The Assembly Committee on Ways and Means was called to order at 8:15 a.m., on Monday, May 24, 1999. Chairman Morse Arberry, Jr. presided in Room 3137 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. Morse Arberry, Jr., Chairman

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne Chowning

Mrs. Marcia de Braga

Mr. Joseph Dini, Jr.

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Ms. Sheila Leslie

Mr. John Marvel

Mr. David Parks

Mr. Richard Perkins

COMMITTEE MEMBERS ABSENT:

Mrs. Jan Evans, Vice-Chair (Excused)

Mr. Robert Price (Excused)

STAFF MEMBERS PRESENT:

Ron Dreher, President, Peace Officer’s Research Association of Nevada representing 20 law enforcement associations throughout the state and President, Reno Police Protective Association introduced the bill. He testified in support of S.B. 404 as amended. Mr. Dreher stated the cost for the bill was minimal.

The purpose for S.B. 404 was to provide paid health, life, and accident insurance for the surviving families of Nevada Law Enforcement officers and fire fighters killed in the line of duty. Over the past 6 years in northern Nevada eight law enforcement officers were killed in the line of duty.

Five years ago Nevada Highway Patrol Trooper Carlos Borland was murdered on Interstate 80 outside Lovelock, Nevada. Mr. Dreher assured the committee if Trooper Borland had a surviving family, they would not have been able to financially afford insurance.

Four years ago Sparks Police Officer Larry Johnson was murdered by a parolee in Sparks, Nevada. Mr. Dreher was positive his family had not received any paid health, accident and life insurance coverage.

Three years ago Reno Police Officer Keith Hashimoto was killed in the line of duty during a training mission. Two years ago Washoe County Sheriff’s Deputy Frank Minne was killed in the line of duty in a traffic accident on Interstate 80. Two years ago Elko County Sheriff’s Sergeant Travis Mackie was killed in Elko. On January 13, 1998, University of Nevada Police Sergeant George Sullivan was murdered on the University of Nevada campus. In May 1998, Douglas County Sheriff’s Deputy Ed Callahan drowned at Lake Tahoe.

Mr. Dreher had asked Carol Hashimoto, surviving spouse of Reno Police Officer Keith Hashimoto and Carolyn Sullivan, surviving spouse of University of Nevada Police Sergeant George Sullivan to appear before the committee to testify about what happened in their cases.

Mr. Dreher had been assigned to assist Mrs. Hashimoto in determining what survivor benefits were afforded to her. During the research he had discovered there was no coverage for survivors other than Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage. That coverage in the case of Officer Hashimoto had to be paid starting 3 days after his death. Failure to pay the required premium would have resulted in no insurance coverage for his spouse and two children. Mrs. Hashimoto had paid the premium out of her pocket at a cost of over $400 per month for nearly 2 years. Mr. Dreher asked the committee to remember that COBRA coverage was only good for 18 months. After that period of time coverage was terminated. Mrs. Hashimoto did receive an offer for Public Employees Retirement System (PERS) insurance coverage for which the premium would have been over $538 per month. That was a substantial sum for a widow and her two small children.

Knowing those facts, Mr. Dreher requested the City of Reno Insurance Committee to review the matter. The City of Reno agreed to cover retroactively Mrs. Hashimoto and her family. They also agreed to cover future line of duty deaths providing paid insurance coverage to surviving family members.

When Washoe County Sheriff’s Deputy Frank Minne was killed in the line of duty in 1997, Washoe County discovered they also did not provide survivor insurance coverage and made the same changes the City of Reno had made.

On January 13, 1998, when University of Nevada Sergeant George Sullivan was brutally murdered; his wife Carolyn and their children were left with no state insurance coverage, again an oversight he was sure. Fortunately, Mrs. Sullivan had her own insurance. She must pay out-of-pocket each month to provide health, accident, and life insurance for her four children. That was wrong. Her husband gave his life to protect the citizens of the state of Nevada.

Mr. Dreher requested as part of the amendment, that S.B. 404 not only implement what the City of Reno and Washoe County had already done, but also provide retroactive paid benefits to Mrs. Sullivan and her family. Unfortunately that part of the amendment had not passed out of the Government Affairs Committee. He had been told Mrs. Sullivan was not even afforded the same PERS insurance package offered to Mrs. Hashimoto. That also was wrong.

Senator James had agreed to sponsor S.B. 404 and the remainder of cosponsors clearly saw that the matter had to be corrected. The cost was believed to be minimal. When the Senate Finance Committee heard the bill, the fiscal note costs stated were minimal. The cost would be borne by the local entities insurance systems or by the state insurance system.

Mr. Dreher noted the discussion was about Nevada law enforcement officers and fire fighters who responded daily to calls for service that could turn deadly in an instant. The cost was a small price to pay to show support for what police and fire personnel did for the state. He hoped and prayed not a penny was ever spent to provide the benefit because it would mean no more police and fire personnel had been killed. It would also mean that each officer or firefighter could live to see their families grow.

Mr. Dreher testified S.B. 404 unanimously passed the Senate and was unanimously passed with amendment from the Assembly Government Affairs Committee. He requested the bill to be passed and put into effect immediately. He noted each committee member was to be commended for taking care of the law enforcement officers and firefighters through passage of the bill.

Carol Hashimoto, widow of Reno Police Officer Keith Hashimoto introduced her husband’s sister Tammy. It had been 3 years since her husband died in a parachuting accident during SWAT training. She had been a full-time housewife and mother of two small children ages 5 and 8 at the time of their father’s death.

Three years prior to that time she had given up a well-paying job to raise her family rather than depend on child-care services. The family’s well being was dependent totally on her husband’s salary, medical and dental benefit. Upon his death the family immediately received income from the city, PERS and social security. Although Mrs. Hashimoto was grateful for the income, all the benefits combined totaled approximately one-half of her husband’s annual salary and it did not cover the monthly expenses that occurred with two young children. Additionally, the only way she could maintain medical and dental benefits through COBRA was to make the monthly payments of approximately $400 herself. The added bill combined with the loss of income created a financial hardship at a time in her life when it was hard enough to keep life together emotionally, let alone financially. After paying COBRA for 2 years, the City of Reno had decided to provide benefits for her family.

Law enforcement and fire fighters were extraordinary people who did a critically necessary job and put their lives on the line every day to keep communities safe. Mrs. Hashimoto said her husband worked long and hard hours. Being on the SWAT team for 5 years placed him in the most dangerous situations requiring great skill and hours of training. Most importantly, Mr. Hashimoto did his job, thinking that if one day something happened to him, his family would be taken care of in the same way he had provided for them.

In addressing the marriage penalty amendment, Mrs. Hashimoto emphasized it was not the responsibility of a future spouse to provide health benefits for her and her children. It was not fair that a widow should have to consider whether or not a future spouse would have enough income to compensate for lost benefits. She urged committee members not to penalize widows for finding happiness again in a future marriage.

Mrs. Hashimoto urged the committee to support benefits for law enforcement and fire fighters’ families. They deserved to know that their families would not have to face the same battles she had in acquiring benefits for their loved ones.

Assemblywoman Giunchigliani stated testimony had requested the bill to become effective immediately. The bill carried an effective date of October 1, 1999. She asked if supporters wanted an amendment to make the bill effective upon passage and approval. Mr. Dreher stated he would love the bill to be effective upon passage and approval but he was aware of the time constraints placed by the 120-day legislative session.

Carolyn Sullivan testified in support of S.B. 404 that would provide insurance coverage for families of slain fire fighters and law enforcement officers. Her husband, George Sullivan, was murdered on the night of January 13, 1998 while patrolling the campus of University of Nevada, Reno. Since that time, his family had undergone many changes.

They had learned to live their lives without a husband and a father. When a death occurred in a family changes were expected, but when the death was tragic and sudden as in the case of her husband, there was even more to handle.

Because Mr. Sullivan gave his life doing what he loved to do, and because his death was senseless, the community support had been phenomenal. Mr. Sullivan had been honored at the James Hoff Memorial where his name was added to the wall of officers in Northern Nevada who had died in the line of duty. He was honored in Carson City the previous year, when the new state memorial was dedicated. The University of Nevada, Reno dedicated an area at the front of the campus to her husband’s work and memory where a park bench bearing his name was placed. That was a testament to the love felt for him throughout the university community showing the incredible number of lives he touched while performing his duties there.

Finally Mrs. Sullivan and her children, with an honor guard of four officers from the University of Nevada, Reno and the new university police chief had just returned from Washington, D.C. where Mr. Sullivan’s name now forever resided on the wall of the national police officer’s memorial. While in Washington, D.C. they participated in an emotional candlelight vigil and a memorial service where 154 officers were honored who all died in the line of duty somewhere in the country in 1998.

Mrs. Sullivan stated she had provided that background because she wanted the committee to understand that for the community and her family, her husband’s sacrifice would never be forgotten. She stated, "He died protecting all of you from what you fear the most." Mrs. Sullivan stated her husband’s sacrifice could be likened to that of a soldier fighting the war to keep the country’s ideals alive. The honors and ceremonies would continue for years, not specifically for him, but for all officers who died in the line of duty.

Now, as a single mother, Mrs. Sullivan was faced with the overwhelming task of parenting alone, working, and maintaining her household. All the while, she was trying to keep things on an even keel for the children, lest they feel more change than they were able to handle. The community had many single parents, but most were the result of divorce or relationships that never resulted in marriage. Though those single parents faced many of the same struggles she faced, most had an ex-spouse or significant other who could help financially, emotionally and physically. The children of those situations still had a non-custodial parent on whom they could rely. They were still able to spend time with both parents, a benefit her children no longer had.

While the State Industrial Insurance System (SIIS) and PERS currently provided her an income, Mrs. Sullivan still needed to work to supplement her income. Much of the income she currently received was specifically for the children and would not continue for them past the age of majority. The SIIS income was specifically designed to terminate if she chose to remarry. Mrs. Sullivan stated she was 41 years-old and if she was lucky enough to find someone who loved her and her children enough to want to share their lives, she would be denied the SIIS income.

Mrs. Sullivan asked if it was the responsibility of any future spouse to provide the majority of the financial support for her children. She stated the burden of financial responsibility belonged to her and George Sullivan, but Mr. Sullivan was gone. Because the Sullivan’s had chosen to cover the children through Mrs. Sullivan’s health insurance over the past few years because the expense was less, the family had not been eligible for health insurance though the State of Nevada when he died.

The family had not been insured under the state policy at the time of Mr. Sullivan’s murder and just as surely as the date of his murder, another police officer or fire fighter working for the State of Nevada would die in the line of duty sometime in the future. That was a bleak thought for those men and women and their families choosing law enforcement or fire fighting as a profession. They did it because they found satisfaction in making the world a little better for others and the ones they loved.

Mrs. Sullivan concluded, for those families who would come after her, and for her family, she urged passage of S.B. 404 without a marriage penalty. During previous hearings on the bill there had been talk about the one-time federal benefit being a large portion of money that could sustain a family indefinitely. She noted the Federal Government awarded her family $154,000 when Mr. Sullivan was killed. Half of that was specifically for Mrs. Sullivan and the other half was to be divided in equal portions among the children. The money for the children was to be specifically set-aside for their care and she had chosen to place those funds into college accounts for them. Mrs. Sullivan’s half came to $77,000 and noted that amount even supplemented, would not last over many years.

The assistance the bill would provide for slain law enforcement officers and fire fighters could take the financial burden off families. It was a small price to pay for a life given in service to the people of Nevada’s communities.

Additionally, she urged one or more of the legislators to consider the issue of SIIS payments to families in the 2001 Legislature. Those payments should not be denied to families fortunate enough to again find a spouse and parent through re-marriage. It remained the responsibility of the slain officer and spouse to financially raise their children. Those children should not have to suffer financially because of the loss of that income. A future spouse might have his or her own set of financial obligations to fulfill.

The state owed it to the families of slain fire fighters and police officers to take care of those families and not penalize them for repairing wounds and again finding happiness.

Assemblyman Marvel asked if Carlos Borland had a family. Mr. Dreher replied he had a mother and father. Mr. Marvel commented he was working on an effort that was underway to establish a memorial for Mr. Borland in Lovelock.

Assemblyman Marvel asked if S.B. 404 would correct the inequities that existed between Mrs. Sullivan and Mrs. Hashimoto. Mr. Dreher replied it should. In Mrs. Hashimoto’s case, the City of Reno was the first agency in the state to provide such coverage. In Mrs. Sullivan’s case the bill would not correct the inequities to her but it would in any future cases once the bill went into effect.

Mr. Dreher noted the state currently offered no coverage at all and in the case of Mrs. Sullivan, she was not afforded the insurance or the PERS insurance, which he was still pursuing. Assemblyman Marvel asked if S.B. 404 were amended to become effective upon passage and approval if it would help. Mr. Dreher responded it would be of tremendous help to anyone who died in the line of duty in the future who might have the same needs.

Gary Wolff representing the men and women of the Nevada Highway Patrol urged passage of S.B. 404. Only one of the four Highway Patrol Troopers who died in the line of duty would have benefited from the legislation, but it was very important to those in the future.

Assemblyman Marvel asked if Mr. Wolff had testified when the bill was heard in the Senate and Mr. Wolff responded affirmatively. Assemblyman Marvel asked if the Senate had ever considered making the bill effective upon passage and approval. Mr. Wolff replied he did not recall such a discussion but opined "the sooner, the better."

No further testimony forthcoming Chairman Arberry closed the hearing on S.B. 404 and opened the hearing on S.B. 544.

Senate Bill 544: Makes various changes concerning programs for public employees. (BDR 23-230)

Randy Waterman, Acting Risk Manager supported passage of S.B. 544. Mr. Waterman suggested some technical changes to the bill. In section 2.3 of the bill the names of several key personnel were changed from an earlier draft of the bill. Those changes might alter the function of the positions and limit their effectiveness.

Mr. Waterman stated he was primarily concerned about two positions. The original draft of S.B. 544 listed one position as an Accounting Officer, but the latest version referred to the position as the Investment Officer. Because the State Employee Benefit Fund did not invest its own reserve funds there was no need for an Investment Officer. The State Treasurer’s Office performed that function. A real need existed for a Chief Financial Officer or an Accounting Officer. Mr. Waterman stated he believed the change was an error in bill drafting when language was incorporated directly from PERS statutes used as a general model for the bill. He suggested the change be made back to an Accounting Officer.

The Quality Control Officer in the original draft of the bill was intended to provide a vender audit/quality control function and to ensure that the plan’s operations were functioning in compliance with all relevant statutes and plan policies. The second reprint of S.B. 544 referred to the position as an Administrative Analyst. Because the Quality Control Officer was so important, Mr. Waterman expressed concern the functions of oversight and internal quality control were lost under the new title. He requested the committee to return the position title to Quality Control Officer.

Continuing, Mr. Waterman referred to S.B. 544, section 11.5, subparagraph 1, which extended COBRA benefits for a select group of employees. That section extended COBRA benefits for legislative session employees to bridge the current gap in coverage. Currently, COBRA coverage of 18 months was not quite enough to bridge the coverage for those employees in the interim between legislative sessions. Mr. Waterman stated research of the Risk Management records indicated the bill affected about 10 legislative employees.

Mr. Waterman stated the bill as written allowed a 3-month extension of COBRA coverage. It also allowed coverage for employees who worked every other year for a period of 4 to 6 months. Taken literally, the section would exclude coverage to anyone who worked longer than a period of 6 months for the legislative session. Mr. Waterman opined that was probably not the intent.

S.B. 544, section 11.5, subsection 2 required those employees to pay 100 percent of the premium under COBRA benefits. Current COBRA benefits for all other employees required payment of 100 percent of the premium plus an administrative fee of 2 percent. Mr. Waterman urged that S.B. 544 be amended to be consistent with provisions for employees already under COBRA. Without the amendment it caused administrative hardships because the benefits would have to be administered manually. That would create a cost to the program and errors could occur more easily.

Mr. Waterman testified if section 12.5 of S.B. 544 remained in the bill, a small technical change was needed. In the bill at page 7, line 21, the word "shall" should be changed to "may" to avoid any ambiguity. All other occurrences of "shall" were changed previously and that one instance was probably an oversight.

In section 18, subparagraph 1a, at page 11, line 22, Mr. Waterman suggested the word "professional" should be inserted before the word "employee." He opined that was the original intent. Further along in section 18, classified employees in general were addressed. Classified employees were to be a part of the Board of Directors. The addition of the word professional would clarify that section of the bill.

Chairman Arberry asked if Mr. Waterman had copies of his exact recommendations for staff in requesting an amendment to the bill. Mr. Waterman replied he would make copies and provide them to staff as quickly as possible.

Chairman Arberry asked why the amendments to the bill were not proposed when S.B. 544 was heard in the Senate. Mr. Waterman responded many of the amendments, particularly those changing titles of positions were not discussed in previous hearings either in the Senate or Assembly. In fact they came to light when other amendments were incorporated into the bill. The second reprint of the bill contained the changes that had not been heard in public testimony.

Chairman Arberry stated another concern was whether or not the Senate would concur in further amendments. Mr. Waterman responded he would hope, particularly with the change from Investment Officer to Accounting Officer that the change would be made.

Assemblyman Hettrick stated he had received a call from Lillian Bergevin, who had served on the Committee on Benefits Board for a long time. He noted the original bill as he had read it showed a 6-member board and Mrs. Bergevin had told him the board was being changed to a 9-member board. Mrs. Bergevin had stated the board should only be made a 7-member board.

Mrs. Bergevin had also told Assemblyman Hettrick that the training budget included in the bill was not beneficial and instead, the Executive Director salary should be raised to attract persons with good qualifications for the position. The position was unclassified. Mr. Waterman responded the bill had been amended several times and the last rendition increased the board to nine members. The reason for the increase in membership was that on the Senate side there had been a strong feeling that there should be two members who were on the board, but not participants in the plan or in other words, members of the public.

Assemblyman Hettrick asked what the training money was directed to. Mr. Waterman replied the training money for the Board of Directors was to provide 16 hours of annual continuing education training in employee benefits. The field was constantly changing and the board felt strongly that members should remain versed on current issues. He added numerous organizations provided very good training in that area.

Assemblyman Hettrick asked if Mr. Waterman would agree that the Executive Director should be paid more. Mr. Waterman agreed and replied he had received a call the previous week from the Legislative Counsel Bureau concerning the Unclassified Pay Bill and a higher amount had been discussed.

Assemblywoman Giunchigliani stated Mr. Waterman’s response about the training was absolutely correct. When she had chaired the Teacher’s Insurance Trust, that body had mandated continuing education training.

Assemblywoman Giunchigliani referred to pages 11 and 12 of S.B. 544 that described the makeup of the Board of Directors. She noted it called for one person from the university system, one retiree, two state employees, one from any other local government, one employed in a state managerial capacity in risk management, two individuals not affiliated with the plan, and the Executive Director. Mr. Waterman stated that was correct. He noted two positions were scheduled to sunset in section 18, subsection F referring to the two non-plan participants. Assemblywoman Giunchigliani asked for confirmation that the two non-plan positions were intended to get the program up and running and then be sunset. Mr. Waterman agreed.

Assemblywoman Giunchigliani asked what salary was proposed for the Executive Director. Mr. Waterman stated the original bill set the salary at $90,000 per year. Assemblywoman Giunchigliani countered with asking what the salary of the Director of PERS was. Mr. Waterman replied that had been some of the questions from the Legislative Counsel Bureau. The PERS director was somewhere around $105,000 annually. Assemblywoman Giunchigliani asked if anyone had an idea what similar positions in other states earned. She added $90,000 seemed somewhat reasonable. Mr. Waterman agreed, adding until one looked at the "outside world," and then the salary was about one-third what the private sector received.

Assemblyman Goldwater asked if the Committee on Benefits was still part of the Governor’s Task Force recommendation meaning that the fund would be run by a committee again. Mr. Waterman replied the committee was part of the original bill draft crafted by the Governor’s office and also re-worked by the Governor’s Task Force. The committee had evolved from six members up to nine.

Assemblyman Goldwater asked if the Executive Director had final authority or whether it rested with the entire board. Mr. Waterman replied the Board of Directors had authority to appoint or discharge the Executive Director. The Executive Director would have day-to-day authority to work within parameters set by the board, whatever needed to be done. The Board of Directors would be present for overall policy-making.

Assemblyman Goldwater asked if that was different from how it used to be in the opinion of Mr. Waterman. Mr. Waterman replied it was quite different. Assemblyman Goldwater stated he hoped to derive that same conclusion from his further reading of the bill. At present he felt the whole issue of administration of multi-million dollar funds by committee was not the best policy for the state. Mr. Waterman countered the bill provided for a Legislative Oversight Committee that provided regular input so that matters did not go as far afield before problems were noticed. Assemblyman Goldwater commented the legislators knew there was a problem in the current system early-on, but that was part of the frustration. He stated further, "I knew about it, I was interested in it, I care about it, I understood it, and there was nothing I could do." There was no one to go to for accountability. Even with the board accountability was very diffuse.

Assemblyman Goldwater noted a similar situation occurred in Clark County but there was someone there who took responsibility. Mr. Waterman responded, one significant change proposed in the bill was that the Governor made all nine appointments. In the past the Governor did not make all the appointments. Thus the Governor would be the point of contact.

Assemblywoman Giunchigliani referred to the back of the bill that implied section 18 expired by limitation on July 1, 2003. That would mean the entire board would cease at that time as she read the language. She thought Mr. Waterman had testified only subsection F of section 18 would sunset. Mr. Waterman responded the sunset provision as it was printed had not been discussed. Assemblywoman Giunchigliani countered a clarification would be needed before the bill could be passed from the committee.

Chairman Arberry requested Mr. Waterman to make an appointment with Senator Raggio to ensure that before the requested amendments were made they could be concurred in. If not, the committee did not want to create a battle over S.B. 544.

Mr. Waterman responded further to the sunset provision of the bill. Section 18 would sunset, but on page 28, section 42.5 became active on that date. The only sunset would be the two non-participant positions. It was just a technicality of the bill.

Assemblyman Parks referred to page 6, section 10, subsection 1 that stated the board could delegate to the Executive Officer the exercise of any powers, duties or functions. Line 5 contained the word "may" might need to be tightened to provide for specificity.

He noted he had not seen a section of the bill that actually set the salary of the Executive Director. At page 6, line 23, the bill stated "an annual salary shall be set by the board." Mr. Waterman replied that was correct. The salary was not directly in S.B. 544, but the salary had been included in The Executive Budget.

Jim Richardson, representing the Nevada Faculty Alliance Chapters testified in support of all the amendments proposed by Mr. Waterman. He also pledged to work with Mr. Waterman on working with the Senate side expeditiously.

Mr. Richardson referred to page 11 where an amendment had been requested to insert the word "professional." That reference was to a professional employee of the university system. It was embarrassing to admit, but it was only the previous week, as he read the last printing of the bill carefully that he had noted the omission of the word. Every time discussions had ensued in other committees the word "professional" had been used. He explained classified employees were scheduled for two representatives on the board. It was hoped the professional employees would be specifically included in board membership.

Mr. Richardson commented on the proposed size of the board. He noted he had chaired the Committee on Benefits during the 1980’s. The board had five people at that time, three of which were appointed by the Governor. Several efforts had been made to change the committee membership over the years and the first draft of the bill had recommended seven members. The decision to raise the membership to nine and then sunset two positions, was in some ways a compromise. Senator Raggio and the Senate Government Affairs Committee had felt very strongly that the membership should include representatives of the general public on the board since there was so much public money involved in the program. The Assembly Government Affairs Committee had agreed but also decided to sunset the two positions so they would be revisited in the next biennium.

Mr. Richardson noted the PERS Board from which the Benefits Board was modeled did not have public representation. Some argument had ensued that the Benefits Board should follow PERS in that regard, but a compromise was reached to add the two positions. All public employee groups with one exception supported the compromise at least in the short term.

Marty Bibb, representing the Retired Public Employees of Nevada (RPEN) testified it was his understanding that some of the changes in the bill might have been results of the bill drafting process because of earlier language that referenced the PERS Board.

RPEN was in strong support of S.B. 544 as amended and concurred with the changes suggested by Mr. Waterman. RPEN believed having a broader base on a new and expanded board would ensure more balanced representation for all groups involved in the program.

RPEN was appreciative of the legislative efforts in attempting to right the "sinking ship." Retirees who through the Medicaid carve-out were asked to sustain about 35 percent of the benefit cuts to the plan to keep it afloat were particularly hard-hit. Though retirees represented a small portion of the enrollees in the group health plan they felt the bill was a step in the right direction.

Gary Wolff representing the men and women of the Nevada Highway Patrol Association testified in support of the amendments to S.B. 544. He noted it had taken nearly 1.5 years to put the bill together.

Mr. Wolff stated he had held a concern with the bill on page 30, section 39 but that question appeared to be answered. He had been concerned that all the provisions would sunset but after hearing the other testimony he no longer believed that was so.

Mr. Wolff referred to section 12.5b, line 21 and stated the word was supposed to be "may," not "shall." That whole section was very important to the bill.

Assemblyman Marvel stated everyone had to share responsibility for what had happened to the group health plan. Everyone was lulled during the 1997 Legislature into thinking the $26 million reserve was sufficient and no one took time to really investigate the problems that were beginning to appear. Suddenly, the reserve was gone into a tremendous "dark hole." He hoped S.B. 544 would help correct the situation. Mr. Richardson responded the bill was a huge step forward in terms of both the personnel to do the job and the organizational structure. He had long argued for more participation of the oversight entity. He predicted in a few years everyone would be very pleased that the bill had passed.

Rocky Cooper, Supervisor, LCB Audit Division, testified in favor of S.B. 544. He explained the bill was a result of an audit conducted in December 1998. The audit of the program was initiated by a special request from Assembly Speaker Dini.

The recommendations from the audit regarding establishment of a management structure that included an Executive Director was a key point. The bill addressed clearly defined reporting relationships and a system of accountability. With a proper organizational structure and management in place, the problems that had plagued the program should be minimized in the future.

Assemblyman Marvel commended LCB for their work in the audit.

Bob Gagnier, Executive Director, State of Nevada Employee’s Association (SNEA) noted he had signed the guest register on the line as neither opposing nor supporting S.B. 544 because there were provisions of the bill that SNEA favored and some provisions they opposed.

Mr. Gagnier referred to page 16, section 24, which was the section that provided professional staffing for the fund and SNEA supported that section. He stated that was the section Mr. Waterman referred to in his testimony stating the Executive Director would have the power to appoint professional staff. He stated with due respect to Mr. Waterman, Mr. Gagnier felt the amendment to change the name of two positions was unnecessary. Page 3, section 2.3 were simply some technical changes to the PERS law which in no way affected the benefits program. The Investment Officer referred to was the Investment Officer for PERS. The only reason the section was in the bill was because the original bill created an interim committee to oversee the program. The Assembly Government Affairs Committee had consolidated that provision in the Interim Retirement Committee. The Interim Retirement Committee became the Interim Retirement and Benefits Committee and had to be referenced in section 2.3.

Section 12.5 had not received much attention at the current hearing but had been discussed heavily in the Government Affairs Committees of both houses. That section would allow undefined groups to opt out of the state health plan and set up their own plan. Those groups did not have to be a particular agency or a particular classification. For instance, it could just be 300 employees with particularly good health history and no retirees. That group would be able to separate and offer a better health plan because of the nature of geography or health history. For instance Clark County had considerably less costly health care than in rural areas of the state or in Carson City.

Mr. Gagnier stated he was not asking the committee to eliminate section 12.5, but he felt it created a very dangerous situation where the overall state health plan would be left with only retirees, for whom it was known health care cost more, and that would drive up the cost of the state health care plan. Mr. Gagnier added the provision should be frozen, at least for the "healing period" for the state plan with the infusion of the $26 million appropriation and the 24 percent increase in contributions contained in A.B. 370. The health plan needed to recover and it would not be a good time to allow groups to split off, so Assembly Government Affairs added an effective date in section 49 that provided section 12.5 would not become effective until January 1, 2001. Mr. Gagnier noted the effective date would allow for the plan to operate one full budget cycle and be addressed by another legislative session.

Mr. Gagnier further noted proponents of section 12.5 had testified that the Benefits Board would have final say on whether a group could pull out of the state plan. He expressed concern that the legislature might not want to give them that power. It was very important the advanced effective date for section 12.5 remain in the bill.

Assemblywoman Giunchigliani thanked Mr. Gagnier for calling attention to section 12.5. She expressed concurrence with his comments on the section. She commented once a group plan became bifurcated funding problems would occur. She suggested further review should be done in the next legislative session and perhaps legislation should require retirees to be taken with any group that might split from the state plan. She noted she would discuss the section with members of the Government Affairs Committee.

Mr. Gagnier responded the problem of requiring a group leaving the state health group to take their retirees with them was that the bill did not define what constituted a group that could opt to split. He explained, under the bill all male 25-year olds in Clark County could opt to split and there would be no retirees to go with them. If groups were defined by classification or department the retiree requirement would have some effect. One point made in testimony before other committees was that if the new board wanted to set up an additional program with different benefits they could do so.

Mr. Waterman concurred with Mr. Gagnier and noted the section he had read on the Investment Officer applied to the PERS statute.

Mr. Wolff commented on section 12.5. He stated he did not know how many committee members remembered the history of the health plan. The failure of the health plan was not the fault of state employees, but was the fault of a system change. Section 12.5 was well thought out and placed in the bill as a safety valve. No one had intentions of bailing out of the program. The intent of the section was that if the proposed system failed there would be an avenue for people to look elsewhere.

The bill was a combination of the attorney general’s bill, former Governor Miller’s bill, Governor Guinn’s bill, and the employee associations all in collaboration. Mr. Wolff commented everyone seemed worried about bailouts from the system. He testified that was not the case. The intent was a safety valve if the system failed again and the percent of impact had been reduced from 10 percent to 5 percent which was minimal. Testimony had indicated a percentage bailout of 5 percent would have no effect on the bill.

Assemblywoman de Braga asked Mr. Waterman if there was still nothing in the law that would regulate the self-funded portion of the plan. Mr. Waterman agreed. Assemblywoman de Braga stated her feeling there was a need for that to happen or regulations be generated similar to Title 57 to cover the issue.

No further testimony forthcoming Chairman Arberry closed the hearing on S.B. 544 and opened the hearing on S.B. 80.

Senator Bill O’Donnell, Senate District 5 testified S.B. 80 was drafted to alleviate some of the traffic concerns in Las Vegas.

The situation in Las Vegas was that there were school zones with flashing traffic signals. The traffic signals could be turned off during the day and motorists could travel the normal speed limit in the area during that time until the children were released from school.

There were other streets in school zones where the zone extended one-quarter mile away and it was even less likely that children would be present, yet school zone speeds were enforced all day long.

S.B. 80 would allow school zones to be delineated into two different time frames from 8:20 a.m. to 9:30 a.m. and again from 2:30 p.m. to 3:30 p.m. A fiscal note was placed on the bill because all the school zone signs would have to be redone.

Detail in the bill was amended in the Senate to allow the signs to be placed only on new schools and replace others only through attrition. Testimony in the Senate had indicated school zone signs only last about 4 years because of weather conditions.

With no further testimony forthcoming Chairman Arberry closed the hearing on S.B. 80 and opened the hearing on S.B. 259.

Senator Jon Porter Sr., Clark District 1 stated S.B. 259 as amended was on the third reprint. The first portion of the bill was intended to encourage economic development in the urbanized rural portions of Clark County. Statutes had been in place that gave certain tax abatements to rural counties that were not available for the smaller communities in large counties. Those were tax abatements in communities of less than 25,000.

Another portion of the bill addressed the production of motion pictures. If a motion picture company conducted its business in the state for less than 60 days it would not be subject to the business tax. That portion of S.B. 259 also provided money appropriated to the Commission on Economic Development for grants would not revert to the state General Fund at the end of a fiscal year. A change was made to the membership of the Commission on Tourism from seven to nine members.

A fiscal note had been presented before the Taxation Committee regarding the community of Boulder City and Senator Porter assured the committee that fiscal note referred to funds the city did not currently have. The bill would cause the city a loss of revenue if they were able to entice businesses into the community. Senator Porter stated the bottom line was that funds the city did not currently have, would be received as a provision of the bill and used to entice businesses to the community.

Assemblyman Hettrick asked if Senator Porter had any discussion with Mary Walker because she had approached him with S.B. 362 concerning a personal property tax exemption amounting to about $3.5 million that did not appear in S.B. 259. Senator Porter stated he was not familiar with that but the county could use $3.5 million.

Bob Shriver, Executive Director, Commission on Economic Development testified S.B. 259 was a strategically detailed bill that involved several points.

Section 1 involved rural communities in an urban county to be treated as a rural community. That would involve the communities of Mesquite and Boulder City in Clark County and Gerlach and Wadsworth in Washoe County. Only the two counties would be affected by the bill.

The Commission on Economic Development felt that the smaller communities were held to a higher standard regarding abatements and therefore discussion had taken place in the interim committee regarding taxation. The bill was the right thing to do.

Sections 2, 3 and 4 dealt with balancing the business tax and adjusting it to represent the same issue as section 1.

Section 5 allowed funds appropriated to the Commission on Economic Development for the Train Employees Now (TEN) program to carry forward throughout the biennial budget. That might or might not have been closed in budgets. The commission could better utilize that money because of timing issues with the end of the fiscal year and when the funds were actually needed. Companies appearing before the commission wanted to ensure adequate funds to train Nevada citizens.

Section 6 described the new layout of the Commission on Tourism.

Section 7 removed motion pictures and television productions from the promoter/producer license.

Sections 8, 9, and 10 allowed the Commission on Economic Development to pursue those who were guilty of not filing the correct paperwork relative to Nevada Revised Statutes Chapter 231.

The bill would make the commission a little more business friendly. One issue was to exempt motion picture production totally from the business license tax. That was a way of exhibiting the state’s commitment to the motion picture industry and the economic impacts it brought to the state. Those sections were amended in the Taxation Committee.

No further testimony forthcoming Chairman Arberry closed the hearing on S.B. 259. He advised the committee of two bill draft requests for introduction by the committee.

• BDR S-1759 Makes appropriation to Clark County for support of Enterprise Community Federal Credit Union. (A.B. 692)

ASSEMBLYMAN DINI SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

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• BDR 50-1748 Makes various changes to provisions governing fees collected by division of agriculture of department of business and industry. (A.B. 693)

Chairman Arberry recessed the meeting at 9:30 a.m. The meeting was reconvened at 10:05 a.m.

Chairman Arberry noted there were some bills to be considered by the committee.

Mark Stevens, LCB staff stated A.B. 679 was the Department of Motor Vehicles and Public Safety (DMV) reorganization bill. Clean up amendments had been proposed. Dennis Colling, Chief, Administrative Services Division was present if the committee had any questions. He stated the Ways and Means Committee had closed the budgets in concurrence with the Senate retaining the reorganization plan. Thus the bill should move.

Assemblywoman Giunchigliani referred to section 6 and stated the Training Division should be added because it had been discussed but left out of the proposed amendments.

Then section 7 would reflect the Training Division would be responsible for providing the basic law enforcement training and continuing law enforcement training to the sworn law enforcement employees of the department. That was commensurate with budget closings.

Finally section 6 was the part that actually allowed the reorganization.
Ms. Giunchigliani indicated Section 6 should not go into effect until January 2000. That way prior to reorganization, the DMV would appear before the legislature or the Interim Finance Committee (IFC). That gave the Governor time to work on the reorganization and make the recommendation to the IFC.

The Chair asked Assemblywoman Giunchigliani to present the floor statement on the bill.

Mr. Stevens stated the bill had been heard 2 weeks previously. Assemblywoman Giunchigliani had been working with Senator James on some potential amendments dealing with the current crafting of the bill. The bill had an accumulative fiscal note of $2 million over time.

The bill eliminated "good time" credit for prisoners who were in disciplinary status or segregation. That provision had not been in the bill when it was presented to the Senate Judiciary Committee. He suggested there might be a way to take care of the original concern without the high fiscal note.

Assemblywoman Giunchigliani stated she had worked with Senator James to change the Senate amendment. Senator James had expressed the original intent of the bill was to narrow the bill to eliminate good time credits for only those inmates that threw bodily fluids at correctional officers.

Gary Ghiggeri stated the original bill proposed a crime by inmates who threw bodily fluids at employees of the Department of Prisons. The bill was subsequently amended to deny inmates in disciplinary segregation earning good time credits. Testimony at that time indicated that was the current practice of the department. He stated that was not the current practice of the department. The department had provided a fiscal note that over time would increase the prison budget by $1.5 million per year after 3 or 4 years.

If the bill was amended back to the original version the fiscal note would go away except for funding for 20 cameras, some evidence kits, and a few other items to implement the legislation.

Mr. Stevens explained Senate Joint Resolution (S.J.R.) 12 of the 69th Session was a proposed constitutional amendment change that had passed in a previous session but was not enacted by the voters. Testimony had indicated a little more public education was needed if the measure was passed again and sent to the voters.

S.J.R. 12 of the 69th Session allowed investment of state money to stimulate economic development.

Assemblyman Perkins disclosed he was a law enforcement officer but he stated he could honestly say he hoped he never had to benefit from the bill.

ASSEMBLYWOMAN CHOWNING MOVED TO DO PASS S.B.80.

ASSEMBLYMAN PARKS SECONDED THE MOTION.

Mr. Stevens explained the bill was drafted on behalf of the Public Employees’ Retirement System. It changed a number of areas within the public employees’ retirement benefits including on page 2, the Nevada Gaming Commission. A variety of changes were incorporated in the bill. Amendments had been discussed previously.

The amendments would allow a legislator who was a member of PERS to elect to stay in that system during their service at the legislature. The premium payment required would include the amount that the legislature paid on the person’s behalf to the legislative retirement fund and any difference would have to be made up by the individual legislator in order to remain in PERS. It would also allow past service credited based on the legislator paying the contribution and any interest accrued.

Assemblywoman Giunchigliani disclosed she was a public employee but she would not benefit any differently because with the combination of funds the legislator would still have to pay.

Assemblyman Parks disclosed he was already retired so the bill would not affect him.

Assemblyman Perkins disclosed he was a public employee but the bill would not affect him any differently than it would anyone else.

Chairman Arberry disclosed he was a public employee but the bill would not affect him any differently than it would anyone else.

Mr. Stevens stated the bill would appropriate $150,000 for a feasibility study regarding construction of a high-tech learning center at Yerington or Fernley high schools.

Assemblyman Hettrick provided a proposed amendment to include some funding to study the potential of a high-tech learning center at Douglas County High School. He noted that Douglas County High School was land-locked. The bill would provide an opportunity to build something that would be beneficial.

Assemblyman Hettrick stated there had been an ongoing problem with Whittell High School at Lake Tahoe not getting fair treatment compared to the high school on the valley floor. The issue had been specifically worked on with a T-1 line to connect Whittell to the Douglas County High School computer laboratory. It was hoped the project would become a pilot for use in some of the other rural areas of the state.

Assemblyman Hettrick stated the amendment requested $50,000 for the Douglas County study.

Assemblywoman Giunchigliani asked if Douglas County had availed themselves of the high-tech center that had been built in Carson City. She suggested there should be some regional approach to the building of technical centers. Assemblyman Hettrick replied Douglas County had looked into the issue but by the time students were bused back and forth it became impractical. That was why the Whittell link was added. Originally it was hoped Whittell high school could avail itself of the Carson City site as well, but the same transportation and time problems existed.

Assemblyman Beers stated his approach was 180 degrees from that of Assemblywoman Giunchigliani noting the high-tech centers were "the best thing since sliced bread; lets not just study it—lets build it." He stated every community over 5,000 residents should have a high-tech center.

Assemblyman Dini suggested the bill be amended to appropriate $100,000 for the Yerington/Fernley study and leave the remaining $50,000 for the Douglas County study. He explained the Lyon County portion was looking at Fernley because that was where the fastest growth in the county was, including some high-tech industries moving there. Fernley was also close to Fallon and Reno, which made it in a different position than Yerington, which was isolated.

ASSEMBLYMAN MARVEL MOVED TO AMEND AND DO PASS A.B. 360.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

Chairman Arberry suggested the bill be approved and have the amendments brought back because he understood the amendments would take some time to process through the LCB Legal Division.

Assemblywoman Giunchigliani concurred the amendments were technical in nature and she had worked with Carole Vilardo representing the Nevada Taxpayers’ Association on amendments.

Assemblyman Perkins recalled the amendment received in the previous week had appropriated $150,000 General Fund money to do the administration of the bill and asked if that was still accurate. Assemblywoman Giunchigliani replied the funds were not for the administration of the bill because the funds were to go to the Board of Examiners. The thought was the issue of long-term financial planning for the fund still needed to be dealt with. For the 2-year period the bill would change the makeup of the old Planning Commission and have them focus on only two issues. Those issues were the continuing financial needs and how that would occur and the amount of time buses were on the road within communities. The Board of Examiners could be hit from a lot of other schools saying they bused children for 2 hours. That might be common throughout the state.

She stated the funding could probably be cut down because the committee could probably meet fewer times and still be able to use some of the documentation from the one report worked on in a previous study.

Chairman Arberry clarified once the amendments were drafted they would be brought back before the committee.

Chairman Arberry asked Mr. Hettrick to present the floor statement for
A.B. 597, and Mr. Parks to present the floor statement for S.B. 149.

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Mr. Stevens explained the bill would make the Commissioner of Veterans’ Affairs a stand-alone entity by removing it from beneath the Office of the Military.

Proposed amendments had been passed out previously. He added his belief that the Governor’s position on the bill was neutral. The agency indicated it would not cost any more money to make the agency a stand-alone entity.

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS S.B. 263.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

Chairman Arberry asked Mr. Beers to present the floor statement for the bill.

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Mr. Stevens stated the bill authorized a pilot program to provide continuum of care for children that received protective services. He reminded committee members a position had been added in the budget closing for the Division of Child and Family Services to assist in the project.

Assemblywoman Giunchigliani commented the position had been provided a sunset date in the budget because the program was a pilot.

THE MOTION PASSED UNANIMOUSLY WITH ASSEMBLYWOMAN EVANS AND ASSEMBLYMAN PRICE NOT PRESENT FOR THE VOTE.

Chairman Arberry asked Mrs. Cegavske to present the floor statement for the bill.

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Chairman Arberry stated he had passed out some amendments for the bill. Judge Porter sponsored the bill. He requested the committee to review the proposed amendments.

Having no further business before the committee, the meeting was adjourned at 10:15 a.m.

RESPECTFULLY SUBMITTED:

Cindy Clampitt,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

DATE: