Cegavske:

Since we are in a work mode, I would like to ask Senator Rawson if he would consider a biennial report the first week of each session from the Colorado River Commission? 

 

Senator Rawson:

I think a report would be fine and could go to the Legislative Commission or wherever the appropriate place is for that report.

 

Senator Titus:

Going back to the original point, I value the appreciation for Marlette Lake; however, we do not have a Pyramid Lake committee, Walker Lake committee, or a Lake Mead committee. I do not see why there needs to be a separate Marlette Lake committee.

 

Senator Rawson:

The reason for a separate Marlette Lake committee was because we had water rights and Carson City could potentially cut off the water to the legislative buildings. The State was interested in protecting its rights to that lake. Whether any of the original concerns are still valid is up for discussion.

 

Senator Cegavske:

In looking at Marlette Lake Water System Advisory Committee that committee has two legislators and both of them are retired. I am just curious as to what is going to happen to that committee. Will someone else be appointed to those positions or will that be changed. I also understand the Tahoe oversight committee no longer has a legislator on it.

 

Mr. Erickson:

The Legislative Commission would appoint legislators to fill those positions following session, unless the committees were repealed. Of course, Tahoe is not a standing committee as yet and this bill would repeal Marlette Lake.

 

Senator Cegavske:

So legislators would still fill those positions?

 

Mr. Erickson:

Unless they were repealed, and of course Tahoe is not a standing committee so it would have to have legislation to continue existence.

 

Senator Cegavske:

Would a legislator be appointed to a Lake Tahoe committee?

 

Mr. Erickson:

Depending on the language of the legislation, yes.

 

Chairman Washington:

Senator Amodei is not available to address the issues of the bill, so I would like to postpone the vote until he is available. I have his recommendations as well as all the other proposals.

 

Senator Rawson:

I have an appointment out of state this week and will not be available for a later vote. This bill is not exempt is it?

 

Chairman Washington:

No, this bill is not exempt.

 

Senator Rawson:

We have to take action before the deadline, which is this week. Would you mind taking action on the motion on the floor and holding the rest of the recommendation for a later time?

 

Chairman Washington:

Part of the sponsor of the bill's recommendation was to include the Colorado River Commission. For the record, I think I would like to tell the committee Senator Amodei's recommendations.

 

Senator Mathews:

Are you walking through this for Senator Amodei? Then will we vote? I know you are not going against Senator Rawson, and Senator Amodei does not have a vote.

 

Senator Titus:

If it will make it easier to pass this out of here, I will let Marlette Lake have its own committee. I do not want the water turned off in the building; that might be a problem.

 

Mr. Erickson:

In the current rules this type of a proposal dealing with the creation of a legislative committee would be exempt from Friday's deadline, but I would suggest the legislative counsel follow up to confirm the accuracy of whether or not the bill is exempt.

 

Ms. Erdoes:

It is my understanding of the rules that all legislative work bills, whether in resolution form or bill form, are exempt if there is nothing else in the bill with that resolution. The reason was to allow the committee to compare all the studies proposed for the current session.

 

Senator Rawson:

Do we see this as a study? I do not interpret this as a legislative study.

 

 Ms. Erdoes:

The other examples we had were studies to be carried out by the health care committee. Those were deemed to be exempt, and were my comparison. That does not stop you from taking action today, however.

 

Senator Rawson:

The Colorado River Commission is an agency that was set up in the Executive Branch and seems like a substantive issue, which is separate from a study. It seems to me putting the Tahoe agency under oversight does not fit the requirement of a study. I just want to be sure the bill is exempt.

 

Senator Wiener:

I see the creation of a permanent statutory committee in the bill and do not think that relates to a study. I think the closest you get is an interim study, but we are talking about a statutory committee, not an interim committee.

 

Chairman Washington:

Ms. Erdoes, I would like to get some clarification. Are you saying this bill could be classified as a study and be exempt from the deadline in your opinion?

 

Ms. Erdoes:

I believe the bill is exempt. A study may be a mistaken term, but exemption is for bills that carry out legislative business. Because the committee cited in the bill is a legislative committee, it will be conducting a study or oversight. The point is all the bill does is create a legislative committee.

 

Senator Rawson:

I certainly would not try to override a committee chairman and I think you should do as you think appropriate, Chairman Washington. Senator Amodei indicated in his testimony that if the southern Nevada Legislators felt they needed to take the Colorado River Commission out of the bill, so be it. It seems what he really wanted were certain things affecting Lake Tahoe. There are a lot of other bodies of water in the state we do not deal with. I would like to clear this up if we can and resolve the issue.

 

Chairman Washington:

I appreciate your comments, Senator Rawson and Senator Mathews. For the record, let me read Senator Amodei's recommendations. As the chairman, I want to give Senator Amodei the opportunity to address your concerns.

 

Senator Amodei's recommendations were to develop a seven-member panel. He recommended six members be selected by the Legislature, three from each House, which would include one minority representative and two majority representatives from each house. The Governor would select one nonvoting member. The Senator's recommendations include holding eight meetings annually. Four would be held in southern Nevada dealing with the Colorado River Commission and Southern Nevada Water Authority. Four would be held in the north with three of those dealing with the Tahoe Regional Planning Agency and one dealing with Marlette Lake issues. The committee would report to the Legislative Commission during the interim and to the Legislature when in session. The Marlette Lake oversight committee would be repealed.

 

Senator Titus:

I would not vote to support that. I think that is too selective. There are a lot of other water authorities. There are the Truckee Meadows Water Authority, Truckee Carson Irrigation District, Humboldt River Basin Water Authority, and many many more. I do not know why you would just single out a couple. If water is such a major issue, you might consider creating a permanent committee on water like the one on public lands. I could support that, but a committee just singling out one water authority and not the others, I do not think is appropriate.

 

Chairman Washington:

We could bring it up with Senator Amodei.

 

Senator Rawson:

Mr. Chairman, I would add to the record, I think it is outrageous to propose another level of oversight for the Southern Nevada Water Authority, it has 27 elected officials involved, and is subject to the open-meeting laws and audits. There are more controls, regulations, and layers than needed. We do not need to add more layers by having the State grab some control.

 

Senator Mathews:

There is a motion and second on the floor.

 

Chairman Washington:

I think we are going to hold off on the vote.

 

Senator Mathews:

What is the procedure if there is a motion and a second on the floor?

 

Ms. Erdoes:

I believe you have to take a vote unless someone defers to the chairman and withdraws his motion or second.

 

Senator Mathews:

I did not give him deference though, whatever deference means.

 

Senator Rawson:

My motion was to delete the Colorado River Commission and the Southern Nevada Water Authority from consideration.

 

Senator Wiener:

Senator Rawson moved to delete the Colorado River Commission and the Southern Nevada Water Authority?

 

Senator Rawson:

I want to take that section out and leave the rest of the bill.

 

Chairman Washington:

Senator Rawson, I appreciate your motion; however, I feel those entities were part of the bill and with respect to the author of the bill I think he should at least have input. If the author wishes to take out the Colorado River Commission and the Southern Nevada Water Authority, then we will move forward, but it is his bill so I would like to have his input.

 

Senator Mathews:

The author of the bill is not on this committee is he?

 

Chairman Washington:

No, he is not, Senator.

 

Senator Mathews:

He is not on the committee. I have heard his testimony. Love him to death, but we are the body that has to vote on this measure. I appreciate you wanting him to have more input and to be here to hear the outcome, but when push comes to shove, it will be us who have to vote.

 

Chairman Washington:

I think we have more than one issue here. We have Marlette Lake and the Colorado River Commission. I have heard from the committee about its recommendations.

Senator Rawson:

A point of order Mr. Chairman, there is a motion and a second on the floor and I am pushing the Chairman on this issue. When everyone is here on another day, certainly a majority vote could undo anything that we do today. I feel this is an important enough issue to my constituents that I need to press forward with the vote. So, I am calling for a vote. I think those are the rules we operate under in the Senate.

 

Senator Cegavske:

I wonder, Senator Rawson, whether you would request the biennial report for the first week of each session. Was that something you were willing to add?

 

Senator Rawson:

I was willing to accept that.

 

THE MOTION CARRIED. (SENATOR WASHINGTON VOTED NO. SENATOR RAGGIO ABSTAINED FROM THE VOTE.)

 

*****

 

Chairman Washington:

We are finished for the day and it is 6:18 p.m., so we will adjourn.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

                                                           

Johnnie Lorraine Willis,

Committee Secretary

 

 

APPROVED BY:

 

 

 

                                                                                         

Senator Maurice E. Washington, Chairman

 

 

DATE: