MINUTES OF MEETING
ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS
Sixty-seventh Session
June 27, 1993
The Assembly Committee on Government Affairs was called to order by Chairman Val Z. Garner at 10:35 a.m., Sunday, June 27, 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
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:
Mrs. Vivian L. Freeman (excused)
GUEST LEGISLATORS PRESENT:
Assemblyman Bernie Anderson, District 31
STAFF MEMBERS PRESENT:
Dana Bennett, Research Analyst
OTHERS PRESENT:
Rita Hambleton, American Association of Retired Persons
Al Edmundson, RPEN
Lindsey Jydstrup, Nevada State Education Association
Jim Wadhams, Attorney
Bob Gagnier, State of Nevada Employees Association
ASSEMBLY BILL 723 - Revises provisions regarding group insurance for public employees.
Assemblyman Bernie Anderson, Assembly District 31, explained the bill had been "dramatically amended" in Ways and Means with the fiscal note being removed. Mr. Anderson referred to prepared testimony (Exhibit C) and pointed out the bill paralleled a provision recently passed for retired employees. According to Mr. Anderson, the active non-state employees enrolled in the state health insurance system could be tracked for a period of one year. At the end of the year, if the claim history was within five percent of an active state employee, the two groups would be merged into a single-rated pool. If there was more than a five percent differentiation, the separate pools would continue.
Mr. Anderson concluded the passage of AB 723 would give active non-state employees participating in the state health insurance system a chance at reduced health insurance rates if there was no negative impact on state employee rates.
Rita Hambleton, American Association of Retired Persons, presented testimony for the record stating the AARP supported the bill, and urged the committee to pass AB 723.
Al Edmundson, RPEN, stated for the record his association's support of the bill.
Lyndsey Jydstrup, Nevada State Education Association, spoke in support of the bill. Mrs. Jydstrup pointed out many members from Mineral County had complained of high health insurance rates when the state proceeded with the separate pooling. In her opinion, the one-year tracking program would provide information to determine if the single pooling would be economically feasible before it occurred.
Jim Wadhams, Insurance Attorney, presented testimony in support of the bill, and explained the one-year period would allow the committee to review the actuarial statistics and evaluate how the plan was designed. Mr. Wadhams concluded if there were differentials, they could be overcome with the evaluation time.
Bob Gagnier, State of Nevada Employees Association, spoke in opposition to the bill, specifically Section 3, page 2. Mr. Gagnier referred to the one-year tracking period and the five percent differential, and once the non-state employee was rated, he would be rated the same as state employees forever more. According to Mr. Gagnier, there was a considerable difference with SB 278 since nothing permanent would be arranged. Mr. Gagnier maintained the local 1,860 governments, which were part of the state plan, would be paying the same rate after the evaluation period. All new local governments joining the state plan would have to be accepted at the same rate, no matter how high their experience rate was. Mr. Gagnier suggested the evaluations be conducted each year in order to prevent them from becoming permanent after only one evaluation.
Mrs. Lambert alluded to Section 2, specifically, the comparison of rates. In Section 1, the language indicated the rates and coverage must be the same, and Mrs. Lambert asked for clarification. Mr. Gagnier responded, as he understood it, Section 3 maintained if during the 12-month period the group rating was no greater than five percent, then Section 1 would trigger in.
Mrs. Segerblom questioned if the rate would go down due to an increase of individuals enrolled in the program. Mr. Gagnier replied a threshold was reached at approximately 10,000 individuals and, beyond the amount, the rate would not necessarily decrease. According to Mr. Gagnier, currently there were approximately 17,000 individuals enrolled in the plan.
Mr. Ernaut asked Mr. Wadhams if, actuarially speaking, as a rate payer, or client of the insurance company, how comfortable he would feel with allowing a group with experience rating enrolling at the same rate. Mr. Wadhams responded it was precisely the reason the bill was structured in its current form. The original language had a flat, single rate with no variation. Given the concerns expressed, the transition language was added in order to determine over the 12-month period if a group could be merged as one. Mr. Wadhams indicated Mr. Gagnier was correct with the statistics regarding the 10,000 rate-break; however, the broadening of the base would continue to generate the scale in terms of the cost of the administration. Mr. Wadhams explained, from an insurer's standpoint, he would consider expanding the base, and from a ratepayer's standpoint, a determination would have to be made as the statistics developed.
Mr. Ernaut questioned if the 12-month period was adequate time to review the program before making it permanent. Mr. Wadhams replied for the existing non-state public employees, it was questionable whether they would come within five percent in the experience. Mr. Wadhams emphasized the individuals joining the group would be coded separately, and the statistical analysis for the 12-month trial evaluation would be continued in perpetuity.
Mr. Bennett asked if local government agencies consisting of 50 to 100 employees which joined the current pool for non-state agencies would receive the same benefits. Mr. Wadhams replied being on their own with a small number of employees placed them in a volatile situation with a private or self-insured program. By pooling similar situated individuals together, less harm would come to the larger pool, but the small group would greatly benefit.
Mr. Gagnier noted the one missing factor was regarding the trigger portion of Section 1. In his opinion, any problems which developed from the trigger would force new legislation in 1995.
Mr. Anderson alluded to the "pooling" in AB 723. According to Mr. Anderson, one of the advantages of the bill was it might actuarially clear up some statistical information for future legislation regarding the differences between the two pools. Mr. Anderson emphasized AB 723 would be a strong bill for the rural areas of the state in terms of population.
Chairman Garner closed the hearing on AB 723 and announced a vote would be held before the end of the meeting.
SENATE BILL 474 -Makes various changes relating to public works projects.
Pam Miller, Government Affairs Director for the Nevada Chapter of Associated General Contractors (AGC), spoke in support of the bill. Mrs. Miller explained the bill would make changes to NRS 338, regarding public works projects. In Section 2, a list of subcontractors would be required; subsection 1(a) would require five percent of the subcontractors to be listed with the bid, and within two hours of the opening of the bids, one percent of the prime contractors, or $50,000, whichever was greater, would be provided to the awarding authority.
Mrs. Miller pointed out the bill was the result of several lawsuits which had occurred over the past two years where a listing of subcontractors was implied in the law, but not necessarily adhered to. Other provisions of Section 2 provided for opportunities to remove the subcontractors for cause, or if the subcontractor was bankrupt or insolvent.
Mrs. Miller alluded to Section 3, page 2, line 40, and commented there was an addition of public convention facilities financed in part with public funds.
John Madole, Executive Director, Associated General Contractors, presented testimony in support of the bill. Mr. Madole referred to Section 4 of SB 474 and explained it would expand the bidding opportunities on public works jobs. Mr. Madole indicated certain situations aimed at helping the female and minority contractors were given to large contractors from out of state. The language in Section 4 was directed toward giving minorities the option of doing smaller jobs which could lead to larger jobs.
Mr. Madole alluded to Section 5 and maintained there had been problems on public works jobs relating to subcontractors not being properly licensed. The language in the section addressed such issues.
Mrs. Miller referred to Section 6 which clearly stated the five-year period was actually a consecutive 12-month period for 60 months. The language was the result of court cases questioning whether a year was defined as a calendar year or time immediately preceding the bid. Line 47 of Section 6 allowed any combination of such sales and use taxes and motor vehicle privilege taxes to be combined in order for smaller contractors to qualify for the bidders preference.
Mrs. Miller alluded to subsection 3 of Section 6 and clarified the awarding authorities had indicated they were inundated with up to 2,000 pages per bid of documentation for people providing the proof of payment to qualify under the chapter. The new language would require quarterly updating to the awarding authority if they had previously submitted proof of qualification.
Mrs. Miller remarked the final change occurred in Section 7 relating to the business license fee. The proposed language would define who should qualify regarding construction materials and motor vehicle privilege taxes.
Mr. Hettrick commented there were many concerns regarding the bidders preference portion; specifically, qualification. Most individuals indicated the proposed section was a step in the right direction.
Mrs. Lambert asked for an explanation on page 2, Section 3, regarding the addition of public convention facilities. Mr. Madole replied certain parties reviewing the bidding process were concerned convention type facilities might not be included; therefore, the language had been proposed to clarify the issue.
ASSEMBLYMAN BENNETT MOVED TO DO PASS SB 474.
ASSEMBLYMAN AUGUSTINE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
Chairman Garner reopened the hearing on AB 723.
Mr. Ernaut commented, in his opinion, the bill was ultimately inevitable. At some point, Mr. Ernaut agreed, the rate should be set equally; however, he felt the trial period should be three years rather than only one. Chairman Garner was concerned any new proposed amendments to the bill would be difficult to obtain at the late date of the session and with the backlog in bill drafting. Mr. Ernaut emphasized a group of 17,000 individuals could be potentially harmed by the passage of the bill as written.
Chairman Garner requested a show of hands of how many committee members would support an amendment to the bill. There were five members in support of such an amendment.
Mr. Bennett expressed concern with the 12-month period regarding the potential of subsidizing a large group with a poor experience rating. Mr. Bennett suggested each group serve a 12-month evaluation period before being able to participate in the large pool. Chairman Garner was under the impression the next legislature would have the option of taking appropriate action for such occurrences relating to groups with poor experience rating.
Mr. Ernaut suggested processing the bill as is, and he would pursue the amendment on his own in the hopes it would be completed before the end of session to be voted on the floor. Chairman Garner and Mr. Bennett were in agreement with the suggestion.
ASSEMBLYMAN BACHE MOVED TO DO PASS AB 723.
ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.
THE MOTION PASSED WITH ASSEMBLYMEN LAMBERT AND ERNAUT VOTING NO.
Chairman Garner referred to the list of bills in committee to be Indefinitely Postponed (Exhibit D). Chairman Garner pointed out AB 397 should be added to the list due to a conflict with AB 474.
ASSEMBLYMAN BENNETT MOVED TO INDEFINITELY POSTPONE THE LIST OF BILLS ON EXHIBIT D, INCLUDING AB 397.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
ASSEMBLY BILL 27 - Makes various changes to charter of City of Reno.
Chairman Garner announced a compromise had been worked out on the bill. The Fire Fighters Union members were in agreement; however, the bill would be voted on the Assembly floor as written, and the Senate would propose the amendment. The bill would come back for concurrence with the legislative intent being read into the record during the current meeting.
There being no further business, the meeting was adjourned at 11:25 a.m.
RESPECTFULLY SUBMITTED,
Marilyn Cole, Committee Secretary
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Assembly Committee on Government Affairs
June 21,, 1993
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Assembly Committee on Government Affairs
Date: June 27, 1993
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