The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 4:05 p.m., on Tuesday, March 30, 1999, in Room 2149 of the Legislative Building, Carson City, Nevada. This meeting was videoconferenced to the Grant Sawyer State Office Building, Las Vegas, 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:

Angela Culbert, Committee Secretary

OTHERS PRESENT:

Scott Scherer, General Counsel, Governor’s Office

Mary Boetsch, Chairman, Commission on Ethics

Marnie Miller, Concerned Citizen

Laura L. Link, Lobbyist, Concerned Citizen

Janine Hansen, Lobbyist, Nevada Eagle Forum

Lucille Lusk, Lobbyist, Nevada Concerned Citizens

Chairman O’Connell opened the meeting asking for an explanation of Senate Bill (S.B.) 478.

Scott Scherer, General Counsel, Governor’s Office, presented a prepared statement explaining S.B. 478 (Exhibit C) to the committee members. He stated the Governor wants a tough, fair, and fast ethics law. In order to accomplish these goals, he noted, the Governor is proposing structural and procedural changes, enhancements to current penalties, and clarifications to existing law. The Governor, he pointed out, is suggesting additional staff for the commission including a full-time executive director to help coordinate investigations, hearings, and subpoenas, as well as a full-time commission counsel to be hired by and to report to the ethics commission. He stressed the importance of generating legal opinions quickly to meet the deadlines. Currently, he explained, the attorney general’s office does not have counsel committed to the ethics commission full time thus affecting the expedience of the process. He expressed the desire to remove any hint of political influence in the process, noting the attorney general is a partisan office. He pointed out there is an even number of members on the commission to ensure a bipartisan approach, and he stressed the need to remove any potential appearance of undue influence from a partisan elected official in the operation of the ethics commission.

Mr. Scherer said two additional commissioners would be added by S.B. 478, explaining one of the members would be appointed by the Legislative Commission and one by the Governor. He explained proposed changes to the process, noting investigations would be coordinated by the executive director. He said "just and sufficient cause" hearings would no longer be heard by the full commission but by a panel of two commissioners who would review the investigative report of the executive director and determine whether there is "just and sufficient cause" to go forward with a full hearing. If the panel had a finding of "just and sufficient cause," then they would not participate in the full hearing. Mr. Scherer explained the investigative process, the "just and sufficient cause" process, and the hearing process would all be subject to time limits for a total of 60 days in the normal course. He noted provisions of time limits extensions for good cause could lengthen the process to as much as 150 days. He stressed the necessity of speeding up the process, pointing out currently hearings may be scheduled within 4 or 5 months though it takes much longer to issue opinions. The bill, he commented, would require hearings be held and opinions be issued within the aforementioned time limits.

Explaining the changes in S.B. 478, Mr. Scherer noted section 2, 3, and 4 of the bill provide definitions. He drew attention to the definition of "willful violation" in section 4 of the bill, noting there has been concern and confusion over this term because it was previously undefined in statute. He indicated many public officials subject to the law question the meaning of "willful" in relation to ethics commission legislation. Section 5 of the bill, he explained, provides for the appointment of the executive director and the commission counsel while section 6 sets forth the duties of the executive director. He continued, noting section 7 of S.B. 478 would require public officers to acknowledge they have read and understand the statutory code of ethics. He said this acknowledgement would be filed along with the required financial disclosure form to avoid additional paperwork. Mr. Scherer indicated section 8 of the bill would provide for the creation of panels to make the "just and sufficient cause" determinations. He explained the panels are appointed by the chairman, noting the chairman and the vice chairman may not participate together on the same panel because this would disqualify both from involvement in a full hearing.

Prompted by Senator Neal, Mr. Scherer explained the structure of the proposed legislation would provide that those participating together in the "just and sufficient cause" determination would not participate in the full hearing. If the chairman and vice chairman were both excluded from the full hearing, the commission would have to determine who would be the acting chairperson. He pointed out this determination will be avoided if the chairman and vice chairman are prohibited from participating on the same panel.

Mr. Scherer continued to explain the changes, pointing out the panel could not consist of two members from the same party to stay true to the bipartisan approach. He said there will be a determination made by the panel regarding "just and sufficient cause." He contended this process will "weed out" the invalid complaints so those unjustly accused will have the complaints dismissed quickly. For those justly accused, he added, the evidence will be marshaled quickly and presented to the commission through the executive director.

Mr. Scherer pointed out section 10 of the bill changes the makeup of the commission by adding 2 members. He said currently law requires the Legislative Commission to appoint 1 former legislator, 1 former public officer of a county, and 1 former public officer of a city. The bill, he noted, requires the Legislative Commission to appoint 4 residents of the state, at least two of whom are former public officers and at least 1 of whom must be a licensed attorney. He explained this would open up the potential number of people available to serve on the ethics commission so the Legislative Commission and the Governor have greater flexibility in whom they choose in order to find the best quality people. The suggestion of having attorneys sit on the ethics commission, he commented, was presented by former members who expressed the importance of decisions made concerning law, legal obligations, and requirements for due process. He said there will be a full-time commission counsel, if the bill passes, with the addition of legal expertise on the commission. The Governor, he explained, would appoint four members of the commission as well, noting these members must be residents of Nevada and at least two must be former public officers or public employees. He said the Governor would be required to appoint an attorney to the commission, as well. He clarified the commission would be made up of a minimum of two attorneys, a minimum of four former public officers or former public employees. He pointed out no more than four members could be from the same political party.

Senator Neal questioned the language in section 10, subsection 4 of the bill which disallows more than 4 members be residents from the same county and subsection 5 which prohibits members of the commission from holding another public office. Mr. Scherer indicated this language would stipulate a member of the commission could not be a current public officer, noting those with experience must be former public officers. He said this provision was in place because a current officer would have a conflict of interest if they were making rules that applied to themselves.

Senator Neal suggested changing the word "may" to "shall" in section 10, subsection 5 in the bill to avoid the conflict. Mr. Scherer stated because the phrase was in the negative, it would be correct as written and the language would be sufficient.

Mr. Scherer continued explaining changes in section 11 of the bill would clean up language to comply with structural changes concerning the executive director position. Section 12 of S.B. 478, he noted, would allow the commission to commence a proceeding or a request for an opinion. He said the commission currently has this authority, but the change would clean up the language as necessitated by the change regarding the "just and sufficient cause" ruling which is no longer found by the full commission, but by the panel.

Senator Neal stressed the commission may take action regarding an "alleged" violation as set forth by language in section 12, subsection 1 of the bill. He noted this would allow the commission to investigate a complaint without any substantial facts involved. Mr. Scherer explained the commission currently has this jurisdiction, noting the provisions for "just and sufficient cause" have been changed so the executive director can do an investigation to determine whether there are facts to substantiate the allegations. If there are not sufficient facts, he noted, the panel would throw out the complaint because there is not "just and sufficient cause" to go to a full hearing.

Mr. Scherer indicated section 13, subsection 6 of the bill would require the publication of a manual for the use of public officers and employees and would require the Legislative Counsel Bureau to prepare annotations to go into the Nevada Revised Statutes (NRS) in chapter 281. He said the Legislative Counsel Bureau currently prepares annotations of court cases, Nevada Supreme Court decisions, federal court decisions, and Attorney General’s Opinions that go in the statutes. He explained it would be helpful to have annotations in this section of the ethics commission opinions since they have an impact on the interpretation of this statute.

Mr. Scherer drew the committee’s attention to section 14 of the bill which would change the subpoena provisions and the way they are issued. He said this section would provide a subpoena may be issued by the chairman or the vice chairman in the absence of the chairman. Currently, he noted, a subpoena must be issued by the commission upon a majority vote, explaining they have to have a commission hearing. He said the commission has the policy to notice meetings prior to holding them. He stressed this provision is necessary to speed up the process. He pointed out there are a number of places in the law where the chairmen of administrative agencies have the authority to issue subpoenas, noting in most civil or criminal cases the attorneys can get the clerk of the court to issue a subpoena.

Senator Neal questioned the importance of only allowing the subpoenas to be issued upon the request of the director. Mr. Scherer pointed out subpoenas would be issued upon request of the commission, the executive director, or the public officer or employee who is the subject of the request for an opinion. He said S.B. 478 would allow the commission itself or the parties involved to request a subpoena. Senator Neal questioned whether a commissioner could issue a subpoena on their own. Mr. Scherer indicated the commissioner could issue a subpoena as set forth in section 14, subsection 2 of the bill.

Senator Neal indicated the referenced language read subpoenas could be issued "upon the request of" the involved individuals. He pointed out the commission itself is currently not allowed to issue a subpoena on its own because of the language "commission, upon majority vote" has been stricken in the measure. Mr. Scherer explained the language had been put back into the bill, stating that it would be discretionary as it could be argued the chairman would not be required to issue the subpoena. He said they could change the "may" to "shall" at the request of the committee.

Senator Neal stressed changing the language from "may" to "shall" would not help. The proposed revisions, he noted, would only allow the commission to issue a subpoena upon the request of the director. Mr. Scherer disagreed with the senator’s interpretation of the measure, stating the intent of the bill was the commission could request the chairman to issue a subpoena. He said the subpoena would still be issued by the chairman, but upon the commission’s request. He restated, it was intended the chairman would issue the subpoena.

Senator Neal questioned the outcome of a situation in which the commission did not have a request, but the commission themselves wanted to issue a subpoena. Mr. Scherer indicated it was the intention that a subpoena could be issued upon the commission’s request. He suggested they clarify the language to make the intent more apparent.

Mr. Scherer continued explaining the current law requires that before a subpoena to a public officer or public employee is issued, the commission shall submit a written request to the officer or employee who is the subject of a request for an opinion. He said the language has been changed to streamline the process and add a 5-business day time limit to ensure the hearing is not held up by the subpoena process.

Mr. Scherer drew the committee’s attention to language in section 14, subsection 2, paragraph (b) of the bill which would specify, "failure of the public officer or public employee to comply with the written request of the executive director constitutes good cause for extension" of the time limits. He said if someone is attempting to "stonewall" an investigation, this would be good cause for a continuance.

Mr. Scherer pointed out section 15, subsection 2, paragraph (c) of S.B. 478 contains an error in need of an amendment. He explained the changes were originally in the bill, but were not reflected in the final proposal. He indicated the language on lines 10 through 13 needs to be removed from the bill. He pointed out the language in section 15, subsection 7 had been put in to replace this language.

Senator Neal questioned the language change in section 15, subsection 2 of the bill which states the "legislative branch shall not vote upon or advocate the passage or failure … materially affected by: (a) His acceptance of a gift or loan; (b) His pecuniary interest; or (c) His commitment in a private capacity to the interest of others." He continued reading from section 15, subsection 2, paragraph (c) of the bill. Senator Neal stated under the Nevada Constitution, the Legislative Branch is only allowed "yes" and "no" votes. He pointed out abstention has been put into the rules, but is not in the Nevada Constitution. Senator Neal proposed that a member of the Legislative Branch can vote on any particular interest according to the Nevada Constitution, noting if an issue affected the legislator personally, than he or she would first have to make a declaration. He reiterated the abstention vote is not in the Nevada Constitution.

Mr. Scherer expressed agreement with Senator Neal, stating the senator is technically correct as the Nevada Constitution does refer to "yeas" and "nays" but does not refer to abstentions. He suggested the Nevada Constitution also gives the Legislature the authority to make rules for governing its proceedings.

Senator Porter stated NRS has many guidelines for officials regarding abstaining from votes. He proposed an amendment to S.B. 478 requiring elected officials to vote in certain instances. He suggested the language, "Every elected official present when a question is put forth, shall vote ‘no’ or ‘present’ unless previously excused by that body. Those elected officials called shall vote ‘yea’ or ‘no’ unless the elected official states a personal interest in the questions or concludes that he or she should not vote under the code of ethics." Senator Porter indicated this would change the direction of the provision, expressing elected officials have a responsibility to vote which should be exercised unless a conflict is specifically stated.

Senator Neal said under the Nevada Constitution, three senators can request "yea" or "nay" voting on any particular legislation. He pointed out this would require all senators to vote. He cited a historical situation pertaining to this issue, noting an abstention in this instance counted as a negative vote.

Mr. Scherer clarified the amendment offered by Senator Porter, stating it would require a member of the legislative body to vote on any question unless he or she specifically declares or discloses a conflict. He said if this was the intent of the amendment, he would offer it for approval by the Governor. He stated he did not believe the Governor would have a concern with the suggested amendment as long as there was the obligation to disclose and abstain when a conflict of interest has been fully disclosed.

Mr. Scherer summarized the legislation, explaining changes made to section 15, subsection 3, paragraph (c) of the bill clarify the current law in which there is no obligation to disclose campaign contributions that are already being disclosed pursuant to chapter 294A of NRS. He remarked there has been discussion of whether an elected official is required to disclose campaign contributions at a meeting when a contributor comes before the body. The current law, he noted, indicates the ethics commission has no jurisdiction over chapter 294A of NRS except under limited circumstances added in the Sixty-ninth Legislative Session. He pointed out the suggested language would require campaign contributions to be disclosed under chapter 294A of NRS, not under chapter 281.

Senator Neal questioned the reason for the proposed change regarding the referenced NRS. Mr. Scherer said when elected officials file campaign finance reports, they disclose all contributors thereby not requiring the official to remember and disclose each time a contributor comes before the respective body. He said in statewide campaigns the number of contributors can be difficult to remember. He explained the intent was to avoid a situation in which a person cannot recall all of his or her contributors for proper disclosure each time a situation arises. He pointed out the disclosure form will suffice as it has been made public record, noting if an elected official fails to disclose properly under chapter 294A of NRS he or she could still commit a violation under chapter 281 of NRS. If the disclosure is done properly, he explained, it is public record.

Mr. Scherer drew the committee’s attention to section 15, subsection 7 of S.B. 478, noting the intent was to give definition to the term "commitment in a private capacity to the interests of others." He noted originally there was a presumption that abstention was unnecessary except in these circumstances, although disclosure was still required. He drew attention to the definition which states an elected official has a "commitment in a private capacity to the interests of others" if the person is a member of the official’s household; is related by blood, adoption, or marriage within the third degree of consanguinity or affinity; employs the public officer or a member of his household; has a substantial and continuing business or personal relationship with the officer; or has any other similar commitment or relationship. He explained there are important policy decisions to be made regarding the wording of this issue. He suggested there is redundancy in the current proposal, noting it is not necessary to have the language "any other similar commitment or relationship" if all of the other language is left in the measure.

Prompted by Senator Neal, Mr. Scherer stated the definition needs to include family members, business partners, and employers as these are people to whom there is a "commitment in a private capacity" to their interests. He expressed a concern regarding personal relationships closer than business partners or closer than family. To cover this concern, he noted, the language, "or personal" had been added to section 15, subsection 7, paragraph (d) of the bill. The language, he explained, opens up the question of when a relationship is close enough to establish a "commitment in a private capacity." He suggested solutions to amend the language while providing for the intent of the measure including removing the words "or personal" from paragraph (d). He indicated the intent would be the same if the bill was amended by removing paragraph (e) in its entirety but retaining the words, "or personal." He said either proposal would accomplish the intent of covering relationships that are "as close as" or "closer than" family, household, employer, or business partners.

Mr. Scherer stressed:

Chairman O’Connell questioned whether it would suffice to add "economic relationship" in the place of "personal" in section 15, subsection 7, paragraph (d) of the bill. Mr. Scherer said this was arguably covered by "business" relationship though the word "economic" could be used instead.

Mr. Scherer said, "The idea here was to get to one where there is not a specific economic relationship or pecuniary relationship, and actually allowed some discretion to the commission where you have a very, very close personal relationship; closer than an ordinary friendship; closer than family."

Chairman O’Connell said early discussions in drafting the legislation found the need for identifying friendships more specifically. Mr. Scherer indicated the language, "any other similar commitment or relationship," or "any other substantially similar commitment or relationship" could clarify the intent that the relationship was the same as the other relationships in the definition.

Mr. Scherer indicated:

Senator Porter indicated he had marked the language on section 15, subsection 2, paragraph (c) of the bill as an error. Mr. Scherer concurred that the changes made to this paragraph (c) were in fact an error. He stressed the language should have been removed when the language in section 15, subsection 7 of the bill was added. He suggested, however, the language could be put back with additional changes to cover the intent that in the case of a personal relationship, one would be required to disclose but would not be required to abstain. He said there was concern the language would take away the commission’s discretion in those cases where people should abstain because they have personal relationships that are closer than family. He remarked there is a policy decision to be made by the committee.

Senator Neal expressed concern for vague language and questioned the way in which it would be required for elected officials to establish a personal relationship. Mr. Scherer suggested the language in the proposal was more definite than current statute which simply reads, "a commitment in a private capacity to the interest of others." He said the bill attempts to define this language and provide guidance in the issue. He reiterated the suggestion that section 15, subsection 7, paragraph (e) of the bill should read, "any other substantially similar commitment or relationship."

Senator Neal stated "common-law" language may be the only appropriate addition to the definition. Mr. Scherer said the proposed language would allow the commission discretion to establish precedent by decisions. He pointed out the proposed language would eliminate the situation where someone is just a friend or just an acquaintance and not "as close as" family, household, business partner, or employer.

Senator Neal proposed a situation in which one legislator left office and the officials remaining would not be able to vote on issues concerning the one who left. Mr. Scherer stressed the person would have to be closer than family.

Continuing his explanation of the bill, Mr. Scherer pointed out changes in section 16, subsection 3 of S.B. 478 would set forth a process for investigating complaints and determining "just and sufficient cause." He explained a two-member panel would consider the complaint after the investigation. He said there would be 15-day time limit for both the investigation and for the "just and sufficient cause" hearings. He noted these could be extended for an additional 30 days each either upon a showing of good cause or request for additional time by the subject of the request for an opinion. He concluded the subject of a request for an opinion was entitled to additional time if necessary to prepare his or her defense. He said the subject would be entitled to a "speedy" trial if desired except in a case where good cause is shown.

Senator Neal asked for the definition of the phrase "just and sufficient cause." Mr. Scherer indicated this was the phrase currently in the law, noting there has to be a determination of "just and sufficient cause" or enough evidence to go forward with the complaint. He said in this case the executive director and the panel must believe that allegations are substantiated by evidence uncovered in the investigation.

Senator Neal questioned how one would be able to argue against "just and sufficient cause." Mr. Scherer responded if the cause was not found to be both just and sufficient, there would be a good case for not charging an individual. He said "just and sufficient cause" is the legal standard used so there is some definition in the commission’s current policy and practices.

Senator Titus questioned the point in the process in which the complaint becomes public. Mr. Scherer stated the information would become public after the panel makes its finding. He pointed out the complaint would become public whether or not the panel finds "just and sufficient cause." He said the intention was the information would be open for public review once the finding has been made. He acknowledged there would not be a way to stop a person who filed a complaint from talking about the complaint, but the commission cannot confirm the information until the panel makes its finding. He expressed it would be more fair to the accused if the confirmation of the complaint and the finding would be reported at the same time.

Senator Titus expressed concern regarding the publicity of a complaint, noting currently a complaint can be made public before the decision is made as to whether or not the complaint is valid or worth pursuing.

Chairman O’Connell mentioned Jan Laverty Jones, Mayor, City of Las Vegas, had been brought up on ethics charges 9 times, of which, each time, she was found within a short period of time not to have been guilty. She explained the intent of the Legislature was to address public situations such as these.

Mr. Scherer stated:

Mr. Scherer continued explaining changes as proposed by S.B. 478. He said section 16, subsection 4 of the bill, allows if the panel determines there is ‘just and sufficient cause,’ then the commission shall hold a hearing and render an opinion within the 30-day time limit. He pointed out if there is good cause found, the time can be extended an additional 30 days. He said the process in its normal course will take 60 days, though with the provision for up to 90 days of extensions, the process could potentially take 150 days. He commented the 150 days is substantially better than some cases that have gone 10 or 11 months before a written opinion has been issued.

Mr. Scherer referred the committee to section 16, subsection 8 of the bill, noting the provision would allow for an executive director to attempt to streamline and to create a sense of formality and professionalism to the process. He pointed out occasionally a member of the public who is filing the complaint wants to cross-examine the elected official with questions irrelevant to the proceeding. He noted subsection 8 would require questions go through the executive director for determination of whether the questions ought to be asked, indicating this is necessary in order to meet the time limits of the proceedings.

Mr. Scherer called attention to section 17 of the bill which would provide for a full-time commission counsel to replace the commission counsel from the attorney general’s office. He said if there was a reason the commission counsel had a conflict, the provision would allow for assistance from the attorney general in those cases. He maintained the intent is to avoid any potential "innuendo" that there would be political influence in the process.

Mr. Scherer explained section 18 of the bill would increase the penalties for repeated violations.

Senator Porter indicated there was a recent newspaper article regarding an individual who has placed many different complaints against an official. He questioned whether there were any penalty provisions for abuses of the complaint process due to possible political motivations. Mr. Scherer explained the previously referenced individual had at least one case in which the complaint had merit. Senator Porter clarified he knew nothing about the individual’s complaints but only about what had been reported in the aforementioned newspaper article. Mr. Scherer answered the senator’s question regarding penalties for abusing the complaint process, stating this issue had been addressed in the Sixty-ninth Legislative Session and could be found in section 18, subsection 10 of the bill. He said this provision sets forth the factors the commission will use to determine whether a complaint is filed in "bad faith." He referenced section 18, subsection 2 of the bill which allows the commission to impose a civil penalty of "$5000 and assess an amount equal to the amount of attorney’s fees and costs" where it is found a complaint is filed in "bad faith" or with a "vexatious purpose" and is found to be without merit. He pointed out an amendment was to be offered on this section. He commented the timing of the filing of a complaint and the manner in which the complaint was filed could be factors in determining whether it has been filed in "bad faith."

Mr. Scherer drew attention to section 18, subsection 1, paragraphs (a), (b), and (c) of the bill noting it would increase the penalties for "willful violations." He pointed out section 18, subsection 5 of the bill would provide for the commission to refer findings of "willful violations" to the appropriate authorities with the possible punishment or removal from office. He said the position held would dictate the specific process for removal. He indicated this provision would not authorize the commission to remove the person from office, but to refer the matter before the appropriate proceeding. In each case the removal would have to be accomplished by a finding by a judge, the Legislature, or the individual’s appointing authority. Section 18, subsection 6, paragraph (a) of S.B. 478, he noted, references the commission’s manual for the use of public officers and public employees containing the definition of what is not "willful." He said if an elected official has relied in "good faith" on advice of counsel or on the commission’s manual, then a violation would not be "willful."

Mr. Scherer explained in section 18, subsection 6, paragraph (c) of the bill the addition of the word "published" would refer to the commission’s manual. He said previously if an elected official relied upon an opinion issued by the commission, the violation would not be "willful." The proposed provision would allow that if a public officer or public employee "took action not contrary to any prior published opinion," then the responsibility would be placed upon public officials to be aware of the published opinions. He noted this is the reason annotations of opinions are in the statute and the reason the manual is to be completed. He called attention to section 18, subsection 8 of the bill which would provide that if the commission believes a "willful violation" is also a criminal offense, then they would refer that to the appropriate party for possible criminal prosecution. He noted there would still have to be a determination by the district attorney or by the attorney general’s office that it warrants prosecution under their prosecutorial discretion. He referenced section 19, subsection 11 of S.B. 478 which clarifies any finding in which there has been a violation, would have to be supported by a preponderance of the evidence. He said this would put the burden of proof on the person alleging a violation.

Mr. Scherer summarized from section 19, subsection 5 of the bill, explaining this provision would make the illegal receipt of an honorarium a Category E felony instead of a misdemeanor. He explained a Category E felony is the lowest level of felony, and noted an increase in penalty can be justified by the length of time in which the receipt of an honorarium has been illegal. He pointed out section 20, subsection 2 of the bill would also increase the penalty of asking or receiving undue compensation to a Category E felony from a misdemeanor.

Senator Porter questioned whether there has been a problem to cause an increase from the current misdemeanor penalty. Mr. Scherer stated there have been allegations of people asking for additional fees to which they are not entitled. He indicated there have been enough allegations to create suspicion for the increase of the penalties. He said section 21 of the bill constitutes extortion, noting the penalty is currently a Category D felony and has not been increased. In section 21, subsection 2, he noted, a provision has been added due to the number of business people who have claimed someone from their regulatory agency has made a request that made the business people feel as though they were unable to refuse although the request was unlawful. He indicated this provision would prohibit those regulated by state or county agencies to be extorted by members of those agencies.

Senator Titus proposed a situation in which a legislator used the position to gain business for his or her own company. She questioned whether this would be prohibited under section 21 of the bill. Mr. Scherer indicated it would fall under this provision because the request is a thing of value and the person from whom the request was made can be regulated by the Legislature. He stressed the request must be made in a manner which would cause a reasonable person to be intimidated into complying with the request to avoid the risk of adverse action. He pointed out the language was drafted so every request or business deal would not be a criminal act. He reiterated the circumstances of intimidation must be made clear and the person must be regulated by the public official or employee to fall within the reach of the language. He pointed out a violation of this provision would not go before the ethics commission but would have to go to the appropriate prosecutor to be proven beyond a reasonable doubt.

Mr. Scherer drew the committee’s attention to section 22 of S.B. 478, which contains language the Governor’s Office wishes to be omitted from the bill. He said the original intent was to fund proposed changes in legislation by raising fees paid by candidates when filing. He said these changes are made to sections 22, 23, 24, 25, 26 and 27 of the bill. He stressed the increased assessment on filing fees is not supported by the Governor who requests references thereof be deleted.

Chairman O’Connell questioned the necessity of removing the fees as they are limited to people filing for a candidacy and the money would go directly to the ethics commission rather than to the General Fund. She asked whether the money charged would still be considered a tax. Mr. Scherer concurred, expressing concern on behalf of the Governor regarding imposing an assessment on the fee. He noted there is a provision in the bill to allow the ethics commission to charge a fee for those who request training. He suggested a fee could be added for people who purchase additional copies of the manual.

Chairman O’Connell requested Mr. Scherer review S.B. 541.

The chairman noted S.B. 541 deals with the pamphlet every candidate must buy and stressed the importance of the legislation in regards to S.B. 478 as the latter does not allow excuses for ignorance of the law. She asked for the Governor’s opinion on S.B. 541 as the bill deals with charging "a fee for the pamphlet in an amount that equals the cost incurred by the Commission on Ethics to produce the pamphlet." Mr. Scherer suggested if the fee is just the actual cost to produce the pamphlet, it might be accepted by the Governor. He indicated he would ask the Governor’s opinion on the proposal.

Chairman O’Connell stated research shows most states put great emphasis on training for candidates and availability of information regarding ethics issues and penalties thereof.

Senator Neal questioned the reason there was no attempt made to define "ethics." Mr. Scherer pointed out a Code of Ethical Standards exist in chapter 281 of NRS. He noted these standards set forth what can and cannot be done from a legal standpoint.

Senator Neal asked if the standards are with what public officers will be charged. He said the language in S.B. 478 was broad and allows the ethics commission to determine who is in violation. He expressed agreement with the suggestion to codify what can or cannot be done and based upon statute, and make a determination as to whether or not there is a violation. He stressed the ethics guidelines need to be codified further than the bill attempts.

Mr. Scherer stated the intent of S.B. 478 was not to rewrite the ethics law, but to improve the process. He pointed out NRS 281.481 lists a Code of Ethical Standards.

Senator Neal stressed if additional penalties were going to be added, the standards should be clarified. Mr. Scherer indicated the attempt was made to clarify the definition of a "commitment in a private capacity to the interest of others." He reiterated the intent was to provide a process that would be fairer to everyone involved. The changes to the process include adding an executive director, having prompt investigations, and discarding cases without merit promptly. He said the burden of proof upon the commission or upon the person filing the complaint has been made explicit, noting they would have to prove there has been a violation of one of the provisions in chapter 281 of NRS. He suggested it would be impossible to write in law every single situation considered to be a violation of the code of ethics without providing "loopholes" which would allow things to be done which the citizens of Nevada view as unethical.

Senator Neal stressed the necessity for guidelines. Mr. Scherer pointed out S.B. 541 would require a manual be provided containing the provisions of the statute as well as decisions made by the commission for guidance purposes.

Senator Neal suggested they start over with a new code, and, from this point on, the annotations would be based on what has been established. Mr. Scherer said the Governor’s Office would review any suggestions made. He remarked there would be room for interpretation for anything written in statute and thereby call for the ethics commission to offer discretion.

Chairman O’Connell said she had met with members of the commission and attempted to get definitions in "black and white." Based upon her research, she noted, there was no way to define everything as each case must be viewed on an individual basis.

Senator Porter stated something may be in the law, but is not necessarily ethical. He pointed out the law does not state ethics because ethics are above the law, noting it is difficult for the law to cover ethical issues.

Senator Care questioned the definition of "willful violation" in section 4 of the bill. He asked whether Nevada has any other statutes in which a person who should have known better, but did not see the conflict can constitute "willful violation."

Mr. Scherer responded he was unsure as to whether another statute covered this example. He indicated the word willful is typically used in criminal statutes, noting within the criminal context, there is a higher standard in which some knowledge or intent must be proven. He pointed out the intent "can simply be to do what you did, it doesn’t [does not] mean you had an intent to violate the law. It means you had an intent to actually do the act that you did." He stated "willful" has a broad definition in the law. He requested the committee keep in mind the definition of "willful violation" would only be for the purpose of imposing a civil penalty and not for a criminal violation. Typically in the criminal law, he noted, there is the "beyond the reasonable doubt standard" as well as the rule that the statutes are strictly construed to catch the proper intentions.

Senator Titus indicated there was a "hazing bill" in the judiciary committee which was criticized for being too broad because one aspect was the mental anguish as well as the physical anguish caused. She indicated the language had to be carefully drafted because the intent was to make hazing a felony. She stressed when a felony is involved, it is important to be careful in the defining process because a felony is permanently on one’s record.

Mr. Scherer agreed, noting this was the reason the provision references when someone requests something of value, they had to have made the request under circumstances where a reasonable person would be intimidated into complying with the request. He indicated it has to be actual coercion and not just an "off-the-cuff remark."

Senator Care drew attention to section 7, subsection 2 of S.B. 478. He questioned whether this meant that current state employees would not have to acknowledge that they have received, read, and understand the statutory ethical standards. He pointed out the language reads this acknowledgment must be made "within 30 days after the date on which his employment commences."

Mr. Scherer surmised this interpretation would be correct though it was not their intent. He stressed the intent was that all state employees would make this acknowledgement of understanding. He indicated to cover the existing state employees, language would have to be added. He pointed out a process was currently in place for new state employees as included in the initial paperwork to be filled out when hired. He pointed out the issue as to whether the existing employees would be required to sign a new document outside of the normal hiring process would be legitimate for discussion.

Senator Raggio stated there are hundreds of people who are appointed to and serve on many boards. He stressed these people have been subject to reporting requirements and disclosures. He indicated it is difficult to find people who are willing to serve on these boards because they get paid little if anything at all, and they are required to file disclosure statements. The senator said he knew of many cases in which people will not serve because they do not want to fulfill all of the requirements. He questioned whether all of these people would also file acknowledgement forms as set forth in section 7 of the bill.

Mr. Scherer concurred those serving on various board would have to file these forms, though, he noted, they are currently required by law to file a financial disclosure form. He indicated the proponents envisioned that the first financial disclosure form these people file after S.B. 478 takes effect would have the acknowledgement included. He stated the intent was not to create additional paperwork or a new deadline. He suggested the acknowledgment would be made a part of the financial disclosure form.

Senator Raggio clarified this provision would apply to all public officers, state employees, city employees, and improvement district employees. Mr. Scherer concurred and noted this was the same as current law as it applies to all public officers and public employees, both state and local.

Senator Raggio expressed concern this provision is "overkill" because it applies to all who are asked to perform a public service. He remarked it will become more difficult getting people willing to serve.

Senator Porter cited a situation which happened under the current law and requested an explanation as to how it would be handled under the language proposed in S.B. 478. He told of a city councilwoman named Iris Bletsch from Boulder City who sought advice from the local city attorney on disclosure. He explained she served in the city council in excess of 8 years and had a "stellar" career. After seeking advice, she disclosed she held stocks in a particular corporation, but did not disclose the amount of the stocks. He indicated an ethics complaint was filed against her for not disclosing the amount. At this point she determined she had a 100 shares out of many thousands available. He stated she left office with a record of a meritorious ethics complaint filed. He stressed Ms. Bletsch had sought advice, and he questioned the outcome of the case under the proposed language.

Mr. Scherer indicated under S.B. 478, the outcome would be the same. He explained NRS 281.501 says that "a person shall not act on a matter without disclosing the full nature and extent of the gift, loan, commitment, or interest." He said the way the ethics commission has interpreted the language is the "full nature and extent" means providing complete details of one’s interest. He indicated the case referenced by Senator Porter was not found to be a willful violation because the councilwoman relied upon counsel and because she made a limited disclosure. He pointed out there has been an effort to make sure that public officials know they have to disclose. He remarked a public official cannot just declare a conflict but must give more detail. He justified Ms. Bletsch was "very close to the line."

Senator Porter restated Ms. Bletsch sought advice from legal counsel, but because she was found in violation, her career was ruined in some people’s eyes. He questioned the fairness of this situation. Mr. Scherer suggested the senator may wish to revisit the "full nature and extent" language for possible modification. He indicated many people have been found to have committed a minor technical, though not willful, violation for not disclosing the full nature and extent of the conflict.

Senator Porter stated:

Mr. Scherer indicated because of his own conflict, he was not involved in the hearing on Ms. Bletsch’s case, and therefore does not know the full details. He reiterated if it was the committee’s wish to change a situation, they would have to change the existing language of the statute in NRS 281.501.

Senator Titus indicated on the Senate Floor, many people abstain on issues without specific detail. She questioned whether the senators who did not disclose the details of their conflict, such as the number of shares of stock owned in a company, were technically in violation of the ethics statutes.

Mr. Scherer indicated in his experience the ethics commission has taken the "full nature and extent of the interest" language very seriously and require a detailed disclosure. He indicated there have probably not been complaints filed, and, therefore, these cases have not come to the attention of the commission.

Senator Care questioned, "Who polices the police? Who is to watch the ethics commission?"

Mr. Scherer stated:

Jonathan Andrews, Chief Deputy Attorney General, Civil Division, Office of the Attorney General, stated:

Senator Titus questioned whether the proposed positions of the executive director and the outside legal counsel have been included in the Governor’s budget.

Mr. Scherer indicated the positions had not been funded in the Governor’s budget, but, he noted, the Governor is committed to coming up with a way to pay for them and is prepared to present his proposal for how to pay for those positions to the Senate Committee on Finance.

Mary Boetsch, Chairman, Commission on Ethics, testified to the commission’s support for the Governor’s bill, noting it covers much more ground than S.B. 540, the ethics bill presented by the commission.

Ms. Boetsch suggested S.B. 540 and S.B. 478 be merged to the greatest possible extent and expressed support for most of the proposals in the Governor’s bill. She told the committee of certain suggestions she would make to change S.B. 478. She drew attention to the provision relating to campaign contributions, which requires campaign contributions, once properly disclosed, not be a consideration of the commission. Ms. Boetsch indicated this was added to S.B. 540 because the topic had arisen several times when opinion requests in smaller elections were submitted in which a candidate had most of his or her campaign budget funded by one person. She expressed concern the contribution would become a problem needing to be disclosed at the time an individual is participating in something involving the contributor, stating it would not be appropriate to allow the presumption that the public has read the disclosure statements and knows about that financial relationship. She pointed out this is a philosophical issue, and noted the difference between the two bills presented to the committee. She voiced this was a topic needing to be addressed by the committee as it was an issue continually arising in opinion requests to the ethics commission.

Referring to Senator Porter’s earlier concern regarding former councilwoman Bletsch, Ms. Boetsch indicated the suggestion had been brought up as to whether there should be a third category in which there was neither a finding of violation nor of no violation. She suggested the third category would be helpful to let people know the policies for future reference in the cases, such as incomplete disclosures, where the offense committed does not rise to the level of an actual violation. She stated there had been no suggestion Ms. Bletsch had done anything unethical, but she had not technically complied with the language of the statutes. Unfortunately, she pointed out, when violation determinations are made, the commission has no control over how they are used, contending politics has become increasingly mean spirited and dishonest. In the aforementioned case, she maintained, the woman, who was a fine public servant, was maligned inappropriately. However, she indicated, the commission should not be given the authority to base the determination of a violation on whether or not the determination could be used against a public servant in the future. She suggested the solution may be to find a middle road. Ms. Boetsch recognized the responsibility of the media to be thorough when reporting on ethics violations. As long as campaigning relies on allegations, she remarked, there may not be a true solution.

Chairman O’Connell questioned since everyone has to file a financial disclosure, whether this would cover the language of "full nature and extent" since that disclosure is already made and filed for the public review. Ms. Boetsch explained the financial disclosure statement does not have a full disclosure in the sense the commission has always applied that language. She pointed out her own disclosure statement says she makes money by sitting on the commission, by her profession as a lawyer, and by sitting pro tempore as a judge. She indicated she is not required to disclose the identities of her clients nor the amount of money she makes. In the context of an ethical question, she pointed out, those disclosures may become very crucial. Disclosure on one, she said, is not always going to address the full disclosure required on the other.

Chairman O’Connell questioned when she declares a conflict because her husband is a chairman of a bank, if she should also disclose at that point how much money she has deposited in the bank. Ms. Boetsch responded, "It depends upon the nature of what your disclosure is about; what the context of the inquiry is." Chairman O’Connell said, "There is no inquiry. I am just disclosing why I am not going to vote on the bill." Ms. Boetsch stated:

Chairman O’Connell asked, "If I were voting on the issue, would that be more pertinent to the listening audience, or the fact that I am disclosing the reason I am not voting on the issue …. If I disclosed and voted, then I can see where your comments would come into play. If I disclosed and did not vote, then I cannot see what."

Ms. Boetsch replied:

Chairman O’Connell said, "Or could have, even though it applied equally to everybody." Ms. Boetsch concurred it would depend upon the facts and the circumstances involved.

Senator Raggio noted:

Ms. Boetsch pointed out, "There are some ethical considerations, and if I would be forced to [list clients] I would not take the job."

Senator Neal indicated he agreed to an extent with the findings made by the ethics commission in reference to the aforementioned city councilwoman in Boulder City. He drew the committee’s attention to old language in section 15, subsection 3 of S.B. 478, reading, "A public officer or employee shall not approve, disapprove, vote, abstain from voting or otherwise act upon any matter: regarding which he has accepted a gift or loan; which would reasonably be affected by his commitment in a private capacity to the interest of others; or in which he has a pecuniary interest, without disclosing the full nature and extent of the gift, loan, commitment or interest." He stated the Legislature put this in the law and can take it out. He indicated this language mandates a full disclosure is made if the official is voting and going to be affected in some way.

Senator Raggio drew attention to section 15, subsection 2 of the bill which applies to the Legislative Branch. He commented this was the language he had previously referenced. He stated the city council is a part of the Legislative Branch. He indicated this language recognizes the problems one has being in the Legislative Branch, noting this provision clarifies that the pecuniary interest is not materially affected, where the detriment or benefit to someone is no greater than anybody else in that class. He pointed out the language had been drafted to clarify this situation, stating it was taken from other state laws dealing with legislative ethics.

Senator Neal suggested this be clarified to make it plain and readable. Chairman O’Connell agreed this would be helpful.

Senator Titus questioned in section 15, subsection 3 of the bill, which public officer or employee is referenced if it is not legislators.

Ms. Boetsch stated:

Senator Titus pointed out section 15, subsection 3 of S.B. 478 references public officer so the "full nature and extent" language would apply to the Legislature. Ms. Boetsch pointed out, subsection 2 references disclosure while subsection 3 references abstention. She remarked these have different standards.

Senator Raggio stated, "My point is, on the issue of which would reasonably be affected by ‘his commitment in a private capacity to the interest of others’ is clarified up in subsection 2 as to members of the Legislative Branch. That is the reason I mentioned it."

Senator Titus pointed out section 15, subsection 2 of the bill reads, ‘a member of the legislative branch shall not vote upon or advocate’ while subsection 3 references disclosure. Ms. Boetsch clarified two different provisions exist; one relating to abstention and one relating to disclosure. Senator Titus indicated a member of the Legislative Branch would only have to abstain according to the criteria set forth in subsection 2, while the criteria in subsection 3 sets forth what the public officer or employee must disclose.

Senator Porter pointed out section 15, subsection 3 includes voting and abstaining. Ms. Boetsch indicated it was previously discussed as to when one must disclose regardless of abstention. Subsection 2, she noted, references when one must abstain from a vote.

Ms. Boetsch continued her testimony, indicating S.B. 540 differed from S.B. 478, with respect to subpoena powers. She explained the intention for tightening this language is to enable hearings to be held faster. Currently, she noted, the commission has meetings one month in the north and one month in the south. If someone in the south wants subpoenas, she explained, they must submit the request to the commission at least the month before the meeting so that the commission can vote on the request for subpoenas and issue them in time. She indicated the suggested measure would expedite the process because the commission would not have to vote every time a subpoena is issued. She expressed satisfaction with S.B. 478 as it relates to this matter.

Ms. Boetsch indicated another difference between S.B. 540 and S.B. 478 is the ‘statute of limitations’ language in which the timing of an opinion request has to be filed before the commission can make a determination. She drew attention to section 12 of S.B. 478 and section 1 of S.B. 540, noting some opinion requests received by the commission have been submitted by people requesting opinions about activities which occurred 4 years ago. She stressed the need for establishing a time frame. She expressed concurrence with the language in S.B. 478, but noted it does not address campaign statements. Ms. Boetsch explained a situation which arose concerning an opinion request received during a campaign in which the allegation was made that a statement by an opponent was false. She stated there is no time limit within which these complaints can be brought to the commission. She noted complaints were filed long after the election was over, which, she voiced, is counterproductive to the purpose of the statute. She indicated the suggestion had been made to set a 10-day time limit in which the requests must be filed with the commission in order for the request to be heard. Otherwise, she said, issues are inappropriately brought up weeks after elections.

Ms. Boetsch reminded the committee of the issue raised in the last legislative session regarding people filing opinion requests for vexatious purposes and whether they should be allowed to proceed or whether they should be sanctioned. She indicated her previous position had been if a complaint was filed maliciously and for a vexation purpose, but if the opinion request was true, the commission should still proceed. She indicated in the same situation in which the opinion request is false, the commission need not address the issue. She explained this has become an overly broad and untenable standard. Therefore, she suggested S.B. 478 be amended to say, "false or that the commission determines to be without merit." Ms. Boetsch told the committee that the commission receives opinion requests based upon newspaper articles which may or may not have merit or have been brought forward with a vexatious purpose. She stressed it is impossible to determine whether a newspaper article’s statements are false because no reporter will ever disclose their sources. She recognized the commission may decide the request is without merit and may suspect the allegations are false, but it cannot be proven. She suggested language be added to say, "without merit."

Ms. Boetsch expressed support for S.B. 478 with the aforementioned changes. She said if the bill is passed, the commission will be able to render opinions much faster and conduct business in a more appropriate fashion. She recognized the concern regarding the language "commitment in a private capacity to an interest of another." She stressed it would be extremely counterproductive to segregate out that a private relationship would exempt one from the rules of ethics. She pointed out relationships exist that are personal that any reasonable person would know to be influential. By removing the word "personal" from this definition, she stated, it would "gut" the entire provision as sometimes personal relationships are more compelling than any business relationship. She reiterated the necessity of this language. Ms. Boetsch stated:

Senator Raggio noted, "The problem though … somebody could say, ‘Well she has a personal relationship with that individual.’ That would put you in violation under this new language."

Ms. Boetsch contended, "No, it would not, I am sorry Senator, I disagree."

Senator Raggio replied, "I don’t [do not] know why not. Well, you might say it doesn’t [does not], but somebody is going to say, and file a complaint on that basis. That is the point that we are concerned about."

Ms. Boetsch stated, "I understand, but I have no solution."

Senator Raggio commented:

Ms. Boetsch stated, "Well it says more than just a personal relationship. It has got other qualifiers to it." Senator Raggio pointed out, "It says these are all conjunctive. They are all ‘or any other similar relationship.’"

Ms. Boetsch maintained, "It also says, ‘With whom he has a substantial and continuing … personal relationship.’ Not just a personal relationship, but substantial and continuing. And I think that that language as written in there is designed to avoid the notion of a casual, but perhaps, lengthy acquaintance." Senator Raggio contended, "I am hearing what you are saying, but I am not convinced that the people that are going to cause the problems are hearing what you are saying. That is the problem."

Ms Boetsch stated:

Senator Raggio noted, "We did not use to let third persons bring complaints." Ms. Boetsch pointed out, "And if third persons had not been allowed to bring complaints, some of the things that I think the commission did in the last couple years that were the most important, would never have happened." Senator Raggio said, "I don’t [do not] disagree with that either."

Ms. Boetsch stated:

Senator Raggio said, "We are not getting rid of it. This is being suggested as being added."

Senator Neal questioned:

Senator Neal questioned whether the public official would be required to submit any documentation. Ms. Boetsch responded the public official frequently submits documents in their defense. Prompted by Senator Neal, Ms. Boetsch indicated the commission cannot require them to submit certain information except by subpoena. Senator Neal asked if the kind of information included would be the number of telephone calls and the number of contacts made with the individual to whom the relationship is in question. Ms. Boetsch stated the information requested was dependent on the case. Prompted by Senator Neal, Ms. Boetsch agreed telephone calls and number of contacts would not be ruled out as evidence.

Senator O’Donnell stated a long-lasting, personal relationship is difficult to narrowly define. Ms. Boetsch contended every long-term relationship does not trigger the ethics statute.

Senator O’Donnell, reciting a passage from Price Pritchet’s "The Ethics of Excellence," read:

Senator O’Connell reminded the committee that Ms. Boetsch was present to support S.B. 478 and to identify areas that she thought needed to be brought to our attention, as set forth in S.B. 540. She noted there were conflicts between the two bills, suggesting they chose one option.

Senator Porter stated:

Senator Porter pointed out, "But in the case of the Bletsch circumstance, she did not disclose how many shares, but she did disclose that she had an interest."

Mr. Scherer stated, "I think that, again, that the question is what is the full nature and extent of the interest. And I think that language could perhaps be improved."

Senator Porter remarked:

Mr. Scherer asked, "That you did not know they were a customer at all or you did not know the extent of their coverages." Senator Porter replied, "Both." Mr. Scherer indicated, "I think that if you knew they were a customer but did not know the extent of their coverages, you could disclose that. ‘They are a customer, somewhere, I know back there, but I don’t [do not] know, to tell you the truth, it is not one I deal with regularly enough that I even know what kinds of coverages.’

Senator Porter stated:

Chairman O’Connell questioned Ms. Boetsch whether she would support S.B. 478 without a full hearing on S.B. 540. Ms. Boetsch indicated the only preferred addition to S.B. 478 she had not mentioned previously concerned the issue of providing the commission with the ability to find someone in contempt in "appropriately outrageous" circumstances. She stated she had been advised by counsel that this is not an unusual provision for other administrative bodies and commissions. Ms. Boetsch pointed out some of the ethics commission hearings are contentious and the only recourse is to call for police or recess the meeting in hopes the individual causing the disturbance does not return. She suggested there should be a third option for extreme circumstances to threaten an individual with being held in contempt, as a behavior strategy. She recognized this issue would not be raised often, stating, "But in the cases where we wished we had had the power, we should have had the ability to do that, and there was nothing we could do. And it turns hearings into circuses." With this and other previously made suggestions, Ms. Boetsch expressed support for S.B. 478.

Ms. Boetsch stressed by striking the language, "or personal" from section 15, subsection 7, paragraph (d) of S.B. 478 the statute will not capture private ongoing relationships, having nothing to do with business. She foretold, with the lack of this phrase, the commission would receive excuses indicating personal relationships are acceptable. She declared this language must not be removed, noting personal commitments can be stronger than any business or financial relationship a person can have with more of an influence on a reasonable person. She recognized the validity of the concerns expressed by committee members regarding direction, though, she contended, the statute must be read as a whole. Not every relationship, she emphasized, requires disclosure or abstention, noting it has to be whether a person would be reasonably affected by that relationship. She stated, "Not every round of golf triggers those requirements. Not every lunch triggers those requirements, and the commission has never gone that far. Nor do I ever expect that we would."

Senator Porter maintained:

Senator Neal questioned whether it was the ethics commission’s position that public officials are only supposed to vote on issues that are for the greatest good for the greatest number of people. Ms. Boetsch indicated the ethics commission has never taken a position on this issue as it is not within the purview of the ethics statute. Senator Neal stated, "So we can vote then to … aid one individual if we desired to, right?" Ms. Boetsch said, "I cannot go there either, Senator. You are not giving me enough facts."

Marnie Miller, Concerned Citizen, submitted a prepared statement (Exhibit D) to the committee members. She indicated she was impressed with the care and extent of the committee’s concern regarding the issue of fair treatment. She testified in support of the bill, and requested the bill be amended to give more specific control in the selection of legislators serving on committees by including the requirement they receive no monetary or social benefit from their service on that committee. She requested a written disclosure be filed to this intent. She indicated this would be of help in allowing the committee members to function in the greatest fairness.

Thomas F Reilly, Director, Administrative Services, Clark County; Lobbyist Clark County, testified in support for the bill on behalf of Clark County with the inclusion of the submitted amendment (Exhibit E) regarding personal relationships. He expressed concern regarding the interpretation of ‘personal.’ He indicated the aforementioned amendment suggested by Mr. Scherer would be supported by the county. He indicated the county’s proposed amendment (Exhibit E) would remove the word ‘personal,’ adding the phrase ‘business or other economic relationship.’ He recognized this issue had been previously addressed.

Laura L. Link, Lobbyist, Concerned Citizen, stated:

Ms. Link suggested the public officials disclose their interest on a percentage basis when disclosing an economic relationship. In addition, she expressed concern that the bill lacked an oversight entity to which the commission would need to report. She indicated it might be helpful if there was a report to the Legislature and to the Governor’s Office on a regular basis listing the number of requests received, the number of opinions heard, and other administrative functions. She stated through a reporting mechanism, the issue of opinion requests not being heard would be brought to the attention of these entities, while providing necessary control. She indicated the ethics commission is becoming a regulatory body with very little oversight. Currently, she pointed out, a lawsuit cannot be filed until an opinion is issued, noting the length of time it takes to issue an opinion is a problem due to statute of limitations for lawsuits.

Senator O’Donnell commented the problem with oversight is that it gives the impression that if the ethics commission does not render the proper decisions, then the oversight committee will take action. He pointed out the oversight committee is subject to the laws, rules, and regulations of the ethics commission. He stated it could give the appearance to attempting to influence the ethics commission which, he maintained, is not what the Legislature wants to do.

Ms. Link indicated she did not intend the suggestion as an influence mechanism, but as a reporting mechanism. She pointed out her suggestion was the report be sent to both the Legislature and the Governor. She stressed currently there is no place for citizens to file a complaint regarding ethics commission’s issues. She reiterated she and other residents of Washoe County are concerned their requests are not being heard and have no system of recourse.

Senator O’Donnell restated, "… I am just saying that I think we don’t [do not] want to get into a position of overseeing the ethics commission after we have promulgated the law to allow them to do what they do and then us come through the back door. It is a sense of impropriety, I think …. we are in a catch 22."

Ms. Link suggested the report then be filed with the Nevada Supreme Court. She reiterated her desire for an official reporting mechanism.

Senator O’Donnell asked Mr. Scherer when a complaint is filed to the ethics commission whether there is any mechanism to take depositions or depose the complainant. He noted when a case is filed for a civil action in a district court, the plaintiff and the defendant have the right to depose one another. He pointed out this is not true for the ethics commission.

Mr. Scherer confirmed this was not allowed in ethics commission cases, noting it was not allowed in many administrative proceedings as there are not the full discovery rules found in civil proceedings. He pointed out civil trials take a minimum of 2 years, and suggested full discovery rules are not ideal for ethics commission cases. He indicated the ethics commission should adopt some rules of procedure that specifically provide for exchange of documents and exchange of witness lists. Mr. Scherer clarified:

Mr. Scherer noted sometimes a complaint is filed by the commission itself, stating there is not always a specific person who has filed a complaint. He indicated he was concerned about the time it would take, noting scheduling depositions is frequently difficult. He expressed concern about the potential for abuse in attempting to scare away a complaint. He pointed out the rules for depositions are more relaxed than for the rules of an administrative hearing, stating it is not just limited to questions that are relevant, but questions that might be reasonably calculated to lead to admissible evidence. He stated, "I am concerned we might be opening Pandora’s box with that …. I certainly would not want to see depositions of more than just the person filing the complaint, and the person who has been charged. If we open it up beyond that to other witnesses, I think you really create a situation were we are not going to be able to meet any reasonable time limits with cases."

Senator O’Donnell pointed out, "Okay, well then we must assume that the ethics commission has a different standard than the constitutional rights of the average person in America. Because what you are saying to me is that I can have a complaint filed against me, but my rights would then be limited because I could not depose the person who has filed a complaint against me."

Mr. Scherer stated, "Senator, you would be entitled to get a subpoena, bring that person to the hearing and your attorney would be able to cross examine them and ask them questions at the hearing."

Senator O’Donnell remarked, "But I am not entitled to full discovery." Mr. Scherer confirmed, "You would not be entitled to full discovery and there is no constitutional right to full discovery. Due process entails notice and an opportunity to be heard, and you would have that at the hearing. And that is typically the case in virtually every administrative proceeding we have. There are very few administrative agencies where there are full-discovery rights."

Senator Porter questioned:

Senator Neal recognized, "… If it is a situation whereby the negative vote would enhance his pecuniary interest, and he says, ‘I will abstain,’ the abstention is just like a ‘no’ vote."

Janine Hansen, Lobbyist, Nevada Eagle Forum, stated, "I will also be representing some other interests today which I would like to disclose. I am the constitutional issues’ chairman for the National Eagle Forum. I am the chairman of Nevada Families Political Action Committee. I am the candidate filing officer for the Independent American Party and the national committee woman."

Ms. Hansen expressed appreciation to the committee for their careful deliberations on the ethics commission statutes. She drew attention to a letter to the editor (Exhibit F) written by John Reese. Mr. Reese indicated in his letter that he had financed his own campaign, and because he failed to file a campaign finance report upon losing the election, he was fined $2,775. His letter stated, "I want to warn anyone who isn’t [is not] financed heavily by special interests to stay out of politics or elections. The process is too complicated." Ms. Hansen stated when she testified last session in opposition to the campaign finance proposal, she foretold the provision would limit and deter activity for those who could not afford an attorney or an accountant. She stated the results of these laws is to make honest people less likely to participate in the process. She mentioned Senator Raggio’s previous comments regarding strict rules which would discourage people from serving on committees.

Ms. Hansen stated her opposition to S.B. 478, explaining:

Senator Raggio stated that on any felony, there is the right of trial by jury as held by the U.S. Supreme Court. Ms. Hansen concurred, but noted the Nevada Constitution also refers to a right to trial by jury for civil violations unless it is waived by both parties.

Ms. Hansen continued:

Ms. Hansen drew attention to section 6, subsection 1, paragraph (c) of S.B. 478 which authorizes the commission to gather information, conduct investigations, submit recommendations, and recommend regulations and legislation. She alluded to the violation of the separation of powers previously mentioned. She pointed out section 7, subsection 1 of the bill regarding the mandate that every public officer must read and acknowledge the statutory ethical standards, contains the criteria that "willful refusal to execute and file the acknowledgment required by this subsection constitutes nonfeasance in office and is a ground for removal." Ms. Hansen commented that during the last campaign a couple of Independent American Party candidates refused to file certain forms, citing the Uniform Commercial Code 3-501 which allows refusal for cause without dishonor. She indicated she had signed disclosure statements under protest due to her feelings that they violate her constitutional right for freedom of speech. She recognized she filed for the Nevada Families Political Action Committee, statements to the secretary of the state under protest.

Ms. Hansen called the committee’s attention to section 8, subsection 3 of S.B. 478 and section 10, subsection 4 regarding the provision that only 4 members can be from one political party. She questioned whether any representation was assured for minor parties. She pointed out Nevada has 3 minor parties including the Libertarian Party, the Natural Law Party and the Independent American Party.

Ms. Hansen expressed concern the ethics commission is allowed to issue subpoenas and render opinions, stating this combines the functions of government. She commented on section 16, noting the bill gives too much power to the executive director. She indicated section 18 provides the imposition of penalties up to $25,000 without the benefit of trial by jury. She stressed this is a violation of our constitutional rights. She declared it is inappropriate for the ethics commission to exercise all of the powers of government, and referenced her previously stated concerns about the IRS.

Ms. Hansen pointed out section 18, subsection 5, paragraph (b) of the bill references filing in a court for removal from office. She said the Nevada Constitution gives the Legislature the right to remove from office its own members if they find a violation, and she questioned whether they want to give a commission this right as well. She again expressed concerned about giving the ethics commission too much power. She stated the felony charge is an incredible penalty to place on people who might have made a mistake, misunderstood, been ignorant of, or misinterpreted the law. She stressed the bill would stop public participation in government because, she said, "people are not going to be willing to be subject to the whims of some commission and end up being subject to a Category E felony."

Ms. Hansen pointed out some of the deliberations of the ethics commission are held in secret, noting the law requires the public to be allowed to participate in all deliberations of government. She questioned the reason the ethics commission should be allowed to hold meetings that are not open to the public. She reiterated previously discussed concerns regarding the definition of ethics and the issue of oversight.

Ms. Hansen quoted from Professor Bradley Smith from the Wall Street Journal as set forth in Exhibit F, regarding regulating political speech, indicating campaign finance reform is "bad policy." She asserted the ethics commission has become a major campaign issue because people file against candidates in order to gain political advantage. Ms. Hansen quoted U.S. Supreme Court Justice Clarence Thomas (Exhibit F), stating campaign reform serves to, "protect incumbents and to increase the influence of special interest groups." She noted the burden of the ethics law on incumbents as well. She suggested the committee review A.B. 130 which repeals major portions of the ethics law.

Ms. Hansen paraphrased from Senator O’Donnell’s previous statement, "Ethics are written on our hearts and they cannot be written in this manner in the law, except to violate our constitutional rights." Ms. Hansen stated:

Lucille Lusk, Lobbyist, Nevada Concerned Citizens, testified to the concern of turning the ethics commission into a quasi court with their own counsel, subpoena power, increasing civil and criminal penalties, conflicts of interest, and the ability to find someone in contempt. She pointed out the ethics commission is extremely political, noting it is found largely under the Executive Branch, thereby blurring the system of checks and balances. She suggested the ethics commission may be creating a buffer zone of protection for a truly corrupt politician by keeping them out of court when a real crime has been committed.

Ms. Lusk commented on Senator Raggio’s earlier concern regarding the overkill of the ethics commission with regards to petty cases, noting it is essentially the formation of a truth police with fines up to $25,000. She suggested the Legislature needs to "start from scratch" regarding ethics statutes. She remarked if the crime is serious enough to need a court, the case should be in the courts where the people are trained to judge properly. She stated, "If we are talking about judgement calls, political speech, personal friends, perhaps we ought to let the people decide if we want that officer as our representative. We have the ability to use the conscience written upon our hearts just as you have the ability to use it." She urged the committee to reopen the political discourse to the judgement of the people.

Ms. Lusk drew attention to section 16, subsection 3 of S.B. 478 which concerns the amount of power given to the executive director. She pointed out the executive director would present his or her recommendations of opinion requests to the commission for decision. She stated, from a practical point of view, it is extremely unlikely that the whole commission will review the issue as the reason set forth for establishing an executive director, concerned time constraints. If the commission is going to have to review the requests anyway, she stressed, there is not going to be any time saved. Ms. Lusk indicated the bill gives one person a "massive amount of unilateral power." She stated this provision, "opens up a room for lots of mischief."

Ms. Lusk drew attention to section 4, subsections 12 and 13 of S.B. 540, noting this provision was previously mentioned for consideration of amending S.B. 478. She commented the provision allows the commission to become more of a quasi court by giving the ability to find a person in contempt of the authority. She stressed not all other public bodies have this power, noting other action can be taken such as gaveling to a recess or calling the police. With the political nature of this process in mind, she questioned what would constitute ‘insolent behavior’ toward a member of the commission during a hearing. She stated:

Senator O’Donnell questioned Ms. Lusk’s opinion on his previous comments regarding conscience. He stated:

Senator Neal stated, "I would just like to say that I come from the school of Voltaire, that I might disagree with what you say, but I will defend with my life, your right to say it."

With no further testimony on S.B. 478, Chairman O’Connell closed the hearing. The chairman noted S.B. 541 would be discussed at another time, and she requested testimony on S.J.R. 15.

Ms. Hansen referred to Article 1 of the U.S. Constitution which requires an "actual enumeration" of the population for a census, and stressed the importance of this provision. She indicated all of the decisions being made in terms of voting districts and reapportionment concern the integrity of the election process as based on the census. She recognized the importance of the citizen’s confidence in the accuracy of the census and that the figures are not statistically projected. She expressed the support for the bill, restating it contributes to the integrity of the election process.

Chairman O’Connell indicated S.J.R. 15 would be further discussed at a later hearing. She closed the meeting at 7:35 p.m.

RESPECTFULLY SUBMITTED:

Angela Culbert,

Committee Secretary

APPROVED BY:

Senator Ann O'Connell, Chairman

DATE: