The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:10 p.m., on Wednesday, March 10, 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:

Julie Burdette, Committee Secretary

OTHERS PRESENT:

Vice Chairman Raggio, formally opened the hearing by requesting information and the necessity for Bill Draft Request (BDR) S-550, an act relating to telephone service.

Pat Coward, Lobbyist, Washoe County, explained that a fund had been set up 3 years ago to implement and augment the emergency 911 services within Washoe County.

SENATOR O’DONNELL MOVED TO INTRODUCE BDR S-550.

SENATOR CARE SECONDED THE MOTION.

Senator Raggio noted that the committee would next consider BDR 23-558.

Lisa A. Gianoli, Lobbyist, Washoe County, stated that this bill would bring the deferred compensation program into compliance with the federal code.

SENATOR O’DONNELL MOVED TO INTRODUCE BDR 23-558.

SENATOR CARE SECONDED THE MOTION.

Senator Raggio drew attention to BDR S-684.

John Berkich, Lobbyist, City Manager, Carson City, explained that since 1959 the state had been granted a waiver of sewer connection fees. This had been negotiated between the state and the county at that time. The state gave the county $135,000 plus 127 acres of land. For that, the county agreed to "never" charge connection fees. Since that time, the county has waived approximately $2.7 million in connection fees and believes that it would be fair and equitable, as the state does in all locations throughout Nevada, for the state to pay a sewer connection fee.

SENATOR O’DONNELL MOVED TO INTRODUCE BDR S-684.

SENATOR PORTER SECONDED THE MOTION.

Robert R. Barengo, Lobbyist, Co-Bond Counsel, Office of Business Finance and Planning, Department of Business and Industry. Mr. Barengo introduced Steve Ghiglieri, Chief, Office of Business Finance and Planning, Department of Business and Industry, and stated their request for introduction of BDR 30-644, which would require that certain records remain confidential. It would allow the adoption of regulations for new bond issues and refundings.

Senator Raggio then stated that the committee would proceed with the posted agenda and opened the hearing on Senate Bill (S.B.) 301.

Cheryl Blomstom, Lobbyist, Nevada Chapter of Associated General Contractors, stated, for the committee, that this bill would require general contractors on highway projects to promptly pay their subcontractors and suppliers. Should that payment not be made in a timely manner, this bill would allow for the accrual and payment of interest. Further, if the contractor withheld more than 10 percent of a payment, the subcontractor would have the ability to contact the Nevada Department of Transportation (NDOT); relate these incidents to them; and when payment was released, a check for payment would be made in a dual form to both the general contractor and the subcontractor.

Ms. Blomstrom introduced Jack Harker, a subcontractor, specializing in highway projects.

Senator Raggio pointed out that the title of the bill provides for prompt payment of subcontractors and asked if this would apply to transactions between the contractor and the subcontractor. Ms. Blomstrom agreed that it did. Senator Raggio further inquired whether provisions insofar as the public entity would be changed.

Ms. Blomstrom replied that the public entity was involved in section 11, line 20. This entire section involved the Nevada Department of Transportation in that it would create a dual payment.

Senator Raggio asked for clarification of the previous statement and a further explanation on the changes in sections 9, 10 and 11. Ms. Blomstrom agreed, and noted that subsection 9, line 8 on page 3, stated that a contractor would disburse money paid to him promptly, including any interest that the contractor received in proportionate share to his subcontractors and suppliers within 15 days of receiving the money. It also indicated that they are to be paid in proportion to the value of work performed by each subcontractor. For example, if a subcontractor did 10 percent of the work, then 10 percent of that money would belong to that subcontractor. Continuing, Ms. Blomstrom stated that section 10, line 15, would allow accrual of interest at a rate equal to the lowest daily prime of the three largest banks, plus 2 percent at the fifteenth day and thereon until the principal contractor made payment.

The language in subsection 11, line 20 clarifies that if a contractor withheld more than 10 percent of a payment, the subcontractor may inform the director of the Nevada Department of Transportation, in writing, of the amount due; and that amount would be withheld from the payment to the principal contractor and made payable to both the principal contractor and the subcontractor, to ensure that the subcontractor received adequate payment.

Senator Raggio inquired whether the 15-day period was a reasonable length of time. Ms. Blomstrom responded that the 15-day period was unreasonable.

Senator O’Donnell explained that he was looking at the bill from the state’s perspective; the state is the contractor, paying out state tax dollars to the subcontractors. He agreed that anyone who performs a service should be paid in a timely manner. However, what would happen when the workmanship or the job was not necessarily completed 100 percent. There may be a problem on the job; a railing may not have the right number of bolts in it or the paving is not thick enough; what would happen under those kinds of conditions. The bill, as Senator O’Donnell understood it, just says to pay the subcontractor upon the subcontractor providing an invoice to the Nevada Department of Transportation, stating that the work had been done.

Ms. Blomstrom asked if Mr. Harker could respond to the question. Senator O’Donnell agreed.

Jack Harker, President, Harker and Harker, answered the question by stating that if work was not performed in either a timely or satisfactory manner, the contractor would hold that item back; and consequently would not be subject to being paid for that item anyway. Problems that have arisen on NDOT projects involve items that the general contractor (Mr. Harker indicated that his company had been general contractor on several projects) just seems to forget to pay. By the time they get around to paying some subcontractors it could be 1 or 2 months or more. Basically, Mr. Harker reiterated, the items have been approved to be paid, but the general contractor has not followed through and paid the subcontractor in a timely fashion. In a business that relies on cash flow this can become a serious problem. Mr. Harker testified that this had happened to him personally. For those reasons, he stated his support of legislation that would require prompt payment.

In the past, Mr. Harker had spoken with NDOT and discussed this issue. Their response has been that their hands are tied; that the state cannot write a dual check made payable to both the prime contractor and to the subcontractor. Often, NDOT will release payment to the general contractor, but the subcontractors and suppliers have not been paid. In some cases, the general contractor has spent the money elsewhere; another project or perhaps declared bankruptcy. This places the subcontractors and suppliers in a very difficult financial position. The problem is ongoing. Mr. Harker also spoke to the issue of out-of-state contractors who have qualified for NDOT projects, completed the projects and received payment; however, compensation had not been made to the subcontractors and suppliers. Mr. Harker noted that one possibility was to involve the State of Nevada and NDOT for assistance in obtaining compensation in a timely manner, whether it was 15 days or 30 days. At least, payment would be made; therefore, the payrolls would be met and suppliers paid. Mr. Harker pointed out again that the operation of a construction business was very costly and relied on cash flow.

Senator O’Donnell stated that it was his understanding if the contractor was paid, then obviously, the Nevada Department of Transportation must have signed off on the project. However, Senator O’Donnell continued:

Mr. Harker thought NDOT should issue a number of checks. He elaborated, giving as an example an ongoing project in which the prime contractor is being paid biweekly and the subcontractors and suppliers are then also paid in a timely manner, but sometimes it happens that the general contractor elects not to pay the subcontractors. This does not occur often, but, in fact, it has happened. Mr. Harker stressed again the necessity of cash flow in the construction business; saying again, that payrolls cannot be met unless the subcontractor has been paid. Summarizing, Mr. Harker added this was an industry-wide problem, but since he was primarily interested in highway projects, it was his belief that language in the law involving the NDOT would be the effective remedy.

Senator Raggio asked if there were further questions for either Ms. Blomstrom or Mr. Harker.

Senator Neal posed the question that when a contractor contracts with a state entity, whose responsibility would it then be for hiring the subcontractors. Mr. Harker replied that it would be the general contractor’s responsibility. Senator Neal asked why then did he (Mr. Harker) want to obligate the state in that arrangement if the general contractor would be the one to hire the subcontractors. Mr. Harker replied that in this case, he would be paying the subcontractors, and stressed again that not all general contractors pay promptly.

Senator Neal asked for an explanation as to why the state would want to become involved in mitigating disputes concerning the general contractor and nonpayment to subcontractors or suppliers.

Mr. Harker explained to the committee that disputes would only relate to payment, or rather nonpayment to the subcontractor or supplier, not the quality of workmanship. If the quality of work were not up to contract specifications, payment would not be made in any case; simply put, the state would not accept the item or that portion of the work.

Leo Myers, Certified Public Accountant, Controller, Lucky Concrete Inc., representing a business located in Reno, declared his support for S.B. 301, and that he held the same opinion as Mr. Harker. Typically, Mr. Myers continued, speaking as a subcontractor, doing concrete curbing, gutter work, sidewalks, etc., his company has experienced indeterminate delays while waiting for payment from the general contractor. He went on to say that Lucky Concrete has often had to inquire of the state entity whether the general contractor had been paid for approved work. Upon learning that the general contractor has indeed been paid, the process then involves going back to the general contractor for payment. It was Mr. Myers’ belief that this legislation would enforce payment on a prompt basis that is outside the general contractor/subcontractor relationship. A system would be created where NDOT would issue checks directly to the subcontractors. This would only apply to work that had already been approved and completed. Senator Neal emphasized that he had been under the impression that historically business groups wanted to keep government out of their operations, but clearly Mr. Harker and Mr. Myers were testifying before this committee asking for a bill that would engage the government entity in solving these payment problems.

Mr. Harker replied it was his belief that this was the only way these issues could be settled. Harker and Harker had been in business since 1946, he noted; and that in his experience since 1975, it had been a real challenge to get paid and therefore be able to make the payrolls.

Senator Neal inquired about the language, in subsection 10, regarding the rate equal to the lowest daily prime rate and the reference to at least three banks. Senator Neal queried who would that attach to; would that be attached to the contractor who is holding up the money or would that go to the state. Mr. Harker replied that would go to the contractor. Senator Neal clarified by saying, the contractor who is holding up the money then has to pay this prime rate plus 2 percent while the money is being held. Senator Neal questioned Mr. Harker, asking whether or not they were talking about applying this to the state. Mr. Harker replied no. In other words, this is a tool just to get the general contractor to pay the subcontractors.

Senator Care questioned whether there was some compelling reason, and inconvenience, in his estimation, would not a compelling reason, that subcontractors still could not seek their traditional remedy which would be a court of law. And secondly, would the contracts not have provisions regarding prevailing parties receiving attorneys’ fees.

Mr. Harker replied:

Mr. Myers stated:

Chairman O’Connell questioned whether there might be a conflict regarding S.B. 144 and S.B. 301.

Kim Marsh Guinasso, Committee Counsel, Legal Division, Legislative Counsel Bureau, responded that in her opinion there was no conflict. Ms. Guinasso explained further that she had looked into the relationship between Nevada Revised Statutes (NRS) chapters, 338 and 408. Although there was no provision that specifically dictated that one would be preempted by the other, the general rules of statutory construction apply and so the specific overrules the general. She went on to say that there was a definition in NRS chapter 338 that includes public highways with regard to public works, addressed by S.B. 144, that essentially becomes the method by which local governments handle bidding for the construction of their public highways. NRS chapter 408 is more specific with regard to state highways and the involvement of the Nevada Department of Transportation. NRS chapter 408 dictates the bidding procedure for state highways. Therefore, this bill, S.B. 301, does not conflict in anyway with S.B. 144.

Senator O’Connell inquired whether anyone else wished to speak in favor of S.B. 301, and, if not, would the opposition come forward.

Rod Johnson, Assistant Director, Operations Division, Nevada Department of Transportation, stated that the Nevada Department of Transportation was in opposition to S.B. 301. First, he declared, the NDOT was absolutely not opposed to sections 9 and 10. Mr. Johnson acknowledged that NDOT was aware of problems involving payment of subcontractors. The concern was that the NDOT would be placed in a regulatory position, between the contractors and subcontractors, with regard to pay issues. The Nevada Department of Transportation does not wish to be a regulator in contractor issues. NDOT is currently not involved, or a signatory to contractor/subcontractor agreements. Mr. Johnson commented that there was concern about the possibility for litigation in reference to the subcontracting parties. Mr. Johnson stressed the differences between the cost of an item negotiated between NDOT and the general contractor and that item cost negotiated between a general contractor and a subcontractor. He elaborated, using a supplier of asphalt as an example. Mr. Johnson stated:

Mr. Johnson remarked that the 15-day issue could pose a problem with certain items; concrete would be one. Concrete has a 28-day strength requirement. A contractor may not want to pay for an item whereby a determination had not yet been made as to whether it was acceptable or not. There would have to be some flexibility on certain items, that are not determined, to be acceptable until a later date.

Senator Raggio questioned Mr. Johnson specifically on the particular item of concrete, asking if the state would have paid the contractor before that 28-day period mentioned.

Mr. Johnson replied that the state would have paid. On that particular item, in fact, NDOT would pay on the 2-week basis. If, in fact, it did not meet the requirement after 28-day strengths, NDOT has a demerit system whereby it would take the money back on the next payment cycle. NDOT would not pay the full price of that, until it got to the point whereby the concrete was rejected and would then have to be removed and replaced.

Senator Raggio stated that, conceivably, the state could have paid the contractor and if the 15-day law was in place, the contractor would have paid the subcontractor in full. Suppose the concrete does not test out, the contractor would have no recourse as there would be a deletion or reduced payment for other work, and there would be no way to get the money back from the subcontractor.

Mr. Johnson said that he did not know what the contractor would do in that circumstance, but NDOT would withhold a certain amount of funding depending on what the penalty would be for the cycle.

Senator Neal questioned NDOT’s relationship to the subcontractor. Mr. Johnson said that presently there was none. Senator Neal wondered what the result would be if a subcontractor did not perform well and the workmanship was faulty. Mr. Johnson responded that NDOT would hold the prime contractor responsible. The contractor is the individual NDOT contracted to perform the work. If work performance is not acceptable, NDOT will withhold the payment from the contractor. Senator Neal clarified the position by saying that NDOT avoided any relationship with the subcontractor.

Senator Raggio gave a scenario to Mr. Harker, whereby a contractor had been paid for concrete work with the 28-day period for the results of testing in effect. The work had been completed; the contractor had paid the subcontractor within 15 days, according to the law; the concrete did not test-out after the 28-day period. Because the concrete did not test-out, the state, according to Mr. Johnson, on the next payment for other work, would diminish the payment that is otherwise due to the contractor. But in this instance, the subcontractor has already been paid because, by law, the contractor had to pay. The senator questioned what recourse is available to the contractor.

Mr. Myers also addressed Senator Raggio’s scenario:

Senator O’Donnell clarified saying he had been aware of jobs so big that there were contractors, subcontractors, and then sub-subcontractors, and even beyond that. He questioned when the subcontractor is paid, if the contractor then, in turn, under this bill, would have to pay the sub-subcontractor or the sub-sub-subcontractor.

Mr. Harker replied he did not think that came under this bill. He thought the bill basically put forth language for the prime contractor and a subcontractor. Most of them are for the highway department and he said he has never been involved with it other than with material suppliers would put a lien against his company or something; but as for subcontractors, he did not think it was meant that way.

Senator O’Donnell referred to the bill and that the check must be made out to the contractor and the subcontractor. He asked when a contractor receives a check, if it would list all of the subcontractors as well. Senator O’Donnell wondered if this would be a problem if the language is not clarified.

Mr. Harker allowed for some clarification of language, indicating that he understood what Senator O’Donnell was inferring. If a subcontractor was having trouble on a project, he would notify the director and, at that time, the director would have the leeway to write a check to the subcontractor in addition to withholding payment to the contractor.

Mr. Myers pointed out if one is a third- or fourth-tier subcontractor, the payment waiting period is approximately 3 months. Most subcontractors desire to be listed as first-tier subcontractors because third- or fourth-tier subcontractors on this type of project, would be paid no earlier than 60 days from the time of billing.

Senator O’Donnell stressed that was the point. The bill requires NDOT to write a check to the contractor and the subcontractor. It does not delineate whether they are first tier, second tier, third tier, etc. If that is not what you want, then the language needs to be clarified because NDOT would make the check out to the general contractor and all of the subcontractors.

Mr. Myers stated that to clarify when a general contractor submits a bid to the State of Nevada, typically the general contractor will list his subcontractors and which aspects of the job they will be performing. The important thing, Mr. Myers stressed ,was to be listed as a subcontractor on the signed document.

Mr. Harker stated that a modification in language could be made so that the general contractor would be liable for the listed subcontractors.

Chairman O’Connell formally closed the hearing on S.B. 301 and opened the hearing on Assembly Bill (A.B.) 98.

Drennan A. Clark, Major General, The Adjutant General of Nevada, Office of the Military, stated that 1 year ago he was the chairman of the Governor’s Commission on Work Place Safety and Community Protection, which was put together as a result of the explosion at Sierra Chemical Company in Washoe County, on January 7, 1997.

General Clark stated A.B. 98 is one of the bills recommended by the commission for adoption during this legislative session. The bill requires that the chief of the Division of Emergency Management oversees and assists local emergency responders in the preparation of their response plans. Then the chief oversees coordination of those plans by and among the local responders. He then assists them by having periodic exercises in order to ensure that the plans work.

Senator O’Connell remarked that while reading this bill, the question arose as to why there was a need for legislation to do this and why this was not just a part of the job description.

General Clark responded by stating he did not know the answer to that question, specifically. However, he did know that in the past there had not been a state agency that oversaw local responders to ensure that they did, in fact, have plans; and that those plans were coordinated by and among the various responders in a local community and that they were exercised. This is a way to insure that all the local responders do, in fact, have plans; that the plans are coordinated; and that they are exercised so that it is known that the plan will work.

Senator Neal queried who would approve the plans.

General Clark believed that the plans would essentially be approved through emergency management, but the principle obligation of emergency management would be to oversee and assist the local responders in putting their plans together; like the local fire departments, the local police departments, and local emergency management. These are called LEMPCs – Local Emergency Management Planning Committees.

Senator Neal stated that this was a mandated action to develop this comprehensive, coordinated plan, and it seemed to him that the individual local responders would be left to their own devices as to what the plan should be. Would they be able to send it out for approval to the various entities in order to coordinate with and engage in the proper tests of these plans.

General Clark agreed, and stated the idea was that they did require that the chief of the Division of Emergency Management do the plans for the local entity. The local entities are all going to be different. Carson City may have different requirements than Boulder City or Douglas County may have. The bill suggests that each of the local entities develop its own plan as local responders. The chief of the Division of Emergency Management oversees that, assists them in the development of their plans and then makes sure that they are coordinated. He then helps them run exercises to see that their plans work.

Frank Siracusa, Chief, Division of Emergency Management, State of Nevada Department of Motor Vehicles and Public Safety, further clarified A.B.98 as it deals with some amendments to chapter 414 of NRS, which established the Division of Emergency Management and identified its roles and responsibilities. He pointed out many of the proposed changes in A.B. 98 are activities that the Division of Emergency Management has already undertaken. This proposed language is to legitimize those activities. The Division of Emergency Management assists local governments in the development of their plans and tries, at the state level, to do a coordinated approach where standard protocols are established; so that the plans that are developed at the local government levels will easily interface among local, state, and federal governments. The Division of Emergency Management reviews the plans. They are approved by the local governmental entities; the local city councils, county commissions, etc. will actually adopt those plans. The Division of Emergency Management assists them in the development of those plans, and coordinates the exercises statewide, so that there is a statewide emergency management program to ensure public safety. The Division of Emergency Management is in favor of the changes to A.B. 98.

Senator Neal asked how the process of involvement with the development of plans occurs.

Mr. Siracusa explained that Nevada has a network of emergency managers: himself, as chief; the Division of Emergency Management at the state level; and also an emergency management organization in each county and each incorporated city within those counties.

Senator Neal pointed to the language, stating that it seemed to suggest that if the Division of Emergency Management were not called to assist then the Division of Emergency Management could do nothing.

Mr. Siracusa replied that Division of Emergency Management works, on a day-to-day basis, with the local emergency managers and provides assistance to them. There are planners within the Division of Emergency Management that actually go out into the field and work with the local governments, assisting them in the development of plans. A lot of the rural communities do not have full-time, professional emergency managers.

Senator Neal asked what would happen if a local entity said they did not want assistance from the Division of Emergency Management.

Mr. Siracusa replied in that instance, the Division of Emergency Management would not go into their community. There are 25 communities within the State of Nevada that are provided funding. The funding is funneled from the federal government through the division office, and passed through to those local governments for the express purpose of having an emergency management organization to do these kinds of plans and exercises. The experience of a community telling the Division of Emergency Management that they did not want assistance has not occurred during his tenure with the Division of Emergency Management. If fact, it is usually the opposite; the communities ask for more assistance that can actually be provided.

Senator Neal remarked that problems in coordination regarding the January 1997 explosion were the probable reason behind this particular measure before the committee. Mr. Siracusa replied that was correct. Many of the response protocols were not established. There were no standardized response protocols and there were, and still are, some communities that do not have quality plans in place. Senator Neal queried how this bill would remedy this situation.

Mr. Siracusa stressed that this bill was establishing, in law, much of what was currently being done. He stated that he did not see anything in this bill that would mandate a local entity must have a plan. This bill would just reaffirm what is already being done.

Senator Neal said again that the assistance depended upon an entity accepting it, and that the issue here is an emergency that needs to be responded to in such a way as to protect the citizens of this state.

Mr. Siracusa agreed, reiterating that the Division of Emergency Management meets with local city councils, and county commissions to promote the program and the need for emergency plans and procedures. In some instances, the Division of Emergency Management does not have the leverage to say to a political subdivision they must develop a plan. The Division of Emergency Management can inform the entities of the ramifications and liabilities if they do not have a plan. He said the senator is correct that the Division of Emergency Management does not have a stringent law that says the entities will develop this plan.

Senator Titus drew attention to the fiscal note attached to the bill and asked if it was in the budget.

Mr. Siracusa explained that in the first rendition of this bill, the language would have mandated by law that the Division of Emergency Management, by law, would develop all local government plans; and’ if that had passed with the original language the Division of Emergency Management, would have required additional staff to try to accomplish that process. The fiscal note, as written, has been eliminated.

General Clark asked if he might respond also, and stated that at the first hearing before the bill was amended, there were a number of local entities who objected to having the chief of the Division of Emergency Management dictate to them what their plans were going to be. They wanted to develop their own plans and thus the amended bill, which obviated the necessity for a fiscal note.

Senator Titus understood a local government not wanting the Division of Emergency Management to dictate the type of plan they should have. Senator Titus stressed the importance of a plan and wanted to know if there should be a requirement that they have a plan.

Mr. Siracusa agreed with Senator Titus, that every local government should have a plan. At this time, there is no requirement. The only leverage that the Division of Emergency Management has is the funding that is provided to those communities and in that funding and application package is the requirement that they have a plan. For those that do not participate in that program, he stated that no, there is not a stringent requirement to have a plan.

General Clark further elucidated, for the committee, by stating that the chief of the Division of Emergency Management and his staff provide all kinds of training for all of the local responders, county by county, and town and city, so that they can develop the plans they need in order to respond to emergencies.

Mr. Siracusa stated that the Division of Emergency Management could lend assistance in the development of proper formats and plans and how to integrate with all the public safety entities within a community. But the Division of Emergency Management does not fully know the intricate details of that community and the problems they may experience. It is in the best interest that the local government, themselves, develop their plan.

Senator Neal related a scenario involving an earthquake in Carson City that might register 7.0 on the Richter scale; which would mean buildings crumbled, and roadways were disturbed, and then asked what would be the responsibility of the Division of Emergency Management.

Mr. Siracusa replied that the Division of Emergency Management’s responsibility would be to coordinate the response and primarily the recovery efforts, in conjunction with the local governments and the federal government.

Senator Neal asked by what authority in law were they permitted to go on a scene and state that the Division of Emergency Management would coordinate.

Mr. Siracusa stated that the Division of Emergency Management is not in charge, but coordinates the state resources in support of a local emergency. The emergency is always owned at the lowest level of government. Their role at state government is to assist. He explained that in Senator Neal’s scenario, a devastating earthquake, the Division of Emergency Management would be coordinating with the federal government, federal assistance, and federal declarations such as during the floods of 1997; which obviously were not of the caliber of a major earthquake, but certainly required assistance from all levels of government. Their role, specifically, is to support local government with state resources. The Division of Emergency Management is the agency, in state government, that coordinates state resources in support of local government.

Senator Neal opined "kind of like a link in a chain." Mr. Siracusa concurred, indicating it also involves working with the National Guard.

Senator O’Connell inquired how the activities performed by the Division of Emergency Management and the state fire marshal might work together.

Mr. Siracusa said the Division of Emergency Management provides for statewide planning, training, exercise initiatives for local government, facilitate those types of activities, provide funding to local governments for the development of local emergency management organizations and interface with the federal government. The fire marshal is enforcement of certain regulations for facilities and also provides training to local fire departments in some different efforts. Most of the training efforts between the fire marshal’s office, the Division of Emergency Management office, and the state emergency response commission are coordinated; some of it does overlap, and we do work together. The Division of Emergency Management works very closely with all those agencies.

Senator Neal asked that when assessments are done regarding the needs of a community in an emergency, how the government will function, where people will be moved, and where the records will be stored, etc. if the Division of Emergency Management receives the necessary cooperation for the survival of a governmental entity in case of an emergency.

Mr. Siracusa stated that the Division of Emergency Management worked with all of the governmental agencies. Twice a year a directors’ conference is conducted with all of the local emergency managers; goals, objectives, and planning are discussed. The Division of Emergency Management exercises with each jurisdiction on a yearly basis. The Division of Emergency Management does public speaking on the continuity of government, including all of the issues mentioned. The Division of Emergency Management always plans for the worst-case scenario, but also plans for the small incidents; all are specific to different parts of the state. This could be a day-to-day occurrence in Clark County, but may be an emergency or disaster for Lincoln County.

Thomas J. Grady, Lobbyist, Nevada League of Cities and Municipalities, wished to speak to the cooperation between local governments and General Clark, the National Guard, emergency management, and the Earthquake Safety Council. The Nevada League of Cities and Municipalities has individuals assigned to those representing local governments and there is a good spirit of cooperation. Although the Nevada League of Cities and Municipalities did object to the first draft of the bill, they do support the redraft of the bill and stand behind the efforts of the Division of Emergency Management.

Senator Titus wondered how many local governments in Nevada do not have an emergency management plan.

Mr. Grady replied that with this bill every local government should have a plan, and that is the intent of the bill. Senator Titus inquired if Mr. Grady saw this as a way to get the local governments without a plan to develop one. Mr. Grady agreed, adding that in the rural areas, especially, there is a lack of expertise in putting together a plan; but with the assistance this bill would provide and the encouragement to do so by the Nevada League of Cities and Municipalities, every community would have a plan.

Senator Neal stated that this is the responsibility of government.

Mr. Siracusa responded in agreement, adding that some of the very small communities, through their local emergency planning commissions may have a plan that is more specific to hazardous materials. The goal of the Division of Emergency Management is to make those plans more all-hazard specific plans. Unfortunately, emergencies and disasters are not among the most popular subjects and particularly in times when there is not a lot of money to budget for activities that may never occur, like insurance policies. The job of the Division of Emergency Management is to get them motivated and working on a community plan.

Senator Neal stressed that communities, state officials and government entities have to think beyond the present and plan for emergency contingencies.

Richard Murdock, Director of Communications and Emergency Management, Douglas County, stated that Douglas County clearly supports the rewrite of this bill. Douglas County was one of the counties that had opposed the original language. This bill provides leadership without providing mandate. Throughout the state, most agencies have emergency operations plans. It is important to remember as a general rule the state is not the first responder to a disaster; it is the local governments that are. The local governments deal with the buildings that have fallen down, the earthquakes, the floods, etc. The state is there as a backup resource, once the local entity has declared a local disaster that has gone beyond either physical or financial means to deal with that disaster. The concern is that if this is mandatory, that the state writes the plans for local governments. The state does not know what the local operational procedures are because every law enforcement agency operates a little differently. A paid fire department is different than a volunteer fire department. By inserting …"shall"… , the state’s position and ability to assist local governments is legitimized. In Douglas County, their position is funded at 5 percent for emergency management only and that is because of federal pass-through money. Mr. Murdock stressed that they do not get the money if they do not have the plan. They support this language because it gives legitimacy to what state emergency management is doing.

Senator Neal reiterated by stating that in an emergency, it does not matter whether someone is a volunteer or works full time. People need to be prepared for that contingency. It is his belief that it should be a matter of policy to have these plans in effect.

Mr. Murdock stated that with the passage of the bill, legitimization of the emergency management assistance would occur by making the process easier for the local governments. He mentioned the harsh reality of communities with water systems and sewer systems that are failing or that are in immediate need day to day with no resources to deal with this issue; let alone an emergency or disaster, or the planning for an emergency. The bill will allow for a good leadership role; and with the state’s assistance, the legal authority to go into those communities to assist.

Senator Raggio expressed concern that the assistance and actions to which were testified, would be possible under the first reprint of this bill. The amendment to A.B. 98 was successful in removing the fiscal note. Specifically noting each change in the bill, he questioned if all this was possible without adding any cost, and without adding positions. Mr. Siracusa stated yes, that the initial bill would have placed a burden on the state to actually go into communities and develop the plans.

Senator Raggio questioned whether the Division of Emergency Management had the means to test periodically. Mr. Siracusa replied, yes.

Mr. Murdock stated that typically emergency management personnel will ask to run exercises with the local level, would support them, and help organize based on the plan. This is seen as a partnership. Nevada has had enough disasters to know that we cannot function without emergency plans. The disaster exercises do work very well.

Chairman O’Connell queried whether there was any further testimony on A.B. 98. There was none. The Chairman closed the hearing on A.B. 98 and formally opened the hearing on Assembly Bill (A.B.) 127.

Bru Ethridge, Supervisor, Notary Division, Office of the Secretary of State, read directly from her prepared testimony (Exhibit C).

Ms. Ethridge pointed out to the members of the committee that A.B. 127 made several changes. First, the secretary of state appoints notaries public, receives complaints in regard to notaries and then conducts investigations into those complaints. Ms. Ethridge stressed to the committee that these investigations would be confidential until concluded, although information could be shared with law enforcement personnel if deemed necessary to the successful conclusion of the investigation. Secondly, she noted, some notaries public would be appointed with limited powers; for example, court reporters. Finally, the fees charged by notaries public would be set by law. The prepared testimony (Exhibit C) contains further fee-for-services information indicating that the current fees charged do not adequately compensate a notary for services in the State of Nevada. Ms. Ethridge thanked the committee for their consideration of this matter and stated she would answer any questions the committee members might have.

Senator Care inquired whether a notary would be aware that they were being investigated. Ms. Ethridge replied yes, the notary would have been informed by the secretary of state, and given a copy of the complaint and a copy of the document notarized.

Senator Care then questioned the necessity of keeping the documents confidential. He inquired whether the documents were that sensitive or if it was to spare embarrassment to the notary public. Ms. Ethridge explained that usually the documents were not of a confidential nature. She went on to say that the individual filing the complaint would want a periodic update. As information is gathered, it might appear that the notary was in violation of a law; when in fact, they are not. The secretary of state would prefer to keep all the information together to be submitted to the complainant at the completion of the investigation.

Senator Care emphasized that he had not seen the specific language in the bill regarding the release of information upon the conclusion of the investigation. If the documents are not confidential upon the conclusion of the investigation, why should they not be; for example, in the case of a notary who has been exonerated as opposed to the notary whose commission is revoked.

Ms. Ethridge responded, saying that everything filed in the Office of the Secretary of State is public record. Therefore, at the end of the investigation, the complaint and correspondence would be public record. However, it is during the investigation that the secretary of state would like this complaint information to be confidential.

Senator Neal was curious as to why this would not require a two-thirds majority vote. Ms. Ethridge replied that Senator Neal’s query was probably in regard to the fees charged by notaries public. These fees go directly to the notary. The State of Nevada does not receive any part of those fees collected for notarial services. Senator Raggio interjected, emphasizing on that point, a notary is not required to charge a fee. This is permissive and this would be the limit as to what could be charged.

Donna Sweger, Supervising Attorney, Nevada Attorney For Injured Workers (NAIW), Department of Business and Industry, came forward to testify, indicating that Nancyann Leeder, Nevada Attorney for Injured Workers, Department of Business and Industry, had proposed the inclusion of state workers along with peace officers in not providing residential addresses (Exhibit C) when they had to be a notary for the state job. Ms. Sweger emphasized to the committee that the Nevada Attorney for Injured Workers was in agreement with the amended language of A.B. 127 and wished the record to reflect their position in favor of A.B. 127.

Chairman O’Connell asked if there was any further testimony on A.B. 127. There was none. The Chairman closed the hearing on A.B. 127. The Chairman adjourned the meeting at 3:35 p.m.

RESPECTFULLY SUBMITTED:

Julie Burdette,

Committee Secretary

APPROVED BY:

Senator Ann O'Connell, Chairman

DATE: