The Committee on Government Affairs was called to order at 8:12 a.m., on Tuesday, May 4, 1999. Chairman Douglas Bache presided in Room 3143 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:

Mr. Douglas Bache, Chairman

Mr. John Jay Lee, Vice Chairman

Mrs. Vivian Freeman

Mr. David Humke

Mr. Harry Mortenson

Mr. Roy Neighbors

Ms. Bonnie Parnell

Ms. Gene Segerblom

Mr. Kelly Thomas

Ms. Sandra Tiffany

Ms. Kathy Von Tobel

COMMITTEE MEMBERS EXCUSED:

Ms. Merle Berman

Ms. Dawn Gibbons

Mr. Wendell Williams

GUEST LEGISLATORS PRESENT:

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Randy Waterman, acting chief, Risk Management Division, said S.B. 544 had been drafted in order to help get the state’s health benefits program back on track and to address problems that had been identified in two Legislative Counsel Bureau audits conducted in the years 1997 and 1998. In addition, S.B. 544 established accountability of board members and clearly defined the relationship between the board and its administrative staff.

Mr. Waterman stated the reconfiguration of the board would eliminate many reporting structure conflicts inherent in the current organizational structure. When combined with implemented changes, such as contract requirements and the FY 2000-01 budget requests, S.B. 544 addressed some of the problems that contributed to the crisis of the self-funded benefits plan in 1996. He explained S.B. 544 provided for a quality control audit position enabling the state to improve the oversight of vendors used to carry out program administration.

Continuing, Mr. Waterman expressed many problems the state experienced over the past couple of years would have been identified sooner and would have cost the plan a lot less money if the state had had the oversight 3 years ago. If enacted, the bill would also provide for other positions enabling the state to effectively administer and communicate the benefits program.

Upon passage of S.B. 544, the Committee on Benefits would be changed to the Board of Directors of the Public Employees’ Benefits Program. The governor would appoint members of the board who, in turn, would hire an executive director. The director would employ several unclassified, higher-level staff positions, as well as classified support staff. The positions when effectively managed would enable the board and executive director to re-establish direction of the program and move it forward.

Mr. Waterman said S.B. 544 was not a solution by itself; however, would provide for a framework upon which an effective solution might be constructed. The long-term solutions of the program would be considered by the board of directors and implemented by the chief executive officer (CEO) and the benefits staff. The bill would eliminate the involvement of the Risk Management Division, and subsection 11 of the Nevada Revised Statutes (NRS) Chapter 331.184, which provided for the risk manager to act as an advisor to the Committee on Benefits, would be deleted. Risk Management would remain responsible for administration of the state’s insured and self-insured property and casualty insurance programs.

Mr. Waterman provided the committee with an overview of the key points of S.B. 544 (Exhibit C).

Denice Miller, senior policy director, Office of Governor, referred to Exhibit D, which included a series of amendments for consideration by the committee. Many of the amendments proposed would clarify language in S.B. 544. Those amendments reviewed with committee members included:

• Section 10, subsection 2, part (b): Required the executive officer to have 5 years of progressive experience in public administration. Special consideration would be given to those with experience in the field of insurance, management of employees’ benefits, or risk management. Would provide more flexibility in the selection of the officer.

• Section 12.5, subsection 2: Amended in Senate in order to allow for groups of not less than 300 employees to withdraw from the plan. Original verbiage of 10 percent was reduced to 5 percent. Withdrawal from the program would not take effect until 120 days after approval from the board. The board was concerned with providing the employees with a reasonable transition time in order to decrease program disruption.

• Section 18, subsection 1, part (a): Original verbiage stated the appointee of the University and Community College System of Nevada was required to have an advanced degree in business administration, economics, accounting, risk management, and so on. Deletion of the requirement for advanced degree had been suggested.

• Section 18, subsection 1, part (b): Suggested amendment would add one member who was retried from public employment, and a participant in the program, appointed by the governor upon consideration of any recommendations of organizations that represented retired public employees. There were retirees in the system who were not necessarily retirees of the state.

• Section 18, subsection 1, parts (c) and (d): It had been suggested to combine those sections in order to add two members who were employees of the state, appointed by the governor upon consideration of recommendations of organizations that represented state employees. Combining those sections would provide for consistency.

• Section 18, subsection 1, part (e): Amended to stipulate the governor shall consider group recommendations.

• Section 18, subsection 1, parts (f) and (g): It had been suggested to combine those two sections because both parts called for the same requirements.

• Delete section 18, subsection 2.

• Revise section 18, subsection 3, part (a) in accordance with changes in previous subsections.

• Section 47: It had been suggested to amend that section in order to stipulate the governor should retain control of the program until the new board had been appointed and organized in accordance with section 48.

With regard to section 47 of S.B. 544, Ms. Miller explained the reasoning behind the change. The bill currently required appointments to the board be made on or before July 1, 1999. The board was required to meet at least quarterly. Because there would be a 3-month gap whereby no one would be in control of the program, amending the section would clarify the governor would administer the program for that period.

Regarding section 18, Mr. Lee asked if a chairman would be elected. Jon Hansen, representing the Office of the Attorney General, replied the bill had been drafted to indicate the governor appointed the chairman.

Chairman Bache asked what was the reasoning behind the particular appointments as indicated by section 18, parts (f) and (g). Ms. Miller replied there had been concerns the benefits committee did not have a substantial amount of education or experience with respect those areas indicated. Those new appointments would allow for expertise on the part of the committee as a whole, and with respect to those areas the committee governed, in order to avoid situations wherein decisions might be made based on a lack of information.

Mrs. Freeman asked what was being proposed with regard to training. Ms. Miller pointed out she did not want to leave the committee with the impression the previous board had no experience. Referring to section 11, she said each member of the board and the executive officer would complete at least 16 annual hours of continuing education relating to group benefits.

In response to Mrs. Freeman’s question, Mr. Waterman said the training would be available through various state and local employee benefits associations.

Mrs. Freeman asked if there was a fiscal note attached, to which Mr. Waterman responded the situation had been addressed in the Executive Budget, and was added into the 2000-01 budget.

Mrs. Freeman asked how much was the budgeted amount. Mr. Waterman replied although he was unknowledgeable of the precise amount, he knew it to be several thousand per year. Typically, employee training amounted to $1,000 per year per member, which included travel and tuition.

Mr. Mortenson asked what was the remuneration for the board members, to which Mr. Waterman replied the standard for all board members in the state was $80 per day.

Mrs. Freeman remarked $80 had been the compensation amount for several years now. She did not feel that was an adequate amount and should be increased in order to obtain the types of members desired for the board.

Chairman Bache noted if the amount was changed, each and every statute would require to be changed. The compensation amount was standard.

Mrs. Freeman remarked although she agreed with Chairman Bache’s point, she believed the bill would be an adequate starting point in order to effect change in compensation amounts for the proposed board.

With regard to section 12.5, Ms. Von Tobel asked Mr. Waterman to clarify the difference between a group that wanted to leave the program under the provisions of the bill, and individual members leaving the program during open enrollment. She suggested if a group was not granted the ability to leave by the board, they could leave during open enrollment on an individual basis. Mr. Waterman replied section 12.5 was an incorporation of S.B. 316, which provided the identical offer. It made it more onerous to the plan by mandating that any group of 300 or more would be required to have their departure from the program approved, unless there was a 10 percent detrimental affect to the plan (with the amendment, a 5 percent detrimental affect to the plan). He did not feel any group of 300 persons would have a 5 percent detrimental affect to the state health plan because of the high number of members in the plan. Individuals did have the option to come-and-go from the various plans during open enrollment.

Ms. Von Tobel asked if open enrollment would be changed, to which Mr. Waterman said S.B. 544 would not change open enrollment at all. It would enable people to form groups in order to initiate their own plans or join into another existing plan.

Mr. Waterman stated the way the bill was currently written, the board of directors would have the option of declining one group’s or many groups’ requests to leave the plan if it had been determined mass exodus would cause a 5 percent detrimental affect to the plan.

Pursuant to Mr. Waterman’s testimony, Mr. Hansen suggested the verbiage in section 12.5, subsection 1, part (b), be changed to from "shall" to "may" in order to clarify the board did have the discretion to make a judgement as to whether or not a group leaving the plan would be in the best interest of the remaining participants.

Chairman Bache was concerned if the group wanting to depart from the plan was a non-state employee group. He was unsure if non-state employee groups could be forced to stay. Mr. Waterman said he was correct. The group could not be forced to stay in the plan. The issue was addressed in another part of the statute and did not block non-state groups from entering in and out of the plan. Ms. Miller added if a group decided to withdraw from the plan, that group should take its retirees as well. Concerns had been expressed that active groups would leave and not take their retirees thereby creating the dilemma of who would pay into the system on behalf of those retirees.

Chairman Bache was concerned if 3 or 4 groups of 300 or more desired to leave, and 2 of those groups were approved and the rest were declined, that the state would be tied up with lawsuits. He inquired as to how the situation would be handled. Mr. Hansen replied the committee’s concern would be that groups leaving the program had superior experience that would place a great burden on those left behind. That was the reason behind the suggested change from "shall" to "may." People would always have the right to litigate against the state, but unless the committee desired to delete the language altogether, it would be a risk the state would have to run.

Ms. Von Tobel indicated thousands of individuals had the option to leave the plan during open enrollment thereby making provisions for group departures moot. Mr. Hansen said one provision in S.B. 316 that had not been discussed previously indicated the state would collect premiums by payroll deductions and would pay other insurers or groups for those that withdrew from the plan. For those leaving individually at open enrollment time, there would be a problem with premium collection and eligibility. Mr. Waterman stressed it was not Risk Management’s idea to include the provision within S.B. 544 because he agreed with Ms. Von Tobel the open enrollment provided an adequate mechanism for individuals to come and go within various plans.

Chairman Bache requested clarification if an individual decided not to participate in the state plan, would Risk Management still deduct pay. He asked if the amount the state contributed to the state health plan would still be going to the state health plan. Mr. Hansen replied he understood S.B. 316 provided a mechanism whereby the state could continue to deduct insurance premiums from the individual or group’s payroll and get a contribution from the state, but instead of going to the self-funded plan the money would be sent to the group’s new insurance carrier.

In response to Chairman Bache’s question, Mr. Waterman said if an individual refused coverage, the state’s contribution still went into the plan. S.B. 544 would allow for insurance premiums, following the groups of 300 or more, to be applied to the plan of their choice.

Chairman Bache asked if an individual refused state coverage and purchased an insurance plan on their own would the money the state contributed on the individual’s behalf still go into the state self-funded account, to which Mr. Waterman replied that was correct.

With regard to the standard set in section 12.5, subsection 2, Mr. Humke asked from where the concept originated and what was the meaning of the subsection. He remarked the subsection was an accountant’s dream. The board, if so desired, could illustrate a group leaving would impact the plan by 5 percent or more. Mr. Waterman replied it would become an actuarial function on the part of the group that proposed to leave and the board to disclose the group’s departure would cause such an impact. A provision would need to be proposed if they wanted it written into regulation. Mr. Humke felt the provision should be in statute. When the word "actuary" was substituted for "accounting" the same disparagement was set on the actuarial profession.

Ms. Parnell asked if it was accurate to say the larger number of members in a program, the better the program’s cost containment. Mr. Waterman replied he believed that to be true.

Ms. Parnell remarked it seemed to her that the integrity of the state health insurance program was being put at risk, as well as those groups that broke off from the program, by reducing the number of participants. Mr. Waterman agreed. S.B. 544 allowed for the board to derive provisions for groups coming into the program as well.

Ms. Miller remarked the group that originally wanted the provision was present and would be able to answer any questions the committee might have.

Mr. Hansen conveyed the attorney general’s support for the bill as it had originated out of the Senate, with the proviso the "shall" be changed to "may." He could not comment with regard to the proposed amendments from the Office of Governor, as he had not yet examined them.

Mr. Lee asked what was the breakdown of state employees to public employees. Becky Crowl, state benefits manager, replied of the total population in the program, 3 percent were non-state employees, 5 percent were non-state retirees, and 92 percent were state employees or retirees.

Mr. Lee asked if it was felt the 8 percent of the public employees and retirees adequately reflected the position of the appointment better than did someone from the state. Mr. Waterman replied the provision did not mandate the person to come from the 8 percent but opened the appointment options so those individuals were not excluded.

Ms. Von Tobel requested clarification on open enrollment. She commented state employees always had the opportunity to choose more than the state Preferred Provider Organization (PPO). Upon hire, state employees chose from a list of companies and were not bound to state PPOs. She asked if regardless of what insurance was chosen, had there had always been a portion paid by the state PPO or had it always been for the state PPO. Mr. Waterman replied that was correct. Those employees did have the option of participating in the state self-funded plan or the three Health Maintenance Organizations (HMOs) that were offered statewide. As far as the state contributions were concerned it was the same for all employees; an employee only in the state plan would be covered 100 percent irrespective of the plan in which that employee participated.

Ms. Von Tobel asked would the premium for dependents be handled in the same fashion if a state employee opted out of the PPO to join one of the three HMOs during open enrollment. She inquired if S.B. 544 would allow for groups to choose not only the four plans offered by the state, but also additional health insurance plans. Mr. Waterman replied that was correct.

Referring to section 18, parts (f) and (g), Chairman Bache remarked the section was patterned after the Public Employees Retirement System (PERS) board and that six or seven of those members were participants. He had problems with board members who had no buy-in and no responsibilities to the participants in the plan, making decisions relating to the plan. He thought if expertise was desired, the expertise should be hired. The board should be the policymaker in response to their employees’ requests. He wanted the board to have experience in insurance matters, but the detailed knowledge and advanced degrees were not necessary. Mr. Waterman said he could not disagree. Due to the large expenditure of public funds, $120 to $130 million per year, and the desire to have two members on the board that had no interest in the program except for maintaining the solvency of the plan, the provision had been added at the request of Senator Raggio.

Marty Bibb, executive director, Retired Public Employees of Nevada (RPEN), related background information on the organization and its members. He said the organization supported S.B. 544 and concurred with the amendments offered on behalf of the Office of Governor. RPEN was concerned with section 18, subsection 1, part (b), which dealt with one retired person out of the proposed nine-person board. As currently written, S.B. 544 (first reprint) would require that person be retired from the state. Because the provision would eliminate more than 1,000 public employees who were enrolled in the program from being considered for the position, RPEN believe the requirement should be expanded to include non-state retirees. Because the new organization would be renamed the Public Employees’ Benefits Board, RPEN believed it should be inclusive of all public employees. Reference had been made to the numbers of enrollees in the state plan. It was Mr. Bibb’s understanding there were approximately 4,000 retired state employees and approximately 1,000 retired public employees participating in the state plan. Unless the requirement in section 18, subsection 1, part (b) was changed, those 1,000 retired public employees would be disenfranchised.

With regard to older retirees remaining within the group, Mr. Bibb observed once an individual reached 65-years-of-age Medicare became the individual’s primary insurance plan and the state self-funded became secondary; therefore, the bulk of the cost was borne by Medicare. Premiums would then decrease for most people in the group insurance plan once that age was reached. Some changes to the plan effected in the current year in order to stabilize a financially troubled plan were particularly difficult on those retired public employees. The over 65-years-of-age employee would be directly affected.

Ms. Segerblom remarked on the many letters she had received from retirees because of the increase in rates. Those retirees had been concerned they were paying for the employee rather than for themselves. Mr. Bibb said once a person reached 65 years of age, though Medicare was still primary they were still required to pay the premium for the state plan. That person was also required to pick up Medicare B that was approximately $47 per month in addition to premiums paid for the state portion. When the broad range of premiums was examined it was determined to be quite significant on the retirees.

Ms. Von Tobel remarked Mr. Bibb had referred to the Medicare gap. Those retirees (65 and older) went from having insurance coverage that would cover the 20 percent co-pay, to not having it picked up until a $15,000 expense had been incurred. Technically, as premiums were paid on a monthly basis throughout the year, those individuals might not receive a PERS benefit check. Mr. Bibb said pharmaceutical costs would be picked up. Formerly in the plan there had been a coordination of benefits between the primary and secondary plans. During the crisis that had been experienced with the self-funded plan, those individuals did not have to incur the $15,000 expense before the self-funded plan would pay. Currently, those individuals did have to meet the $15,000 expense thereby decreasing the amount of the monthly PERS benefit check.

Ms. Von Tobel remarked one would think the premiums would have decreased for the retiree because they had to pay so much out-of-pocket. Mr. Bibb said everyone experienced the rate increase for the self-funded plan in 1999. There was currently a proposed rate increase built into the recovery of the program for the year 2000.

Ms. Von Tobel asked if Mr. Bibb was knowledgeable of the amount it would take in order to fill in the Medicare gap. Mr. Bibb replied it was RPEN’s understanding that particular portion of the plan had been designed to save $3.3 million by eliminating the former coordination of benefits between Medicare and the state’s group insurance plan specific to those over 65-years-old.

Ms. Von Tobel was concerned the retirees had never been informed that the secondary insurance plan would not pick up the remaining 20 percent, and the initial $3,000 had to be paid out-of-pocket for hospital expenses. She remarked only $3.3 million was saved in a plan that expended $27 million in 1 year. She hoped the plan was restored before the end of the 1999 session because of the detriment to the state’s retirees. Mr. Bibb said both active employees and retirees had been "hit" in terms of reduced coverage and increased premiums in order to get the plan back on track. The $3.3 million affected a small amount of those retirees, but could have an extremely devastating effect.

Gary Wolff, representing the Nevada Highway Patrol Association, informed the committee he appeared before the committee in the capacity of representative and spokesperson for the coalition to fix the State’s Self-funded Health Plan. He stated the coalition was comprised of several individuals from Communication Workers of America, Teamsters Union, Nevada Correctional Association, Nevada Highway Patrol Association, and the Nevada Conference of Police and Sheriffs (NCOPS).

Mr. Wolff informed the committee S.B. 544 was originally called S.B. 316. The reason S.B. 316 was drafted was due to the long investigation of the program and the past records of the Committee on Benefits. The Committee on Benefits had never performed close to what had been anticipated after PERS. In 1995, the Assembly had voted to change the structure of the program; however, at the present time the state was faced with the same problems. He was chagrinned knowing the state employees were shackled to a system whereby the cost of insurance continued to increase. He said employees should be provided with options to seek other solutions.

Continuing, Mr. Wolff said the labor groups that he represented desired the provision allowing them out of the plan. S.B. 316 would provide an option for groups to present their case to the board in order to opt out of the plan if the system continued to fail and did not provide adequate insurance for comparable price. He related a personal story of his daughter who had removed her son from the plan because she could participate in another plan for less cost and better benefits for herself and her son.

Ms. Von Tobel commented she would like to see other group employees have the same options and choices provided to them. Mr. Wolff said if the bill passed other insurance plans would be examined. Even with the provision, the state would not be able to repair the damage sustained to the self-funded program. He stressed to oppose the concept of the proposed opt-out provision contradicted the standards of the free-enterprise system and state employees would be forced to remain in a program expending increased amounts of money.

Ms. Parnell remarked the state needed to examine the underlying problems with the plan in order to make the plan viable again. If, as a solution to the problem, the state allowed for groups and individuals to depart from the program, the underlying causes would not be solved. She believed S.B. 544 did not address the key issue. Mr. Wolff agreed. A system should be implemented whereby all state employees would benefit. S.B. 316 was amended into S.B. 544 for that particular reason. If the Committee on Benefits could not fix the problem, the option to depart from the plan would be provided to those who desired to leave. The groups he represented were aware they would have the cost burden. The governor, the attorney general, and other groups supported S.B. 316.

Mrs. Freeman asked if the governor would appoint all the board members. Mr. Wolff replied it had been determined the governor would appoint those qualified members in order for the program to be administrated in a more efficient manner. The board members would serve for 4 years.

In response to Mrs. Freeman’s question, Mr. Wolff said. If groups wished to depart from the state health plan, the board would require a comprehensive strategy indicating the reason for departure. The board would then determine if the group could leave.

Mr. Humke asked if the amendments Mr. Wolff provided were referred to as the contents of S.B. 316, to which Mr. Wolff replied affirmatively. Mr. Humke asked, if those amendments within S.B. 544 were enacted, did Mr. Wolff believe the content of the bill would serve as the basis for formation of additional employee labor organizations. Mr. Wolff said it was possible if that was what was needed. He anticipated in the future, the self-funded plan would be repaired; however, if the plan continued to fail he was sure groups would form together to depart from the program, which in turn, would send a message to those in control to repair the dilemma.

Ms. Parnell commented section 12.5 would go into effect in July which did not give the plan an adequate recovery time before groups could start breaking from the program. Mr. Wolff said there had been a provision provided in S.B. 316 that would delay the opt-out period for 1 year after passage. He would have no problem if the committee wanted that same provision in S.B. 544; however, informed the committee before groups could depart from the plan, a board needed to be implemented and a program developed.

Ms. Von Tobel asked if the option of choosing another insurance plan, in lieu of departing altogether, would be provided if a group or individuals within the group were not satisfied with the self-funded plan. Those individuals would not necessarily be required to move with the rest of the group. Mr. Wolff said they would always have that choice.

Chairman Bache clarified those groups would not just be participating in a separate plan from another carrier, but might join a health and welfare trust. In response, Mr. Wolff said state employees would have the same options under collective bargaining rights.

Andy Anderson, representing Nevada Conference of Police and Sheriffs (NCOPS), stated NCOPS had a group within the state that was directly affected by any problems incurred by the state health insurance. He felt the fairest option would be to choose entire groups without exempting specific members of the group. Those groups wishing to leave had to gain the permission and approval of the benefits board, and if the board determined the departure of the group would adversely affect the health program, permission would be denied.

Mr. Anderson said providing health care options to employees would make the board pay closer attention to the structure of the program. If individuals in those groups did not attain program satisfaction, the board needed to allow those groups to leave. He reiterated groups choosing to leave the plan would cause the board to examine the structure of the plan thereby causing them to implement repairs to the insurance system.

Ms. Von Tobel was concerned with members within the groups taking the state contribution with them to their chosen insurance plan. She queried why the state contribution would be allowed to go to a plan of which only specific groups got to take advantage. All state employees should be provided with that option. Mr. Anderson explained when individuals formed groups or associations, they were formed to increase benefits for the membership. A collective group could then establish benefits that would help its members. He provided the committee with reasons some groups may opt for different insurance plans with benefits that the state insurance plan did not provide.

Ms. Von Tobel remarked she had a problem with the board being able to pick and choose which groups to deny and which groups to approve for departure if it had been determined their departures would have an adverse affect on the plan as a whole. Mr. Anderson said there was a misinterpretation in the adage "bigger is better," which was not necessarily the case in that instance. The increase in premiums had nothing to do with lack of size and could be due to structural or benefit changes. If a plan was administered properly there should be a minimal difference between 10,000 and 20,000 employees. They wanted to be able to control their own destinies when it came to major medical insurance. Mr. Anderson stated the two most important things in life for an employee were salary and medical benefits, and an option should be allowed in that case.

Gary Crews, legislative auditor, introduced Rocky Cooper, audit supervisor, and said S.B. 544 had been developed as a result of an audit of the group insurance plan and the Risk Management Division. There were two findings that dealt with the Committee on Benefits. The audit had indicated the organizational responsibilities were not well-defined in statute and no person had control over the operation. In addition, there was also inappropriate management structure within the division.

Mr. Crews stated he appeared in order to comment on a couple of provisions in S.B. 544. Both Mr. Crews and Mr. Cooper agreed with the concepts of the bill in that S.B. 544 provided for the accountability and organizational structure needed for program viability. In the past it had been indicated there was confusion with regard to Risk Management’s involvement in the program. The bill would provide for a separation of that responsibility. He restated members of the new board would be appointed by the governor thereby holding one person accountable for program operation. The addition of the executive director would aid in strengthening the program. Sections 8, 10, 11,18, 20, and 24 would provide for that structure.

Mr. Crews stated the audit division had not commented on the provisions of S.B. 316, but would be glad to answer any questions from committee members. No further discussion ensued.

Dr. James Richardson, representing Nevada Faculty Alliance, testified in support of S.B. 544. A tremendous amount of effort on the part of the Office of the Attorney General, the Office of Governor, and others, had gone into developing the bill. He believed S.B. 544 would succeed in making the state health plan thrive and thought the reorganization of the board was sound. Many discussions had been endured regarding the structure of the new board; however, he felt the positions indicated in the bill were more important.

Dr. Richardson stated he supported the amendment proposed by Ms. Miller. He thought Mr. Hansen’s suggestion to change "shall" to "may" would clear up possible ambiguity on the part of the board. A concern arose with regard to the percentage issue, and he remarked even though 5 percent did not seem like much, it was a large amount where money was concerned. Although he did not have a specific percentage to recommend, he questioned how much the state should allow a withdrawing group to affect the plan in order to still provide the kind of choice discussed in previous testimony.

Dr. Richardson remarked the committee might want to include a section that required at least 1 year before the opt-out provision became effective. He strongly urged the passage of S.B. 544 and felt it would contribute to the recovery of the plan. With regard to the Medicare gap, he wanted it known for the record that there had been previous discussions in the Assembly Committee on Ways and Means on how to adequately take care of the problem and reinstate the coordination of benefits. It was hoped the problem could be solved.

With regard to section 12.5, Mr. Humke asked if there had been an agreement forged in the Senate and asked if the "shall" that remained "shall" was a mistake or was it a policy decision. Dr. Richardson replied it was the intent when S.B. 316 was amended into S.B. 544 all of the verbiage pertaining to "shall" would be changed to "may." Upon reading the bill, Dr. Richardson discovered one "shall" had not been changed and he immediately inquired about it. Various individuals had informed him it was an oversight; however, in overlooking the one "shall" ambiguity in the language had been created. The committee would need to address that ambiguity on a policy level.

Mr. Humke remarked based on Mr. Wolff’s testimony, it would seem if one believed in the concept of the "free enterprise system," then the committee or any group should not have a problem with "shall."

With regard to the amendments proposed by the Office of Governor that reduced the threshold from 10 percent to 5 percent in order to approve a group’s withdrawal from the plan, Mr. Humke did not know if the amendments represented errors overlooked in the Senate’s rush to move S.B. 544 to the Assembly or a policy question within the purview of the committee. Dr. Richardson replied it was his understanding when S.B. 316 was amended into the bill the Office of Governor did not have amendments at the time. Knowing S.B. 316 was part of S.B. 544, the Office of Governor might currently be inclined to review it more carefully. He supported the suggestions proposed for section 12.5.

Mr. Humke understood Dr. Richardson had expressed uncertainty with the 5 percent threshold level and asked if he was testifying in favor of 2.5 percent level. Dr. Richardson replied he was trying to avoid having to comment on a percentage level. He had chaired the Committee on Benefits for 6 years so he was experienced in dealing with those matters. The problem was in thinking any group that departed would cause any harm to the plan for the remaining state employees. Percentages would need to be determined and interpreted. He questioned whether the allocation from the state to the plan on behalf of the employees would increase by that percentage or if benefits would be cut in order to recover a certain percentage.

Mr. Humke remarked if a Committee on Benefits had the egregious level of malfeasance that it had had in the past, the percentage would not make a difference. A group would form strictly for the purchase of benefits without regard to the other collective bargaining issues.

Chairman Bache commented he thought there was confusion regarding the percentages, that they might have referred to the percentage of employees as opposed to the percentage of effect on contribution. He clarified it was to the effect on premium rates to which the percentages had referred.

Kathy Naumann, representing Teamsters Local 14, echoed the remarks presented by Gary Wolff. The committee had provided names of civilian employees who were suffering from the lack of health care choices and the increasing cost of insurance. She observed that currently within the committee there was an embracing of both conservative and liberal principles. The issue was about choice and competitive environments. She urged the committee to allow those wanting to develop a better proposal for the plan to do so and commented on the percentage stated in the bill.

Ms. Naumann believed the union, in working with legislators, had developed a good option that provided good controls and check-and-balances. She urged the committee to support S.B. 544 in its entirety.

Ms. Segerblom asked if she had suggested that support include those proposed amendments. Ms. Naumann replied with regard to the "shall" and "may," she was concerned individuals were very uncomfortable that the issues had become the S.B. 316 amendment rather than a bill in its own right. The Office of Governor had reviewed the checks-and–balances which the bill would provide. Ultimately those employees should be allowed to choose with regard to what was the best health care plan and to hold those employees "hostage" was wrong.

Ms. Von Tobel remarked the entire committee was concerned with the insurance plan and had been for some time. She reiterated her point was if the option was provided for one group it should be provided to all employees and if the state’s contribution could be taken with that group and applied to the new insurance plan, all employees should be offered the plan. She was concerned the option did not provide for more choice, but less.

Continuing, Ms. Von Tobel suggested the contribution for those departing the plan should remain with the state unless that option was offered to all state employees. Ms. Naumann echoed the comments of Mr. Anderson and supported choice for every state employee. A solution had been crafted that would be palatable to systems within the state to operate. The fact those groups would report to the board that had a reporting mechanism back to the state could aide in repairing the plan over the long run. She stressed she was not implying she did not support the individual’s right to choose, but the argument should be in coming up with a good deal for employees, and create competition in the system in order to spark repair of the plan.

James Wadhams, representing Clark County Education Association (CCEA) Welfare Benefit Trust, called the committee’s attention to section 15, subsection 2, and provided them with a proposed amendment (Exhibit E).

Mr. Wadhams explained the proposed amendment would allow the programs to obtain worker’s compensation health insurance in addition to other insurance plans. He stressed the amendment did not require that to be performed but was merely enabling legislation. The change would facilitate and accommodate the July 1, 1999, change of the State Industrial Insurance System (SIIS). He appreciated the committee’s indulgence and believed a germane vehicle had been created for that type of an amendment.

Chairman Bache disclosed as a teacher he was a member of the CCEA Health and Welfare Benefit Trust. Currently he paid $511.10 to maintain that insurance. In examination of Exhibit E, he was not affected and so could participate in the discussion relating to the amendment. It appeared to him the amendment allowed those members to be provided with worker’s compensation benefits, as well as health insurance benefits. Mr. Wadhams said in regard to the disclosure provided, the amendment if adopted would be available as an option for any public group currently pursuing insurance programs.

Robert Gagnier, executive director, State of Nevada Employees’ Association (SNEA), said he had signed in to testify in opposition to S.B. 544 because there were portions of which SNEA was in support and portions of which they were not.

Mr. Gagnier stated there were good features in the bill including the structure that would provide the staffing for the insurance program. SNEA preferred to have seen a mandatory certified public accountant (CPA) that would work directly for the board within the staffing structure. The structure was necessary to the overall administration of the plan, and SNEA was in support of that portion of S.B. 544. With regard to the governor’s amendment, section 10, he suggested the term "Risk Management" be omitted and require the person employed in that position have experience in the field of insurance and management of employee benefits. In part, the problem from which the plan currently suffered was due the fact the state health plan had been operated by the risk manager. Risk Management, by and of its own nature, was not necessarily a competent area for those administering health plans.

Referring to section 12, Mr. Gagnier said the interim benefits committee had created that section. He did not feel section 12 should expire by limitation on July 1, 2001, but should be a permanent committee. It was suggested whatever the composition of the legislative oversight committee, it should be operated in a manner likened to PERS. If S.B. 544 was to be modeled after PERS and the PERS board, it should be more like that board. The PERS board had control over a considerably larger amount of funds than did the Board of the Public Employees’ Benefits Program, and there was no public member on the PERS board. He questioned the reason for the two public members on the benefits board; therefore, SNEA objected to section 19, subsection 1, part (g).

With regard to section 18, subsections 4 and 5, Mr. Gagnier suggested the term "appointing authority" had been a hold over from a previous bill draft. Because there was only one appointing authority, the verbiage should state "the governor." If the board was to serve at the pleasure of the governor, the 4-year term would be unnecessary. He felt those members should not serve at the pleasure of the governor but more like those members of the PERS board whereby the members could be removed at any time for a cause. SNEA did not see a problem with the composition of the committee and had no problem with the stipulation that the governor would retain control over the program until the new board had been appointed.

Mr. Gagnier explained with regard to section 12.5, the issue of collective bargaining under A.B. 131 insurance would be negotiable. It was important to note under that provision the state would be dealing with eight bargaining units. Those bargaining units were clearly defined in A.B. 131 and would have eight separate health plans for those groups. Under the provision of S.B. 544, the state could have a vast number of separate health plans.

Mr. Gagnier explained health care costs in Carson City and northern Nevada were considerably greater than those in Clark County, which were almost 20 percent less. The hospital with the state’s highest cost was Carson-Tahoe Hospital. In Washoe County the cost of health care was 17 percent greater than Clark County. He said law needed to define what constituted a group. It should not be left up to the board to make that determination. Under collective bargaining there would be a definition of what constituted a "group." Mr. Gagnier did not feel it was appropriate for any group to be able to depart, especially at a time when Nevada was attempting to rebuild the state self-funded plan.

Under S.B. 544 there was no provision stipulating a group that departed had to take their retirees. It may have been suggested, but was not stated in the bill. He warned if those groups did not take their retirees, many splinter groups would be departing from the plan and only retirees and those coming from higher cost areas would remain. He stressed the point if the state maintained a consistent smaller group of active employees with an increasing percentage of retirees, then the cost of health insurance would increase for some individuals.

With regard to Chairman Bache’s comments on what he paid for maintaining health care, Mrs. Freeman asked if insurance would cost more in northern Nevada. Mr. Gagnier replied affirmatively. The cost would be greater in northern Nevada based upon health care costs, which were highest in Carson City and the rural areas.

Mrs. Freeman commented the hospitals in the northern portion of the state were nonprofit hospitals whereas those in the southern portion were for profit, which made a tremendous difference in the cost of health care.

Danny Coyle, president, American Federal of State, County, and Municipal Employees (AFSCME) Chapter 4041, concurred with the testimony of Mr. Gagnier. He had been concerned with the provisions of section 12.5. He believed a low-risk group opting out of the system would have a significant impact on the plan and the insurance rates.

Mr. Coyle reiterated sentiments expressed by Mr. Gagnier with regard to the definition of a "group." He said it was just not the number of those individuals opting out of the plan, it was the risk factor. As previously stated, if low-risk groups begin departing the program those high-risk individuals’ premiums would increase based on both experience and accident rates. He preferred to have the provision that groups of 300 or more could opt out of the plan omitted from S.B. 544.

With no further testimony, Chairman Bache closed the hearing on S.B. 544 and recessed the meeting at 10:27 a.m. The meeting was then reconvened at 10:55 a.m. as a subcommittee in order to allow hear testimony on the remaining Senate bills.

Ronald Dreher, president, Peace Officers Research Association of Nevada, informed the committee he represented 21 law enforcement associations throughout the state and urged the support and passage of S.B. 404. May 7 through May 16, 1999, was National Law Enforcement Memorial Week and two more law enforcement officers would be added to the memorial wall in Washington, D.C., and Carson City.

Mr. Dreher stated the purpose of S.B. 404 was to allow for paid health, accident, and life insurance for surviving families of Nevada law enforcement officers and firefighters killed in the line of duty. Over the last 6 years in northern Nevada eight officers had been killed while on duty. Those officers included Keith Hashimoto, killed during a Special Weapons and Tactics (SWAT) training mission, and George Sullivan, Jr., who had been killed on the University of Nevada, Reno campus. He introduced Carole Hashimoto, surviving spouse of Reno police officer, Keith Hashimoto, and provided the committee with a letter from Carolyn Sullivan that related the anguish through which she went.

Mr. Dreher had been assigned to assist Ms. Hashimoto in determining what survivor benefits were afforded to her. In doing the research, he had discovered there was no survivor coverage except for Consolidated Omnibus Budget Reconciliation Act (of 1984) (COBRA) coverage. In the case of Mr. Hashimoto, COBRA premiums had to be paid starting 3 days after his death. Failure to pay that premium would have resulted in lack of coverage for Ms. Hashimoto and their two children. The money amounted to over $400 per month for over 2 years time and was an out-of-pocket expense for the family. After 18 months, COBRA coverage was terminated.

Continuing, Mr. Dreher stated the city of Reno Insurance Committee reviewed the matter and agreed to provide retroactive coverage to her family. They also agreed to cover future line-of-duty deaths and provide paid insurance coverage to the surviving family members. When Washoe County sheriff, Frank Minnie was killed in 1997, the county determined they did not have similar coverage and made the same changes the city of Reno did; however, in 1998, when Sergeant George Sullivan was murdered, his wife and their four children were left with no state coverage. He expressed his displeasure with the amount of money Ms. Sullivan had to pay in order to maintain health coverage for herself and her children, and requested the committee not only implement what the city of Reno and Washoe County had already implemented, but also to retroactively provide paid benefits to her and her family.

Concluding, Mr. Dreher said Senator James agreed to sponsor S.B. 404 and the cost to the state would be minimal. Because those law enforcement officers and firefighters put their lives on the line everyday in order to protect Nevada’s citizens he provided the committee with numerous reasons why S.B. 404 should be supported and enacted. The proposed amendment to the bill would eliminate the marriage penalty, which had been added in the Senate. There was no need to penalize the families of the state’s fallen officers and firefighters.

Carole Hashimoto, representing herself, stated her husband had been killed in a parachuting accident during SWAT training approximately 3 years ago. At that time she had been a full-time housewife and a mother of two young children, giving up a well-paying job prior to the accident in order to raise their children. Upon the death of Mr. Hashimoto, she said she received income from CDS insurance, PERS, and social security, but the income combined totaled half of Mr. Hashimoto’s annual salary. The only way she could maintain medical and dental insurance through COBRA was to make the monthly payments of approximately $400. Because of the expenses incurred and loss of income, the family had been faced with a financial hardship at a time in their lives when it was the hardest emotionally. After paying for COBRA coverage for 2 years the city of Reno decided to make that a benefit for the family.

Ms. Hashimoto said her husband had been dedicated to the SWAT team for 5 years and kept in mind if one day something ever was to happen, his family would be taken care of in the way for which he would have provided.

Addressing the marriage penalty amendment, Ms. Hashimoto expressed it was not the responsibility of a future spouse to provide health benefits to that new family. She said it was not fair that she should have to consider if a future spouse would make an adequate income to compensate for lost benefits. She urged the committee not to penalize spouses for finding happiness in future marriages and pass S.B. 404.

Senator Mark James, representing Clark County Senatorial District 8, stated he was pleased to testify in support of S.B. 404. He felt the least the state could do in terms of a meaningful gesture was to assist those law enforcement officers’ families in the way the bill contemplated, and said he could not articulate the need for the bill any better than Ms. Hashimoto did.

Senator James said when the bill had been proposed in the Senate, a number of other law enforcement groups and firefighters asked for his support on an amendment that would expand the provisions of the bill to other law enforcement officers and firefighters. The Senate Committee on Finance to which the bill had been referred did not find it feasible to include an amendment like that which had been proposed.

Senator James asked the committee to consider the requests of Ms. Hashimoto and remove the marriage penalty amendment. He expressed desire to work with the committee in the event the proposed amendment was not concurred.

Chairman Bache asked if the proposed amendment would change section 1, subsection 2, part (a) to "…surviving spouse’s life," and delete the remainder of the sentence. Senator James replied that was the intent.

With regard to section 1, subsection 2, part (b), Mr. Lee was concerned the benefits should extend to college-aged children. Mr. Dreher said the amendments to be proposed would increase the benefits from 18 to 23 years of age if the child was enrolled as a full-time student in an accredited university, college, or trade school.

With regard to section 1, subsection 1, Mr. Lee asked for clarification relating to the 60-day notification for continuance of health care coverage. Mr. Dreher was unsure how that time-limit came about. The time limit would not present a hardship for those assigned to assist in benefits of fallen officers or firefighters; however, he preferred removing or restricting the limit.

Mr. Lee commented the committee hoped to amend the bill to add Sergeant George Sullivan, and asked if there was any other fallen officer or firefighter that had "slipped through the crack" in the last 2 years. Mr. Dreher replied he could not speak on behalf of the Las Vegas officers and was unsure without consulting benefits packages. He stressed Carolyn Sullivan had not been afforded any benefits whatsoever. If the committee could require retroactive coverage, and request PERS to provide benefits also, it would be in the best interest of Ms. Sullivan. Providing retroactive coverage would present a fiscal cost; however, he was unsure of the amount.

Directing her question to Senator James, Mrs. Freeman asked had a cost analysis been performed with regard to the amendment proposed. Senator James replied he was unsure; however, he was interested in knowing what the outcome of the analysis would be. Mr. Dreher added during the Senate hearing, Senator Raggio had asked for the fiscal cost. He had been informed there would be no fiscal impact.

Mrs. Freeman remarked it seemed to her if retroactive coverage was requested that a cost analysis was needed.

With regard to section 1, subsection 1, Mr. Mortenson remarked it would be reasonable to amend the verbiage to state the surviving spouse and child would continue coverage until declined in writing. In the event of a death of a loved one, a surviving spouse would have enough grief without having to remember to provide a 60-day notification.

Mr. Humke asked Mr. Dreher to describe the package of benefits available from federal agencies in the event of a death of a firefighter or a police officer. Mr. Dreher replied he could not attest to the benefits for the firefighters but the package for law enforcement officers was on a scale that increased with the cost of living. When Sergeant Sullivan was killed, the federal benefit was $137,000 that had been afforded to the family. In addition to those benefits, the state provided worker’s compensation benefits. Speaking in regard to Ms. Hashimoto’s case, Mr. Dreher said her benefits would terminate with the marriage penalty. The amount afforded to the surviving children was based on the amount of tenure the officer acquired in the PERS system. Some benefits were in the process of implementation which would provide paid college education for the children of fallen officers and firefighters.

With regard to the worker’s compensation benefit, Mr. Humke asked if a death benefit had been included and if it was ongoing health care assistance. Mr. Dreher replied death benefits were included; however, there was no ongoing health care assistance for anyone in the state unless stipulated.

Indicating section 1, line 6, Ms. Von Tobel expressed concern the bill had not included the working spouse who maintained insurance. If the working spouse was to lose his or her job there would be no safety net. She commented it would be prudent to cover every spouse whether under the plan or not. Senator James replied if that was the situation he would support the proposal. As currently written, the surviving spouse in the event a job had been lost, would not be covered. He said the verbiage could be changed to include the insurance that would have been available to the surviving spouse in the event of a death of the fireman or police officer.

Ms. Von Tobel remarked she agreed. The situation would be just as devastating to have two incomes decreased to less than one under PERS. The bill should ensure all spouses were included to receive insurance.

Senator James thanked the committee for its consideration of S.B. 404 and the deliberation on the proposed amendments to the bill. In order to ensure the legislation was passed, he said he would be available to assist the committee in any way.

Ms. Tiffany asked what body was normally assigned to the oversight committee on benefits and who made determinations when questions on interpretation arose. Mr. Dreher replied it began with the investigation itself. In the case of Keith Hashimoto, Mr. Dreher had been the assigned to work with Risk Management and the attorney involved in determining whether or not the death fell within the line-of-duty standards set by the Federal Government. The benefits had not been set in Sergeant Sullivan’s case thereby causing the inability of Ms. Sullivan to be afforded PERS insurance.

Ms. Tiffany asked if the local government body or the local risk manager or board made those determinations, to which Mr. Dreher replied the cases in which he had been directly involved included other parties. All those involved had ensured all benefits had been addressed. The Federal Government had a selection standard whereby they assisted an individual in determining what benefits would be afforded the survivors. He said in most cases it was a complicated and complex situation. A federal group called the National Organization for the Concern of Police Survivors met in order to ensure benefits were not overlooked in the death of an officer or firefighter.

Ms. Tiffany asked if the issue ever ended up in the hands of a private attorney if there was a question regarding the benefits to which the survivor was entitled. Mr. Dreher was unsure; however, in Ms. Hashimoto’s case they had been close to litigation.

In response to Ms. Tiffany’s question, Mr. Dreher said he represented 21 law enforcement organizations on a state level.

Ms. Tiffany asked if, normally, benefits for the dependents were paid, to which Mr. Dreher replied it depended on whether the officer had the family covered under the plan.

Ms. Tiffany remarked not everyone covered dependents and the bill would require the mandatory coverage of the dependent child until age 23. She felt the requirement extended what was normal and traditional. Mr. Dreher replied in some respects she was accurate.

Ms. Tiffany remarked S.B. 404 was extensive policy, and was beyond the traditional procedures. She asked if the issue had been approached previously. Mr. Dreher replied the issue had been addressed in the city of Reno and Washoe County. Fortunately, due to the infrequency of deaths in the line-of-duty, he felt the provision was appropriate. The initial purpose of the bill was to demonstrate state police officers and firefighters were not covered.

Chairman Bache asked Ms. Hashimoto to read the testimony of Ms. Sullivan who could not be present (Exhibit F).

In the testimony, Ms. Sullivan indicated her husband, Sergeant George Sullivan had been murdered while on patrol for the University Police Department on January 13, 1998. They had been married 16 years and had four children. She had a reasonably paying job as a nurse; however, raising four children on one salary was difficult. The issue holding her back from pursuing a higher degree in nursing was her health insurance benefits. In order to maintain health insurance, she had to work a minimum of 20 hours a week. Returning to school was a full-time commitment and she would not be able to work a minimum of 20 hours a week and raise her children. Upon the death of her husband, Sergeant Sullivan, she had been informed the family was not eligible for health insurance through the State of Nevada because they had not been covered at that time. She and Sergeant Sullivan had chose to cover the children under her less expensive policy.

She applauded the consideration of the committee to provide health insurance benefits for the families of police officers and firefighters who died in the line of duty. By relieving families of the stress associated with health insurance benefits, survivors would be provided a very important benefit.

She stressed families of fallen officers and firefighters should not be penalized for wanting to find future happiness. She urged the committee not only to pass the bill providing insurance benefits for the widows or widowers and children of fallen police officers and firefighters, but also not to penalize them for remarrying. It was not the responsibility of the future spouse to support a family he or she did not create as they might have other financial obligations of their own. She hoped in addition to passing the provision for health insurance during the 1999 session, a future legislator might consider the importance of continuing worker’s compensation benefits for widows and widowers who remarried.

Ms. Von Tobel remarked in hearing the testimony she felt the amendment, on which she previously commented, was definitely needed for all spouses. If the insurance was available to the surviving spouse they should be entitled to it.

With regard to life insurance, Ms. Tiffany asked if there was a special benefit such as double or triple the indemnity paid to the families of those killed in the line of duty. Mr. Dreher replied it depended on the insurance carrier. In the city of Reno there was double coverage. For an individual whose base salary was $40,000, Reno would pay a benefit of $80,000; however, the Federal Government had a set death benefit.

Ms. Tiffany asked what was the Federal Government’s involvement in S.B. 404. Mr. Dreher replied the Federal Government provided a one-time set dollar amount of life insurance benefits for all the families of officers throughout America that had been killed in the line of duty. The percentage increased based on the cost of living.

Ms. Tiffany remarked the families had been left with something with which to start over and had not been left destitute. She reiterated most insurance companies paid double indemnities for accidental deaths. Mr. Dreher stated the flat-rate amount provided by the Federal Government was not an adequate amount for surviving families and the amount of death benefits depended upon what benefits the police officer or firefighter had. The agreement to pay double coverage had been negotiated only a few years ago in the city of Reno. No further discussion ensued.

Raymond McAllister, southern district vice president, Professional Firefighters of Nevada, read from prepared text (Exhibit G). The Professional Firefighters of Nevada supported S.B. 404 but did not feel it went far enough in its coverage. The amendment proposed (Exhibit H) would ensure the benefit would be extended to all firefighters and police officers in the state. Under the current verbiage of the bill, a firefighter or police officer would need to belong to an entity that was part of the state’s health insurance program in order for surviving spouse and children to obtain the benefit.

The amendment proposed by the Professional Firefighters of Nevada removed the stipulation that a firefighter or police officer be a participant of the state health insurance plan and stated they must be employed by a public agency and be covered under a group insurance program. No additional costs to the state would be incurred under that portion of the amendment. The cost would fall upon the individual entities. Coverage would be extended to the volunteer firefighters in Nevada. The amendment would propose health insurance coverage be offered to the surviving spouse and dependents under the state’s program since volunteers would not be employed by a public agency while performing their duties. The costs were to be paid by the state, which would be miniscule. It would also address the duration of coverage provided in the benefit. Under the current language, the benefit would end when the spouse remarried. In that case, a person may choose not to remarry in order to maintain health care coverage. The marriage penalty provision removed from a similar law in California had been determined to be discriminating to a person looking at remarriage. Continued coverage would be provided for dependent children up to the age of 23 if that child was enrolled as a full-time student in an accredited college, university, or trade school.

Mr. McAllister stated he had spoken with several Senate members and he had been informed the Senators were under the impression S.B. 404 would cover all firefighters and police officers, but it did not. By adding the amendment, coverage would be provided to an additional 1,800 professional firefighters, 2,500 additional police officers, and 2,500 volunteer firefighters throughout the state. He appreciated the committee’s consideration.

Andy Anderson, representing Nevada Conference of Police and Sheriffs (NCOPS), stated NCOPS supported the bill with the proposed amendments and believed the fiscal impact would be minimal.

Gary Wolff, representing Nevada Highway Patrol Association, stated the association supported S.B. 404 with the amendments, and commended the Senate for their support in developing the bill.

Mr. Mortenson felt the provision mentioned by Ms. Von Tobel should be added to the bill. Insurance should be made available to all surviving spouses in the event a spouse was killed in the line of duty. He felt the 60-day clause in section 1, subsection 1, should also be removed.

In response to Ms. Von Tobel’s question, Mr. McAllister replied he hoped the language would address the issue. If it did not, he would be happy to provide a change to ensure the surviving spouses of fallen officers and firefighters were covered in the event they were covered under another form of insurance prior to the death. The intent was to bring the surviving spouse and the dependent children in and under the health insurance program that was in effect for the officer who died in the line of duty.

Ms. Segerblom commented she agreed with the age of 23 years for the full-time student enrolled in college and added the same age provision was offered under social security benefits.

With regard to the volunteer firefighters, Mr. Lee requested clarification as to what "in the line of duty" referred. Mr. McAllister said he understood it to mean anything within the job’s description. In Mr. Hashimoto’s case, he had been performing in training exercises that were part of his job when he was killed.

Mr. Lee asked if the volunteer arena would be extended further, to which Mr. McAllister replied, with regard to volunteer firefighters, a finite number of members would be covered under worker’s compensation. The fire chief was required to submit the names of those firefighters considered to be members of the volunteer department to the insuring agency. He did not believe the arena would be expanded to volunteer ambulance drivers. No further discussion ensued.

Stephen Turner, representing the Peace Officers Research Association of Nevada, related the story of the situation in which Mr. Hashimoto died, and clarified the officers and firefighters were not requesting unjust enrichment when asking for spouses and dependents to be covered if they were killed in the line of duty. He urged the committee to recognize the risks law enforcement officers and firefighters, including Mr. Hashimoto and Sergeant Sullivan, took in everyday job performance and urged the support of S.B. 404 and the officers and their families.

Nile Carson, representing Reno Police Department, stated the department whole-heartedly supported S.B. 404 and the proposed amendments. Over the years the department and the police industry had performed a great job taking care of its own when it came time for a funeral; however, a poor job was done in providing for those left behind. Survivors of fallen officers for that reason created the National Organization of Concerns of Police Survivors. The organization currently lent support to departments that experienced the death of an officer in the line of duty with protocol and lists of benefits available to the surviving families.

Mr. Carson said the issue dealt with the fundamental need of modern society and the continuing health benefits. If there were any continuing payments through worker’s compensation, in most cases payment was based upon a calculation of years of service. The most active and most exposed officers were those younger officers with the least amount of years. The younger officers did not always get the same benefits that the older, more experienced officers would receive. He remarked the state was putting its strongest, finest, and quickest at an increased risk.

With regard to changing the age at which coverage ended, Mr. Carson said in some insurance programs it was beneficial the age extend to 23 years if the child remained dependent upon the parent while in college.

Concluding, Mr. Carson stated he knew of no authority for solving disputes involving benefits to be paid. Most often it was family or friends of the family who dealt with the local government in determining what benefits were available. To his knowledge, if there was a conflict a private attorney was hired in order to assist in negotiations. If the dispute could not be resolved the issue ended up in litigation. The association did not think those types of situations following a tragic death should be weighed upon the survivors simply to ensure the future. Additionally, the situation placed the local government entity in a very bad light based on business reasons rather than what was right or wrong. He encouraged the passage of S.B. 404.

With no further testimony, Chairman Bache closed the hearing on S.B. 404.

Steve Holloway, executive vice president, Associated General Contractors (AGC), Las Vegas chapter, testified in support of S.B. 475 on behalf of AGC in northern and southern Nevada. The committee had been informed currently Nevada Revised Statutes (NRS) Chapters 338 and 408 required a public works agency to negotiate with an architect or engineer for the design of a project and then solicit bids from general contractors for the project’s construction. That was commonly known as the design-bid-build method of contracting, which was the traditional method of contracting public works projects.

During the past decade, federal agencies such as the Department of Transportation, Bureau of Reclamation, and General Services Administration had increasingly utilized an alternative method of contracting known as the design-build method. The design-build method would be utilized to construct approximately 15 percent of their public works projects during the next fiscal year.

Mr. Holloway acknowledged 30 states that currently allowed public works agencies to utilize design-build as an alternative method of contracting. While the procedures for doing so varied from state to state, the majority of those states had four elements in common with the more standardized federal procedures:

• The design-build method was utilized only on projects where it had been determined a significant savings in cost or time would be provided;

• Selection criteria of the successful design-build team were set forth in the initial Request for Proposals;

• The costs associated with the development of the final proposal required the list of bidders to be quickly pared down to a short list of no more than five finalists; and,

• The unsuccessful finalists were partially remunerated for the nearly completed designs that they were required to submit.

Mr. Holloway said S.B. 475 was a collaborative effort involving the construction industry and state and local government, and it borrowed from the experiences of the Federal Government and other states.

Mr. Holloway proceeded to present the high points of S.B. 475 in a section-by-section analysis (Exhibit I).

With regard to Section 1, Mr. Holloway stated S.B. 475 proposed to amend chapters 338 and 408 of NRS by allowing state and local public works agencies to use the design-build method of contracting in addition to the more traditional method of contracting.

Mr. Holloway informed the committee he would dedicate more time to section 2 as it was the most difficult section to illicit compromise among the industry.

Section 2 delineated the types of public works projects in which the design-build method of contracting was used. Section 2, subsection 2 (beginning with line 6), provided that any public body might utilize the design-build method of contracting on any project exceeding $30 million ($100 million if a water or sewage treatment plant), if it could illustrate that the project would be completed faster utilizing the method. Section 2, subsection 3, line 19, allowed public works agencies in Clark County to also utilize the design-build method on no more than one public works project in a fiscal year. The cost of the project would be required to exceed $5 million but less than $30 million. Mr. Holloway informed the committee subsection 3 was a compromise between Clark County, which would like to use the design-build method on selected smaller projects, and Washoe County and other smaller counties who indicated they did not wish to use the design-build method. The majority of the construction industry agreed the methods used should be limited to a trial period of 4 years. Subsection 3 was added at the request of various public works agencies.

Continuing, Mr. Holloway stated section 2, subsection 4, line 40, allowed for any public body to utilize the design-build method on certain stand-alone projects. Use of the method was to have a particular value. Section 3, line 12, required contractors determined to utilize the design-build method to make it known at a public hearing. The section needed to comply with the open meeting law. Section 4 distinguished those procedures to be used for the design-build method and the more traditional design-bid-build method of contracting. Section 5, line 33, described information a public body was required to provide to design-build teams wishing to submit a proposal for a design-build project. It also required public solicitations of proposals for a design-build project. The design-build project procedures were required to be both open to the public and competitive.

Mr. Holloway said section 6, line 38, set forth the minimum qualifications for any design-build team who wished to submit a proposal for a design-build project. Section 7 set forth the objective criteria for finalist selection among those teams who submitted proposals. Section 8, line 34, set forth minimum criteria for both the final proposal submittal and the selection of the design-build team.

With regard to section 8, subsection 2, Mr. Holloway said local bidder's preference applied only to those evaluation factors pertaining to the cost of construction. He said the only amendment he believed would be introduced to the committee related to subsection 2. AGC had made several attempts to write the subsection in a manner acceptable to all parties. The Nevada Department of Transportation would introduce an another attempt at language clarification.

Section 8, subsection 9, line 41, allowed a public body to employ an architect or engineer as the project manager and codified a common practice among the public works agencies. He informed the committee he would not review the definitions provided by section 10, subsections 2 through 11; however, he would be available to answer any question regarding those subsections.

Mr. Holloway said sections 11 and 12 both contained conforming amendments indicated on pages 10 and 11, lines 21 and 39, respectively.

Mr. Holloway explained section 13, needed to be reviewed in detail. AGC had promised, based on the body in which A.B. 106 had been considered, they would return to the Assembly with a bill that would correct problems relating to the bidder’s preference statute. Section 13 of S.B. 475 would accomplish that and was developed in conjunction with design-build because bidder’s preference also applied. Section 13, subsection 3, required the state contractors' board to issue a certificate of eligibility for bidder's preference to licensed and qualified general contractors. Both the construction industry and public works agencies believed certification for bidder's preference should be centralized with the state contractor's board. The contractor’s board was in support of centralization.

Section 13, subsection 3, part (a) (1), was added at the request of the Clark County District Attorney's Office. It simply clarified the fact that the sales and use taxes paid to the state by a general contractor qualified him for bidder's preference even though the actual construction occurred on federally owned land. Part (b) of subsection 3 allowed bidder's preference to be passed along with the appropriate license. As written, the current statutory language gave bidder's preference to out-of-state contractors who subcontracted out but denied bidder's preference to a local contractor. Part (b) was intended to turn that around. Bidder's preference could be passed along to family, but an out-of-state contractor could not buy it. Bidder's preference was to encourage the use of those contractors who purchased and employed locally.

Section 13, subsection 4, required sales and use-taxes used to qualify for bidder's preference must have been paid by either the contractor or an affiliate of the contractor. Section 13, line 20, required a certificate of eligibility for bidder's preference be renewed annually upon renewal of the general contractor's license. Section 13, subsection 6, stated what would happen if the general contractor failed to renew his certificate of eligibility.

Section 13, line 32, provided a penalty for those who falsified their bidder’s preference application. Section 13, subsection 9, deleted a provision allowing out-of-state contractors to circumvent the statute’s intent. Subsection 10 would allow the state contractor's board to adopt regulations that were necessary to issue a certificate of eligibility and subsection 11 allowed challenges to the application of bidder's preference. It codified the existing practice and placed burden of proof on the complainant. Section 13.5 was simply a reprint of section 13 that had been added the legislature in order to extend NRS 338.147, which would have "sunsetted".

Both the construction industry and the affected public works agencies supported the proposed changes in section 13. The changes were intended to rectify problems experienced with the bidder’s preference application during the decade since it had been instituted.

Mr. Holloway stated sections 14 through 35 repeated sections 1 through 12. That was done in order to allow the State Public Works Board (SPWB) and the Department of Transportation (DOT) to use the design-build method of contracting.

Section 36 would repeal NRS 341.171, which currently allowed SPWB to use the design-build method of contracting but only with the project-by-project approval of the legislature. Section 37 established an interim advisory committee to study the use of the design-build method over the next 4 years. The legislature would be informed of any recommended changes to the statutes.

Mr. Holloway explained section 38 would provide for the expiration of the act in 4 years if the legislature did not respond to the recommendations of the interim advisory committee in the 2001 session. No further discussion ensued.

William Molini, representing Ducks Unlimited, Inc., called the committee’s attention to section 1, subsection 4, which provided for a provision that would allow a public body to enter into a contract with a nonprofit organization only for the design and construction to restore, enhance, or develop wetland. To his knowledge, Ducks Unlimited was the only nonprofit organization that performed that type of work. The provision would be in the interest of the public and would allow for the development of those wetlands at a lessened cost than through the normal process. Ducks Unlimited often brought its own funding to the projects, maintained a staff of qualified engineers, and hired local contractors to perform the actual construction of the project.

Mr. Molini stated Ducks Unlimited was interested in developing the Las Vegas Wash Wetland Project and was in the process of developing the initial site evaluation for Clark County. Ducks Unlimited was in support of S.B. 475.

Rod Johnson, assistant director of operations, State of Nevada Department of Transportation, stated he supported the design-build concept. The department felt the method was a mechanism for the construction of their projects; however, they had not discussed whether or not the method would be utilized in the near future. He said on several occasions the department and AGC had attempted to correct sections 8 and 27 (paragraph 2), to which the final proposal submitted by a design-build team had referred. The intent of the bidder’s preference was to be imposed on the cost-of-construction criteria not all the required criteria. Currently the bill indicated if the bidder’s preference was present the proposal would be deemed as a better proposal. He provided the committee with a proposed amendment to S.B. 475 (Exhibit J).

Bill Dickerson, president, Careborne Incorporated, said he opposed certain portions of S.B. 475 as it applied to some public works projects. He related some personal and business background information to the committee, and stated Careborne Incorporated had a policy against design-build because the method was a very costly way to perform construction work.

Mr. Dickerson said design-build was a method whereby a project might be completed in a shorter timeframe, but the cost and the cost overruns were a problem. Typically it was 50 to 100 percent more costly to do design-build projects than it was to bid the project. Many states did not use the method because of the costs.

Mr. Dickerson explained under the current verbiage of the bill, Reno’s railroad trench project would be design-built. The project could commence without drawings, bids, estimates, or specifications. It could also go beyond the $192 million that had been proposed for the project.

Chairman Bache stressed he did not want to detail any specific projects nor did he want to get into the verbiage of another bill. He asked Mr. Dickerson to keep his testimony to current legislation.

In response to Mr. Dickerson’s question, Mr. Bache replied the appropriate governmental entity would have to authorize a decision relating to design-build projects.

Continuing, Mr. Dickerson informed the committee the county commissioners had gone on record with the legislature, opposing the design-build method in Washoe County. He felt the bill should be amended to apply only to road construction projects for the trial period. He urged the committee to amend the bill so it did not cause the state and the counties undue problems with excessive project costs.

Margi Grein, representing Nevada State Contractors Board, testified in support of portions of S.B. 475 pertaining to the state contractors board. No further discussion ensued.

James Spinello, representing Clark County, said the county was supportive of S.B. 475 both in terms of the bidder’s preference section and the design-build method. He thanked AGC for cooperating with the county on the verbiage of the bill. As a matter of record, and on behalf of Clark County, he clarified those public entities governed by the Clark County Board and considered to be separate entities; the airport district, the sand district, and the water district were not limited to only one project constructed for that range of function.

With regard to section 37, Mr. Lee asked who appointed the interim advisory committee members. Mr. Spinello replied it was his understanding the legislature appointed those members. Mr. Holloway added the AGC during discussion in the Senate, had initially considered an interim legislative committee, but it was felt there were currently too many interim committees. It had been determined an interim study committee would be developed whereby each of the entities indicated would appoint a representative to the committee with the idea that those committee members would then elect a chairman.

Speaking on behalf of Mrs. Freeman who had to leave the meeting, Mr. Humke stated she opposed the bill for its application to Washoe County. She had expressed a concern why there was anyone mentioned from northern Nevada to be placed on the advisory committee. He asked how Mr. Spinello felt about amending out any northern Nevada representatives. Mr. Spinello replied the use of the design-build method under the bill was permissive. Washoe County did not have to use it if they so chose. He informed the committee Reno and Sparks had been offended because Washoe County did not want to use the design-build method of contracting and both cities did. Because Washoe County had indicated they did not want to use the method, representatives from those agencies indicating they did desire to use the design-build method had been mentioned to be placed on the committee. The intent of the advisory committee was to ensure the method was used appropriately and would save the taxpayer time and money.

Mr. Humke, now speaking on his own behalf, countered the beliefs of Mrs. Freeman. He remarked for the record, as an example, he acknowledged the importance of a representative from northern Nevada Chapter of the Associated General Contractors to be on the board. There were state public works projects on a limited basis that could be performed in the northern portion of the state including Washoe County. Furthermore, northern AGC members may perform projects in Clark County. Mr. Spinello commented if there were projects completed in southern Nevada and representatives from northern Nevada viewed those projects as being successful, northern Nevada might want to be part of the process. He felt it would be unfortunate to remove northern Nevada from project assessments.

Cheryl Blomstrom, representing the Northern Nevada Chapter of Associated General Contractors, stated the northern Nevada chapter did want to be included on the advisory study committee primarily for the reasons Mr. Humke had indicated. Additionally the chapter had made a commitment to the cities of Reno and Sparks to work with them over the next 2 years. If it was determined design-build was a successful method of contracting Reno and Sparks could be included by the end of the next legislative session.

Warren Hardy, representing Associated Builders and Contractors of Southern Nevada and the Southern Nevada Strategic Planning Authority (SNSPA), testified in support of S.B. 475. The legislation was a result of years of intensive work on behalf of the industry and local government and he was looking forward to seeing how it worked.

William Parker, representing himself, related some personal background information to the committee and stated he had performed contract work with several companies. He had concerns regarding the design-build method of construction and said General Motors, for which he previously worked before retiring, would have never thought to use that method. In order to be knowledgeable of the exact project costs, the project was designed, engineered, and bid-out. General Motors had never issued a purchase order for any project that did not have a "not to exceed" clause and had a specific "no later than" completion date.

Mr. Parker stated section 7, subsection 3, part (a), should be omitted. Individuals or companies made money by submitting successful bids and money was lost when bids were unsuccessful.

Mr. Parker felt the design-build method of construction should pertain only to construction of highways. Fifty to 75 percent of the engineering for highway and road construction was covered in the specifications. He provided an example of a design-build project that was 100 percent over budget and only 70 percent completed and said it was wrong to apply the design-build method of construction to all projects.

Chairman Bache remarked the bill only applied to those counties in Nevada with populations of 400,000 or more. He asked if Mr. Parker was opposed to the idea of design-build method of construction in Clark County. Mr. Parker replied utilizing the design-build method with public funds was wrong unless detailed specifications were in place in order to construct the project.

Pat Coward, representing Washoe County, introduced Jim Galloway, chairman, Washoe County Board of Commissioners, who would present Washoe County’s position on S.B. 475.

Mr. Galloway stated a report received from John Slaughter, strategic planning manager, had indicated the amended version of S.B. 475 (first reprint) did not exclude entities in Washoe County from the bill (page 4 of Exhibit K). The amended version of the bill allowed public bodies in Clark County to contract once each year with a design-build team for a public project with a cost of at least $5 million but less than $30 million. There were no restrictions on those projects that totaled above $30 million. It was when the cost of the project was large that the risk of overruns was also very large. The concern on overruns had prompted the county’s initial position.

Mr. Galloway read from page 1 of Exhibit K, which stated Washoe County’s position on the bill.

The board had taken a position that many projects in Washoe County could be affected S.B. 475. Because the bill would allow design-build projects over $30 million, design-build contracts could be applied to specific, larger projects such as the airport expansion, a high school, the railroad trench, and the convention center’s expansion. Initially the county was opposed to the bill in its entirety because of the possibility for cost overruns. It had been determined the position would cause difficulties because there were entities in Clark County that wanted to use the design-build process. As a compromise, if Clark County wanted to use the design-build method, Washoe County would not oppose its use; however, Washoe did not want to utilize the design-build method.

Mr. Galloway said there had been some ambiguity in the verbiage but he felt the intent of the county was made clear. When the matter came up before the Senate Government Affairs Committee he had stated the position was to oppose the application of the design-build provisions of S.B. 475 to any project with Washoe County, no matter which governmental entity labored on the project. There had been some questions raised and the motion was interpreted to mean only that Washoe County did not want to use design-build contract arrangements.

Mr. Galloway said subsequent to the Senate hearings the commission had received additional input from the public works department. As a result of a discussion, the county offered additional criticism of the bill. For the purpose of improving the bill and without negating the position, the county offered a suggestion based on the discussion (page 3 of Exhibit K). The public works director, Dave Roundtree indicated the bill proponents did not consult him in drafting the bill. He also indicated the following requirement should be included in bills authorizing design-build contracts. The requirement did not seem to be present anywhere in the bill as of May 25. The suggestions were as follows:

• Section 8, subsection 2 and section 27, subsection 2 added "to be considered responsive, each final-round proposals must be at some design level specified in the solicitation which is sufficient to arrive at a not-to-exceed total price for the work proposed. This not-to-exceed price shall be submitted by the contractor as part of any responsive proposal."

• Section 8, subsection 4, part (b) and section 27, subsection 4, part (b) added "a not-to-exceed price must be specified as a condition in the contract awarded."

Mr. Galloway queried rhetorically why the county authority opposed what had been presented as enabling legislation. The county did not have the authority to veto projects by other governmental entities within Washoe County. He provided an example of one governmental entity, the Reno-Sparks Convention & Visitors Authority (RSCVA) that utilized a similar method to the design-build method for the bowling stadium. He postulated how that could be done when the law did not allow it and offered the explanation RSCVA had claimed they were not a public entity and thus not subject to the restrictions of those sections of the law. In RSCVA’s case, the architect had been given the authority to direct the contractor and the design would be generated as the project was under construction.

Mr. Galloway stated there had been concern that the design-build method by its very nature lead to cost overruns. Pete Sferrazza, member Washoe County Board of Commissioners, who had been on the RSCVA board at the time the construction of the bowling stadium began, had said many of those same arguments being used for S.B. 475 were given to RSCVA as reasons they should design the stadium the way they did.

Mr. Galloway stated it was not just out of concern for Washoe County as a bureaucracy that they took the position, but out of concerns for the constituents the county represented. If entities were to experience trouble due to large overruns with the design-build approach to a contract, all taxpayers in the county would bear the burden. Future resources for other projects would also be limited.

With regard to the compromise to which Mr. Holloway referred, Mr. Galloway said the floor was not lowered from $30 million to $5 million in counties outside Clark County. He did not view that as a compromise and said it was only a compromise in the sense it was a unilateral action. The compromise was not sufficient to allay the concerns expressed by the county commissioners even if within Washoe County each public body had been limited to only one public project over $30 million. He advised the method should not apply to any project within the county.

Mr. Galloway said the bill did not require what level of design was to be included in a final-round proposal. S.B. 475 allowed for the use of subjective criteria for award of a contract, which would ultimately lead to charges of favoritism, patronage (whether or not those charges were justified), abuse, and would allow a contract to be awarded without any definite cost. He related personal information about his knowledge of contracts to the committee and stated the bill did not require the contractor to update or correct the original estimate of the body soliciting the project, there was no limit on the not-to-exceed cost or a limit on fees that might be incurred. For instance, if a Federal Governmental agency performed a cost-plus contract they utilized a cost-plus fixed fee contract whereby making the contract larger did not benefit the contractor; however, utilizing a cost-plus incentive fee (CPIF) contract and coming in under budget did benefit the contractor.

Continuing, Mr. Galloway referred the committee to page 8 of Exhibit K, a list of those entities that had design-build legislation. Upon review of the list it had been determined those states with enabling legislation amounted to only five. Of those five, three were restrictive. They were enabled with restrictions greater than what S.B. 475 proposed. Washington and Florida had enabling legislation as broad as what S.B. 475 proposed. He suggested the committee investigate the years of experience those two states had with regard to design build.

Mr. Galloway said the design-build method was not a tried-and-true procedure, which was consistent with Washoe County’s position. Because Clark County desired to utilize the method, the county would defer to them and examine what track record would be established in Nevada before allowing the design-build method to be used in Washoe County.

In conclusion, Mr. Galloway advised under the provisions of S.B. 475 as currently written it would be possible for the public to never disclose the project cost or be knowledgeable of the cost altogether. That was another reason for the amendment that had been proposed by the county commissioner; however, was not the only amendment that would improve the bill. He reiterated he was only presenting the position of Washoe County. No further discussion ensued.

Paul Zahler, representing himself, presented to the committee personal and professional background information. He had been the largest custom homebuilder in southern California and had completed in excess of 1 million square feet of commercial space.

Mr. Zahler said he had never performed a project that did not have a not-to-exceed clause and when contractors received specifications on design-bid-build projects, those contractors would bid accordingly. With the design-build method there were multiple teams with differing approaches and ideas of construction achievement. The larger the project to be constructed, the larger the risk for discrepancies and cost overruns.

Mr. Zahler concluded by reading from The Book of Luke, Chapter 14, verses 28-30, and stated the way to construct public projects was to include a not-to-exceed clause or an incentive clause.

With no further testimony, Chairman Bache closed the hearing on S.B. 475.

Marvin Leavitt, representing the city of Las Vegas, testified he appeared on behalf of the committee on local government finance. He provided the committee with background about how S.B. 501 was created. There had been concerns expressed about the ballot questions examined throughout Nevada with regard to the levy of property taxes and overrides in a bond request. After careful examination of various questions asked on the ballot, the committee pondered how voters understood on what they were asked to vote. The district attorneys in the various counties had used the language in the development of ballot questions simply because the language appeared in statute.

Mr. Leavitt said S.B. 501 was an attempt to provide guidance and consistency to language used in those ballot questions when bonds were issued. It was hoped by providing annual examples to each local government of how they might use the questions, consistency would be achieved and voters would be better informed in their decision-making.

Referring to page 12, Chairman Bache asked how did the repeal of NRS 387.601 fit into S.B. 501. Mr. Leavitt replied it was his understanding when the emergency situation by which bonds could be issued had been indicated in section 2, subsection 2, part (a), it had been determined the verbiage indicated in that section would duly cover the emergency situation.

Chairman Bache asked if the language was duplicative language and was in two separate portions of the statute, to which Mr. Leavitt replied he was correct.

Carole Vilardo, representing Nevada Taxpayers Association, stated the association supported S.B. 501. Concerns had been expressed the ballot questions were so badly worded an individual was voting against a question because it was not understood. She preferred an individual vote against an issue with full understanding of the question being asked. S.B. 501 would provide clarification of ballot questions. No further discussion ensued.

There being no further business, Chairman Bache closed the hearing on S.B. 501 and adjourned the meeting at 1:17 p.m.

RESPECTFULLY SUBMITTED:

Rachel Baker,

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

DATE: