The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:15 p.m., on Wednesday, February 17, 1999, in Room 2149 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Senator Ann O'Connell, Chairman

Senator William J. Raggio, Vice Chairman

Senator William R. O’Donnell

Senator Jon C. Porter

Senator Joseph M. Neal, Jr.

Senator Dina Titus

Senator Terry Care

GUEST LEGISLATORS PRESENT:

Senator Bob Coffin, Clark County Senatorial District No. 3

Senator Dean A. Rhoads, Northern Nevada Senatorial District

STAFF MEMBERS PRESENT:

Angela Culbert, Committee Secretary

OTHERS PRESENT:

Pat Fladager, Concerned Citizen

D. Taylor, Nevada Director for Hotel Employees and Restaurant Employees International Union

Bernard Correa, Concerned Citizen

Danny L. Thompson, Lobbyist, Nevada State AFL-CIO

James F. Mulhall Jr., Lobbyist, Nevada Resort Association

Harvey Whittemore, Lobbyist, Nevada Resort Association

Lucille Lusk, Lobbyist, Nevada Concerned Citizens

Janine Hansen, Lobbyist, Nevada Eagle Forum

Denice L. Miller, Senior Policy Director, Governor’s Office

Douglas R. Ponn, Lobbyist, Sierra Pacific Power Company

Colleen A. Wilson-Pappa, Lobbyist, Clark County

William E. Isaeff, Lobbyist, City of Sparks

Henry Etchemendy, Lobbyist, Nevada Association of School Boards

Chairman O’Connell opened the hearing on Senate Bill (S.B.) 86.

Senator Care stated until January 20, 1999, he worked for the law firm that has represented and continues to represent various Las Vegas resorts. He said he was not currently engaged with the firm, but will return after May 31, 1999.

Senator Joseph (Joe) M. Neal Jr., Clark County Senatorial District No. 4, testified that President Eisenhower, upon leaving the office in 1960, suggested the nation beware of the military industrial complex as he had observed the control of the defense contractors exerting pressure upon the Congress through the defense department. This control, he declared, even extended to the point of waging war for the purpose of making money. The senator stated that Nevada is confronted with a similar gaming industrial complex which cannot make war but can have a political influence just as devastating. The representative democracy has a process of free and fair elections, majority rule, freedom of assembly, and freedom of speech. He spoke of values associated with democracy including equal opportunity. Senator Neal proclaimed the democratic structure rests upon the foundation of separation of powers and the bill of rights. He stressed the gaming industrial complex has high-jacked the process with indifference to damaging popular consent, as the money gaming has put into campaigns has allowed it to take the democratic process out of the hands of people. He cited a poll conducted by the University of Nevada, Reno, in which 69 percent of those said the gaming industry should pay more taxes. With results such as these, he questioned his lone sponsorship of S.B. 86, noting this indicates representatives are afraid of gaming powers.

Senator Neal continued, quoting an unnamed colleague who said, "If we don’t [do not] get gaming money, no one would be elected." Such dependency, he declared, is frightening. He expressed his disagreement with this statement and called attention to the proposed measure which would make it illegal for gaming to contribute to the political campaigns. Because of questions on the constitutionality of this proposal, the senator submitted an opinion (Exhibit C) from the Legislative Counsel Bureau which supports S.B. 86 as constitutional. He explained New Jersey does not permit gaming to give contributions to political candidates, and upon being challenged, their law has been found to be constitutional. He stated gaming is a privileged industry, and citizens have a constitutional right to control gaming rather than to allow gaming to control them. He stressed gaming has the power to exercise its corporate will over that of the citizens, surmising this cannot be allowed to continue. The senator pointed out gaming is unlike other industries in that it has the capacity to cause a moral rupture in the fabrics of society by taking advantage of the epigenetic culture of winning.

Senator Neal indicated there has been concern S.B. 86 will effect gaming rights of free speech. He explained the proposal would not stop gaming from speaking to officials or asking support for laws by which they would be benefited. The measure prohibits the giving of contribution, he stressed, noting purchasing elective officials is what is attempted to be stopped. The state has the constitutional powers to prevent corruption and the appearance of corruption within its gaming industries. The courts have recognized that casinos are places with a tremendous concentration of wealth, he pointed out. Senator Neal commented that in the last gaming statement approximately 20 hotels located on the Las Vegas strip made 6 billion dollars in the last year. That concentration of wealth, he suggested, carries with it a great deal of influence. He stated when this wealth is brought to bear on the process such as in case of the last gubernatorial election, the state has a sufficient interest to institute laws to maintain the integrity of its regulatory process, even to the point of disallowing all of those associated with casinos from contributing to political campaign.

Senator Neal indicated S.B. 86 has been characterized as a bill to prohibit campaigns by casinos, noting in reality the proposal would prevent corruption of the political process thereby preserving the values of democracy.

Senator O’Donnell commented Senator Neal had disparaging words towards the casino industry although it is the bloodline of Nevada’s entire economy. He questioned the motive behind the proposal.

Senator Neal indicated the proposal was not charged with bitterness as suggested. He agreed a lot of Nevada residents are dependent upon gaming, stating this dependence is the reason gaming should be kept out of politics. If this is not done, he noted, and gaming becomes the dominant influence, then the federal government will be invited to take action in the future. State control is necessary, the senator voiced, in able to continue operating as a gaming state. He noted the President’s budget reflected a 28 percent tax on bingo and Keno, stressing the federal government is looking at the gaming industry very closely.

Senator Neal stated gaming is unlike any other industry because it is money intensive. He referred to an opinion from the Legislative Counsel Bureau, Legal Division (Exhibit C) which indicates the way the courts have dealt with the concentration of wealth and how it might be used to dominate the political process thereby engaging in corruptive practices. He noted the intent of the bill is to avoid these practices. The measure, he pointed out, would give notice to the public and to the federal government that the State of Nevada wants to control gaming rather than allowing gaming to have the control.

Senator O’Donnell stated Senator Neal’s statements are an indictment on every legislator. He stressed he was uncontrolled by gaming, and noted he did not receive a great amount of money from gaming establishments during the recent election.

Senator Neal remarked it was not his intent to accuse anyone of undue influence. He pointed out the ease by which gaming has been able to dictate measures due to power, citing a bill in which money was taken from school kids at a time when school bond issues had to be addressed. He drew attention to the way in which counties cater to gaming interests, noting a recent Clark County commissioner campaign cost over $1 million for one candidate. He said the public is aware of this problem and their voice should be heard.

Senator Porter clarified Senator Neal’s intent was to prevent corruption of the process. He questioned whether the senator could cite particular cases in which elected officials were purchased by the gaming industry or have taken advantage of this process.

Senator Neal stressed it was not his intent to make accusations against anyone. He said the legislators must act on their conscience. He said the legislative body was not immune from corruption.

Senator Porter indicated Senator Neal specifically mentioned the need to insure the process is not corrupt. He said his constituents request total opening of records of elected officials regarding contributions and questioned whether gaming has been a part of Senator Neal’s campaigns.

Senator Neal concurred gaming has always been a part of his campaigns, noting he accepts and uses the money as long as it does not exceed the law. He pointed out he did not present the measure because of an animosity towards gaming, but because of the danger of the concentration of wealth. He said the mining industry is different as gaming is money intensive and creates other problems which are not created by mining, such as addiction. These issues, he noted, must be looked at from a broad point of view, and pointed out the importance of not letting gaming influence to the point where the public is neglected. He stated when the public cannot control and dictate to the gaming industry, the public loses.

Senator Porter questioned Senator Neal’s position on getting rid of all contributions and moving to a public type of campaign financing. Senator Neal said this would be a great idea if it could work. He said gaming contributions dominate smaller contributions in campaigns, though smaller contributions do not get the same credit in terms of influence. He said in the spring of 1997, the Progressive Leadership Alliance put a contributions report out on all of the legislators. According to this report, the small contributions amounted to over $2.4 dollars. He pointed out gaming could be eliminated from contributions along with their influence. He requested the committee consider S.B. 86 with a fair mind.

Senator Neal stressed he was not angry at the gaming industry but did see a problem. He pointed out New Jersey recognized gaming as a problem and legislated against it from the start. Across the state, gaming generated approximately $13 billion in 1998. He listed amounts made by the gaming industry in various areas around the state into the billions of dollars. He said the 1998 elections marked the first time in the history of Nevada that gaming supported one candidate for Governor. Senator Neal pointed out new gaming corporations contributed to only one party in this race, rather than to both major parties, and the recipient of the contributions was elected to office. As a result it has been indicated that "growth is a local issue." Senator Neal suggested this means gaming will not be taxed for growth problems in Clark County. He restated the influence of gaming needs to be taken out of politics.

Senator Porter questioned whether Senator Neal has felt corrupted by the donations he has received from gaming. Senator Neal stated no, noting corruption is a concern as evidenced by the need for a gaming control board.

Senator O’Donnell questioned whether the casino who gives to both sides would be more corrupt than the casino that gives to one side. Senator Neal said the casino who gave to one side would be more corrupt because by giving to both sides the candidates are put on level ground. Senator O’Donnell pointed out the casinos giving to both sides are trying to hedge bets to control whoever wins. Senator Neal stated giving to both candidates allows them equally to go before the public to make their case. Money, he noted, is very important in politics and suggested it can be used as a controlling factor.

Senator Care indicated contributions are a matter of public record. He noted he received contributions in excess of $200,000, with the amount received from the gaming industry to be insignificant. He said he received more money from teachers than from gaming and questioned whether teachers should be disallowed from contributing to campaigns. Senator Neal said teachers are not in the same category because gaming can cause many problems and has potential to make a community poverty stricken. He restated gaming is a money intensive operation. He referred to the court case in Exhibit C, Buckley v. Valeo, which has permitted states to control gaming because of their differences from other industries and because of the social disruption gaming can cause in a community. He stressed teachers and labor unions cannot cause these problems in a community.

Senator O’Connell indicated Senator Neal had stated in the past his concern regarding control of elections. She stated some elections have been controlled by unions and questioned the reason unions were considered different than casinos. Senator Neal indicated his concern dealt in part with the industry’s impact on the community rather than who is controlling an election. The control, he stated, can cause all kind of problems in a community if the industry is left to operate without impunity. Gaming, he stressed, is not like other industries and it needs to be treated as such.

Andrew Barbano, Lobbyist, Casinos Out of Politics (COP), read from a prepared statement (Exhibit D) in support of S.B. 86. He stated for the record:

Mr. Barbano continued with his prepared testimony stating the proposal represents substantial and overdue campaign finance reform. He directed the committee’s attention to the front page of the Reno Gazette-Journal from December 6, 1998 (Exhibit E). He indicated COP was formed late in 1998 and listed reasons for its formation as set forth in Exhibit D. He stated because of inadequate taxes placed upon casinos, Reno and Las Vegas cannot afford parks. He mentioned there was an initiative considered by the Sparks City Council in which user fees would be imposed on "foreigners from Reno" using Sparks parks because Reno parks are so deficient. He questioned the destination of the casino room tax.

Mr. Barbano said it was the goal of COP to obtain substantive campaign finance reform and tax reform. He expressed the dominance of the casino industry in Nevada. He stressed the continuing growth problems without adequate money provided from casinos. He directed the committee’s attention to his newspaper article titled "The Zero-Based Tax Initiative" (Exhibit D). He pointed out the attached (Exhibit D) compilation of tax and fee increases imposed since 1981 and a tax chart from the Tax Foundation (Exhibit D), citing numbers regarding Nevada’s tax base. He urged the committee to support S.B. 86.

Pat Fladager, Concerned Citizen, expressed support for S.B. 86, stating her awareness of the control casinos have in preparation and passage of bills that help govern Nevada. She stressed no one industry should have more influence and power than its citizens.

D. Taylor, Nevada Director for Hotel Employees and Restaurant Employees International Union, of which the Culinary Union is affiliated, stated in Nevada they represent 55,000 workers, virtually all in the hotel and gaming industry. He testified in opposition of S.B. 86; stating, despite great respect for Senator Neal, they do not concur that the solution to campaign finance reform lies in disenfranchising any one person, group, or corporation. He expressed disagreement that the gaming industry should be removed from the political process.

Mr. Taylor stressed the economic backbone of the gaming industry acts as a corporate citizenship. The industry, he said, provides quality union jobs in the state to both those that build the resorts and those that work in them. In Nevada, he explained, resort workers enjoy affordable health insurance, pensions, living wages, a guaranteed work week, and job security. He maintained the innovative labor management partnership evident in the gaming industry, which, he furthered, is the backbone of a livable Nevada. He stressed the availability of homeownership to casino service employees, stating the gaming industry is one of Nevada’s responsible employers. The hotel and restaurant job quality in Nevada is better than other states in the country, Mr. Taylor stated, as workers make 41 to 47 percent more than their counterparts in other states, noting 63.7 percent of these workers have health insurance compared to 24.2 percent in other states. In Nevada, 36.7 percent of these workers are covered by pensions as opposed to 10.6 percent in other states. This, he maintained, displays the gaming industry’s citizenship which also extends to the political process.

Mr. Taylor questioned the problem S.B. 86 attempts to address, noting the problem cannot be solved by taking people and corporations out of the political process. He indicated an effort has been made in the past to disenfranchise unions and their members from the political process, stressing one group cannot be removed from the political process without repercussions that will eventually affect other persons or groups in Nevada. He stressed the unfairness of disenfranchising Nevada’s economic backbone from the political arena. He pointed out national discussions in regards to problem gambling, stating casinos are putting the resources into dealing with this problem.

Mr. Taylor recognized a problem with illegal political contributions by individual casino owners. Both the casino industry and the government, he noted, need to address this problem. He cited an example in which an individual casino owner flaunted campaign finance laws without repercussion. He stated the Venetian Casino Resort owner used 20 different corporations to funnel hundreds of thousands of dollars to just 3 county commission candidates. In response, he explained, Common Cause filed a complaint over these activities with the secretary of state’s office stating, "It appears highly likely that funds were transferred by and between these various entities in an attempt to launder campaign contributions in excess of the statutory limits." The secretary of state’s office, he noted, has decided against pursuing this matter, and the attorney general’s office has declined to take any action either. As Common Cause’s complaint alludes, the Venetian Casino Resort owner’s activities flaunted the legislative intent and authority in limiting contributions to a political candidate by any one person, organization or corporation. This legislation applies to everyone, he stated, and was supposed to make these types of political activities illegal. He suggested the most important concern for the committee would be to ensure this behavior does not happen in the future rather than focusing on the disenfranchisement of one particular group. When one casino owner, he stressed, can have activity unchallenged by the highest elected officials in Nevada, it serves as a green light for others interested in circumventing the intent of Nevada’s campaign finance laws. He urged the committee to oppose S.B. 86, stating no individual or group should be removed from the political process because of another individual’s actions. He expressed support for the enforcement of the spirit of the existing laws.

Bernard Correa, Concerned Citizen, representing Culinary Workers Union No. 226 explained he is employed at the MGM Grand Hotel/Casino in Las Vegas as a cook. He indicated his activism in the union has allowed him to develop a perspective on the importance of the labor management cooperation. The gaming industry, he said, is under attack, noting some would like to tax and regulate gaming out of existence. The gaming industry and the unions, he said, need to mount an aggressive political defense as the jobs of many residents of Nevada are on the line. He testified he did not want his employer’s political rights taken away any more than he would want those of his unions to be taken away. He indicated he was active in protesting attempts of taxes on employee meals, stating the meal tax would have amounted to more than $300 per year in a pay decrease for every worker. He noted the importance of having the gaming industry in political fights such as these. He urged the committee to oppose S.B. 86.

Mr. Correa noted Senator Margaret (Maggie) A. Carlton, Clark County Senatorial District No. 2, is a waitress at The Mirage Hotel & Casino, recognizing the possibilities of political participation in Nevada. He stressed the system works for employees of Nevada, and once again urged the defeat of the measure.

Danny L. Thompson, Lobbyist, Nevada State AFL-CIO, expressed his respect for Senator Neal and his opposition to S.B. 86. He noted in January 1998 a group put together an initiative petition which was designed to take unions out of the political process by removing their ability to make contributions to candidates and disallowing any action without the expressed consent of the members every year. He said the idea of corporation exclusion from the process was investigated at that time. He said the AFL-CIO had filed a counterpetition under a group named Nevadans for Fairness. During the campaign, he said, there was occasion to debate this issue, noting the opposition’s reason for filing a petition was that the AFL-CIO gave 90 percent of their money to Democrats. He stressed they had made donations to those with similar views to their own regardless of party. He said the issue was won in court, pointing out enough signatures had been added to the petition in support of the AFL-CIO in every county in the state. He said they did not believe the casino industry should be taken out of the political process no more than they believe unions should be taken out.

Mr. Thompson stated he had served as a member of the Legislature for five terms and during that time he had received money from various casinos, although he never voted with them on a single issue of unemployment insurance and workers’ compensation; yet every time the donations were made to him. He said it would be inaccurate to say that a donation buys legislators.

Senator Neal questioned whether the Culinary Workers Union No. 226 is organized in the State of New Jersey. Mr. Taylor indicated this to be true. Senator Neal asked whether he was aware that New Jersey has the same law which is proposed in S.B. 86. Mr. Taylor said he knew this to be correct. Senator Neal requested Mr. Taylor explain the difference between those serving in the union in New Jersey and those serving in Nevada.

Mr. Taylor acknowledged 48 out of the 50 states have some form of legal gambling with the exclusion of Utah and Hawaii. He said separating New Jersey from the rest of these states skews the reality for comparisons.

Senator Neal interjected New Jersey has the same type of houses represented in the State of Nevada.

Mr. Taylor said between 20 to 25 percent of the jobs in Nevada are generated from gaming, which according to the statistics, he noted, are good jobs. This is not the case in New Jersey, he remarked, as gaming is a very small part of that state. When gaming was established in New Jersey, he explained, there was much concern over organized crime which, he noted, has already been rooted out in Nevada due to the State Gaming Control Board and the Nevada Gaming Commission. He stated the members of the union in New Jersey are very involved with the political process.

Senator Neal asked for information on the hotels in New Jersey and the comparison hotels in Nevada regarding the difficulty the casinos in New Jersey are having under this law. He questioned whether gaming facilities were about to leave New Jersey because they cannot participate in the political process. Mr. Taylor indicated he did not have this information.

Senator Neal questioned whether the labor groups in New Jersey find it difficult to deal with issues that apply to the casinos because of the prohibition against participation in political campaigns. Mr. Taylor indicated he had dealt with issues of contracts. He said they have a very difficult time negotiating contracts with certain companies.

Chairman O’Connell questioned if any other state has a law prohibiting the major industry in that state from participating in the political process. Mr. Taylor indicated no states that he knew of prevents their largest employer from being involved in the political process.

James F. Mulhall Jr., Lobbyist, Nevada Resort Association (NRA), testified in opposition to S.B. 86, stating the proposal was unreasonable and unfair. He expressed support for the previous arguments against S.B. 86. He said the gaming industry represents 22 percent of the work force, noting 1 out of 5 employees in the state work for this industry and they contribute the lion share of taxes to state and local government. He maintained S.B. 86 would disenfranchise the gaming industry by singling them out, despite contributions to and investments in the community and despite new competitive pressures on the industry. Nevada, he pointed out, has had a long history of regulating the gaming industry through the gaming control board, suggesting the industry in New Jersey has had a much different history. He restated the proposal to be unreasonable, and he noted gaming is the most regulated industry in Nevada and stressed their rights should be upheld. He reiterated once the Legislature disallows one group of people to a reduced set of political rights then it becomes "a dangerous slippery slope." He urged the committee to oppose S.B. 86.

Senator Neal pointed out Harrah’s and Caesar’s Palace are located in New Jersey as well as in Nevada. He questioned whether these resorts disagreed with the New Jersey law forbidding them to participate in political activities. Mr. Mulhall said as a matter of policy the industry complies with the laws in the respective states.

Senator Neal questioned the reason the NRA finds it difficult to entertain this proposal. Mr. Mulhall indicated the NRA does not believe it is right to disenfranchise any particular group, suggesting just because it is done in New Jersey, does not make it right for Nevada.

Senator Neal questioned whether Mr. Mulhall believed the corporations operating gaming establishments have a greater right than the individual citizens in Nevada. Mr. Mulhall said "absolutely not."

Senator Neal asked whether the citizens then should have the right to control gaming. Mr. Mulhall stated the citizens do control gaming through elective representatives. Senator Neal questioned whether Mr. Mulhall believed the citizens have the right, if they so decide, to take gaming out of the political process. Mr. Mulhall said the people, through elected officials, control and should control public policy. He said if the laws are passed, the gaming industry will obey them.

Harvey Whittemore, Lobbyist, Nevada Resort Association, said the NRA has no further testimony and said he was available for questions.

With nothing further on the issue, Chairman O’Connell closed the hearing on S.B. 86 and asked for testimony on Senate Joint Resolution (S.J.R.) 5.

Senator Bob Coffin, Clark County Senatorial District No. 3, began his testimony proposing the Nevada Constitution be amended to allow the Legislature to meet on special occasions outside of the capital. He clarified meeting and voting were distinct terms, and the constitution prohibits legislators from voting outside of the state capital. He indicated this measure had been considered and rejected in a previous session, noting substantial changes have been made in the bill based on the suggestions made. He dismissed concerns the ultimate intention would be the first step to move the capital, stating this was not the intention nor had it been in the past. He pointed out S.J.R. 5 limited the length of time the Legislature could meet outside the capital for purposes of voting. He indicated the proposal is limited to the same length in the Nevada Constitution that the Legislature is allowed to meet as far as special sessions.

Senator Coffin said he did not contemplate anything but an emergency taking the Legislature from Carson City except in the case of something of vital interest to a particular community. Although there has been improved accessibility through electronic means, he recognized the legislative proceedings remain a puzzle to nearly 70 percent of Nevada’s population. The population in Clark County, he noted, has grown 50 percent since the measure had last been proposed. He requested committee consideration of S.J.R. 5, stating meetings had been held outside of Carson City without the right to vote 6 years ago. He cited members of the population for whom coming to Carson City to participate was too expensive. He emphasized there could come a time when an important issue to some of the specific communities throughout Nevada could arise. He urged the committee to pass the measure for voter approval, noting the bill would have to pass through the Legislature twice in order to succeed.

Senator Coffin stated he did not take constitutional changes lightly. The recent change to shorten the session to 120 days, he maintained, has unintentionally closed off some of the process because so much has to move so fast that the voters are having difficulty comprehending the process. He indicated the measure would allow people in other parts of the state to participate in the proceedings and would remove some of the animosity that is sometimes evidenced towards the Legislature. The senator expressed his pride in participation, commenting he would like the citizens to witness this pride. Currently, he said, this is limited to a small percent of the population, noting school children from southern Nevada cannot visit as they do in northern Nevada.

Senator Raggio stated the measure was not a new concept, clarifying some committee and other special meetings of the Legislature are currently held outside of the capital without taking vote. He expressed grave misgivings about moving the entire Legislature somewhere else for any purpose, noting S.J.R. 5 is not limited to an emergency situation. He questioned whether Legislatures in other states are allowed to move.

Senator Coffin indicated changes may have occurred in the statistics complied since the last time the measure was researched, yet pointed out approximately a dozen states allowed their Legislature to vote outside of the capital. Two states, he mentioned, did not allow the Legislature to vote outside of their capital except according to law which meant that their statute could override their constitution. He stated it was not the intent to move the Capital from Carson City or to move the whole staff and body of the Legislature. He stressed it would make sense in an emergency situation for the Legislature to convene in another part of the state.

Senator Coffin stated other states do have provisions for moving, stressing it is not something to be taken lightly. He listed states which do have such provisions, noting these are allowed in cases of conflagration, danger, disease, emergency invasion, or safety. Both Indiana and West Virginia, he pointed out, set the time and place unless a different day or place is appointed by law. He said the other states which allow the Legislature to move do not set limits on the length of time as S.J.R. 5 does.

Senator Coffin acknowledged in the past 16 years there have been two special sessions, neither lasting more than 2 days. He voiced the measure would be very useful in the case of a special session and stated he would be agreeable to an amendment in which a special session would be the only reason the Legislature would be allowed to vote outside of the capital.

Chairman O’Connell questioned the reason no fiscal note existed on the bill. Senator Coffin indicated there was a fiscal note prepared the last time this measure was proposed. He explained he did not believe a fiscal note was appropriate because no matter where the Legislature meets, there will be some expense. He pointed out the expense of the current infrastructure which has to be mobilized to come to Carson City, noting the light, heat, and air conditioning costs of meeting in the Legislative Building. It is probably less expensive, the senator declared, to meet some place else other than the Legislative Building. He said the Senate and Assembly chambers used to be approximately 10 percent of the size occupied today, suggesting it would not be difficult to meet in a meeting hall or public conference hall in Nevada in an emergency or special session situation. He disregarded any fiscal notes which may have previously been attached to the measure.

Senator Neal questioned whether the Nevada Constitution currently allowed moving the Legislature from Carson City in an extreme emergency situation. Senator Coffin indicated if an emergency situation arises, a place in Carson City must be found for purposes of convening the Legislature so voting could take place.

Lucille Lusk, Lobbyist, Nevada Concerned Citizens, testified the Nevada Concerned Citizens have proper government as their primary common interest. She expressed respect for the intent S.J.R. 5, but opposed the broad language of the bill. The measure, she explained, will not work as ordinary citizens have difficulty following actions of the Legislature without having to travel all over the state. She stated it would be unaffordable for citizens and thereby eliminate the few citizens and volunteer representatives that currently participate in the process. The cost of moving the Legislature, she furthered, would fall upon the taxpayers’ shoulders, and she expressed the costs would be great as those who move to Carson City for the session would then have to pay for a room in another location if the Legislature were to convene in another area. She noted the mention of limiting the measure to only special occasions or emergencies, but she emphasized, the language does not provide these limits. Ms. Lusk pointed out that rural communities are often affected by the same special issues, and questioned the way in which the location of convening would be determined in these cases. She urged committee members to oppose S.J.R. 5.

Senator Neal mentioned legislative standing committees have met in various areas of the state though voting was not permitted. He questioned the possibility of amending the measure to allow committees to meet and vote outside of the capital.

Ms. Lusk expressed opposition to this proposal, noting the actions taken by committees usually determine the action which will be taken on the floor as the committees review items with great care. The members not on the committee considering a bill, she said, usually do not have the opportunity for careful review and they rely on those committees for information. She stated participants would still have to follow the committees around in order to be involved in any effective manner.

Janine Hansen, Lobbyist, Nevada Eagle Forum, stated S.J.R. 5 is an admirable aim to attempt to make the Legislature more accessible to citizens, noting it is a problem trying to afford ordinary people the opportunity to come and participate in the process. She stressed advances in teleconferencing have helped the issue of participation in Las Vegas. She suggested this arrangement be made for some of the rural areas which could benefit from increased teleconferencing, thereby helping to bring more activity from ordinary citizens.

Ms. Hansen expressed concern about S.J.R. 5 due to the difficulty moving would create for volunteers and citizens to participate. She indicated she is never able to attend hearings in other areas because of the involved expense. While holding committee hearings in local areas would be positive, she said, there would be a great cost in terms of changing the regular place of meeting to both the volunteer lobbyists and the taxpayers.

Ms. Hansen mentioned she remembered reading a provision in the Nevada Constitution which would allow the Legislature to make special arrangements in the case of emergency. She indicated that if in fact this was a provision, it would serve to act as an answer to the voiced concerns.

Chairman O’Connell indicated the committee on standards has met all around the state, but she noted, there were few to no members of the public participating in the hearings regardless of the importance of the topic. She expressed discouragement in the lack of interest and advantage taken in this case.

At a later point in the meeting, Chairman O’Connell asked Senator Neal for clarification on S.J.R. 5 dealing with the constitutional declaration of emergencies. Senator Neal indicated Article 4 section 37 of the Nevada Constitution refers to the emergency move of the Legislature in case of enemy attack.

With no further testimony on S.J.R. 5, Chairman O’Connell closed the hearing and opened the hearing on S.B. 160.

Senator Dean A. Rhoads, Northern Nevada Senatorial District, indicated in the United States today, only five states do not confirm appointments by the governor as indicated in Exhibit F; a list of all states’ methods of confirming gubernatorial appointments. He noted in 39 states, these appointments are confirmed by the state senate; in 2 states, they are confirmed by both houses; in 2 states, they are confirmed by either house; and in 2 states, appointments are confirmed by governor’s council.

Senator Rhoads stated legislative approval of gubernatorial appointments is one of the most important tools of the system of checks and balances in state government. In the United States Constitution, he noted, it is mandated the Senate approve certain federal appointments. State Legislatures, he continued, function as a board of directors for the state while the governor acts as a chief executive officer. He explained checks and balances are important in the legislative process, noting the governor has veto power. In 45 states, he pointed out, the Legislature checks the power of the executive branch by reviewing and approving his appointments.

Senator Rhoads said Nevada’s Governor currently approves over 700 appointments though S.B. 160 only seeks approval of 6 major agencies; the members of the State Gaming Control Board, the members of the State Board of Parole Commissioners, the commission of the public utility commissioners, and the chairman of the Nevada Gaming Commission. The senator pointed out in section 1, subsection 2 of the bill allowances are made for appointees of the Governor during a recess of the Legislature in which the "… appointment must be confirmed or rejected by the senate at the next regular session of the Legislature…." The appointee would serve as acting member or director until the confirmation. He indicated this to be standard protocol for the other states in which confirmation is approved by the senate, including those with biannual Legislatures.

Senator Rhoads continued explaining section 1, subsection 3 of S.B. 160, which, he noted, is mostly old language, requires a "… statement of all appointments made by him [the governor] to fill vacancies …" has to be reported to the Legislature when they begin session. He said appointments made during the 18 months out of session have not been officially reported by any Governor for the last 20 years.

Senator Rhoads pointed out section 1, subsection 5 of the bill would allow each standing committee to have "… jurisdiction of the subject matter of the appointment." He explained for appointment of members of the parole board, the judiciary committee would have jurisdiction. These committees will make a recommendation and forward it to the Senate. He summarized section 1, subsection 6 of the bill which deals with rejection of the appointment, noting if rejection occurs the position "becomes vacant immediately." Section 1, subsection 7 of S.B. 160 indicates if a person is rejected, he or she is not eligible to be appointed to another position.

Senator Rhoads testified S.B. 160 gives the opportunity to create a hearing process to let the public know the background and positions of some of the key appointments that any Governor will make.

Chairman O’Connell questioned whether the vacancy remains open if the person is appointed while the Legislature is not in session. Senator Rhoads explained the appointee would be an acting director or acting member until rejected or confirmed by the Senate as in other states. He told the committee that in Utah and Oregon, all legislators come in once a month to go over the governor’s appointments. This, however, would not be the case in Nevada as the bill dictates the Governor’s appointments would be reviewed at the start of the next session.

Denice L. Miller, Senior Policy Director, Governor’s Office, testified in opposition of S.B. 160, noting it is impractical and unfair to those appointed when the Legislature in not in session. She said it would be difficult to find qualified people who knew that every 2 years their appointment would be subject to the Senate’s approval. There has been a lot of discussion, she explained, as to whether this is a violation of the principle of separation of powers. She pointed out the argument had been made that the federal government operates in this manner, but, she maintained many things the federal government does are not necessarily a model for Nevada nor the Legislature. She gave examples of other ways in which the federal government acts distinctly different than Nevada’s state government.

Senator Raggio indicated he has been a proponent of this measure for a long time, noting his position does not change because the party affiliation of the Governor changes. He suggested Ms. Miller review Exhibit F, stating the list of states where appointments are confirmed by the senate indicate it is not impractical. Many of the states, he noted, have Legislatures that meet biannually such as Texas and Oregon. He said these states have the same kind of provisions as proposed in S.B. 160 which allow the appointee to serve with full authority in an acting capacity until such time as the senate convenes. He recognized Exhibit F contains an impressive list of states, explaining this is not just practiced by the federal government. He further added if Nevada is going to have the separation of powers and the interface that occurs in a tri-partied system, there has to be some oversight to avoid inefficiency and impotency that occurs as a result.

Ms. Miller noted Nevada is now unique due to the biennial 120-day time limit of its legislative session. She pointed out although Texas has biennial sessions, they have a number of special sessions and virtually meet all of the time. She indicated she would review the information concerning methods used by states to confirm gubernatorial appointments (Exhibit F) and would pass it on to the Governor.

Senator Titus indicated she has been an opponent of this measure regardless of the party affiliation of the Governor. She maintained there cannot be a direct comparison with the federal government as it has a single executive while Nevada has a plural executive. The President can appoint his entire cabinet who then serves as his loyal, policy team and help him initiate and implement policy in a certain direction. In Nevada there are five people all with their own constituencies, different political parties, and different agendas. She pointed out these people may not be acting as a cohesive unit supporting the Governor at all. She declared the Governor needs the ability to make some appointments to the heads of these different departments to support him with his policy agenda. Also, she noted, some of these offices already have built in nonpartisan controls, such as the gaming control board and the "PSC" (Public Utilities Commission of Nevada). She voiced these kinds of controls make up for senate confirmation. She referenced Exhibit F, stating if the states with independently elected executive officers were listed separately from the states in which the Governor and Lieutenant Governor run together, it would not be nearly as dramatic as it appears in the simplified form.

Douglas R. Ponn, Lobbyist, Sierra Pacific Power Company, testified in support of S.B. 160, maintaining the end result of this process would be a higher quality of appointments to many of the commissions by which Sierra Pacific Power Company is regulated and with which they do business.

Chairman O’Connell closed the hearing on S.B. 160 and requested presentation of proposed bill draft requests (BDRs).

Colleen A. Wilson-Pappa, Lobbyist, Clark County, explained the measure relates to federal wetlands mitigation banking. Currently, she noted, if a wetland is discovered on a piece of property, developers are required by federal law to create a wetland in another area before they can receive approval to build on that property. She indicated the proposal would allow for the creation of a local wetlands mitigation bank.

Chairman O’Connell questioned whether this was a federal mandate. Ms. Wilson-Pappa said this is a federal program, explaining currently developers are setting up wetlands in other areas as Clark County has no provision to keep these local.

SENATOR PORTER MOVED TO INTRODUCE BDR 20-266.

SENATOR O’DONNELL SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

*****

Ms. Wilson-Pappa explained the Nevada Revised Statutes (NRS) currently exempt political subdivisions from paying building permit fees. The proposal would remove the exemption for political subdivisions located in counties with a population of 400,000 or greater so that local governments be paid for services rendered to political subdivisions.

Senator O’Donnell asked for clarification. Ms. Wilson-Pappa stated currently when Clark County provides services to other local governments or districts, the NRS does not allow them to charge building permit fees although cooperatively the local entities have been paying each other. All the proposal would do, she explained, would remove the exemption for political subdivisions while leaving the exemption in for the State of Nevada. She pointed out if Clark County is inspecting and doing the work, this proposal would provide they would be paid for the services.

Senator O’Donnell stated if Henderson wanted to build a police station in Henderson, even though it is in Clark County, they would have to go through plan-check in Clark County and they would have to pay the county a plan-check fee. Ms. Wilson-Pappa said it was her understanding currently through cooperative agreement, they are paying each other. When Clark County builds in the city, they pay permit fees and when Henderson and the City of Las Vegas are building in other jurisdictions, they are paying the permit fees. She explained further, noting because there are still inspectors looking at the business, staff time is still being used.

Senator O’Donnell questioned the reason why Clark County would be building in the city. Ms. Wilson-Pappa explained Clark County builds justice centers or other types of programs.

Senator Raggio said ordinarily bill drafts are not questioned for introduction, but, he said, there was a reason why the Legislature did not think counties should charge the state when the state or the school district builds in the county. He stated this would be taking money out of one taxpayers pocket and putting it in another. He clarified the proposal would take out this exemption.

Ms. Wilson-Pappa agreed this would take out the exemption, explaining the Clark County building department operates as an enterprise fund which means it is self-sufficient, taking in building permit fees and paying expenses from those fees. It receives no General Fund revenue. She said the original bill draft was requested in that fashion. She pointed out other local governments in southern Nevada requested the bill draft be changed to also include them as they believed it unfair to just include enterprise funds.

Senator Raggio indicated said he would vote for introduction, but warned that he would be a "hard sell" on the bill for the reasons previously indicated.

SENATOR CARE SECONDED THE MOTION.

THE MOTION CARRIED. (SENATOR NEAL AND SENATOR TITUS VOTED NO.)

*****

William E. Isaeff, Lobbyist, City of Sparks, indicated the proposal was a result of meetings of the Spark’s charter committee reviewing the Sparks City Charter, and in particular Article 9, for possible changes to civil service provisions. The bill draft, he noted, presents five or six proposed changes to the charter as well as two minor areas correcting previous clerical errors. Each change, he explained, has been reviewed by the Spark’s Charter Commission and the Spark’s City Council.

SENATOR RAGGIO MOVED FOR COMMITTEE INTRODUCTION OF BDR S-349.

SENATOR O’DONNELL SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

*****

Henry Etchemendy, Lobbyist, Nevada Association of School Boards, explained the proposal would allow the opportunity for the school districts to explain to the legislators the necessity for protecting ending-fund balances of the local districts. In the past the state has used the ending-fund balance in their calculations of the DSA (Distributive School Account). He stated the proposal is important because although the current practice is not to use the balance in the state calculations, the districts would like it to be incorporated into the statute so as to disallow its use in the future.

Senator Raggio said he believed this measure would have to be referred to the finance committee upon introduction.

SENATOR PORTER SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

Chairman O’Connell stated the committee has four bill drafts which they may request as a committee. She noted the deadline for introduction of committee bill drafts is February 22, 1999. She requested the committee present any proposals prior to this time. Senator Raggio indicated it was not mandatory that the committee use all of the request allotments. The chairman mentioned other committee chairman have extra measures to be considered if the Senate Committee on Government Affairs does not use all of their requests.

Chairman O’Connell adjourned the meeting at 4:15 p.m.

RESPECTFULLY SUBMITTED:

Angela Culbert,

Committee Secretary

APPROVED BY:

Senator Ann O'Connell, Chairman

DATE: