The Committee on Government Affairs was called to order at 9:16 a.m., on Monday, May 10, 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

Ms. Merle Berman

Mrs. Vivian Freeman

Ms. Dawn Gibbons

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

Mr. Wendell Williams

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Chairman Bache stated there were some concerns with the original amendment and Mr. Tom Skancke worked with the Attorney General resulting in the revision presented to the committee (Exhibit C).

Tom Skancke, representing the Las Vegas Convention and Visitors Authority, indicated the amendment had been worked out between their legal counsel and the Office of Attorney General. There was some concern regarding membership, dues, and payment for goods and services. That was alleviated by exempting those organizations that paid membership dues, as oftentimes those dues were less than $500. He added all the people previously testifying on S.B. 312 had agreed to the amendment.

Mrs. Freeman questioned where the $500 figure came from as it had been awhile since the first hearing on the bill. Mr. Skancke replied, when the bill was originally heard there was concern from some organizations that membership dues paid to such organizations as Economic Development Authority of Western Nevada (EDAWN) would have to operate under the open meeting laws. Those membership dues were then exempted if the dues were $500 or $1,000 and paid to such organizations as EDAWN or the chamber or commerce.

Mrs. Freeman understood the bill dealt with sending notices by first class mail, and wondered if that changed the whole intent. Chairman Bache interjected the amendment had no effect on the original bill it only added a section to alleviate a problem, and was done because the bill was an appropriate vehicle to define "public body."

Ms. Gibbons asked where the proposed amendment was to be inserted. Eileen O’Grady, legal counsel, Legislative Counsel Bureau replied the amendment would apply to the section currently defining "public body."

Mr. Mortenson wondered about such organizations as KNPR, the public radio station in southern Nevada, or the Nevada Dance Theatre, as they also received substantial outside funding. They received grants from the National Endowment Fund and KNPR received funding from the state in order to operate. He was concerned as it could be 10 percent or more of their budget, and questioned if they would have to hold their meetings under the open meeting law. Mr. Skancke related the amendment covered only those organizations whose board had elected officials appointed by an elected body. If a city councilman was appointed to a specific board and that board received tax dollars in excess of 10 percent of their operating budget, then they would have to operate under the open meeting law. The Attorney General’s office specified the member must be a voting member, appointed by a governing body, and must be an elected official appointed by that body, with the organization receiving more than 10 percent of their operating budget from tax revenues. Such organizations as Nevada Dance Theatre, Nevada Opera, or similar organizations were exempt.

ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.

Chairman Bache indicated there was no debate on S.B. 341 at the previous hearing. Mr. Danny Thompson representing the AFL/CIO had provided an amendment dealing with Silver State Disposal in southern Nevada and apparently problems between the two entities had been resolved with that amendment.

ASSEMBLYWOMAN TIFFANY MADE A MOTION TO DO PASS S.B. 341.

ASSEMBLYWOMAN BERMAN SECONDED THE MOTION.

Chairman Bache stated the bill had been heard in the early part of the session and the proposed amendment was parallel language for cities and counties (Exhibit D). The original language did not adequately define "excess property" and the amendment made the definition more specific.

As he recalled, Chairman Bache thought there had not been any opposition to the bill. Mr. Ziegler, research analyst, Legislative Counsel Bureau, testified that Mr. Ron Linn representing Clark County said S.B. 216 addressed county charges and fees paid for all activities regarding construction in the nature of an enterprise system. The bill enabled a university or school district to enter into an interlocal agreement with Clark County and provided a vehicle under which that could be accomplished. Martha Tittle representing the school district, Rick Bennett representing the university system and Marta Brown appearing for the city of North Las Vegas all supported the bill.

ASSEMBLYWOMAN TIFFANY MADE A MOTION TO DO PASS S.B. 216.

ASSEMBLYWOMAN PARNELL SECONDED THE MOTION.

Chairman Bache stated from his notes there had been no opposition to the bill.

Mr. Lee pointed out the bill insured that the smaller counties remained under the state fire marshal even though their populations were increasing. That way the fire marshal still handled all investigations until the county became large enough to hire their own investigator.

ASSEMBLYMAN LEE MADE A MOTION TO DO PASS S.B. 389.

ASSEMBLYWOMAN FREEMAN SECONDED THE MOTION.

Chairman Bache pointed out S.B. 470 and S.B. 436 were the two bills that dealt with the debt management commission, and there was some confusion. He felt they should take each bill separately and they would address S.B. 470 first.

Carole Vilardo testified she had spoken with Senator Porter and there was some confusion on S.B. 436 relative to the language in section 1. She added the senator wanted to present an amendment and there was no problem if the committee voted to pass S.B. 470. S.B. 436 created the Southern Nevada Regional Strategic Planning Authority and there was a lack of clarification that Legislative Counsel Bureau legal division had pointed out should be corrected before action was taken on the bill. There were qualifications placed in the bill for Clark County’s Debt Management Commission (DMC), so action could be taken on S.B. 470.

Chairman Bache clarified S.B. 436 was the bill requested by the regional planning coalition and presented by Senator Porter wherein a debt management commission was set up but structured differently than the one in S.B. 470. In Senator Porter’s bill the school district was omitted as a player and the chairman had reservations with the language, because school construction was something involving all the districts.

Carole Vilardo added when talking about S.B. 470 the qualifications were set for the public members serving on the debt management commission in Clark County. Those included at least 5 years experience in either banking, public administration or financial backgrounds. It also created a section that would avoid any conflict of interest on the part of public members. For instance if there was someone in financial administration they would be hired to work on the bond issues which would be presented before the DMC. She added when talking with Senator Porter it was not his intent that the school district be omitted from the bill. That was what was to be included in S.B. 436.

Chairman Bache stated the bill allowed for dissolution of local governments, and setting procedural guidelines for that process. There was no opposition or controversy.

Chairman Bache indicated the bill addressed the provisions of disclosure and ballot questions, as well as approval of general obligations and property taxes. There was no opposition and the taxpayers association was in support of the bill.

Chairman Bache stated the bill had been heard the previous Friday and there was no opposition.

ASSEMBLYWOMAN TIFFANY MADE A MOTION TO DO PASS S.B. 528.

ASSEMBLYWOMAN BERMAN SECONDED THE MOTION.

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Chairman Bache indicated he had been given two different proposed amendments (Exhibit E) and (Exhibit F). He pointed out if action was taken on the bill he wanted it re-referred to the Committee on Ways and Means so they could see if it impacted the distributive school account, because that issue was part of the problem in Eureka County. The county was not involved in the account, but were having significant problems due to the fact taxes from mines were substantially less. The mining industry was in trouble and he had heard that morning that the price of gold had dropped substantially.

He added neither of the amendments to S.B. 48 had been opposed in the Senate. He recalled State of Nevada Employees Association (SNEA) had testified in opposition to the original bill in the Senate and he felt Mr. Etchemendy had responded to the Chairman’s concern, as the original intent was to deal with the mining tax. The two amendments did not deal with the exact same issues. Mr. Etchemendy’s amended language change (Exhibit E) dealt with populations less than 100,000 with 25 percent of their general fund revenues coming from property tax levies derived from the net proceeds of mines. The amendment from Mr. Bellister and Ms. Cahill (Exhibit F) suggested the fund not exceed 30 percent of the expenditures from the general fund, which was currently 10 percent of the prior year’s general fund expenditures, and was being changed to 15 percent.

Ms. Tiffany questioned if Mr. Etchemendy’s amendment would increase or decrease the amount that could be saved. Chairman Bache replied S.B. 48, assuming the 30 percent was left alone, restricted it to those counties less than 100,000 who received the money from net proceeds. It would essentially only affect Eureka county because it had 35.69 percent of its revenues from those net proceeds.

Ms. Tiffany asked if she understood correctly, that only Eureka county would be targeted because of the percentage rather than the amount of money. The Chairman responded that was correct. Current law was 10 percent and the school district was proposing to make it 30 percent.

Ms. Tiffany thought S.B. 48 targeted the amount that was being stabilized rather than a county. Chairman Bache pointed out it would be increased by 5 percent over the current amount, but it would decrease from the 30 percent currently in the bill.

Henry Etchemendy, Nevada Association of School Boards testified that he had not seen the proposed amendment from the Nevada State Education Association (NSEA) and indicated his concern at previous hearings on the bill because it was too open ended. The way the bill was written, it would apply to any school district that was located in a county with less than 100,000 so many could be affected when the language was supposed to only address net proceeds of mines. In working with the department of education to review the amount of money received from mines in the various districts, he found Eureka county was the only county heavily impacted. So 25 percent of the general fund revenues derived from property tax levies was picked. Another limitation in the original bill was the fund could not exceed $2 million at any given time. With respect to the NSEA proposal, although it was 5 percentage points above the 10 percent, it could be increased 50 percent over what was presently allowable. His organization still felt it was logical to remain at the 30 percent because it was still restricted to the $2 million. The theory was that a district that was so volatile needed to save some of its revenue for future years whenever problems similar to that in Eureka occurred.

Ms. Tiffany said she agreed with Mr. Etchemendy, and if it was appropriate she would like to amend and do pass the bill with just Mr. Etchemendy’s amendment. Chairman Bache informed Ms. Tiffany he would like to finish discussions on the bill and amendments before taking any motions.

Mr. Neighbors wondered how the counties with 400,000 or above, would be affected. He queried if net proceeds dropped the school district would have to pick up the slack. Mr. Etchemendy replied if proceeds dropped to any significant degree the district would re-enter the formula, but it was not known how much they would receive. At the end of the coming biennium the county would be placed back in the formula, but they would not receive the amount of some other districts because there would still be some revenue from the net proceeds available.

Mr. Mortenson observed in effect the taxpayers would save a considerable amount of money if it was deposited into a separate account rather than using taxpayer funds when the county rejoined the formula. Mr. Etchmendy disclosed if a reserve was in place, the district would not return to the formula for a considerable period of time.

Ms. Parnell stated if the current rate was 10 percent, any school district could set aside 10 percent and wondered if there was a dollar amount such as the $2 million cap. Mr. Etchemendy replied there was no cap on the dollar amount.

Ms. Parnell said she was extremely uncomfortable with the 30 percent and felt if language could be specified it only applied to Eureka county, she would have no problem with the bill.

Mrs. Freeman stated she would like to have the bill re-referred to the Committee on Ways and Means without the amendments, as that committee was aware of the White Pine county problems.

Chairman Bache disclosed he was a Clark County teacher, but the bill had no impact on him. He was also uncomfortable with any expenditure going beyond 10 percent, and felt both amendments needed to be placed with the bill and then sent to the Committee on Ways and Means. The net proceeds of mines problem needed to be addressed and he felt it could be coordinated with the Distributive School Account (DSA) so any revision to the formula regarding Eureka county could be resolved.

Ms. Parnell disclosed she too was a teacher with the bill not affecting her in any manner.

Chairman Bache stated he was opposed to the motion without the inclusion of the 15 percent amendment. He felt the 30 percent would give districts the opportunity to hoard money.

Mr. Neighbors added he too had a problem with the 30 percent and questioned if he could have Mr. Bellister and Ms. Cahill’s proposed amendment included. Chairman Bache pointed out the motion could be amended.

Ms. Tiffany stated she would have to vote against the amendment, because it was not brought before the Senate. She recalled many times before it had been stated "if the amendment was not brought before the Senate then don’t bring it to the Assembly side." 30 percent was agreed upon, and particularly with Eureka county because the volatility of the tax base, there needed to be a stabilization fund for the future so they did not have to touch the DSA, as that was general fund money. She felt it was ridiculous to even hint that money could be squirreled away in the stabilization fund, because even the state had a stabilization fund.

Chairman Bache informed the committee it was the telecommunication services bill heard on April 30.

Mr. Lee asked as long as Mr. Herr was in the audience, if he could explain what farmer-line service was. Brian Herr representing Nevada Bell responded there were certain types of residential services that probably only existed in Nevada. It was a case where part of the service was supplied by a telephone company, and other parts supplied by the farmer or rancher. Such as one case in northern Humboldt county, where part of the barbed wire fencing that led into the ranch served as open wire telephone service.

Chairman Bache asked what single line directory meant. Mr. Herr stated that was single line directory listing and was the listing in the telephone directory for a single residential line. There could be an additional listing in the directory but only the first listing was considered part of the basic service.

Chairman Bache indicated there had been an amendment offered by the Controller’s Office, which was subsequently rejected and the committee had moved to pass the bill out of committee. However, afterward an amendment had been submitted that was worked out between the controller’s office and the attorney general (Exhibit G). The chairman asked if a member of the attorney general’s office could appear on the amendment.

Jeannine Coward, Assistant State Controller, responded the representative of the attorney general could not make the hearing, but had indicated she had called the chairman to let him know the two offices had worked out a compromise. Ann Cathcart originally had some concerns about whether the task force had agreed with the amendments and she indicated there had been verbal agreement to the amendment by all the members of the task force. She had presented a packet to the committee and informed them there were only two members she could not reach and the rest had initialed off on the cover sheet to the amendment (Exhibit H). It was basically the same amendment that was originally proposed and she had contacted Gary Crews to assure the amendment was satisfactory to him.

In the amendment (Exhibit I), they were trying to define cancellation and meanwhile Norm Azevedo, Senior Deputy Attorney General, discussed the issue of "write-off" and "cancellation" with Brenda Erdoes, and she concluded that "write-off" was an acceptable accounting term and therefore could be placed in the statutes. What the term meant was the office would have the ability to write-off certain debts, but those would still be collectible if the money became available and the debt had not exceeded the statutes of limitations. The bill attempted to coordinate the debt collection for the smaller agencies as larger agencies had their own statutes. What was hoped was that all the agencies would have the knowledge that allowed them to know which companies were having problems, and therefore no business should be given to them. She added the Government Finance Officers Association had issued a report stating the only way to collect debts by all agencies, was to have one agency in charge of collecting those debts. A good point was the $17,000 in bad checks written to Department of Motor Vehicles by the same vendor over the past 18 months. She felt if the bill had been in effect the controller could have gone back to the vendor and withdrawn licenses or held up vehicle registration until those funds were repaid completely. Originally there had been a fiscal note which was removed on the Senate side; since then the position dedicated to that debt collection had been added back into the bill.

Ms. Tiffany questioned why the controller, as well as the attorney general, was being placed in statute to adopt regulations. Ms. Coward replied in that particular section of statute it was identified in tandem because they would both be deciding which debts would be written off.

Ms. Tiffany asked if that was a normal procedure in setting regulations, because she thought the attorney general was usually just used as the legal arm for advice. Ms. Coward stated it probably was traditional, but she was not sure why they were placed in there except that must have been something that the task force had requested. She believed it was when they were working with the task force in setting regulation for the State Administrative Manual (SAM).

Eileen O’Grady, Legislative Counsel Bureau said it was unusual, as typically the attorney general’s office did not adopt regulations. She added sometimes administrative issues such as a form for a notice of intent for regulations, was adopted by them.

Ms. Coward pointed out when she was part of the body and many of the audits were completed, several months later nothing had been accomplished. She felt it was very frustrating, but now that she was on the other side she knew that both she and the controller wanted to be accountable for the intent and will of the legislature. She felt the audits were a serious issue, especially with the question of cash flow and thought it was imperative to collect as many debts as possible.

Chairman Bache questioned the difference between the previous and current amendments. Ms. Coward replied they were basically the same, but Mr. Crews had pointed out the language referred to in the first bill was not in the amended bill, so she had retyped the second page. She did it so section 23 coincided with the language of the amended version of the bill.

Chairman Bache stated, at this point he would like to have a motion for reconsideration, so action could be held until he had checked with both Mr. Crews and the attorney general’s office.

ASSEMBLYMAN HUMKE MADE A MOTION TO RECONSIDER S.B. 500.

ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.

THE MOTION CARRIED.

Chairman Bache indicated the governor’s office had pointed out there were technical problems with the bill, but he had not heard from them nor did he see any representative in the office. He felt they should hold any action although he had hoped to hear it as soon as possible because of the concurrent referral to ways and means.

Mrs. Freeman added she had a proposed amendment involving the interim legislative committee she considered would be the oversight body. There was a sunset clause in the bill she was proposing be removed.

Chairman Bache agreed with her, but wanted to hold action until the other amendments were presented so all of them could be considered at the same time. As there was no further business, the meeting was adjourned at 10:30 a.m.

RESPECTFULLY SUBMITTED:

Virginia Letts,

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

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