The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:15 p.m., on Monday, March 8, 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 Jon C. Porter

Senator Joseph M. Neal, Jr.

Senator Terry Care

COMMITTEE MEMBERS ABSENT:

Senator William R. O’Donnell

Senator Dina Titus (Excused)

STAFF MEMBERS PRESENT:

Angela Culbert, Committee Secretary

OTHERS PRESENT:

John L. Balentine, Lobbyist, Public Purchasing Study Commission

Chairman O’Connell opened the meeting by asking for a brief explanation on Bill Draft Request (BDR) 27-722.

The chairman indicated she had attended a meeting in which the attempt was made to eliminate some of the problems involved with public purchasing.

John L. Balentine, Lobbyist, Public Purchasing Study Commission, indicated the Public Purchasing Study Commission has been established by the Nevada Revised Statutes (NRS) to review various purchasing laws, rules, and regulations in the state and to make recommendations to the Legislature. He indicated the basic premise of the bill is to clean up language. He pointed out the requirement to keep "permanent" records of bids between $10,000 and $25,000 which would be changed to comport with the current state recommended practices of keeping records of 7 years. He noted "authorized representative" is being added throughout the proposal to accommodate counties with purchasing and contract administrators. He drew attention to the change asking for the exception of "perishable goods" to be expanded.

Chairman O’Connell said a good reason to introduce the legislation was to provide direction to the commission.

SENATOR RAGGIO MOVED FOR INTRODUCTION OF BDR 27-722.

SENATOR CARE SECONDED THE MOTION.

THE MOTION CARRIED. (SENATORS O’DONNELL, PORTER, AND TITUS WERE ABSENT FOR THE VOTE.)

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Chairman O’Connell asked for testimony on Assembly Bill (A.B.) 125.

John R. Crossley, Carson City, Chairman, Committee on Deferred Compensation for State Employees, provided the committee with a statement explaining the basis for the legislation (Exhibit C). He indicated the changes were made to parallel the language in section 1448 of Public Law 104-188 which sets forth the federal trust requirements for deferred compensations plans of state and local governments. He quoted section 1448 (Exhibit C), mentioning the language was placed in the bill, as a result of a case in Orange County, to protect the employees assets. He explained state law mandates the committee to have two providers to hold the funds in trust. He emphasized the intent of the bill was to bring NRS 287.320 into conformity with federal law and the Nevada Deferred Compensation Plan.

He pointed out section 2 of A.B. 125 would make the legislation effective upon passage and approval with retroactive applicability to January 1, 1999. Federal law, he said, requires this to be in place, noting the proposal would amend state law.

Chairman O’Connell questioned the purpose of the retroactive provision, commenting the money is currently held in trust. Mr. Crossley indicated the Legal Division of the Legislative Counsel Bureau had said this was the way the state statute should be in accordance with federal law. He read from section 1448 stating, "In the case of a plan in existence on the date of the enactment of this act, a trust not be established by reason of the amendments made bt this section before January 1, 1999." He reiterated to be in conformity with the federal law, the state statute should be effective January 1, 1999.

Prompted by Senator Neal, Mr. Crossley stated the participants set money aside in deferred compensation to reduce income tax, noting this is money the state does not match. Senator Neal indicated one does not have to pay taxes on deferred money. Mr. Crossley concurred though, he stated, taxes do not have to be paid until an annuity is drawn on the account. Senator Neal clarified this was an investment savings plan.

With no further testimony before the committee, Chairman O’Connell closed the hearing on A.B. 125 and opened the hearing on A.B. 126.

Mr. Crossley distributed prepared testimony on the proposal (Exhibit D). He pointed out in order to finance its own administrative costs, the deferred compensation committee assesses each participant $4 a year which when deposited, earns approximately 3 percent. He indicated A.B. 126 proposes to deposit this money in the state General Fund, to be credited to the deferred compensation account, where up to 6-percent interest could be earned. He declared this to be a "win-win situation." He said this method is currently used by several other accounts in the state. He pointed out this will benefit the participants because the interest can be used to finance the administrative costs, stating "every penny helps." He indicated the expenses of administering the program are set forth in section 3, subsection 2 of the bill.

Mr. Crossley noted the bill would become effective on July 1, 1999, as this marks the start of the fiscal year where accounting records are concerned. He reiterated the intent is to earn more interest than they would be able to earn in the bank.

Chairman O’Connell questioned the reason A.B. 125 and A.B. 126 were not incorporated into one proposal. Mr. Crossley indicated this was a decision by the Legal Division of the Legislative Counsel Bureau.

With no further questions on the measure, Chairman O’Connell closed the hearing on A.B. 126. The chairman asked the committee if it was their pleasure to vote on the measures heard and place them on the consent calendar.

SENATOR CARE SECONDED THE MOTION.

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Chairman O’Connell asked for presentation of Senate Bill (S.B.) 274.

Joseph (Joe) M. Neal Jr., Clark County Senatorial District No. 4, testified he and the other sponsors have decided to hold the bill while the representatives from the City of Las Vegas address the city council to initiate a "mandatory" rather than an "advisory" vote in the June election. He indicated this had been agreed to, noting if this does happen as planned, the sponsors would not have a problem with the agreement. He clarified the bill was not being withdrawn as the council would meet in 2 weeks to vote on the measure.

Daniel C. Musgrove, Lobbyist, City of Las Vegas, stated they have spoken to the city manager, and upon conferring with Senator Neal, the issue will be placed on the agenda at the next city council meeting. The goal is to have the council change the language from "advisory" to "mandatory" for the election on June 3, 1999. He said the intent was to let the people decide the issue.

Chairman O’Connell questioned whether the redistricting of the wards would be compatible with the future changes in the legislative districts. Senator Neal assured the chairman redistricting would be accomplished upon the 2000 census. He stressed the ordinance must be changed in order to create wards. He said the vote before the city council would be to change the ordinance to admit additional council members.

Mr. Musgrove indicated the current statute gives the cities the ability to put in as many wards as the city council deems necessary. This would be put to a vote of the people to decide whether the wards should be expanded. He pointed out if the voters decided to add wards, then the city would redistrict according to the 2000 census and create the mandatory 6 wards.

Senator Neal agreed with this explanation, indicating this was his understanding as well. He stressed the council must take a vote in order to make the creation of wards "mandatory" rather than "advisory." If the ordinance says "advisory," the city council must again review the issue after the voters have decided to add wards.

Chairman O’Connell questioned the date of the next city council meeting. Mr. Musgrove indicated the meeting would be in 2 weeks.

With no further business before the committee, the chairman adjourned the hearing at 2:30 p.m.

RESPECTFULLY SUBMITTED:

Angela Culbert,

Committee Secretary

APPROVED BY:

Senator Ann O'Connell, Chairman

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