The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 11:35 a.m., on Friday, February 19, 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

STAFF MEMBERS PRESENT:

Amelie Welden, Committee Secretary

OTHERS PRESENT:

John P. Sande III, Lobbyist, Airport Authority of Washoe County, requested a committee bill draft request (BDR) and distributed a handout to that effect (Exhibit C). He explained the executive director of the Airport Authority of Washoe County and the chairman of that board requested this legislation. The proposed bill draft would add a Consumer Price Index adjustment to airport authority members’ salaries in order to eliminate the necessity for periodic legislative adjustments. The bill would also change the term of the chairman of the Airport Authority of Washoe County from 1 year to 2 years. Mr. Sande commented the executive director believes this provision would help continuity and allow the chairman to become more familiar with the airport.

Senator Raggio noted he and Mr. Sande are members of the same law firm, but commented that situation should pose no conflict for voting on Mr. Sande’s BDR request.

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David S. Gibson, Lobbyist, Clark County Public Defender, requested a committee bill draft request and distributed a handout to that effect (Exhibit D). Mr. Gibson explained Clark County Administrative Services personnel had hoped they could take care of their concerns through a county ordinance, but were unable to do so. He provided testimony (Exhibit D) regarding recent and projected size increases in the Clark County Public Defender’s Office. Mr. Gibson stated Clark County personnel are concerned because of differences in the application and hiring processes used by the public defender’s office and the district attorney’s office in that county. The proposed bill draft would provide for uniformity in these processes. (Later introduced as Senate Bill 456.)

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Chairman O’Connell opened a work session. (See work session document, Exhibit E.) She began discussion on Senate Bill (S.B.) 2 and Senate Bill (S.B.) 3.

Chairman O’Connell asked whether committee members had considered her previous proposal to include studies proposed under S.B. 2 and S.B. 3 in an in-depth interim study on long-term care. Chairman O’Connell indicated Senator Rawson supported this idea.

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Chairman O’Connell opened discussion on S.B. 4.

Chairman O’Connell stated S.B. 4 involves an expenditure of $800,000 over the biennium. Thus, she asserted the bill should be re-referred to the Senate Committee on Finance.

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Chairman O’Connell began discussion on S.B. 14.

Marvin A. Leavitt, Lobbyist, City of Las Vegas, indicated he was involved with preparing an amendment to S.B. 14. He stated the bill presents a situation that should involve only persons with the proper amount of expertise in securities-lending transactions. Thus, the amendment provides that the bill would only apply to cities and counties with populations of 100,000 or more and with investment portfolios equal to at least $100 million. Also, Mr. Leavitt stated the amendment requires the lending entity to have a policy which has been approved by the entity’s governing board. The amendment further requires the governing body to receive collateral of at least 102 percent of the value of the securities borrowed.

Finally, Mr. Leavitt testified the amendment states any investments purchased with the collateral must mature no later than 90 days before the date on which the securities are lent. He explained that provision would eliminate a conceivable problem in which an entity which has a short-term lending contract buys securities which have a long-term horizon and then has to redeem them quickly. Mr. Leavitt indicated the entity could face a substantial loss if market interest rates had risen between the time the entity bought the securities and the time of the redemption of the securities-lending agreement.

Senator Neal indicated he asked the Legislative Counsel of the Legislative Counsel Bureau to issue an opinion (Exhibit F) regarding the constitutionality of S.B. 14. He cited section 10 of Article 8 of the Constitution of the State of Nevada, which reads, "No county, city, town, or other municipal corporation shall become a stockholder in any joint stock company, corporation or association whatever, or loan its credit in aid of any such company, corporation or association, except, rail-road corporations[,] companies or associations." Senator Neal indicated the word "acceptable" in S.B. 14 suggests that a particular security must be an acceptable investment for a local government pursuant to Nevada Revised Statutes (NRS) 355.170. According to Senator Neal, if the transaction is not "acceptable," it might become a poor and unconstitutional investment. He stated even the Legislative Counsel is not entirely clear about this issue, and the people who would make such investment decisions would shoulder much responsibility.

Mr. Leavitt noted securities lending is done almost exclusively with securities of the federal government. He summarized the process: a local government would have securities in its portfolio, usually short-term investments such as U.S. Treasury Notes, and someone else who has a need for such securities would borrow them for a short period, offering collateral in their place. Mr. Leavitt indicated the collateral would be in the form of securities or cash which the local government could consequently invest, thereby increasing earnings. He stated S.B. 14 does not address local governments issuing bonds or lending them out in a securities transaction; S.B. 14 deals with bonds a local government owns.

Mr. Leavitt emphasized the prices of securities involved in such transactions need to be watched closely so that the loaning entity does not lose money. He explained the safeguards included in the proposed amendment diminish the chances of such a loss. Mr. Leavitt recalled in previous testimony on S.B. 14, it was asserted that a local government could trust a banker, or others involved in a securities-lending transaction, to oversee the transaction. However, Mr. Leavitt maintained a local government should have an in-house employee who is competent to watch such transactions.

Chairman O’Connell pointed out the Public Employees Retirement System (PERS) and the Board of Regents were included in S.B. 14, and they had previously asked to be taken out of the proposed legislation. She asked Mr. Leavitt if the PERS Board or the Board of Regents had gotten in touch with him regarding an amendment to that effect. Kim Marsh Guinasso, Committee Counsel, Legal Division, Legislative Counsel Bureau, clarified the amendment does not include the requests from PERS or the Board of Regents. Ms. Guinasso indicated if the committee so desired, she would include direction from those entities in an amendment.

Ms. Guinasso also elucidated the point the Legislative Counsel’s letter to Senator Neal made was with regard to the language in paragraph (a) of subsection 1 of section 1 of S.B. 14, which says the securities must be "acceptable" to the governing body. She suggested rather than using the word "acceptable," which might provide room for interpretation, the bill could use the provision set forth in NRS 355.170, which specifies the types of securities in which local governments may invest. Mr. Neal indicated he would be more comfortable with that provision.

Senator Raggio stated he would not vote on S.B. 14 because Mr. Sande, a member of Senator Raggio’s law firm, was an advocate for it.

Senator Raggio addressed the PERS Board’s and the Board of Regents’ requests to be removed from the provisions of S.B. 14. He commented the bill is permissive only and does not mandate any entities to utilize securities-lending transactions. Senator Raggio expressed his belief that it would be better for entities like PERS and the Board of Regents to have the authority granted under S.B. 14, with the understanding that they are not required to use it.

Senator Neal indicated he would be more comfortable seeing the amendment to S.B. 14 before taking action on it. Chairman O’Connell asked Ms. Guinasso to put together language for an amendment that would include all the discussed suggestions.

Mr. Leavitt mentioned PERS currently has investment guidelines which allow investments according to the "prudent man rule." He suggested a general allowance for investments is beneficial to PERS because it allows PERS to take advantage of new investment vehicles that arise. Mr. Leavitt expressed concern that once the Legislature lists which investments are allowable, PERS will be confused as to whether unlisted investments are also allowable. He explained that would be a situation in which PERS would have a general authorization in one place and a specific authorization for one particular investment in another place. Mr. Leavitt indicated PERS believes a general authorization is all that is necessary for their operations. He noted, based on its general authorization, PERS is currently investing in the types of securities covered by S.B. 14. Thus, Mr. Leavitt maintained S.B. 14 is unnecessary in the case of PERS.

Chairman O’Connell directed Ms. Guinasso to remove the sections of S.B. 14 that pertain to PERS and the Board of Regents.

Senator Raggio reiterated PERS wanted to be deleted from S.B. 14 because that organization believes it already has the authority to perform the transactions described therein.

Chairman O’Connell indicated the committee would vote on S.B. 14 on Monday, February 22, 1999, and opened discussion on S.B. 28.

Senator Titus stated she would like to see S.B. 28 passed out of committee, with the inclusion of a conscience clause as submitted by Janice C. Pine, Lobbyist, Saint Mary’s Health Network (included in the work session document, Exhibit E).

Senator Raggio stated he would abstain from voting on S.B. 28 because he is on a board that deals with policies on benefits.

Senator Porter indicated he had been at a health care presentation during the hearing on S.B. 28 on February 15, 1999. He referred to the information regarding opponents to S.B. 28 on page 4 of the work session document (Exhibit E). Senator Porter mentioned the religious and moral concerns raised by opponents would be covered under the proposed conscience clause amendment. He asked for specifics regarding abortifacients as referenced in the work session document (Exhibit E).

Senator Titus maintained her argument that S.B. 28 has nothing to do with abortion. She indicated discussion during the hearing on February 15, 1999, had been made broader than the scope of the bill. Senator Titus suggested perhaps people who testified on Assembly Bill (A.B.) 60, which does cover items like the "morning after pill," used the same testimony to testify on Senate BIll 28.

Senator Titus explained S.B. 28 was not intended to cover abortifacient procedures such as the "morning after pill."

Senator Porter referenced paragraph (a) of subsection 1 of section 1 of S.B. 28, which addresses coverage for prescription contraceptives. He asked whether drugs like the "morning after pill" would be covered under that provision if they were someday legally approved in the United States.

Senator Titus answered the provision covers "contraceptive" procedures only, which means procedures that prevent conception rather than cause abortion. She expressed her belief that a drug like the "morning after pill" would not be included under that definition.

Ms. Guinasso mentioned she had discussed the language of S.B. 28 with the attorneys who had drafted the bill. She asserted there may be room for interpretation of paragraph (a) of subsection 2 of section 1 of S.B. 28, which defines "contraceptive" as "a drug or device intended to prevent pregnancy." Ms. Guinasso further indicated there may be room for interpretation of the wording "approved by the Food and Drug Administration" in paragraph (a) of subsection 1 of section 1 of S.B. 28. She maintained it is her understanding that the "morning after pill" has been approved by the Food and Drug Administration. Thus, Ms. Guinasso explained paragraph (a) of subsection 1 of section 1 of S.B. 28 could be interpreted to include that type of drug because of the various interpretations of the point at which pregnancy begins. She indicated paragraph (a) of subsection 2 of section 1 of S.B. 28 could be interpreted to mean preventing pregnancy, which would mean preventing implantation. Such an interpretation could include coverage of a drug like the "morning after pill." Ms. Guinasso stated the bill could be amended to exclude that type of drug.

Senator Titus indicated she would like to narrow the definition of "contraceptive" in S.B. 28 so that it could not be interpreted to include abortions or abortifacients like the "morning after pill." She stated if such an action is possible, she would support it, and if it is not possible, she would withdraw her previous motion to amend and do pass S.B. 28.

Senator Neal pointed out S.B. 28 deals with a policy relating to insurance. In his understanding, the bill means a person who is covered under state insurance could have access to contraceptive coverage as a part of his or her policy. He noted S.B. 28 only allows contraceptive coverage to become part of an insurance policy and does not mandate anyone to use that option. Senator Neal also commented that references to the Committee on Benefits may have to be amended out of S.B. 28 because that committee may no longer be active.

Senator O’Donnell indicated contraceptives would have to be prescribed by a doctor in order to be covered under S.B. 28. He asked whether the bill means state employees will be treated differently than others in the work force. He asked why access to contraceptive coverage should not be mandated for everyone.

Senator Titus stated two issues are involved. She said one is mandated benefits for insurance companies, and the other is providing a benefit to the state workers. Senator Titus asserted A.B. 60 relates to mandated benefits, stating that insurance policies which offer prescription drug coverage should also pay for prescription contraceptives. She maintained S.B. 28 is not a mandated benefit bill and is not as broad as A.B. 60. Senator Titus explained S.B. 28 is simply an attempt to provide an additional benefit for state employees. She emphasized women state employees who do not take oral contraceptives cannot currently get coverage for other types of contraceptives because the state insurance policies only cover birth control pills. Senator Titus pointed out some women cannot take birth control pills for various reasons, and these women would like to have other contraceptive options covered by insurance.

Senator Neal commented contraceptive coverage is not a new policy. Senator Titus agreed, but noted that such coverage is not guaranteed. She mentioned women’s health is often given a low priority when insurance benefits are being reduced.

Senator Porter pointed out the state health care program is currently losing approximately $60,000 per day. He asked if it would be more prudent to allow state employees to have a choice in their health care benefits. Senator Porter commented the majority of concerns he has heard from state employees deal with delivery of services, ability to have doctor bills paid, and maintenance of reasonable premiums. He indicated that while looking at health care issues, the committee should consider whether the state has a deliverable health insurance system, which it currently does not in his opinion. Senator Porter mentioned there have been serious problems with premiums and unpaid benefits during the past year. He indicated these problems should take priority.

Senator Neal maintained S.B. 28 deals only with drugs and services prescribed by a doctor. He reiterated Senator Titus’ statement that the bill addresses situations in which a state employee cannot take oral contraceptives and so her doctor prescribes another birth control method.

Senator Titus noted insurance coverage of contraceptive options besides birth control pills could reduce costs. She stated not only are some contraceptive methods cheaper than birth control pills, but they also prevent unintended pregnancies and encourage regular visits to the doctor, where problems can be detected early. Senator Titus stated the passage of S.B. 28 would help the cost problems of the current health plan.

Senator Care indicated he is uncomfortable with the possibility of a broad interpretation of "contraceptive," per Ms. Guinasso’s previous testimony. He supported an amendment to narrow the definition of that term.

Chairman O’Connell asked Senator Titus to state for the record the items she would like to include in an amendment. Senator Titus answered she would request two amendments. She would like one to include a conscience clause, and the other to narrow the definition of the term "contraceptive" so that it could not be misconstrued to include abortifacients. Ms. Guinasso commented the amendment relating to the term "contraception" would be a one-word change in paragraph (a) of subsection 2 of section 1 of S.B. 28, changing that language to read, "’Contraceptive’ means a drug or device intended to prevent conception."

Senator Raggio mentioned S.B. 28 will have a fiscal note of approximately $230,000 over the biennium. He pointed out the bill will need to be discussed in the Senate Committee on Finance. He stated if the contraceptive coverage was provided as an option only, there would be no fiscal note because any extra cost would be paid by those who want such coverage. However, Senator Raggio commented that approach would defeat Senator Titus’ purpose in introducing S.B. 28.

Senator Titus indicated she disagrees with the fiscal note of $230,000 over the biennium. She said she will get more information and argue the point, but she recognized it is an issue for debate.

Chairman O’Connell indicated the motion would now be to amend and do pass S.B. 28 and re-refer it to the Senate Committee on Finance.

Senator O’Donnell requested the amendment be drafted and brought back to the committee. He asked if the committee could then take action on S.B. 28 at its next meeting. Senator Titus agreed to this proposal. Chairman O’Connell indicated the committee would look at S.B. 28 on Monday, February 22, 1999.

Chairman O’Connell opened discussion on S.B. 83.

Senator O’Donnell stated he would like to amend S.B. 83 to require airport authorities to post the FAA rules and regulations regarding bumped passengers. He said there is a carrier who, out of ten airlines, ranks ninth in terms of bumped passengers. Senator O’Donnell indicated there are FAA regulations that require airlines to give $400 to each passenger who is bumped and must wait for more than 6 hours. He expressed his belief that this provision is not being followed and suggested he would like the public to be informed of their rights regarding this issue. Senator O’Donnell offered to work on an amendment and bring it back to the committee.

Chairman O’Connell asked whether Senator O’Donnell was proposing to use language comparable to that suggested by United States Senator Richard Bryan. Senator O’Donnell answered there is a federal law that may be in the works, but since Senator Bryan is not going to run for re-election, no one can be sure how far his proposal will go. Senator O’Donnell stated he would rather not wait for 2 to 3 years for federal legislation to be enacted. He noted he would not mind giving Senator Bryan credit for the bill.

Senator Neal said he agrees with Senator O’Donnell’s idea, but expressed his belief that it would be unconstitutional because it would interfere with interstate commerce.

Senator O’Donnell clarified he meant to amend the bill as a whole. He indicated instead of having the bill require the state to contract with two carriers, he would like to require the airport authorities to post Federal Aviation Administration (FAA) regulations regarding bumped passengers.

Senator O’Donnell commented he just realized he could not do what he had proposed. Ms. Guinasso concurred.

Senator Raggio pointed out Senator O’Donnell could request a bill draft. Senator O’Donnell indicated he would like to indefinitely postpone S.B. 83 and request a new bill draft which would address the posting of FAA regulations regarding bumped passengers.

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Chairman O’Connell instructed Ms. Guinasso to move forward with a bill draft request as provided above.

Chairman O’Connell opened discussion on S.B. 86.

Senator Raggio indicated he would abstain from voting on S.B. 86 because he holds a gaming license and because he is on the board of a company which owns a gaming operation.

Chairman O’Connell indicated she also has a gaming license.

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Chairman O’Connell opened discussion on S.B. 139.

Chairman O’Connell noted S.B. 139 was requested by the Purchasing Division, and it has an amendment (included in the work session document, Exhibit E) which attempts to facilitate the process of getting donated items into schools. Chairman O’Connell recalled the committee had talked specifically about computers because the Purchasing Division had experienced problems in handling all of the computers they had been given. She stated this problem arose because of an associated fee the Purchasing Division was required to charge. Chairman O’Connell indicated the language in the proposed amendment (included in the work session document, Exhibit E) would take care of this situation and would instruct the chief to decide whether or not he or she would need to charge a fee for donated items.

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Chairman O’Connell opened discussion on S.B. 160.

Chairman O’Connell reminded the committee S.B. 160 was introduced by Senator Rhoads. She stated the bill would allow the Nevada Senate to have approval of various appointments made by the Governor. Chairman O’Connell indicated no amendments had been requested for S.B. 160.

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Chairman O’Connell opened discussion on S.J.R. 5.

Chairman O’Connell indicated S.J.R. 5 was introduced by Senator Coffin. She summarized S.J.R. 5 proposes to amend the Nevada Constitution to authorize the Legislature to convene temporarily at another location.

Senator Neal commented the Legislature will at some point have to deal with the issue addressed in S.J.R. 5. He said currently, the Legislature can only meet temporarily in another location in a time of war. He pointed out there is no provision for possible destruction of the Capitol and/or the Legislative Building due to a natural disaster, such as an earthquake. Senator Neal reiterated his contention that the Legislature will have to deal with this issue sometime, though maybe not with as drastic measures as S.J.R. 5 proposes.

Senator Porter asked what options the Legislature would currently have for meeting if there were an emergency. Ms. Guinasso responded the Nevada Constitution requires the Legislature to meet in the capital. She asserted the Legislature could probably meet in some other facility in Carson City if the Legislative Building were unavailable.

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Chairman O’Connell closed the work session and opened the hearing on Senate Bill 91.

Senator Neal explained the purpose of S.B. 91 is to let prospective candidates put a statement on the sample ballot, thus giving voters additional information so they can make more informed decisions. He noted voters currently receive candidate information from sources such as political parties, television, radio, interest groups, and governing bodies. Senator Neal commented if a candidate statement is included on the sample ballot, voters would have that information at hand when they cast their votes, thus making the voting process more effective and informative.

Senator Neal continued candidates would file their statements along with their nomination papers. He asserted the statement would be filed no later than 5:00 p.m. of the next working day after the date the candidate’s declaration of candidacy was filed. Senator Neal noted the fee for the candidate statement would be $1000 for statewide candidates and $400 for other candidates, including those running for district, county, or city offices. He said the statement would not contain any remarks about any other candidate for any other office. He added candidates would have an option to remove their statements from the ballot, but not to change their statements. Senator Neal mentioned this provision would prevent candidates from changing their statements during the race, and would thus protect against additional costs associated with such changes.

Senator Neal suggested an amendment stating if a candidate cannot afford to pay the fee for his or her candidate statement, he or she should submit a statement of financial worth. He explained when the statement of financial worth was filed, a decision would be made regarding whether the candidate’s statement would be included on the sample ballot.

Senator Neal indicated if S.B. 91 were passed, the government could potentially become more democratic. He contended citizens who might not otherwise vote might do so because the voting process would be more informative, and therefore more "painless." He commented if voters are provided with more information, the government could become more effective and more representative of the people.

Senator Neal pointed out California has instituted a measure similar to S.B. 91 for nonpartisan offices. He noted S.B. 91 is more extensive because it deals with both partisan and nonpartisan offices.

Senator Neal expressed his belief that the statement fee would be optional in the sense that candidates would choose whether they wanted to include a statement on the sample ballot. Only candidates who chose to include a statement would be required to pay the associated fee.

Chairman O’Connell asked what the approximate cost would be to a candidate for including his or her statement on the sample ballot. Senator Neal reiterated S.B. 91 would require candidates to pay a statement fee of $1000 for state offices and $400 for district, county, or city offices. He noted the Legislature could change that amount as they see fit.

Senator Neal commented the ideas in S.B. 91 would be especially valuable in helping voters make informed decisions as Nevada’s population grows. He asserted the intent of the candidate statement is to present a truthful account of a candidate’s record, not to allow a candidate to lie. Senator Neal maintained if a candidate included false information, he or she could be taken before the Ethics Commission. He suggested opposing candidates would probably point out untrue statements.

Senator Care stated he shares Senator Neal’s concerns about an enlightened electorate and about the recent decline in voter participation. However, he expressed his belief that the government should not get involved in the political process to the extent that S.B. 91 proposes. He said the traditional role of the press should be sufficient to provide candidate information. Senator Care indicated he does not believe that a citizen who does not read the newspaper would read candidate statements on the sample ballot.

Senator Neal noted he is aware S.B. 91 would affect advertising in the press. He stated such an effect is intended because currently, if a potential candidate cannot afford to buy advertising, he or she cannot realistically compete with those candidates who can afford to do so. He said S.B. 91 would allow candidates, if they can raise just $400 on the local level or $1000 on the state level, to have information about themselves included in the sample ballot. Senator Neal stressed this opportunity would help inform the public about the candidates. He mentioned individuals have called him to ask for information about certain candidates. Senator Neal stated S.B. 91 allows a candidate the opportunity to offer such information for voters. He recognized some press mediums could see less advertisements as a result of S.B. 91, but maintained the bill would not eliminate all advertising. He concluded S.B. 91 would give individuals of modest means the chance to participate in the political process.

Senator Porter asked whether registrars would be responsible to "police" the candidate statements for accuracy. Senator Neal responded such activities would be the responsibility of other candidates in the field. He reiterated if a candidate were to present false information, the case would be taken before the Ethics Commission.

Senator Porter asked whether candidates would be able to see opponents’ statements prior to the election. Senator Neal answered the candidates would see the language when it comes out in the sample ballot.

Pamela Crowell, Deputy Secretary of State for Elections, Office of the Secretary of the State, indicated that office supports the basic concept of a voter’s handbook because it could improve voter participation. She stated the Office of the Secretary of the State has some questions regarding S.B. 91. Ms. Crowell noted she has requested information regarding voters handbooks and voters guides from Washington, Utah, and California; states which currently produce such publications. She commented the materials from Washington have arrived. Ms. Crowell offered to include these in a packet for the committee when the materials arrive from Utah and California.

Ms. Crowell voiced concern about the timeframe in which candidates who have paid the statement fee may withdraw their prepared statements. She noted S.B. 91 proposes such a withdrawal would have to happen not later than 5:00 p.m. of the next working day after the date the candidate’s declaration of candidacy or acceptance was filed. Ms. Crowell pointed out a candidate may withdraw his or her candidacy within 7 days after the close of filing. She mentioned the withdrawal must be in written form and must be presented in person to the filing officer. Regarding the 1-day timeframe for withdrawal of a candidate statement, Ms. Crowell asked what would happen to a candidate who is statutorily permitted to withdraw his or her candidacy within 7 days of the close of filing.

Ms. Crowell suggested a provision for the refunding of money needs to be added to S.B. 91. She questioned what the refunding policy would be in a case in which a candidate dies within a certain time period. She further asked if or how the statement fee would be refunded to a candidate who withdraws his or her candidacy.

Ms. Crowell also brought up the case of unopposed candidates. She indicated during the Sixty-ninth Legislative Session, a proposal was made to include in the sample ballot a page which would declare all such candidates whose names would not appear on the primary election ballot. Ms. Crowell asked if unopposed candidates, whose names will not appear on the primary election ballot, would be allowed to provide a statement to appear in the sample ballot.

Ms. Crowell cited some statistics regarding states which currently produce voter information guides. In 1998, California prepared 15 million voter guides and mailed out 10 million of them. Ms. Crowell stated California’s voter guides are sent by bulk-rate mail. She added California’s and Washington’s voter guides are separate documents from the sample ballot. Ms. Crowell asserted in order to save money, the states send such publications as household mailings rather than mailings to each registered voter. She indicated a household mailing enables the state to save money by eliminating hundreds of thousands of individual names.

Ms. Crowell reiterated despite the aforementioned concerns, the Office of the Secretary of the State believes such a proposal as that outlined in S.B. 91 is essentially a good idea because it would bring more information to the electorate.

Senator Neal indicated he accepted the concerns Ms. Crowell had raised. He suggested necessary amendments be added to S.B. 91 to address these concerns, including a provision for bulk-rate household mailings.

Ms. Crowell asked whether the proposed candidate statement would apply to the primary election, the general election, or both. Senator Neal believed the statement would apply to both the primary and the general elections. He recognized this question was not addressed in S.B. 91. Ms. Crowell commented some names, such as those of minor party candidates or candidates who file as independents, may not appear on a primary ballot.

Andrew Barbano, Lobbyist, stated he has been in the media business in Nevada for 30 years. He indicated he has been involved in campaign advertising and has run for office. He noted some candidates have money to pay for advertising and some do not.

Mr. Barbano distributed copies of a newspaper column he wrote regarding the politics of the proposed nuclear waste repository at Yucca Mountain (Exhibit G). He said he wanted to give the committee a brief history of nuclear waste in Nevada. He maintained Nevada could have "closed the door" on a possible nuclear waste repository if a higher profile were raised in 1982 and 1983, when then-United States Senator Paul Laxalt directed the Republican Congressional Delegation to espouse a "wait-and-see" attitude regarding nuclear waste. Mr. Barbano contended the United States government assumed that attitude represented Nevada public opinion as reflected by three of the state’s four congressional delegates. Mr. Barbano continued the United States government assumed Nevada was the only state which had divided public opinion on nuclear waste.

Mr. Barbano indicated he was the Democratic nominee for the Second Congressional District of Nevada in 1984. He stated if he had been able to put a candidate statement on the general election ballot, he would have addressed the nuclear waste issue. Mr. Barbano noted he did not have that opportunity and did not have an advertising budget. Thus, the only way he could get his message out was through the news media.

Mr. Barbano contended the news media is not democratic and are very often "not up to the challenge." He asserted his message on nuclear waste never got to the public. He commented that in 1984, there was only a brief mention of the problems caused by the image of a Nevada divided on the nuclear waste issue.

Mr. Barbano maintained we live in a time of increasing "media clutter" and increasing numbers of candidates. He said this situation makes it increasingly difficult and expensive for candidates to get their messages out through the media. Mr. Barbano added the media may not be interested in particular issues.

Mr. Barbano indicated in Las Vegas, a "robust and open press" exists. However, he stated the news media has "a bad case of follow the leader." He maintained local newspapers set television stations’ news agendas. In other words, stories in the morning newspaper often generate similar stories on evening television broadcasts. Mr. Barbano noted in Las Vegas, there are "1½ major newspapers" and a variety of other publications. He pointed out the Reno Gazette-Journal and two small competitors, the Daily Sparks Tribune and the Reno News and Review, are the only newspapers in Washoe County. Mr. Barbano contended if the Reno Gazette-Journal chooses to ignore an issue, that issue in effect "does not exist." He stated the Reno Gazette-Journal generally sets the news agenda for the local television stations, so when that newspaper chooses to ignore an issue, other news media ignores it as well.

Mr. Barbano said S.B. 86, which was not voted upon due to lack of a second earlier in the meeting, was the most radical campaign finance reform bill in the Legislature. He stated among Nevada newspapers the day before, only the Reno Gazette-Journal did not have coverage of S.B. 86. He commented instead, that newspaper printed a page-and-a-half article regarding a meeting held by casino owners to address a proposed room tax increase. Mr. Barbano indicated the Reno Gazette-Journal supported the room tax increase on the editorial page and did not mention the newspaper’s publisher is on the Board of Directors for Harrah’s Casino. He added the Reno Gazette-Journal has failed to disclose that two members of the board of its parent company, Gannett Company, are executives with Union Pacific Railroad, the company which previously proposed a sales tax increase.

Mr. Barbano reiterated if candidates have neither money nor access to the media, their stories can get "buried." He stated S.B. 91 is important because it would allow candidates a cheap and alternative way to raise the issues.

Senator Care commented his views are probably similar to those of Mr. Barbano regarding the news media. He pointed out voters can become informed about candidates and issues through alternatives to the media, including candidate forums and debates.

Mr. Barbano agreed with that point, but added voters pay most attention near the end of a race. He stated individuals who plan to vote will likely look at the sample ballot, so S.B. 91 offers a unique opportunity.

Janine Hansen, Lobbyist, Nevada Eagle Forum, conveyed that organization’s support for S.B. 91. She brought the committee a copy of Washington law regarding voters’ pamphlets (Exhibit H), as well as an example of a voters pamphlet from that state (Exhibit I). She indicated the publication not only provides information about the issues, but also allows candidates to include personal statements along with their pictures. Ms. Hansen stated the voters guides are available to all voters. She said they are mailed to households at the nonprofit rate and are also available at other locations.

Ms. Hansen voiced concerns about voter participation. She asserted because of voters’ busy schedules, they want to get solid information without having to sort through media coverage. She mentioned every 2 years, the Nevada Eagle Forum publishes the Nevada Families Voter Guide (Exhibit J. Original is on file in the Research Library.). Ms. Hansen noted in 1998, the guide included information about voting records and previous legislation. She explained people were glad to receive the guide because it contains "hard facts" that may be difficult to gather otherwise.

Ms. Hansen recognized voters may not have time to attend events like Candidate’s Night, but they still want to be informed and to feel like they have participated. She indicated the Nevada Eagle Forum distributed 50,000 copies of its voter guide to help such voters gain information. She stated S.B. 91 would provide a valuable service to voters and would increase voter participation.

Ms. Hansen added S.B. 91 would help undermine negative campaigning. She noted everyone is concerned about the increase in negative campaigning, though it has always existed and probably always will exist. She maintained she does not support some measures the Legislature has passed in attempts to stop negative campaigning because she believes such measures violate free speech and political rights to assembly. However, Ms. Hansen expressed S.B. 91 would provide a positive way for candidates to make their information available to voters.

Ms. Hansen addressed campaign finance reform, stating her belief that limitations on spending restrict freedom of speech. She contended S.B. 91 would provide an alternative to previously passed measures which she considers restrictive. She emphasized allowing a candidate statement on the sample ballot promotes freedom of speech and puts government in a position where it does not limit speech or take sides.

Ms. Hansen emphasized S.B. 91 would give candidates an equal opportunity to participate. She mentioned other states have considered government financing of campaigns. Ms. Hansen indicated she does not support this idea as a means of equalizing campaigns. Instead, she favors an approach like that of S.B. 91 which would help "level the playing field" and allow voters access to information they would not otherwise have.

Ms. Hansen stated perhaps candidate information should be included in a voters pamphlet rather than on the sample ballot. She explained a voters pamphlet would be more inexpensive to print and might be more readily available. She added a pamphlet could contain information about issues as well as information about candidates. Ms. Hansen commented Washington State has specific laws governing the production of voters pamphlets.

Ms. Hansen stated S.B. 91 is "a step in the right direction." She pointed out this issue is "uncharted territory" for Nevada, so the Legislature should be open to suggestions.

Ms. Hansen then addressed media bias, noting much information is available through the media. She asserted the media has refused to accept any restrictions on its editorial license, though campaign-finance reform has restricted the activities of people involved with campaigns and political parties. Ms. Hansen contended the media has rejected government restrictions on its free speech rights while favoring such restrictions on others through campaign censorship laws.

Ms. Hansen said the media maintains a continuing bias. She offered an example in which the Independent American Party recently attempted to get a publication similar to the Nevada Families Voter Guide inserted into the Reno Gazette-Journal. She indicated the Independent American Party planned to have the publication inserted as a paid advertisement. Ms. Hansen stated the Reno Gazette-Journal would not allow such a publication to be included in its newspaper.

Ms. Hansen continued each year, the Nevada Eagle Forum and the Nevada Right to Life, through the Choose Life Coalition, put a full-page advertisement sponsored by approximately 400 individuals in the Reno Gazette-Journal. She indicated last year, the groups wanted to include in this advertisement illustrated figures of previously televised information about partial birth abortion. Ms. Hansen asserted the Reno Gazette-Journal censored out both the illustrations and the explanatory written information. She emphasized the newspaper would not allow the aforementioned groups to buy a paid advertisement explaining their point of view, thus restricting their access to the public. Ms. Hansen indicated the groups then used the censored advertisement.

Ms. Hansen concluded much media censorship occurs, some intentional and some because the media cannot cover everything. She maintained many media businesses do the best they can, but sometimes their interests are not the same as those of portions of the public.

Ms. Hansen reiterated her support for Senator Neal in trying to open up the political process, promote free speech, discourage negative campaigning, and encourage voter participation and information.

Senator O’Donnell commented he agreed candidates should be allowed to express their views in a medium that can be disseminated throughout the state. He asked if such information could be available on the Internet rather than in printed form. He proposed establishing a website at the Office of the Secretary of the State, using the same guidelines provided in S.B. 91. Senator O’Donnell indicated people could log on to the website through links from sites like those of local newspapers.

Ms. Hansen agreed with Senator O’Donnell’s idea, but added she does not believe a website would be adequate. She noted some people are still learning how to use the Internet and others do not have access to the Internet. She asserted many voters wait until the last minute to make up their minds. Ms. Hansen expressed voters might prefer a readily available publication which they can look over with their families. She indicated the Internet is not conducive to going over information with family or friends. She further noted, unlike the Internet, a printed pamphlet is portable. Ms. Hansen contended a website would not respond to the needs of the voters as well as a printed publication would, but expressed a website would be a good addition to such printed information.

Kathryn Ferguson, Lobbyist, Registrar of Voters, Clark County, expressed support for the intent of S.B. 91. She distributed a handout summarizing her testimony (Exhibit K). Ms. Ferguson indicated she receives numerous calls from voters requesting candidate information. However, she voiced concerns with S.B. 91 as written.

Ms. Ferguson expressed putting candidate information in a publication other than the sample ballot would save money. She indicated in Clark County, including candidate statements on the sample ballot would nearly double the size of the ballot, thus dramatically increasing printing, postage, and labor costs. She added Clark County is not equipped to ensure the accuracy of candidate statements.

Ms. Ferguson stated Clark County has about 230 ballot styles with approximately 125 candidates per style. She asserted Clark County estimates the cost of including candidate statements on the sample ballots would be nine times the amount of money which would be collected from candidates under S.B. 91.

Ms. Ferguson asked how money paid by the candidates to the Office of the Secretary of the State would be distributed. She also questioned how the state would recoup costs from candidates who are unable to pay and from candidates who are filing for offices in which they do not receive compensation.

Ms. Ferguson reiterated the administrative responsibility for the content of candidate statements is a "sticky question." She stated in California, the secretary of state’s office is responsible for putting out the voter pamphlet. Ms. Ferguson said in Texas, the Legislative Bureau produces similar booklets with regard to all ballot questions. She noted, as an election administrator in Texas, she was not even allowed to distribute those booklets because of the nature of her office.

Ms. Ferguson indicated S.B. 91 presents a good idea if its intent can be accomplished through another means. She commented that in 1998 in Clark County, the League of Women Voters produced a candidate pamphlet. She pointed out that organization is neutral with regard to candidates, though it may sometimes support or oppose a question. Ms. Ferguson said the League of Women Voters maintained they did not have enough funds to do a good job of producing the booklet, but the organization did produce and distribute one which included candidate statements. She suggested an option to produce a voter pamphlet through a similar organization, if not through the secretary of state’s office.

Ms. Ferguson indicated her support for Senator O’Donnell’s website idea. She mentioned candidates in Clark County are asked to give their candidate website addresses so the county can provide links to those websites from its own. She recognized everyone does not have access to the Internet, so printed booklets would be important. Ms. Ferguson suggested, for postage cost reasons, such booklets should not automatically be mailed, but should be available free of charge to people who are interested.

Senator Neal asked if Ms. Ferguson agreed with the bulk-rate mailing to households. Ms. Ferguson answered if the booklet were to be mailed, she would agree with that type of mailing. She pointed out Clark County does not mail out its sample ballots in that manner. She added she did not believe responsibility for preparing and mailing voter booklets should fall upon local election officials.

Senator Neal asked Ms. Ferguson who would be taking her place when she leaves her position in a few weeks. Ms. Ferguson did not know, but indicated a decision would probably be made shortly.

Harvard (Larry) Lomax, Lobbyist, Assistant to the Registrar of Voters, Clark County, added as written, S.B. 91 presents a cost problem. Mr. Lomax indicated if Clark County received $400 from each of approximately 250 candidates, the county would receive $100,000. He noted under S.B. 91, the county would not in fact receive money from all 250 candidates. Mr. Lomax said estimated costs for carrying out the provisions of S.B. 91 would be almost $900,000. He stated he did not know how much this cost would change using bulk-rate mailings, but asserted it would not drop enough to be covered by proposed candidate fees. Mr. Lomax maintained if candidate fees were increased, the proposal could be more feasible. He emphasized the costs associated with S.B. 91 would affect taxpayers in Clark County.

Barbara Reed, Clerk/Treasurer, Douglas County, and President, Nevada Association of County Election Officials, testified she was representing that organization. She said the Nevada Association of County Election Officials is opposed to S.B. 91 as written, but does recognize the need for a proposal such as that in the bill. Ms. Reed offered suggestions for changes which would address problems with S.B. 91.

Ms. Reed voiced concern regarding candidate fees. She asked if the fees would cover both primary and general ballots. She further questioned whether the secretary of state would keep the fees he or she collects and then distribute them to the counties. Ms. Reed indicated if that were the case, each county would receive $58.83 for each statewide candidate. She asserted that amount would not cover costs.

Ms. Reed pointed out if counties had to include a statement from each candidate in the sample ballot, compilation time for that ballot would be doubled. She stated the counties already have a difficult time meeting the federal deadline for absentee voting between the primary and general elections. She expressed concern that including candidate statements would delay the process.

Ms. Reed addressed additional costs which would be involved in printing and mailing the sample ballot. She said in the general election, there were 39 state candidates and 48 local candidates in Douglas County. She indicated the county had calculated how many extra pages would have been necessary to include candidate statements. Douglas County also had talked to its printer and its mailing service. Ms. Reed testified the county’s costs for producing and mailing the sample ballot would, at a minimum, double.

Ms. Reed indicated S.B. 91 would require additional costs for mailing absentee ballots. She stated the counties would need to use larger envelopes because the ballots would be about twice the size of current ballots. She contended absentee ballot costs would thus increase substantially.

Ms. Reed asked where candidate statements would be placed in the sample ballot. She questioned whether it would be placed after each race, in its own section behind all the candidates, or behind the questions.

Ms. Reed asked what the counties’ liability and level of responsibility would be regarding correct grammar and correct information. She stressed she does not believe candidate fees would cover the costs associated with S.B. 91.

Ms. Reed reiterated the need for a proposal like the one outlined in S.B. 91, stating it would be very useful for candidates. She suggested the secretary of state compile the statements from all statewide candidates and distribute booklets with that information to each county. Ms. Reed said the county clerk would then put a statement in the sample ballot communicating where that booklet could be obtained. She continued the booklet could be available at the county clerk’s office and at other locations, depending upon the size of the county.

Ms. Reed suggested if candidates wanted to have their statements printed on both the primary and general election ballots, they should each pay a fee of $2000. She indicated when candidates file a declaration of candidacy, they should pay $1000 to cover the fee for the primary ballot. She stated an additional $1000 should then paid to the secretary of state on or before the Friday following the primary election.

Ms. Reed expressed her belief that local candidates should not have the option to put candidate statements on the sample ballot until the response and demand for such information regarding statewide candidates has been analyzed. She recognized in addition to other previously mentioned states, Oregon also makes candidate information available.

Ms. Reed stated she had sent information regarding S.B. 91 to all Nevada counties, and all of them except Eureka County and Storey County had responded and concurred with her testimony. She maintained if the secretary of state prepared voter pamphlets, they would be available sooner than the sample ballots because the secretary of state would not have to wait until the sample ballots were compiled and assigned numbers.

Ms. Reed pointed out the $400 county-wide fee does not address small districts, like general improvement districts or towns. She asked if individuals running for office in such districts would have to pay a $400 fee, or if their fee would be less.

Ms. Reed also noted in Douglas County, the local newspaper puts together a candidate brochure which is sent out with newspapers and made available for general distribution. She commented candidates do not have to pay a fee for including a statement in that brochure. Ms. Reed suggested similar options could be pursued with other local news media.

Alan H. Glover, Lobbyist, Clerk/Recorder, Carson City, indicated he had asked a printer to estimate the costs for implementing S.B. 91. He stated costs were estimated by inserting pages into the 1996 and 1998 general election ballots. He commented the extra pages increased the size of the ballots substantially. Mr. Glover asserted if candidate statements had been included in the 1996 general election ballot, costs would have increased by $15,703.38. He said there were 15 local candidates that year, and he assumed the county would receive $400 from each local candidate, but no money from statewide fees. He maintained to cover the cost of producing the ballot, each local candidate would have had to pay $1046.89. Mr. Glover indicated in the 1998 election, the county had 22 candidates, and the cost would have been $1151.52 per candidate. He stated 12 of those 22 candidates were unopposed and would probably not want to pay for a candidate statement. He noted this situation would have pushed the cost per candidate up to $2100.

Mr. Glover contended candidate statements were "pretty dry reading" when included on the sample ballot. He indicated color pamphlets with pictures and graphics would encourage people to read the information. He stated when Carson City published the full text of constitutional measures, people did not read the information because it was too "dry." Mr. Glover indicated printing candidate statements on the sample ballot would not be the best way to encourage people to read the information. However, he recognized including the statements on the sample ballot would be "handy" because voters take it with them to the voting booths.

Mr. Glover addressed mailing costs, noting Carson City usually sends out absentee ballots folded in an envelope. He pointed out the county would have to use a larger envelope if the ballot included candidate statements, pushing current postage costs of 55 cents per envelope to $1.21 per envelope. He concluded Ms. Ferguson and Ms. Reed enumerated other Carson City concerns.

Chairman O’Connell asked Senator Neal to work with Ms. Crowell to address concerns regarding S.B. 91. She also asked him to bring resulting information back to the committee. Senator Neal agreed to do this.

Chairman O’Connell closed the hearing on S.B. 91 and opened the hearing on A.B. 101.

Jeannine Coward, Assistant Controller, Office of the State Controller, testified she would be speaking on behalf of State Controller Kathy Augustine. Ms. Coward indicated classified employees of the controller’s office are the only classified state employees who are not allowed to work outside state government, probably due to a simple oversight. She distributed a handout (Exhibit L) summarizing her testimony. The handout shows statutes which provide that various constitutional officers of the State of Nevada cannot pursue businesses or occupations beyond their state offices. Ms. Coward pointed out these statutes refer to unclassified employees except in the case of the lieutenant governor, whose unclassified employees are not addressed at all. She further noted that in the case of the controller’s office, "other employees" are included in the relevant statute. Ms. Coward commented this language indicates both unclassified and classified employees are included under the statute. She stated by deleting the words "other employees" from NRS 227.100, classified employees of the controller’s office would be allowed to work outside their state positions, as can classified employees of other offices.

Chairman O’Connell asked why such employees would want to work outside of their state positions. Ms. Coward referred to her handout (Exhibit L), noting all of the statutes say "except as otherwise provided in NRS 284.143." She referred to A.B. 725 of the Sixty-eighth Session, which later became NRS 284.143.

Ms. Coward asserted A.B. 725 of the Sixty-eighth Session allowed unclassified employees of state departments and agencies, other than directors of departments, to pursue any other employment or hold any other offices for profit, provided such employment does not conflict with the hours or duties devoted to the state. Also, A.B. 725 of the Sixty-eighth Session required unclassified employees to get their supervisors’ approval for such employment. Ms. Coward testified that bill allowed unclassified employees, like classified employees, to hold part-time jobs either for enjoyment or to supplement personal income. She maintained this provision included such activities as refereeing a sporting event. Ms. Coward indicated when A.B. 725 of the Sixty-eighth Session was passed, it allowed unclassified employees to do all of the things that classified employees were able to do, but did not include the controller’s office.

In response to a question from Chairman O’Connell, Ms. Coward indicated there are CPAs employed in the controller’s office who might want to do some tax work outside of their state employment.

Chairman O’Connell asked Juliann Jenson, Committee Policy Analyst, Research Division, Legislative Counsel Bureau, to pull up the minutes on A.B. 725 of the Sixty-eighth Session.

Chairman O’Connell closed the hearing on A.B. 101 and opened the hearing on A.B. 124.

Chairman O’Connell asked whether, in 1995, the Legislature had changed all of the headings of the accounts covered in A.B. 124, and whether A.B. 124 would simply put the original headings back on these accounts and funds.

Brenda Laird, Chief Accountant, Office of the State Controller, answered no, and explained A.B. 124 deals with different accounts and funds than those that were covered in 1995. Ms. Laird presented a handout (Exhibit M) summarizing A.B. 124. She commented this bill is primarily housekeeping in nature, and its purpose is to change the language regarding certain funds and accounts in order to comply with generally accepted accounting principles.

Chairman O’Connell asked why A.B. 124 proposes to designate that certain accounts go into the General Fund, when such accounts currently go into the treasury or into special human resources accounts. She referred specifically to sections 2 and 19 of A.B. 124.

Regarding section 2 of A.B. 124, Ms. Laird responded the original NRS created a fund in the state treasury, but did not give a designation for the type of fund. She noted every fund has to have a designation. Ms. Laird added the activity addressed in section 2 of A.B. 124 can be accounted for in the General Fund, and for that reason, the controller’s office is proposing to create an account there. She commented there is no need to create an additional fund, and if such a fund were created, the Legislature would have to specify what type of fund it would be.

Senator Neal pointed out A.B. 124 would change the designations for certain accounts and funds which receive proceeds from the liquor tax. He asked why these changes would be made.

Ms. Laird replied the tax on liquor currently goes into the human resources gift fund. She explained the tax proceeds do not belong in a gift fund because they are not a gift.

Senator Neal commented the Legislature put the liquor tax proceeds into the gift fund and reiterated his question as to why the controller’s office wants to change this practice.

Ms. Laird answered under generally accepted accounting principles, gift funds are trust funds. She continued that because the gift fund in question receives proceeds from the liquor tax, the controller’s office has been forced to classify it as a special revenue fund instead of a trust fund, which conflicts with generally accepted accounting principles. Ms. Laird said by putting the proceeds from the liquor tax in an account in the General Fund, the controller’s office would be able to properly classify that gift fund as a trust fund.

Senator Neal asked what advantage that would be to the state. Ms. Laird responded the only place this change would be seen would be in the comprehensive annual financial report, in which the controller’s office reports on all of the funds and the fund types. She reiterated the gift fund which receives the proceeds on the liquor tax is currently in a special revenue fund, and this situation is not typical. Ms. Laird indicated the change in account designation would be an issue of presentation.

Senator Neal questioned whether the intent of A.B. 124 was simply to make things easier for the state controller’s office. Ms. Laird again stated the office has generally accepted accounting principles which it follows, and the office is audited annually.

Senator Neal noted the accounts and funds had been put into law as they are currently designated. He asked what problems have prompted the controller’s office to request changes to current practices. Ms. Laird reiterated the problem is that the classifications of certain funds and accounts do not comply with generally accepted accounting principles.

Chairman O’Connell referred to section 19 of A.B. 124, noting that the account for alcohol and drug abuse has been taken out of that section. She commented she did not see that put back in anywhere. Ms. Laird responded the account for alcohol and drug abuse is currently an account in the human resources gift fund, and liquor tax proceeds are currently being transferred to that account. She stated A.B. 124 would create an account in the General Fund to which to transfer those proceeds.

Chairman O’Connell pointed out section 19 of A.B. 124 takes out language regarding the "account for alcohol and drug abuse." She commented when that language is picked up later in the bill, drug abuse is not mentioned. She wondered if specific money for drug abuse comes from a source other than the tax on liquor program, and if so, where that money would be located under Assembly Bill 124.

Ms. Laird stated the account for alcohol and drug abuse does receive money other than that from the tax-on-liquor program. She maintained such money would still be accounted for in that account.

Ms. Guinasso clarified section 25 of A.B. 124 creates the tax-on-liquor program account in the General Fund.

Chairman O’Connell asked whether there is specific money, separated out of the liquor tax, which is collected for drug abuse; or whether the liquor tax proceeds support both the alcohol- and the drug-abuse programs. Ms. Guinasso expressed her belief that the liquor tax proceeds support both the alcohol- and drug-abuse programs, but stated she would research the question and bring an answer to the committee. Chairman O’Connell again asked whether there is just one money source – the liquor tax program – which supports both the alcohol- and drug-abuse programs.

Regarding section 2 of A.B. 124, Chairman O’Connell asked why money which is being collected for a special purpose, the common-interest communities, would be going into the "black hole" of the General Fund. Ms. Laird answered the money would not be going into a "black hole," but rather would be going into its own account in the General Fund. She added the money in this account would still have to be spent for its intended purpose. Ms. Laird added typically, unless there is a legal reason for creating a special revenue fund, many types of activities can be accounted for in the General Fund.

Chairman O’Connell maintained a fund is normally on a "higher level" than an account. She asserted when money is put into an account rather than a fund, that money usually has more general purposes.

Ms. Laird responded that statement is not necessarily true. She noted in the case of the account in question, the NRS specifies for what purpose the money must be used. Ms. Laird contended the money would be used for its intended purpose regardless of whether it were in a fund or an account.

Regarding section 2 of A.B. 124, Chairman O’Connell asked why the controller’s office wants to take the money out of the treasurer’s office. Ms. Laird answered A.B. 124 would not take any money out of the treasurer’s office; she emphasized all the funds are in the state treasury. She indicated NRS 116.1117 put a fund into the treasury, but did not specify that fund. Thus, Ms. Laird stated the fund must either be specified or be put into an existing fund.

Chairman O’Connell noted the fund in question is now becoming an account. Ms. Laird said generally accepted accounting principles state funds should not be created unnecessarily if they can be accounted for within other funds. She mentioned if a fund were created for every type of activity, the state could have thousands of funds. Ms. Laird indicated the state currently has just under 100 funds. She explained the generally accepted accounting principles’ rule for not creating unnecessary funds is especially applicable with regard to activities with relatively low revenues and expenditures. Ms. Laird stated if there is no legal mandate requiring that money be accounted for in a special revenue fund, such money can be accounted for with its own account in the General Fund.

Chairman O’Connell commented in her understanding, all the funds included in A.B. 124 would become accounts or sub-accounts.

Ms. Guinasso addressed Chairman O’Connell’s previous question regarding where the money from the tax on liquor goes. She indicated a portion of this tax, 50 cents per wine gallon, goes to the counties through the local government tax distribution fund, which would also become an account under A.B. 124. Ms. Guinasso stated the amount which exceeds $1.90 per wine gallon is the portion of the liquor tax in question. She said this money currently goes to the account for alcohol and drug abuse, and under A.B. 124 it would be transferred pursuant to what had been discussed. Ms. Guinasso expressed her belief that the use for that money would remain the same under A.B. 124. She recalled that when she reviewed A.B. 124, the contention was that the name for the alcohol- and drug-abuse account was somewhat incorrect or misleading. Ms. Guinasso remembered there was a request to change the name of that account to be more in accordance with the language typically used.

Senator Neal commented if the name of the account were misleading, there should have been an audit justification for that change. He added the Legislature should have been informed.

Ms. Guinasso clarified in her understanding, the name of the account in question was somewhat incorrect because it was a tax that was being put into the account rather than a gift.

Chairman O’Connell stated the changes included in A.B. 124 are being proposed in order to comply with the national council on government accounting statements. Ms. Laird indicated that statement was correct.

Senator Neal suggested the committee ask the Fiscal Division of the Legislative Counsel Bureau to inform committee members about what changes A.B. 124 would make and what the impacts of these changes would be. Chairman O’Connell was unsure whether this action would be necessary.

Chairman O’Connell closed the hearing on A.B. 124.

Chairman O’Connell noted the committee had two bill draft requests to address. She opened discussion on BDR 23-457, proposed by the Department of Prisons.

*****

Chairman O’Connell opened discussion on BDR 23-639, also requested by the Department of Prisons.

Chairman O’Connell explained this BDR would expand powers of officers and employees of the Department of Prisons.

SENATOR NEAL MOVED TO INTRODUCE BDR 23-639.

SENATOR PORTER SECONDED THE MOTION.

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Chairman O’Connell adjourned the meeting at 1:40 p.m.

RESPECTFULLY SUBMITTED:

Amelie Welden,

Committee Secretary

APPROVED BY:

Senator Ann O'Connell, Chairman

DATE: