MINUTES OF MEETING
ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS
Sixty-seventh Session
June 15, 1993
The Assembly Committee on Government Affairs was called to order by Chairman Val Z. Garner at 8:08 a.m. Tuesday, June 15, 1993, in Room 330 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mr. Val Z. Garner, Chairman
Mr. Rick C. Bennett, Vice Chairman
Mrs. Kathy M. Augustine
Mr. Douglas A. Bache
Mrs. Marcia de Braga
Mr. Pete Ernaut
Mrs. Vivian L. Freeman
Mr. Lynn Hettrick
Mrs. Erin Kenny
Mrs. Joan A. Lambert
Mr. James W. McGaughey
Mr. Roy Neighbors
Mrs. Gene W. Segerblom
Mr. Wendell P. Williams
COMMITTEE MEMBERS ABSENT:
None.
GUEST LEGISLATORS PRESENT:
Senator Mike McGinness, Central Nevada Senatorial District.
STAFF MEMBERS PRESENT:
Mrs. Dana Bennett, Senior Research Analyst.
OTHERS PRESENT:
Mr. Bob Gagnier, Executive Director of Nevada State Employees Association; Mr. Al Edmundsen, Retired Public Employees of Nevada; Mr. Will Keating, Executive Officer of Public Employees Retirement System (PERS); Mr. Greg Betts, Rural School Districts; Mr. Mike Johaneson, Service Employees International Union (SEIU); Mr. Jim Richardson, Nevada Faculty Alliance and University and Community College System; Ms. Lindsey Jydstrup, Nevada State Education Association; Mr. Fred Suwe, member of Committee on Benefits; Ms. Nancy Howard, Nevada League of Cities; Mr. Mark Dawson, Chancellor of University and Community College System of Nevada; Mr. David Thomas, State Risk Manager; Mr. Bob Hadfield, Nevada Association of Counties (NACO), and Nevada League of Cities (NLC).
Chairman Garner requested committee introduction for the following bill draft requests:
BILL DRAFT REQUEST 30-2073 - Authorizes issuance of state securities for savings or college savings investment.
BILL DRAFT REQUEST 42-1641 - Makes various changes relating to regulation of fireworks.
ASSEMBLYMAN BENNETT MOVED FOR COMMITTEE INTRODUCTION OF B.D.R. 30-2073 AND B.D.R. 42-1641.
ASSEMBLYMAN BACHE SECONDED THE MOTION.
THE MOTION CARRIED.
ASSEMBLY BILL 743 - Revises provisions governing selection of officers to fill certain positions in metropolitan police departments.
There being no testimony in favor of AB 743, Chairman Garner requested a motion to indefinitely postpone the bill.
ASSEMBLYMAN HETTRICK MOVED TO INDEFINITELY POSTPONE A.B. 743.
ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.
THE MOTION CARRIED. Assemblymen Ernaut, Williams and Freeman were not present for the vote.
ASSEMBLY BILL 159 - Requires state board of examiners to evaluate contracts it approves.
Mr. Bob Gagnier, Executive Director of Nevada State Employees Association, testifying in favor of AB 159, indicated it came out of the SCR 2 interim study. He said each time the Board of Examiners met, they would consider from 180 to 200 contracts and the review of the contracts was fairly perfunctory. Mr. Gagnier noted in the SCR 2 study it was thought there needed to be more effort put forth on the review procedure.
Mr. Hettrick asked if the State Board of Examiners would have time to do the review of contracts, and how many days or hours did they meet per month.
Mr. Gagnier replied the board met once a month and the length of a normal meeting was approximately 20 minutes to one hour.
Further discussion ensued between Mr. Hettrick and Mr. Gagnier.
There being no further testimony Chairman Garner requested a motion to do pass AB 159.
ASSEMBLYMAN DE BRAGA MOVED TO DO PASS A.B. 159.
ASSEMBLYMAN BENNETT SECONDED THE MOTION.
THE MOTION CARRIED. Assemblyman Williams was not present for the vote.
Chairman Garner requested Mrs. de Braga handle the bill on the floor.
SENATE BILL 278 - Allows certain additional retired public employees to participate in group insurance plan.
Mr. Al Edmundsen, past president of Retired Public Employees of Nevada (RPEN), testified in favor of SB 278 (Exhibit C).
Mr. Will Keating, Executive Officer of Public Employees Retirement System (PERS), indicated the Retirement Board had not had an opportunity to consider and take a position on SB 278; however, staff would be recommending a position in favor of the bill. He stated it would provide a vehicle for retirees of the system to be able to obtain insurance coverage.
Mrs. Segerblom asked if the teachers were under the same system.
Mr. Keating replied the teachers would have whatever insurance their public employer might have provided for them.
Mr. Greg Betts, Rural School Districts, testified in favor of SB 278, indicating he felt the bill would provide a reasonable option for people who might find themselves without insurance protection.
Mr. Mike Johaneson, Service Employees International Union (SEIU), spoke in favor of SB 278 for several reasons. He said it would enlarge the insurance pool which was a basic ingredient for any kind of cost containment program, and if there was to be health reform in the state, that would be a basic criteria to consider. Mr. Johaneson commented he was particularly concerned with the employees in several of the smaller agencies he represented, as their future in terms of insurance options upon retirement was very dismal. He noted upon retirement many of them would be looking at insurance costs close to equaling their retirement pay, and this would provide an option which they otherwise would not have.
Mr. Johaneson pointed out there had been concern expressed in the Senate relating to problems of bringing in more people to the program and possibly increasing the cost for those retirees already in the program. He said the bill had been amended to put those retirees initially at the same rate and track them separately, so he felt any concerns over cost increases to existing state retirees could be set aside. Mr. Johaneson indicated the bill would bear no cost to the state or the local entities as costs would be picked up by the participants and he felt it was a good bill in every way.
Senator Mike McGinness, Central Nevada Senatorial District, testifying as a proponent of SB 278, indicated the bill was originally brought forth because of Section 3 and he briefly reviewed the reasons the bill was introduced. Senator McGinness stated when testimony was given on the Senate side, the state's actuary was present and he had said there could be a chance the experience rate on the new people could be worse, but he also said it could be better, and the retired people were basically the same type of people who were currently in the program. Senator McGinness referenced page 2, line 39, indicating that section should allay fears the new people would drastically impact any costs to current participants.
Mr. Jim Richardson, Nevada Faculty Alliance, testified in favor of SB 278, indicating he felt it helped resolve a difficult problem the state had faced on a policy level of what to do with the smaller political entities which had trouble getting and keeping health insurance at a reasonable cost.
Ms. Lindsey Jydstrup, Nevada State Education Association, stated she wanted to put the association on record in support of SB 278. She felt it made good common sense with the rapidly escalating health insurance costs that as many options as possible be provided for retirees.
Mr. Bob Gagnier, Executive Director of State of Nevada Employees Association, testified in opposition to SB 278. He gave background regarding the health insurance plan in the state of Nevada. He said the health insurance plan currently in use dated back to the late '60s and it was started as a state employee health insurance plan. He continued, stating there were problems with some small local governments getting insurance so the state plan had been opened up to them. Over the years the concept had changed and more and more local governments of a larger size had opted to come into the state's plan. Mr. Gagnier pointed out a few years previous it had become obvious from actuarial reports that local governments in the state employee health insurance plan were costing the plan money, eventually impacting the plan in the amount of $2 million. Mr. Gagnier said this meant the state government and employees subsidized local governments by $2 million out of the state's reserves. Mr. Gagnier indicated it was SNEAs position to oppose the addition of any more local government people in what should be a state employee plan.
Mr. Gagnier responded to testimony which indicated some local government employees might not have a health plan upon retirement by referencing Section 1, line 8 which clearly stated every local government in the state of Nevada must allow its retirees to continue with their health insurance.
Mr. Gagnier said at SNEAs request Senate Finance had added the amendment on page 2, Section 2, line 38, "To somehow assure that the addition of these retirees, where we don't have their active employees, would not impact our plan financially." Mr. Gagnier did not seem to think it would last. He indicated it was possible a bill would come forth in the next legislative session to delete the provision to have those retirees pay a separate rate. Mr. Gagnier wondered why the local governments did not want their retired employees, and why the state government had to take them in on an adverse selection basis. He said the actuary had testified in the Senate there could be an adverse effect.
Mr. Gagnier referenced Section 3 and pointed out it would allow anyone who had ever retired from state government to come into the state health insurance plan regardless of how long they had been away from state government.
Discussion ensued between committee members and Mr. Gagnier.
Mr. Fred Suwe, member of Committee on Benefits, testified in opposition to SB 278 and gave a brief example of personal experience as a member on the committee as it related to previous legislation on the state health plan. He also reiterated and expanded on testimony given by Mr. Gagnier.
Mr. Neighbors asked Mr. Gagnier how many local governments were currently in the plan.
Mr. Gagnier thought there were approximately 1,400 employee local government members.
Mr. Neighbors asked which counties were involved.
Mr. Suwe replied he could obtain a list of all non-state entities involved, but recalled there were close to 2,000 insureds from local government groups.
Further discussion ensued between Mr. Neighbors, Mr. Gagnier and Mr. Suwe relating to rates paid by local government employees for insurance.
Mr. Gagnier wished to make clear, "You should understand that we already have these local governments that Mr. Neighbors is talking about in the state plan. Their retirees are not the question. The question is about retirees of other local governments where they just want their retirees to come into the state plan, but not their active employees. If it was their active employees and their retirees, that is currently covered by law, there wouldn't be any question. What they are talking about here is just putting in their retirees, letting the retirees come in."
Further discussion followed.
Ms. Nancy Howard, Nevada League of Cities (NLC), testified NLC currently had an employee benefit package for local governments, with 19 participating entities (city, county, school and special districts) with approximately 1,200 employees participating. She offered to answer any questions by the committee.
Mrs. Freeman asked how Ms. Howard would respond to Mr. Gagnier's suggestion that the other government entities would want only their retired employees to become part of the state system.
Ms. Howard explained how their plan worked, when a new entity would enroll in the plan, NLC would take the retirees also, and if the entity decided to leave at a later date, the retirees would go with whatever new plan the entity might contract with.
Further discussion ensued between committee members and Ms. Howard.
Mr. Al Edmundsen explained how the insurance would work for those people who had worked their entire life under state or county government and did not have Medicare.
Extensive discussion ensued.
There being no further testimony Chairman Garner closed the hearing on SB 278.
Chairman Garner called for a short break at 9:00 a.m. and reconvened at 9:12 a.m.
ASSEMBLY BILL 17 - Changes composition of committee on benefits for programs for public employees.
Mr. Mark Dawson, Chancellor of University and Community College System of Nevada, testified as a proponent of AB 17, indicating the University had proposed the bill with the hopes of obtaining broader representation on the committee for group benefits. Mr. Dawson pointed out health insurance had become a very important part of the compensation package for employees, and university employees felt they needed broader representation on the committee on benefits. Mr. Dawson commented Mr. Richardson would testify on the bill and introduce a proposed amendment, which the University system supported.
Mr. Jim Richardson, Nevada Faculty Alliance and University and Community College System, testifying in support of AB 17, introduced a proposed amendment to the bill (Exhibit D). He felt the bill was not specific enough and was unclear as to the intent regarding changing membership of the committee and the proposed amendment should clarify that. Mr. Richardson reviewed the amendment and what it would do. He stated Section E of the amendment indicated a position would go to a participant from a non-state agency. He also suggested there be a member by law from the University and College System of Nevada. Mr. Richardson pointed out approximately 5,000 of the 22,000 participants in the plan were university employees and did not by law have a participant on the committee. He said there was a participant by custom, but not by law.
Mr. Richardson commented he had chaired the committee for six years from 1984 through 1990, having been appointed by Governor Bryan and then by Governor Miller. He indicated he would like to see continuation of participation by a retiree, as well as keeping a member of the administration on the committee.
Mr. Richardson continued, stating the controversy arose over what to do about classified employees and this bill suggested one member would serve from the classified service.
Mr. Richardson gave extensive testimony on his experiences with the committee and the SNEA, non-state and administration (budget director) involvement with the committee. He read a letter from Mr. Douglas Byington and wished to make it part of the record (Exhibit E).
Mrs. Freeman asked what difference it would make in the long term to change the membership, and she also wanted to know if Mr. Richardson was comfortable with having the director of the department of administration stay on board.
Mr. Richardson answered the long term functioning of the committee was very important to all state employees and others who participated in the system. He pointed out there were 22,000 people participating in the system at present, and while he was not sure of SNEAs figures, he thought it was around 4,000 - 4,500, and felt to have 40 percent of the vote on the committee designated to one particular group (SNEA) seemed to be a policy question of some import which should be looked at. In answer to Mrs. Freeman's second question, he replied he had chaired the committee for six years and felt very comfortable having the budget director there. In fact he felt it was a plus as that person was forced to sit through the hearings and was educated about the costs of things and therefore, had better information when it came to making decisions to allocate funds.
Further discussion ensued between committee members and Mr. Richardson.
Mr. Greg Betts, representing Rural School Districts and Mr. Hank Etchemendy of the School Board Association, testified in support of AB 17 with the suggested amendments. He felt if AB 17 as amended was passed there would be more assurance representation on the committee would be more broadly based.
Mr. Mike Johaneson, Service Employees International Union, testified in favor of AB 17 with the proposed amendments. He said in May the legislators had been given a lengthy paper on the state benefits program in which it was recommended the benefits committee be reorganized to guarantee a more meaningful input from those participating in the plan. He commented it had been requested that the constituents elect their representatives but he would support AB 17 as it did go a long way toward providing better representation for the members.
Mr. David Thomas, State Risk Manager, voiced support of AB 17 as amended on behalf of the administration, indicating it was consistent with the governor's reorganization proposals.
Chairman Garner said there was a question in the governor's reorganization proposal that the committee would be advisory, and it was his understanding that would not be the case.
Mr. Thomas agreed.
Mr. Al Edmundsen, Retired Public Employees of Nevada (RPEN), testified RPEN had over 6,300 members and represented about 13,000 retirees. He testified in favor of AB 17 with the amendment.
Mr. Bob Hadfield, Nevada Association of Counties (NACO), and Nevada League of Cities (NLC), confined his comments to the amendment to AB 17 regarding the appointment of one member representing non-agencies participating in the program. He said as long as they were being allowed to participate in the program he felt it was important the group have representation on the committee.
Mr. Bob Gagnier, Executive Director of State of Nevada Employees Association (SNEA), testified in opposition to AB 17. He said one of the reasons SNEA was opposed to SB 278 and bills like it was the more local people allowed into the state insurance plan, the more it would become less of a state insurance plan. He stressed the problems of NACO and NLC should be solved and all the local governments should be removed from the state plan and put in the NLC plan.
Mr. Gagnier stated the purpose of AB 17 was to, "Get rid of our [SNEA] appointees on this committee." He said the bill was requested the week after members of the committee had voted 4-1 against having the budget director as chairman of the committee. Mr. Gagnier wondered why the budget director should be chair of the committee, she had not attended a meeting since the first of the year, and prior to that, had attended only sporadically. He felt if other duties were such as to prevent attendance, perhaps the budget director should be removed in the bill from the list of those on the committee. Mr. Gagnier pointed out if AB 17 was passed with the amendment the committee would no longer be a joint labor/management trust, but would become strictly a management trust, as the positions would all be gubernatorial appointees. Mr. Gagnier commented the university had had a member on the committee for at least 22 years.
Chairman Garner asked how many people were represented by SNEA in the plan.
Mr. Gagnier replied there were approximately 4,650 members who would be affected by the plan, which included their retired members. He said the largest group of employees would be diminished by the bill.
Mrs. Augustine commented she agreed with Mr. Gagnier that the director of the Department of Administration should not be a member of the board. She asked if that person was eliminated, who would Mr. Gagnier suggest to replace that position to maintain the five member board.
Mr. Gagnier answered SNEA would support removing the director and have all five members elected by the members in the plan (rather than appointed by the governor). He further felt the fifth position should come from a member of the general public. When Mrs. Augustine asked why a member from the general public, Mr. Gagnier replied typically boards and commissions would have a member of the public to observe and participate to represent the public's interest.
Mr. McGaughey asked if members of SNEA worked for the university system. Mr. Gagnier replied they did. Mr. McGaughey then questioned if there was a university representative on the committee and two members represented by SNEA, did that not mean there were actually three members on the committee which represented the university system.
Mr. Gagnier answered that was very possible. Mr. McGaughey then pointed out the work performed by SNEA benefitted all employees of the state, regardless of whether they were members of SNEA or not.
Mr. Gagnier agreed. He stated the wording of the amendment indicated the only group which could have two representatives on the committee would be the university, as they would be guaranteed a member under subsection D, and subsection C allowed for a person to be on the committee who had retired pursuant to NRS 286.510, NRS 286.620, or a contract issued pursuant to NRS 286.801 which would apply only to the faculty of the university system.
Mr. Fred Suwe, member Committee on Benefits, testified he was one of the two appointed positions from SNEA. He stated as a member of the committee, when he had to make decisions in administration of the plan, he would never consider how his decision would help SNEA members as opposed to non-SNEA members or non-state employees. He said, "The issue of whether or not SNEA should be appointing the positions, we have been around for a long time, we have a lot of experience in this. And the other groups, particularly local government, I've got to tell you, it's already to me, a generous part on the part of this legislature to let them in the plan. I am a state employee, you are my employer, and this is a state employee health plan. It is not a public employee health plan. If it was, then I guess I want some of the benefits that some of the other public employee groups get. As a total package of pay and benefits, I would like to have Clark County's longevity pay, but I can't get that, that's not on the board here... What's on the table here is my health plan. And not only are they on the plan but they want to have a say, a disproportionate say in how that plan is administered. And I am opposed to that. As a member of the committee, I am also here to tell you that the committee, I'm authorized to speak on their behalf, is generally opposed to any change in the composition of the Committee on Benefits."
There being no further testimony, Chairman Garner closed the hearing on AB 17, indicating he would appoint a subcommittee to work with the concerned parties.
Chairman Garner reminded the committee there were a number of bills on the board and reviewed the assignments.
There being no further business to come before committee, the meeting was adjourned at 10:12 a.m.
RESPECTFULLY SUBMITTED:
LINDA FEATHERINGILL
Committee Secretary
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Assembly Committee on Government Affairs
June 15, 1993
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