The Committee on Government Affairs was called to order at 9:17 a.m., on Thursday, May 13, 1999. Chairman Douglas Bache presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. 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:

Chairman Bache referred to the two proposed amendments to the bill. The first one was agreed upon by the parties involved (Exhibit B), and the second one was submitted by Eric Raecke from State Public Works Board (Exhibit C).

Jack Jeffrey, representing the Electrical, Mechanical, and Sheet Metal Contractors, as well as the Southern Nevada Building Trades Council, pointed out he had not seen the amendment from public works. Mr. Jeffrey explained S.B. 144 was an issue that had been developed over several years and many hours had been spent negotiating with all the involved parties. The sheet metal, mechanical, and electrical contractors had retained an attorney specializing in that particular area and spent thousands of dollars in the drafting and negotiating process. Mr. Jeffrey noted even if everybody loved the amendment, time was too short, and the group he represented would have to go back to their attorney.

Mr. Jeffrey indicated he was concerned because public works dropped an amendment on the bill knowing the circumstances that had taken place, and apparently not discussing it with any of the parties involved.

Cheryl Blomstrom, representing the Associated General Contractors and the Nevada Association of Mechanical Contractors, reiterated she had not seen Mr. Raecke’s amendment (Exhibit C). Ms. Blomstrom contended the amendment would gut the bill eliminating judicial remedy, both against a public body and a subcontractor or contractor. Ms. Blomstrom urged the committee to reject the amendment as too much work went in the bill reaching a consensus by all parties involved.

Max Christiansen, Executive Director, Sheet Metal and Air Conditioning Contractors, requested the committee reject the amendment from public works for the reasons previously mentioned.

Ms. Von Tobel expressed her disappointment with Mr. Raecke’s last minute amendment and contended he had all session to work with the involved parties. In her opinion, the bill was very important and needed to be acted upon.

Mr. Lee observed the parties had extended a great deal of effort on the bill and there was a consensus with the proposed amendments from Mr. Jeffrey (Exhibit B).

ASSEMBLYMAN LEE MOVED TO AMEND AND DO PASS S.B. 144 WITH

THE PROPOSED AMENDMENT EXHIBIT B.

ASSEMBLYWOMAN VON TOBEL SECONDED THE MOTION.

Chairman Bache referred to the proposed amendment that had been distributed to the committee (Exhibit D). Chairman Bache explained the committee had passed the bill the previous week. However, the Controller’s Office indicated there had been an additional amendment agreed upon by the Attorney General’s office and the Controller’s Office correcting a technical matter.

Jeannine Coward, assistant controller, State of Nevada Controller’s Office, explained the intent of the original amendment from the Attorney General’s office was correct. However, Gary Crews, legislative auditor, Legislative Counsel Bureau (LCB), pointed out there were some technical errors in drafting related to the original bill rather than the amended version. Ms. Coward stated she had retyped the amendment but had overlooked a sentence in section 13.

Chairman Bache mentioned he had an additional amended copy Mr. Crews had submitted regarding corrections to section 10. On line 3 it stated, "…the Nevada Department of Taxation" the "T" in "The" was not capitalized. On line 4, after "…Division of Industrial Relations" the "and" was eliminated and inserted in line 5 before "…Employers Insurance Company of Nevada."

In section 13, line 2, Mr. Crews’ amendment added the language, "The state controller shall maintain the reports to the extent that resources are available" after "owed to the agency." Ms. Coward agreed and pointed out that was the language omitted in the retyped amendment (Exhibit D).

Mrs. Freeman questioned section 23, subsection 3, where it stated, "If resources are available, the state controller shall keep a master file of all debts that are canceled…". Ms. Coward responded the language was added on the Senate side because the original bill had a $75,000 fiscal note attached due to the request for two additional employees. The amendment changed the language to read, "If resources are available the state controller shall keep a master file…" relieving the fiscal note. Ms. Coward pointed out the governor and the Department of Administration added the two positions to the Controller’s Office budget, but that still needed approval by the Committee on Ways and Means.

Mrs. Freeman questioned Mr. Crews regarding the procedure for audits relating to debts that had been written off. Gary Crews, Legislative Auditor, Legislative Counsel Bureau, Audit Division, replied it was his understanding the lists would be maintained by the Controller’s Office for use by the LCB Audit Division. Ms. Coward commented it was the intent of the bill to set forth some procedures for writing off debt. The new Integrated Financial System (IFS) for the state would be recording receivables and would allow for identifying debts more rapidly than in the past.

Mrs. Freeman expressed concern with the request for two additional positions to handle this function since current computer technology should be enough. Ms. Coward responded keeping track of all the vendors to whom checks were written, for all of state agencies would create a large task of condensing them to one new file.

Mr. Lee pointed out the whole idea of the bill was to consolidate debt collection and omit cutting checks to people who owed an agency money. However, it appeared that if the bill passed the goal would not be accomplished without the two additional positions or if a cross-reference system could not be implemented.

Mr. Crews explained there were two provisions to the bill. One would provide for the crosscheck, withholding payment in certain situations, and the other would give the agencies the tools to be able to collect those debts. The provision for the crosscheck was an important starting point, and since different systems were already in place, they would have to combine and consolidate within the state controller’s system. Ms. Coward pointed out it was the controller’s intent, with or without the extra positions, to implement the process as quickly as possible.

Ms. Von Tobel queried if the other state agencies actively worked their receivables. Mr. Crews replied that had been the problem in the past. In certain situations, there had not been any record of which vendors owed money. In cases where there were records, the follow-up on collecting the receivables was poorly done. The state was left with millions of dollars of receivables that would never be collected and would need to be written-off.

Ms. Von Tobel asked if a noncollected receivable in a write-off account could still be collected. Ms. Coward referred to section 10 of the amendment where new language was added stating: "…In the event that a debt is written-off this act should not be construed to mean that the debt is no longer a legal and valid binding obligation owed by a person to either an agency or the State of Nevada." Ms. Coward explained that, A.B. 638, which passed out of committee approximately 2 weeks ago, made recording receivables mandatory.

Ms. Von Tobel was alarmed at the millions of dollars of debt that might not have even been billed. Mr. Crews pointed out a portion of those outstanding bills had received only a minimal effort at collection. As the receivables aged, the likelihood of collection diminished, and in many cases, the companies were no longer operating in Nevada. Mr. Crews expressed the importance of regulation by establishing criteria, and noted before a determination was made, an evaluation had to be completed.

Ms. Segerblom questioned if the state controller had that responsibility in the past. Mr. Crews replied it had been the responsibility of the controller since 1915; however, it had not been actively pursued.

Anne Cathcart, Special Assistant, State of Nevada Attorney General’s Office, indicated the bill was the result of a task force consisting of the Attorney General’s Office, the Department of Administration, the Controller’s Office, and various agencies in need of debt collection procedures. The task force identified the kinds of tools various agencies would require in collecting debts long past due. She referred to the technical amendment regarding "write-off" versus "cancellation" and noted the recommendation had come from the Legislative Counsel Bureau Legal Division. In conclusion, Ms. Cathcart commented the Attorney General’s Office remained neutral as to which entity, the Department of Administration or the Controller’s Office should handle the duties.

Mrs. Freeman questioned if there had been an occasion where a large amount of money owed had involved the Attorney General’s Office, rather than the Controller’s Office, when attempting to collect the monies. Under the proposed bill, Ms. Cathcart understood the Attorney General’s Office would handle litigation for large amounts.

Ms. Berman referred to section 10 (a) of the proposed amendment and asked for clarification of the language, "As determined by either regulation or the state administrative manual…". She questioned to what regulation it referred. Ms. Cathcart replied the intent was to allow the establishment of regulations or State Administrative Manual (SAM) procedures that would help the smaller agencies create good internal debt collection types of procedures including timeframes and record keeping. She remarked if their internal capabilities were exhausted, they would be able to send the debt to another entity.

Mr. Crews agreed and pointed out originally it was to be regulated by SAM, and came from the board of examiners with its guidance and essence from the governor. That was the process to be used and exhausted before turning it over to the controller for further collection efforts.

Ms. Berman asked who adopted the regulation. Mr. Crews referred to the proposed amendment where it stated, "The state controller and the attorney general may jointly adopt such regulations…". He remarked they would have to work together developing regulations and taking them through the public hearing process. The final steps would be going before the Legislative Commission and then they would be filed with the secretary of state.

Chairman Bache called attention to section 21, subsection 3 of the original bill stating, "Any contract entered into pursuant to this section is subject to approval by the director of the Department of Administration and the state controller." He commented in the amendment, the director of the Department of Administration had been omitted in section 12 and 13, and questioned if that was their intent. Ms. Coward replied there was no problem with leaving the language relating to the Department of Administration director in section 21.

ASSEMBLYWOMAN VON TOBEL MOVED TO AMEND AND DO PASS S.B. 500 WITH THE

PROPOSED AMENDMENTS (EXHIBIT D) AND THE TECHNICAL AMENDMENTS FROM GARY

CREWS.

ASSEMBLYWOMAN PARNELL SECONDED THE MOTION.

Chairman Bache remarked there was an amendment offered by Clark County and Carole Vilardo. From his recall, he thought the proposed amendment deleted section 14.

Dave Ziegler, principal research analyst, Legislative Counsel Bureau Research Division, testified on May 6, 1999, Senator Porter had introduced the bill. Mr. Ziegler noted Lesa Coder from Clark County had proposed two amendments. In section 9, subsection 2(b), it might be appropriate to change the units per acre figured at three units per acre, and in section 14, the language related to fee and improvement districts. Ms. Coder had suggested deleting the entire section 14 since it was gratuitous. Senator Porter had responded he had no objection to either amendment. Mr. Ziegler added Carole Vilardo from the Nevada Taxpayers Association had testified the association was neutral and agreed to the removal of section 14.

Carole Vilardo explained the reason for the recommendation of the removal of section 14 was because fees did not fall under Nevada Revised Statutes (NRS) 278, as it was a planning and land use statute. Ms. Vilardo conceded if fees were required, NRS 271 was the appropriate place to set up mechanisms for fee use that were required under the provisions of a rural plan. She stressed the importance of consolidation so individuals were aware of their liabilities, and governments needed to know what provisions they could use involving taxes or fees.

Ms. Parnell pointed out if section 14 were removed, the summary of the bill would also need to be changed. Mr. Ziegler informed the committee Ms. O’Grady’s notes mentioned another amendment proposed at the hearing on May 6^th. On page 2, line 19 read, "Which allows residents to raise or keep animals noncommercially."

Chairman Bache clarified the third amendment related to page 2, line 36, currently stating "…not exceed two and one-half residential dwelling units per acre;" The proposed amendment would change it to "…not exceed three residential dwellings...".

ASSEMBLYWOMAN SEGERBLOM MOVED TO AMEND AND DO PASS S.B. 391 WITH THE THREE PROPOSED AMENDMENTS.

ASSEMBLYMAN MORTENSON SECONDED THE MOTION.

Senate Bill 194: Extends use of fund to stabilize operation of local government. (BDR 31-83)

Chairman Bache commented according to his notes the firefighters and police organizations had offered an amendment on page 3 returning the amount to "10 percent" on line 30, rather than the proposed increase to "15 percent."

ASSEMBLYMAN LEE MOVED TO AMEND AND DO PASS S.B. 194

WITH THE PROPOSED AMENDMENT.

ASSEMBLYWOMAN PARNELL SECONDED THE MOTION.

Mr. Mortenson stated he was under the impression the 10 percent already existed. Chairman Bache remarked that was correct and had been agreed upon by the firefighters and the police.

Ms. Berman inquired as to how the bill had passed the Senate with the 15 percent.

Carole Vilardo, representing the Nevada Taxpayers Association, explained the bill as originally written, created a disaster relief fund with 10 percent set aside. She and Mr. Leavitt opposed the bill as a proliferation of funds and suggested an amendment that incorporated natural disasters into the budget stabilization fund. Ms. Vilardo indicated the 15 percent had been added to that fund to account for the fact that natural disasters were being added. If the funds had been separate, each would have had the 10 percent for a total of 20 percent potential set aside.

Ms. Von Tobel queried if anyone had spoken to Senator Rawson to assure he was in agreement with the reduction to 10 percent. Chairman Bache responded he was unaware if the Senator knew of the change; however, he personally was not in support of an increase to 15 percent.

Ms. Von Tobel requested holding action on the bill for 1 day until someone had spoken to Senator Rawson. Chairman Bache suggested checking with the Senator as soon as possible to resolve the issue.

Ms. Vilardo announced she had located the Senator and he was amenable to the change from 15 to 10 percent.

Neena Laxalt, representing the city of Sparks, referred to previous testimony by Bill Isaeff, deputy city manager, city of Sparks. At that time, Mr. Isaeff was unaware of any opposition to the provisions of the bill. However, Ms. Laxalt indicated a problem had surfaced with section 2, subsection 2(e) that provided for an extended probationary period; and with section 5, subsection 1, increasing the time limit for suspension of an employee from 30 to 45 days. Ms. Laxalt remarked the city manager was in agreement with deleting those provisions from the bill.

Ms. Gibbons referred to page 3, lines 3 through 6, and suggested deleting that portion. Chairman Bache commented he had spoken with the various employee groups and they did not have a problem with the language.

Ms. Von Tobel called attention to page 2, subsection 2(e), and questioned what portion was being changed. Chairman Bache responded it was his understanding the proposed changes were to be deleted and returning to the original language.

Chairman Bache reiterated the amendments were to return to the original language on page 2 by deleting the proposed changes in lines 11 through 13, and on page 4, section 5, returning the proposed 45 calendar days to 30 days.

Ms. Gibbons indicated she had a problem with page 4, lines 36 through 38, regarding the grievance procedure. Ms. Laxalt replied, to her knowledge, there was no problem with the language between the unions and the city. Chairman Bache suggested Mr. McAllister address the issue.

Raymond McAllister, representing the Professional Firefighters of Nevada, indicated it was his understanding from the testimony given by the Sparks firefighters and police officers, they would give up their rights to have a hearing with the civil service committee for their grievance process, and it would not present a problem. Mr. McAllister pointed out the firefighters and police officers felt the civil service process was not beneficial to them. The members had been advised to use the grievance process already in place.

Ms. Gibbons questioned the avenue of grievance in NRS 288.150. Chairman Bache replied NRS 288 was the employee/management relation act, addressing collective bargaining. Mr. McAllister remarked each entity formed a bargaining group and agreed to a grievance process in their contract. According to Mr. McAllister, the grievance process allowed members to go through the proper channels with supervisors up to and including the city manager. He commented if no agreeable compromise was reached, an independent arbitrator could be used.

Mr. McAllister pointed out by deleting the language Ms. Laxalt had proposed in section 2, line 11, the statute would coincide with the language of the current contract. The proposed legislation, if passed, would have superseded the contract agreed upon by the parties involved.

Chairman Bache asked if the proposed amendments would be satisfactory to the employee groups and Mr. McAllister agreed.

THE MOTION CARRIED UNANIMOUSLY.

The meeting was adjourned at 10:43 a.m.

RESPECTFULLY SUBMITTED:

Virginia Letts,

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

DATE: