The Committee on Elections, Procedures, and Ethics was called to order at 5:30 p.m., on Monday, May 3, 1999. Chairwoman Chris Giunchigliani presided in Room 3138 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Ms. Chris Giunchigliani, Chairwoman

Mr. Bob Beers

Mr. Joseph Dini, Jr.

Ms. Sheila Leslie

Ms. Kathy McClain

Ms. Kathy Von Tobel

COMMITTEE MEMBERS EXCUSED:

Mr. Bob Price, Vice Chairman

Mr. Richard Perkins

Ms. Sandra Tiffany

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Chairwoman Giunchigliani opened the meeting as a subcommittee. She opened the hearing on S.B. 471 and called on the representative of the Nevada Association of Counties (NACO), Robert Hadfield, executive director. The bill was requested on behalf of NACO.

Mr. Hadfield explained S.B. 471 was an amended version of a bill introduced on the Assembly side. The committee did not take action on A.B. 355, so the bill died in committee. He felt S.B. 471 was made a better bill by increasing the limitation cap for an unfunded mandate from $2,000 to $5,000. The threshold amount was changed as some felt the threshold too low. A note placed upon the bill would clarify whether a bill was an unfunded mandate. It would note whether the local government had requested the service or program. Mr. Hadfield felt the efforts of the public and counties to solve the problem of unfunded mandates had been an issue since the general election of 1993 when 82 percent of the voters were against unfunded mandates. He stated the fiscal notes would be done by NACO for several of the counties, and the government would verify whether the mandate was necessary.

Chairwoman Giunchigliani requested from Mr. Hadfield a mockup of a bill front showing the language for requirements, for example: two-thirds, exempt, and all other language. He agreed to do so. She wanted to know how the bill would change current procedure in place. Mr. Hadfield stated the changes would not only show fiscal impact upon counties, it would show on the bill itself whether it was an unfunded mandate, causing the government to take note of need for new or expanded services. Chairwoman Giunchigliani asked if there was a definition anywhere for what was classified as "provide service." Mr. Hadfield stated the phrase had not been defined.

Chairwoman Giunchigliani recognized Mary Henderson, member, Technical Advisory Committee on S.B. 253, who stated the advisory committee was in support of S.B. 471. She stated the committee had heard extensive testimony from NACO and understood the issue of the fiscal notes pertaining to the unfunded mandates. It had never been the intent of the committee to state the legislature did not have an understanding of unfunded mandates. The committee felt the legislature needed to clarify unfunded mandates so fiscal notes were not misunderstood and the true impact to each county was understood. Ms. Henderson felt passage of the bill would help local government and legislators make laws.

Chairwoman Giunchigliani stated a concern of the committee was the building of a false fiscal note. Ms. Henderson stated the burden of proof should be on local governments. She stated the concern of the committee was a label would be placed on a bill as an unfunded mandate when in reality the local government had requested the bill. She was also concerned about false fiscal notes or misleading information listed on bills.

Chairwoman Giunchigliani recognized Colleen Wilson-Pappa, management analyst, representing Clark County, legislative affairs, who spoke in favor of S.B. 471. She said she had nothing to add to the testimony of Mr. Hadfield and Ms. Henderson.

Chairwoman Giunchigliani asked if there were any further questions or comments. Hearing none, the hearing closed on S.B. 471 with no action taken by the committee. She opened the hearing on S.B. 478 and called on the representative for the bill, Scott Scherer, general counsel, Office of the Governor. A quorum was present.

Mr. Scherer explained the governor was in support of S.B. 478 and distributed a handout explaining section by section proposals of the bill (Exhibit C). According to current law, everyone was required to sign a code of ethics when they registered to run for office. He read each section where the changes would be, if passed. The proposed ethics reform bill included:

• All public officers would be required to sign code of ethics;
• Public officers would file with the initial financial disclosure form;
• The commission would conduct training for public officials and employees, upon the request of any government entity;
• Expanded the commission to eight members;
• Authorized the Ethics Commission to hire an executive director to direct investigations, hearings, and set up a commission counsel to advise commission at hearings, write opinions, and handle cases on judicial review;
• Just and sufficient cause must be determined within 30 days of filing the request for opinion;
• If just and sufficient cause was found, the hearing must be completed and the opinion issued within 30 days;
• Increased the maximum fine to $25,000 for repeated violations. Maximum fines for repeated violations would start at $5,000 for the first offense, increased to $10,000 for the second offense, and $25,000 for the third or subsequent offense;
• The commission would be authorized to refer findings of willful violations to the appropriate authority (attorney general or district attorney) to determine if the violation constituted a criminal offense warranting prosecution;
• When there was a third willful violation found by the same public official, the commission would be required to commence any appropriate proceeding for removal of the public official or refer the matter to the appropriate authority if the commission was not empowered to bring the proceeding directly, Nevada Constitution, Article 7, section 4.
• Violations of the code of ethics were grounds for disciplinary action against public employees, Nevada Revised Statute 281.551.7; and
• Increased criminal penalties in statute for felonies.

Mr. Scherer felt page 10, lines 1 through 12, could be deleted. He stated the governor did not care which language was in the bill, as long as the bill worked. S.B. 478 would enable the civil penalties to be waived; whereas, according to current law, there was no waiver of penalty. Mr. Scherer hoped the committee would take into account the issue of confidentiality and the First Amendment. He read from the Nevada Revised Statutes 281.481, section (Exhibit C). The section stated a public employee or officer could not use his or her position to secure or grant unwarranted privileges, preferences, exemptions, or advantages for himself, any member of his or her household, any business entity in which he or she has a significant pecuniary interest, or another person.

Chairwoman Giunchigliani recognized Thomas "Spike" Wilson, former Senator from Washoe County, District 1, and former chairman of the Ethics Commission from 1989 through 1996, who spoke in support of S.B. 478 with a proposed amendment (Exhibit D). The letter had been sent to Chairwoman Giunchigliani and all of the committee members before the hearing on S.B. 478. His main concern was the Senate, particularly section 15, paragraph 7, had taken the language of "personal" out of the proposed amendments. He felt the intent of the amendment appeared to define the meaning of a commitment in a private capacity to the interest of others by specific language referring to a substantial and continued business or personal relationship.

Mr. Wilson further stated the Senate Committee on Government Affairs recommended and the Senate adopted an amendment eliminating any substantial and continuing personal relationship, leaving only a business relationship. The practical effect of the amendment was to limit the meaning of commitment in a private capacity to the interest of others only to another household member, who was related by blood, adoption, or marriage; who employed the legislator or a member of his or her household; or who had a substantial and continuing business relationship with the legislator. Mr. Wilson stated a personal relationship of whatever kind, degree, or duration would require no disclosure or abstention, no matter that the independence of judgment of a reasonable person in those circumstances of the legislator would be materially affected. He felt everyone had friends. His suggestion was to return the language in section 15, paragraph 7, to its original form including personal, as introduced by the governor.

Mr. Wilson further touched on the subjects of administration, staffing, budget, qualifications of commissioners, and campaign practices. He did not know whether the Ethics Commission was the best body to perform the service required. The Ethics Commission had been the only group available. He emphasized S.B. 478 was not talking about unfair campaigning or negative campaigning. He was talking about campaigning by false statement, an untrue statement, or in his opinion, a lie. He felt if the amendments to the bill were passed, it could prove fatal.

Chairwoman Giunchigliani stated she had a concern with page 9, lines 4 through 8. She wanted to know what was classified as sufficient information as the words had been deleted from the bill stating the full nature and extent of sufficient information. When the language was deleted, clarification needed to be done pertaining to sufficient information. She felt judgment needed to be used in those cases. She commented upon lines 25 and 26, stating a public officer had a duty to vote unless he or she made a disclosure required pursuant to subsection 3. Subsection 3 listed the areas when a public officer or employee could not vote: receiving a gift or loan; which would reasonably be affected by the commitment in a private capacity to the interest of others; and in which he or she had a pecuniary interest. Mr. Wilson stated there might be a conflict with those lines.

Discussion began among the committee members about the interpretation of S.B. 478. Assemblywoman Von Tobel stated she had not disclosed the worth of the shares when she completed her financial disclosure statement. She explained the disclosure form each legislator completed did not ask for the number of shares or the worth of those same shares. She stated she had been advised by legal counsel to abstain on certain bills pertaining to gaming due to her stock. Mr. Wilson stated one could not concern themselves with the number of shares held but the material worth of those shares that might affect judgment. He explained the test consisted of whether the stock would be materially, substantial, or of no value to the person in order to make the right decision. Chairwoman Giunchigliani stated there should be a legal interpretation of conflicts in the bill, particularly the revenue stream.

Assemblywoman Leslie gave as an example: when freshman legislators went to orientation they were informed how to complete the financial statement and all the disclosures, and then when the legislators asked leadership, they received the answer the legislator did not need to complete the form the same way. She noted the confusion about how to complete forms and what was disclosed. She referred to page 10, section 15, paragraph 8, which left out personal language. She felt the bill needed to be returned to current law rather than the language with the word personal in it. She commented where was the line drawn on friendship. Mr. Wilson used as an example a campaign manager, and the requirement of judgment in dealing with the candidate’s campaign issues. He felt two people became very close and one had to be able to know the person well enough to make certain judgment calls on their behalf. Assemblywoman Leslie stated the language added to the bill would help the Ethics Commission define the criteria difference between a personal friendship and the friendship in a business relationship.

Assemblyman Beers stated there were unwarranted and warranted privileges. Mr. Wilson stated it was hard to define what was warranted and what was unwarranted. His criteria was based on merit rather than just because someone or a business had asked for the privilege. Chairwoman Giunchigliani suggested the deletion of unwarranted and the addition of granted privileges or the addition of a definition.

Chairwoman Giunchigliani recognized Mary Boetsch, chairman of the Ethics Commission, who spoke in support of S.B. 478. She suggested changes to portions of the bill for clarification of language. She explained her concerns on page 9, section 7, where the language was too broad and could be deleted. If the language was added, the introduction of legislation would be interrupted and violated other provisions of the law. She could understand the concern legislators had about being caught between their personal lives, professional lives, and political lives.

Ms. Boetsch explained she also had concerns on page 11, subsection 2, lines 17 through 20, of S.B. 478, and she felt language of the section would invite more inmate lawsuits. There were two types of judicial hearings available to each incarcerated person. Until those two hearings were done, the Ethics Commission was not apt to accept a request from an inmate. Those two procedures included the civil litigation in federal court and the litigation within the prison system itself. Those two criteria had to be met before the Ethics Commission would accept a request from an inmate. The civil litigation hearing lasted 15 to 20 minutes and in some cases had merit.

Ms. Boetsch stated there had been many complaints from the guards and the inmates as the Ethics Commission had become a choice for the inmates. She noted the hearings were done in a concise manner. She had heard the warden in the correctional facility in Lovelock wanted the language placed in a bill so the facilities could no longer accommodate those types of hearings. If the purpose was to cut down on the inmate litigation, then the language on page 11, subsection 2, lines 17 through 20, would not accomplish that purpose. She questioned whether the section was constitutional. Her concern was a blanket prohibition was not in position to be used even if the inmate had a legitimate complaint. She felt the provision was too broad.

Ms. Boetsch explained the type of requests the Ethics Commission accepted from incarcerated persons. The main types were extortion between the guards and the inmates. The guards would extort money from the inmates for certain favors given to that particular inmate. Favors given to the inmates from the guards included financial arrangements and special privileges.

Assemblyman Beers asked if the request would be eliminated if incarcerated people were registered voters. Ms. Boetsch stated inmates still had the option to utilize the legal process of the state, and why would any person need to be a registered voter to have rights. A person who committed a felony did lose some rights as a citizen yet not all, particularly the use of legal system within the state.

Ms. Boetsch asked the committee to follow the bill on page 15, section 18, talking about the sanctions and fines imposed on a requestor for a false statement issued during a campaign. She stated there was a new category for a violation. That category was a false statement, and she noted newspapers printed whatever they wanted with no liability. The person would not be able to prove the article was false. A newspaper article could not be sworn in as a factual piece of information. She gave an example of a duck. She said it could walk like a duck, talk like a duck, act like a duck, and a person would not be able to prove in the false sense it was not a duck. She felt the section made it impossible for a person to prove a false statement. The section stated it was deemed without merit. The language needed to be crafted to help the Ethics Commission determine whether it was willful, without merit, or false, in order to take action on the requestor or the party in question.

Ms. Boetsch stated on page 11, section 16, the entire section needed to be deleted, as mentioned earlier in the testimony. She agreed with the areas of concern former Senator Wilson stated in earlier testimony. When the Senate hearings were taking place, it was noted in the bill that the Ethics Commission had no contempt powers. Under certain conditions it was very important for the Ethics Commission to have the ability to keep the session in control. She recommended the language be added for that ability.

Chairwoman Giunchigliani asked Mr. Scherer for clarification about some of the sections about which Ms. Boetsch and former Senator Wilson voiced concerns. He referred to page 10, subsection (e), which stated the removal of "personal" in the earlier portion of the bill would be included vaguely in the subsection. Mr. Scherer explained the use of "personal" would be narrower in language than in previous language usage. He also stated as far as inmates were concerned, the inmate must have a sufficient cause to file a request in the first place. One of the main problems with the requests had been the inmates were located in rural, remote areas. He felt those types of requests would waste time and revenue, and there was still a grievance process internally available in the prison system and through the courts. Mr. Scherer felt the bill was both fair and constitutional.

Chairwoman Giunchigliani asked Mr. Scherer if the contempt measure had been considered when drafting the bill. He replied he felt the same as the Senate; not many times did the contempt issue arise, and if it did, the police were called or there was a recess called. He felt there was a concern for the Ethics Commission to be very careful since the contempt issue could be abused. Chairwoman Giunchigliani noted a fiscal note was listed on the bill, and she did not see one in the fiscal book. Mr. Scherer stated he would give the secretary a copy of the fiscal note. She opened the discussion up for questions before she went to her own list of questions about the bill.

Assemblywoman McClain asked Ms. Boetsch if the section about the inmates was left out, could the process just continue with the screening panel. Chairwoman Giunchigliani asked if the inmates had to exhaust all of the avenues available to them before a request was filed with the Ethics Commission. Ms. Boetsch stated the requests had been filed before all of the other avenues had been exhausted, and that was the main reason the requests had been declined. Assemblywoman McClain wanted to make sure the ability of the inmates to make a complaint was not stifled. If the bill passed, every incarcerated person would have the ability to file a request.

Assemblywoman Leslie stated with more training and guidance, the system would work better. If no one filed a complaint, then whose advice would you follow. Mr. Scherer stated the Legislative Counsel Bureau. Assemblywoman Leslie suggested those procedures be placed in writing, so there was no problem with interpretation. She suggested looking at the First Amendment, as she felt the areas of compliance needed evaluation where a person could tell another person an Ethics Commission complaint had been filed against them. Mr. Scherer stated those people would fall into a bad faith complaint area. The potential fine would be determined then. The penalty would be $5,000 and the attorney’s fees, not the class E felony or criminal charges.

Assemblywoman McClain stated that on page 6, line 17, the section about the public employees would be an administrative nightmare. She did not think it was a bad idea about having the public employee’s disclosure statement. Scott Wasserman, chief committee counsel, stated the problem would be easier to handle with newly hired people rather than the rest of the state. She stated she worked in another state job when not in session, and she recommended a guideline book be issued once a year or when the person was hired. Chairwoman Giunchigliani suggested some type of handbook. She used as an example that teachers received a district handbook once a year to review policies and regulations in Clark County.

Assemblywoman Leslie stated in section 15, volunteers were listed. Mr. Wasserman explained the language stated executive boards, the legislature, governor, and people who would have a conflict of interest must file a disclosure statement. Those categories would also include public officers such as the city commission, and several of the advisory boards would be exempt from filing the disclosure statement. Chairwoman Giunchigliani asked Mr. Wasserman and Mr. Scherer for clarification of the language of the bill in the section to be discussed during a work session.

Assemblyman Beers asked about the section pertaining to false claims. He said to his recollection, there had only been one penalty handed down. Ms. Boetsch stated there had been at least one. It was a case where the person admitted the statement had been false. She thought there was one more. She felt there still would be a conservative commission. She elaborated it would not require the information to be false. It would only expand the category that could categorically be sanctioned, such as newspaper articles. Assemblyman Beers stated if he understood what was being said, the complaints that were without merit would be sanctioned. Discussion pursued about false complaints. Ms. Boetsch did not know how it would affect the First Amendment.

Assemblyman Beers called attention to page 4, lines 41 through 43. He wanted to know the reasons behind the section. Mr. Scherer stated the section pertained to Washoe County, Douglas County, and Clark County. Assemblyman Beers felt if the number of members on the committee were supposed to reach the rural counties, then the numbers had fallen short as there should be more in Clark County and fewer in Washoe County.

Assemblyman Beers stated on page 20, lines 3, 4, and 5, a request must be made 10 days after an election with the alleged violation. Assemblyman Beers felt the language needed to be 10 days after the infraction. He felt the bill was trying to protect frivolous complaints and not too much was being done to discourage the complaints. Ms. Boetsch felt most of the people would not worry about the section or the timeframe. She gave as an example a case where the commission was just now hearing a complaint that was filed long after the election. Assemblyman Beers explained the complainant sometimes felt that he or she had a chance to win the election. Ms. Boetsch explained the timeframes and the sanctions involved. There had been a total of 18 filed, with 15 unfounded, 1 founded, and 1 scheduled to be heard. She felt the process needed to be kept open for legitimate complaints. No language specifying frivolous complaints was listed at present in the bill.

Chairwoman Giunchigliani explained there were areas of concern to be clarified in S.B. 478 during a work session. Those subjects needing clarification included the need to talk about bad faith, willful violation, priorities of the council, the use of contempt order, who would be appointed as an executive director and commission counsel, the experience needed to serve as counsel for the commission, the need for the counsel to be full-time with no other employment, the use of the new terms, and the prohibition on lobbying. The commission gave more discretion and use of abstention. The other topics of clarification included the deletion of unwarranted in the language.

Chairwoman Giunchigliani recognized Jonathan Andrews, chief deputy attorney general, Office of the Attorney General, who spoke in support of S.B. 478. He stated the Office of the Attorney General was supportive of working with the Ethics Commission and would give more support to the office. Assemblywoman Von Tobel stated the Board of Regents should be the same as the Ethics Commission. She stated if the Ethics Commission was part of the Office of the Attorney General, then why could the Board of Regents not also be a part of the office.

Chairwoman Giunchigliani recognized Kent Lauer, executive director, Nevada Press Association, Incorporated, who spoke in opposition to portions of S.B. 478. He called attention to page 13, section 7, lines 9 through 13. He felt those lines should be deleted from the bill because the language might deny a person’s First Amendment rights. He noted the bill stated "may" disclose, and he pointed out the provision did not state "shall" disclose. The provision gave the illusion it was illegal to file a complaint. In 1997, the penalty provision was taken out of the law, as it was found unconstitutional. Once a decision was made, the decision became public record. He felt the intent of the bill needed to be known, and he explained people thought the entire complaint was confidential which was not the case. He also stated there appeared to be no penalty for filing a complaint. Assemblywoman McClain wanted clarification about what it was Mr. Lauer wanted from the bill. She questioned what he wanted to be part of public record, the decision of the complaint known afterwards or the complaint known at the time of filing. Chairwoman Giunchigliani questioned confidentiality and constitutionality. She felt that Mr. Lauer’s concern was that he preferred the complaint be public knowledge from the time of filing. Chairwoman Giunchigliani felt it was appropriate to keep the complaint confidential until the panel made a determination. At that time, it all became public knowledge.

Assemblywoman Leslie stated she was confused about the penalties, and if she had not been before, she was now. Mr. Wasserman was asked to research all the penalties, the applications, and the history behind the penalties.

Lucille Lusk, member, Nevada Concerned Citizens, spoke in opposition to much of S.B. 478. She felt the bill was a misuse of the Ethics Commission. She wondered if the issue of the bill would lead to clarity or confusion, and she went through several sections of the bill that had already been discussed in previous testimony. She asked for clarification as to what two extra lawyers would bring to the commission. She questioned the issuance of the subpoena by the executive director or a member of the committee. Ms. Lusk called attention to page 11, as she felt it was the largest heartburn of the bill. The executive director had already judged the case, and it was only a cursory decision. In her opinion, too much power was given to the executive director or the commission and she wanted clarification as to what constituted a third party: husband, friend, or child. One of the most chilling effects of the bill was the truth police penalty, as she called it. Ms. Lusk wanted to know how insolence was defined in politics, and she felt if the contempt provision was added to the bill she would oppose it more strenuously.

Chairwoman Giunchigliani recognized Janine Hansen, president, Nevada New Eagle Forum, who spoke in opposition to S.B. 478. She agreed with the testimony given by Ms. Lusk and Mr. Lauer. Ms. Hansen stated providing a fix would not help the problem of the Ethics Commission. The entire Ethics Commission needed to be reexamined for effectiveness. She distributed a handout (Exhibit E) giving examples of fines and penalties and explaining that campaign finance reform never works. She read from the Nevada Constitution, and stated the Ethics Commission violated the Nevada Constitution as the constitution currently read. She felt the bill would not allow due process needed for a person and violated the First Amendment. She gave as an example a penalty of $2,775 given to a candidate for not turning in the financial disclosure report required, even though the person had used his own money for the campaign and no contributions from others. The person fined did not win the election. Chairwoman Giunchigliani explained to Ms. Hansen the fine for a candidate stopped accumulating from the date reported or the form received, so the fines could vary from person to person.

Chairwoman Giunchigliani asked if there were any further questions or comments. Hearing none, the hearing closed on S.B. 478 with no action taken by the committee. She stated she would entertain a motion for the approval of the minutes for April 7, 1999, and April 21, 1999.

Chairwoman Giunchigliani adjourned the meeting at 8:45 p.m.

RESPECTFULLY SUBMITTED:

Jodie Van Wyhe,

Committee Secretary

APPROVED BY:

Assemblywoman Chris Giunchigliani, Chairwoman

DATE: