The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:15 p.m., on Wednesday, April 28, 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 Terry Care

COMMITTEE MEMBERS ABSENT:

Senator Dina Titus

STAFF MEMBERS PRESENT:

Amelie Welden, Committee Secretary

OTHERS PRESENT:

Chairman O’Connell opened the hearing on Assembly Bill (A.B.) 12.

Carole A. Vilardo, Lobbyist, Nevada Taxpayers Association, testified in support of A.B. 12. She explained the bill is a "refinement" of a similar bill, A.B. 171 of the Sixty-ninth Session, which "got lost in the shuffle."

Ms. Vilardo asserted state agencies can currently assess fines against businesses that are not in compliance with relevant regulations. She indicated ignorance of such regulations is not considered a valid excuse, and businesses are libel for compliance in multiple areas, as set forth in Nevada Revised Statutes (NRS) chapter 233B. She added, "The law is defined as statute or regulation, the Nevada Administrative Code [NAC]."

Ms. Vilardo asserted monetary penalties have been imposed based on "things a businessperson could not possibly know existed." She emphasized such items were neither in code nor in statute, but were interpretations, policies, findings, and "internal-type documents." Ms. Vilardo reiterated businesspersons could be considered out of compliance, even though they had no reasonable way to know such documents existed. She stated A.B. 12 was requested for that reason.

Ms. Vilardo explained A.B. 12 would be incorporated into NRS chapter 233B. She maintained:

Ms. Vilardo indicated A.B. 12 was "amended from" A.B. 171 of the Sixty-ninth Session through multiple workshops in an attempt to alleviate the concerns of many deputy attorneys general, who believed the original bill would open up constant litigation.

Ms. Vilardo stated section 1 of A.B. 12 contains a specific reference to an exclusion from the bill’s requirements, as set forth in paragraph (l), subsection 2, section 2 of the bill. She contended that exclusion would accommodate a requirement for the Nevada Occupational Safety and Health Review Board to do a certain amount of safety inspections. She elaborated that organization is required to assess fines, and if it does not do so, the federal government could take over its responsibilities.

Ms. Vilardo stated:

Ms. Vilardo continued paragraph (d), subsection 1, section 2 of A.B. 12 adds to the definition of a regulation, "The general application by an agency of a policy, interpretation, process or procedure to determine whether a person is in compliance … ." She contended that paragraph "sets up what we have a right to know, what we can reasonably expect, and it provides for that level of documentation."

Ms. Vilardo indicated Assembly-side workshops on the bill resulted in a "laundry list" of items which "would have presented a problem" if they were not included in subsection 2 of section 2 of A.B. 12. For example, she maintained internal-policy and internal-audit manuals used to train and provide guidance to employees should not be part of the regulatory process. She asserted other items which should not be part of that process include advisory opinions issued by agencies that are not of general applicability, as well as published opinions of the attorney general. Ms. Vilardo pointed out these exclusions involve documents that are already published. She stated, "So we agreed that rather than go through the full procedure of [NRS chapter] 233B, where you would have the ability to see written documentation ahead of time, that we would exclude those."

Ms. Vilardo expressed A.B. 12 would also accommodate agencies such as the Department of Human Resources, "which, in some cases, has a federal guideline or statute that comes down that is simply codified." She explained, "That is generally known, so we did not feel that we needed to put agencies through this full regulatory process again."

Ms. Vilardo continued paragraph (l), subsection 2, section 2 of A.B. 12 would exclude situations in which agencies take emergency actions that are necessary to protect public health and safety. She commented:

Ms. Vilardo asserted the attorney general’s office might prefer broader exclusionary language. She stated the language in A.B. 12 is "probably as far as [the Nevada Taxpayers Association and other trade associations] want to go."

Ms. Vilardo distributed a proposed amendment to A.B. 12 (Exhibit C). She explained the proposed amendment would change subsection 2 of section 2 to include a paragraph (o), reading "the establishment of hunting and fishing seasons by the Department of Wildlife." Ms. Vilardo contended this amendment is an effort to "try and make sure we covered and did not put a hardship on agencies." She expressed the proposed paragraph would allow the establishment of hunting and fishing seasons to be considered outside of NRS chapter 233B. She added:

Ms. Vilardo noted the proposed amendment would also take the word "general" out of paragraph (m) of subsection 2 of section 2 of A.B. 12. She asserted that change would provide clarity and would "allow for more situations." She indicated:

Senator Care commented paragraph (d) of subsection 1 of section 2 of A.B. 12 is vague. He questioned whether that paragraph contemplates a written document, a compilation of internal memos or letters, or something else.

Ms. Vilardo responded:

Senator Care noted:

Ms. Vilardo agreed. She elaborated:

Ms. Vilardo noted four workshops with various agencies and trade groups had been held to address A.B. 12. She further commented three committee hearings had addressed the bill. She expressed:

Senator Care suggested clarifying the bill to require that relevant documents be tangible and in writing. Ms. Vilardo agreed with that suggestion.

Senator Neal commented the regulatory process is supposed to track the law. He indicated regulations should be gauged by statutes, and statutes by the constitution. He maintained A.B. 12 would create a "whole new body of administrative law governing the regulation process." Senator Neal expressed, "I can see that that would be kind of an incumbency upon the process and also the statute. … You’re [You are] getting very close to making the regulation the law." He asserted regulations should not be laws, but should be rules that carry out the mandates of the Legislature.

Senator Neal stated section 2 of A.B. 12 defines a regulation, and some of the language "seems to go beyond the statutory requirements which an agency is supposed to be carrying out." He raised concern about having such language put into statute because regulations should not be equal to statutes.

Ms. Vilardo agreed, "It would be so much easier if you could say to a businessperson, ‘… The law is statute.’" She noted A.B. 12 would apply only when an agency assesses a monetary penalty on a business or an individual. She said:

Senator Neal asserted:

Ms. Vilardo responded, "I specifically know that the administration is supportive of this bill."

Amy Halley Hill, Lobbyist, Las Vegas Chamber of Commerce, and Retail Association of Nevada, testified in support of A.B. 12. In response to a question from Chairman O’Connell, Ms. Hill stated various businesses have had problems with certain state agencies over the past few years. She elaborated some state agencies have internal policies which seem to differ from case to case. She emphasized A.B. 12 would provide uniformity.

David L. Howard, Lobbyist, Greater Reno-Sparks Chamber of Commerce, offered further support for A.B. 12. He asserted the bill is part of a "continuing overhaul of NRS [chapter] 233," and other bills on the same subject will be forthcoming.

Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association, also testified in support of A.B. 12. He indicated the Nevada Motor Transport Association has had problems with some state agencies, and A.B. 12 would help eliminate such problems.

Senator Neal asked for explanation of paragraph (n) of subsection 2 of section 2 of A.B. 12. Mr. Capurro indicated that language was suggested by the Nevada Department of Transportation.

Ms. Vilardo clarified the language in paragraph (n) of subsection 2 of section 2 of A.B. 12 came from A.B. 171 of the Sixty-ninth Session. She explained that paragraph is necessary due to relevant schedules of fines, fees, and assessments. She stated:

Senator Neal asked if traffic laws address those situations. He further asked if A.B. 12 would affect municipal- and county-level ordinances. Ms. Vilardo answered no and expressed paragraph (n) of subsection 2 of section 2 of A.B. 12 addresses "thaw-cycle" and highway-patrol issues. She elaborated, "The specific statutory site identifies this narrow band that we didn’t [did not] want to impact anybody on relative to having to do regulations. That’s [That is] why it’s [it is] excluded."

Senator Neal clarified the paragraph in question is an exclusion. Ms. Vilardo agreed.

Mr. Capurro stated, "An excellent example … is the freeze-thaw-cycle legislation that you passed last time and amended this time."

Cheryl C. Blomstrom, Lobbyist, Nevada Chapter of Associated General Contractors offered support for A.B. 12.

Douglas E. Walther, Senior Deputy Attorney General, Office of the Attorney General, testified the attorney general’s office questions whether A.B. 12 is the best way to address the relevant problems. However, he noted the office has participated in discussing the legislation, and many of the office’s concerns have been addressed in amendments to A.B. 12.

Mr. Walther distributed copies of a letter outlining some previously proposed amendments, as well as a proposed amendment for the committee’s consideration (Exhibit D). He maintained his letter describes some amendments that "made it into the second reprint [of A.B. 12] in some form." However, he pointed out some differences exist between his suggested language and that of the adopted amendments. He commented he has no objection to the amendments proposed earlier in the hearing.

Mr. Walther indicated one issue involves the prior-notice provision set forth in paragraph (m) of subsection 2 of section 2 of A.B. 12. He expressed the attorney general’s office suggested this exception because of state-agency practices. He elaborated some state agencies issue regular bulletins or newsletters, and some distribute published and unpublished attorney general opinions to the appropriate industries. Mr. Walther asserted some agencies also use their newsletters to provide their positions on and interpretations of statutes and regulations. He contended such practices give businesses guidance as to agency expectations. Mr. Walther continued if businesses have prior written notice of an agency’s position on or interpretation of a statute or regulation, the businesses should be held accountable for that information.

Mr. Walther indicated, "The difference between the way we had proposed the amendment and the way it ended up in the bill, though, was the removal of the phrase ‘written or’ before the word ‘actual’ on line 30 [of page 2 of A.B. 12]." He raised concern that the bill, as written, would give state agencies the burden of showing that a person had received actual notice of a written interpretation or attorney’s opinion. He commented, "It is very difficult to try to prove affirmatively what is going on in someone’s head." Mr. Walther maintained including "written prior notice" would be "sufficient and fair." He stated if a business receives a newsletter about an industry for which it is licensed, the business should be expected to read that information. He emphasized an agency should not have to prove that a business received, read, and understood a newsletter.

Mr. Walther also raised concern about the adopted amendment regarding attorney general opinions. He stated the attorney general’s office does not represent all state agencies, some of which have their own public or private attorneys. He indicated these public or private attorneys assist the agencies in interpreting and applying laws. Mr. Walther suggested the adopted amendment should be changed to include any agency’s attorney’s opinion and any written opinion. He explained some agencies do not have formal published opinions from the attorney general’s office, and he noted the office writes "far more" unpublished opinions than published ones. He expressed the attorney general’s office would have an incentive to formally publish more opinions if A.B. 12 excluded opinions that are written, but unpublished. Mr. Walther elaborated only published opinions would be of value in setting forth standards of conduct under the first reprint of A.B. 12, since the bill would not allow unpublished, written opinions to be used to put businesses or the public on notice of agency expectations. Mr. Walther mentioned sending out unpublished opinions for notification purposes is currently "typical."

Mr. Walther requested that the committee consider the issues he raised when considering proposed amendments to A.B. 12.

Chairman O’Connell asked if Mr. Walther’s proposed amendments were presented when A.B. 12 was heard in the Assembly. Mr. Walther replied they were presented to Ms. Vilardo during a workshop on A.B. 12. He noted the attorney general’s office did not comment on the reprint of the bill on the Assembly side, though the office participated in discussions to prepare the amendments. However, he expressed the amendments "came out a little bit differently than we had proposed." Mr. Walther concluded some disagreement might exist regarding the scope of the amendments.

Senator Neal pointed out Mr. Walther was addressing the first reprint of A.B. 12. Senator Neal further noted subsection 1 of section 2 of the bill defines a "regulation." He asserted that language is vague, and he expressed concern with setting out exclusions in the bill. He maintained issues could arise regarding matters not considered in the exclusions. Senator Neal indicated, "We go through the whole list of exclusions, … which then say to the reader that if it’s [it is] not excluded, then all of these other things that we don’t [do not] know about might be included." He asked if that situation could create other problems or exacerbate the problem the bill intends to correct.

Mr. Walther answered Mr. Neal’s comments outline a potential problem that "probably exists whenever you’re [you are] amending language or creating a rule with a bunch of exceptions." Mr. Walther stated various agencies have different procedures, so every situation could not be covered. He said, "While there was a great willingness to look at those specific situations, we were concerned that we may not have heard from all the agencies or all the situations that this could apply to, and that would create a problem after the fact."

Mr. Walther added a potential problem could exist regarding unintended side effects of the language in A.B. 12. He explained the exceptions in the bill are not intended to "broaden the rule," but to "more clearly define the rule." He continued:

Chairman O’Connell closed the hearing on A.B. 12 and opened the hearing on A.B. 203.

Libby Jones, Assistant to the Director, South, Department of Employment, Training and Rehabilitation (DETR), testified A.B. 203 clarifies the duties of DETR’s rehabilitation administrator.

Senator O’Donnell asked if A.B. 203 would require the administrator to do anything differently than he or she currently does. Ms. Jones answered no and explained the rehabilitation service administration in Region 9 requested that the proposed language in A.B. 203 be put back into statute for clarification purposes. She expressed this language was "deleted by description" during a 1993 reorganization.

Senator Neal asked if A.B. 203 addresses the classified or unclassified status of the rehabilitation administrator. Ms. Jones answered no.

Senator Neal asked if the rehabilitation administrator is currently a classified or unclassified position. Ms. Jones replied the rehabilitation administrator is an unclassified position that serves at the pleasure of the director, who serves at the pleasure of the Governor.

Senator Neal commented, "So it’s [it is] two unclassified positions." Ms. Jones responded, "That’s [That is] correct."

Senator O’Donnell asked if those positions are currently classified. Ms. Jones answered no and reiterated the administrator is an unclassified position appointed by the director of DETR.

Senator O’Donnell asked again if A.B. 203 would change any employee’s classified or unclassified status. Ms. Jones replied no.

Senator O’Donnell questioned the necessity for A.B. 203. Ms. Jones reiterated the bill was requested by the rehabilitation service administration in Region 9 to further clarify the job description of the rehabilitation administrator. She concluded, "It changes nothing."

Chairman O’Connell closed the hearing on A.B. 203 and opened the hearing on A.B. 254.

Thomas J. Grady, Lobbyist, Nevada League of Cities and Municipalities, indicated A.B. 254 is sponsored by that organization. He noted, "[The bill] was a unanimous vote out of our legislative committee." He further pointed out the bill passed in the Assembly by a vote of 41 to 0, with one assemblyperson absent.

Mr. Grady asserted A.B. 254 is a "simple bill" which would not affect Clark or Washoe counties. He expressed the bill would assist smaller rural Nevada communities that are considering incorporation. He explained A.B. 254 addresses "the density and the 7-mile limit" found in NRS chapter 266.

Mr. Grady continued the Fernley area, with a population of approximately 9,000, is currently considering incorporation. He stated if Fernley decided to incorporate under existing law, it would incorporate "from the Churchill County line, to the Washoe County line, to the Storey County line, and over the hill into Silver Springs." Mr. Grady mentioned that area comprises "about 1/3 of the county," and he said Fernley does not want to incorporate such a large area. He asserted A.B. 254 would enable Fernley to "do less than the entire township."

Mr. Grady added the Spring Creek area in Elko County is not presently considering incorporation, but hopes to do so in a few years. He indicated that area is currently within 7 miles of Elko, the county seat, and is basically divided into three sections: smaller lots for "mobile modular" homes; larger, "more estate-sized" lots; and "the horse palace," which has 3- to 5-acre lots. Mr. Grady explained, "With the density requirement of this bill, they would not be able to incorporate." He contended A.B. 254 would provide that rural areas would not have to meet the density requirement of four persons per acre. He commented Spring Creek is currently a homeowners association with approximately 15,000 residents. Mr. Grady mentioned Spring Creek has a high school and a middle school, and he suggested the area will soon "have to move into some type of a government." He noted the Nevada League of Cities and Municipalities believes Spring Creek should probably consider a town form of government at this point.

Mr. Grady continued Dayton is considering "doing something" regarding incorporation or a township. He related Dayton is within 7 miles of Carson City, and he stated current law is confusing as to whether the 7-mile limit includes cities that are in different counties. He maintained A.B. 254 would clarify the law on that point.

Chairman O’Connell asked if Fernley would have problems providing services to residents. Mr. Grady responded Fernley currently provides most appropriate services. He elaborated Fernley is discussing an interlocal agreement for a sheriff, and he noted the area is already providing parks, water, sewer, and a portion of roads. He added the county is handling a portion of the roads, as well.

Chairman O’Connell asked if Fernley would gain a tax advantage by incorporating. Mr. Grady answered no. He stated, "They already have part, and I’m [I am] not sure, I believe they’re [they are] at about 22 cents on the ad valorem rate." He expressed Fernley currently does not levy that full rate. Mr. Grady asserted Fernley is growing rapidly and has a strong industrial base. He indicated Fernley representatives have to travel across the county to Yerington for planning and zoning purposes, and that is a major reason Fernley is considering incorporation.

Chairman O’Connell asked how far it is from Fernley to Yerington. Mr. Grady replied the distance is about 60 miles.

Senator O’Donnell commented:

Mr. Grady reiterated Fernley already has a tax rate and a school system. He indicated Fernley operates differently from southern Nevada town boards because it has an elected town board.

Senator O’Donnell asked if Fernley has a mayor. Mr. Grady replied no and stated Fernley has a town manager, a town council, and a chairman of its town board.

Senator O’Donnell asked how that system would change if A.B. 254 passed and Fernley incorporated. Mr. Grady answered Fernley would then have a mayor. Senator O’Donnell asked if the mayor would have a salary. Mr. Grady replied affirmatively and noted town council members currently have a salary. He explained Fernley could not incorporate without submitting a budget for approval by the Committee on Local Government Finance and the county commissioners. Mr. Grady mentioned the process takes approximately 2 years.

Senator O’Donnell asked if Fernley would have a town tax. Mr. Grady reiterated Fernley currently has a town tax. Senator O’Donnell asked if the town tax would increase if Fernley incorporated. Mr. Grady responded, "Probably not." He expressed that question cannot be definitively answered until Fernley submits a proposed budget for incorporation. He added Fernley believes it could incorporate without a tax increase. Mr. Grady emphasized Fernley has a 22-cent rate, but currently levies only 17 cents of that amount.

Chairman O’Connell closed the hearing on A.B. 254 and opened the hearing on A.B. 588.

Bill Moell, Chief, Purchasing Division, Department of Administration, read from prepared testimony in support of A.B. 588 (Exhibit E). He indicated Brett Kandt, Deputy Attorney General, Contract Unit, Civil Division, Office of the Attorney General, is counsel for the Purchasing Division. Mr. Moell stated Mr. Kandt would offer further remarks on A.B. 588.

Mr. Moell testified A.B. 588 would codify the centralized procurement of services over $100,000. He noted authorization previously occurred through appropriation and through chapter 1596 of the State Administrative Manual (SAM). He continued a 1995-96 task force found a lack of consistency in the solicitation, evaluation, and contracting of large service procurements. Mr. Moell asserted the task force suggested the Purchasing Division should use public purchasing principles to provide central procurement for services over $100,000.

Mr. Moell stated necessary staff for such a provision was approved during the last biennium. He commented the Purchasing Division has since hired staff, established appropriate procedures, written a manual regarding requests for proposals (RFPs), and considered 86 RFPs. Mr. Moell asserted, "Customers that use us the first time quickly bring other projects to us." He explained the Purchasing Division is involved with the process from discussion with the customer through signing of the contract.

Mr. Moell concluded, "Last biennium, we testified we would delay the implementation of statutory authorization until this session to reap the benefit of the learning curve. This bill is the culmination of our efforts."

Mr. Kandt reiterated he is counsel for the Purchasing Division and noted he is responsible for overseeing state contracting on behalf of the attorney general. He read from prepared testimony regarding the purpose and effect of A.B. 588 (Exhibit F).

Mr. Kandt stated NRS 284.173 allows state agencies to engage independent contractors with approval from the State Board of Examiners and the attorney general. Mr. Kandt asserted Nevada lacks a comprehensive statutory procedure to govern the procurement of service contracts. He maintained A.B. 588 would "remedy this gap" by amending NRS chapter 333 to establish a process for procuring service contracts pursuant to NRS 284.173. He noted A.B. 588 would not affect contracts outside the scope of NRS 284.173.

Mr. Kandt continued the state purchasing act originally governed the procurement of goods, and service procurements are addressed only in NRS 333.165 and NRS 333.275. He expressed NRS 333.165 allows the purchasing administrator to secure services contracts for agencies upon request, and NRS 333.275 requires agencies to work with the attorney general and the Purchasing Division on large-dollar contracts.

Mr. Kandt mentioned NRS chapter 333 and SAM chapter 1500 govern services procurement by the Purchasing Division. He elaborated service contracts are obtained by issuing an RFP and evaluating proposals pursuant to current law.

Mr. Kandt continued agency-direct procurements must currently comply with NRS 284.173, the State Administrative Manual, and any regulations promulgated by the agency. He added the contracting agency must also determine whether the procurement must comply with any applicable federal laws.

Mr. Kandt asserted A.B. 588 would codify existing SAM procedures for state contracting and would remedy inconsistencies in NRS chapter 333. He emphasized the bill would ensure that contracts for services are properly solicited, fairly and consistently procured, and in the best interest of the state.

Mr. Kandt summarized the sections of A.B. 588, as set forth in his prepared testimony (Exhibit F). He noted section 2 of the bill addresses regulations for contract procurement, proposal evaluation, and contract negotiation. He continued section 6 would "allow agencies to benefit from the Purchasing Division’s expertise when contracting for services for which the estimated value is in excess of $100,000." Mr. Kandt commented section 7 "would not preclude agency-direct procurements that are in the best interest of the state." He summarized section 7 of A.B. 588 addresses proposal evaluation, evaluation committees, and awarding of contracts. He stated section 9 would provide that all contracts entered into pursuant to NRS 284.173 would be awarded pursuant to NRS chapter 333. Mr. Kandt concluded sections 3, 4, 5, and 8 would remedy inconsistencies, and section 10 would repeal NRS 333.275, which would no longer be necessary.

Chairman O’Connell asked, "What do you consider in the best interest of the state?" Mr. Kandt answered, "That would depend on the nature of the procurement."

Chairman O’Connell commented she would like to see the criteria which would be used if the bidding process is eliminated. Mr. Moell responded, "… Cheapest is not always least expensive." For example, he explained a state agency might release an RFP for an advertising contract. He continued the cheapest bid might be $100,000, and the next-cheapest bid might be $500,000. Mr. Moell maintained the services provided by the lowest bidder "might not be very good." He contended the Purchasing Division considers various areas during evaluation "to see if the difference in price is worth the extra money." He explained spending $100,000 on a "bad project" could be "throwing money away," so spending $500,000 on a better project could be in the best interest of the state.

Chairman O’Connell indicated she understands that logic, but she would like to see a "measurement" the Purchasing Division would use. Mr. Moell responded the division predetermines evaluation criteria. He added those criteria are weighted and kept confidential, and price is just one of the criteria used during proposal evaluations. Mr. Moell concluded the proposals that rate best overall may not carry the cheapest prices. He expressed the state gets the best value by using evaluation criteria and by using an evaluation committee’s analysis.

Senator O’Donnell asked, "How come you want to abrogate your responsibility of purchasing to using agencies if it’s [it is] under $100,000?" Mr. Moell replied the Purchasing Division does not have enough staff to address contracts for amounts less than $100,000.

Senator O’Donnell asked if agencies are currently allowed to do purchasing. Mr. Moell answered agencies are allowed to do so only for services, not for goods.

Senator O’Donnell commented, "I notice you’ve [you have] got language on here that says … if it’s [it is] $100,000 or more, it’s [it is] deemed a contract for services. If it’s [it is] $100,000 or less, it’s [it is] deemed a contract for goods."

Mr. Moell responded, "No, sir." He indicated a threshold had to be set, and $100,000 "seemed to make a lot of sense." He explained the Purchasing Division does not want to maintain a "huge staff" and do all contracts for services. He continued:

Chairman O’Connell referenced a recent audit on the Division of Child and Family Services. She asked, "Have they been taking on this responsibility right now?" Mr. Moell answered the Purchasing Division has been working with the Division of Child and Family Services. He asserted A.B. 588 would require procurement of services to be done in a consistent manner throughout state government. He commented no criteria regarding this issue previously existed. Mr. Moell indicated A.B. 588 would require that agencies provide proper notice and use appropriate standards for all contracts, regardless of the amount. He added contracts would have to be on a form approved by the attorney general. He contended A.B. 588 would set standards for not only large-dollar contracts, but also small-dollar contracts.

Chairman O’Connell commented, "And those agencies are supposed to use that as a guideline." Mr. Moell responded affirmatively.

Chairman O’Connell asked if this issue has anything to do with the transition of children from temporary to foster homes, or with finding care for such children before they are placed in foster homes. Mr. Moell replied affirmatively. Chairman O’Connell recalled the aforementioned audit showed the Division of Child and Family Services averages about 344 days before placing children in foster homes. She mentioned the situation costs the division a substantial amount of money because the transition period is more expensive than having a child in a foster home. She stated, "If you are involved in that, could you kind of give us any insight as to what’s [what is] going on there? Because it would appear that the present system is not working as well as it needs to work."

Mr. Moell responded the Purchasing Division analyzed whether it could add value to the process by issuing RFPs for the relevant services used by the Division of Child and Family Services. He indicated the Purchasing Division concluded it could not add any value, so it directed the Division of Child and Family Services to proceed with the agency-direct approach. Mr. Moell expressed the Division of Child and Family Services has difficulty finding foster placement, and an RFP cannot help in that circumstance.

Senator Neal asked if "competitive selection" is defined in A.B. 588. Mr. Kandt answered no. Chairman O’Connell asked if the NRS contain a definition for that term. Mr. Kandt replied no.

Senator Neal commented competitive selection would take the place of an invitation to bid. Mr. Kandt responded that statement is not correct. He said statutes would still provide for the use of invitations to bid when appropriate. He added NRS 333.162 provides that the chief of the Purchasing Division will designate the proper method of obtaining a contract, and that method could be an invitation to bid, an RFP, or another process.

Citing subsection 3 of section 3 of A.B. 588, Senator Neal read, "’Invitation to bid’ means a written statement which sets forth the requirements and specifications of a contract to be awarded by competitive selection." Mr. Moell explained the Purchasing Division uses the bidding process for commodities and uses the RFP process for services. He stated, "That’s [That is] the competition."

Senator Neal maintained an RFP or an invitation to bid sets forth certain specifications. He questioned whether the chief of the Purchasing Division makes a final selection from the bids or proposals received.

Mr. Kandt answered that decision could be made by the chief of the Purchasing Division, the chief of the using agency, or an evaluation committee.

Senator Neal commented, "We’re [We are] talking in conjunctive terms now, … which means that the chief can do it by himself, or the committee can do it." Mr. Kandt responded affirmatively. Mr. Moell expressed an evaluation committee of three or more persons is formed for every RFP. He stated the evaluation committee’s scoring determines who will be awarded the contract. He added the Purchasing Division does not participate in the scoring process, but only makes sure the proper procedures are followed.

Senator Neal commented the final selector could be the chief of the Purchasing Division or the evaluation committee. Mr. Moell added the chief of the issuing agency can make a final selection if the contract is for an amount less than $100,000.

Senator Neal asked who could make a final selection for contracts for amounts over $100,000. Mr. Moell answered the evaluation committee would make a final selection, and the chief of the Purchasing Division could make the selection under rare circumstances. Senator Neal asked Mr. Moell to explain "rare circumstances." Mr. Moell replied the Purchasing Division uses an evaluation committee as a matter of policy. He said, "We have never … not used an evaluation committee," and he emphasized he does not know of any situation in which the division would not use an evaluation committee.

Senator Neal asked if the evaluation committee evaluates a contract and then makes a recommendation to the chief of the Purchasing Division. Mr. Moell clarified the evaluation committee determines a "winner," and the Purchasing Division then enters into negotiation with that winner.

Senator Neal commented, "So the evaluation committee could be the agency, or it … could be the entity, or it could not be the entity." Mr. Moell responded, "Depending on the size of the service contract, yes, sir."

Senator Neal asked, "So going back again to over $100,000, that would be the committee, or would that be you?" Mr. Moell answered, "That would be the committee."

Senator Neal asked, "That’s [That is] what this is saying in this particular bill?" Mr. Moell responded, "If it’s [it is] for a good, then it may indeed be me or my designee, which would be the buyer."

Senator Neal asked, "If it represents goods, that means over $100,000 in contracted goods?" Mr. Moell replied, "No, sir. Goods start at, frankly, $500."

Citing paragraphs (a) and (b) of subsection 4 of section 6 of A.B. 588, Senator Neal commented:

Mr. Moell responded:

Senator O’Donnell commented, "Every time we relax the criteria that we use to determine who gets a bid, we’re [we are] the ones that get the calls crying ‘foul,’ that some bidder did not get fair treatment." He questioned whether A.B. 588 would cause bidders to complain about unfair treatment.

Mr. Moell answered he does not think so, and he added A.B. 588 represents a "tightening" of the requirement to purchase services through the State of Nevada. He continued no such requirement existed until 15 or 16 months ago. He commented, "All you had to do was advertise in the paper on one Sunday afternoon and then take bids." Mr. Moell asserted standards are being set for solicitation, and he emphasized the Purchasing Division "works extremely hard to make sure that everybody has a fair shot at the bid." He expressed requests for bids are distributed as widely as possible so the state receives as many bidders as possible. Mr. Moell asserted, "We have no vested interest in who the winner is. We don’t [do not] score. We just make sure that the process is fair."

Referring to a previous question from Senator Neal, Mr. Kandt clarified NRS 333.335 defines the competitive-selection process with regard to RFPs. Mr. Kandt maintained that section requires the identification of preestablished criteria and the consistent evaluation of proposals on the basis of those criteria. He added NRS 333.340 sets forth the competitive-selection process for invitations to bid. He explained that section requires a contract to be awarded to the lowest responsible bidder.

Senator Neal asked, "If this bill does not pass, what harm is done to the state?" Mr. Kandt replied agencies would have to rely on the State Administrative Manual. He asserted the provisions are "much more powerful" if they appear in NRS than if they appear only in the policies and procedures set forth in the State Administrative Manual. Mr. Kandt contended A.B. 588 would also clarify inconsistencies in the state purchasing act. He explained that act makes reference to soliciting contracts for services, but never comprehensively sets forth a manner in which such contracts should be solicited and procured.

Chairman O’Connell closed the hearing on A.B. 588 and opened the hearing on A.B. 612.

Kim Guinasso, Committee Counsel, Legal Division, Legislative Counsel Bureau, testified the Assembly Committee on Elections, Procedures, and Ethics requested A.B. 612 on behalf of the Legislative Commission. She explained the bill would make changes to NRS 233B.0675. She noted current law provides that if the Legislative Commission objects to a regulation adopted by an agency, the agency can revise and resubmit that regulation an unlimited number of times. Ms. Guinasso pointed out current law also provides that if the agency refuses to revise the regulation, the Legislative Commission may suspend the filing of that regulation until the 30th day of the next regular legislative session. Ms. Guinasso stated, "Before that 30th day of the next regular session, the Legislature may, by concurrent resolution, declare that the regulation will not become effective."

Ms. Guinasso continued A.B. 612 would revise the aforementioned provisions, changing "the 30th day" of the next legislative session to "the final day" of the next legislative session. She contended such a change would allow the Legal Division to perform the relevant tasks later in the session. She explained the implementation of a 120-day session has made the first 30 days of the session "extremely busy" for the Legal Division, in terms of drafting legislation. Ms. Guinasso asserted, "[A.B. 612] will enable us to leave this until later in the session, for example, now, when things are slower for our office, and we would be able to take care of that more effectively."

Ms. Guinasso noted A.B. 612 would also add "or other appropriate legislative measure" to the language in subsection 3 of section 1 of the bill, and she indicated that change would relate to the bill itself. She commented section 2 of A.B. 612 addresses a specific regulation adopted by the ethics commission during the last interim. Ms. Guinasso expressed the Legislative Commission had objected to that regulation, which would have allowed the ethics commission to adopt a motion authorizing the chairman to issue subpoenas he or she deemed reasonable, "without consulting the commission." Ms. Guinasso recalled that change was made in statute through Senate Bill (S.B.) 478.

However, Ms. Guinasso explained, "At the time, they did not have the statutory authority to do that, and so the Legislative Commission objected to it." She maintained A.B. 612 would "take care of that regulation that’s [that is] still sort of hanging out there in the status of being objected to by the Legislative Commission." Ms. Guinasso clarified A.B. 612 would declare that regulation "not effective."

Senator Neal asked for examples of problems faced by the Legislative Counsel Bureau due to the current reference to the 30th day of the session. Ms. Guinasso responded the Legal Division has to give first priority to drafting bill draft requests (BDRs). She continued the deadlines and quotas imposed by the 120-day session caused an "enormous number" of bills to be requested during the first week of session.

Senator Neal asked, "Is there any damage that would be done as far as the agency is concerned without having a regulation to operate under?" Ms. Guinasso replied she does not know of any examples to address that question, except for the aforementioned example regarding the ethics commission. She stated she does not know of any other instances in which an agency refused to revise and resubmit a regulation objected to by the Legislative Commission. Ms. Guinasso pointed out agencies can adopt emergency regulations during session because the Legal Division does not have the capacity to review regulations at that time.

Senator Neal commented, "So the 120 days, then, would not give them any problems." Ms. Guinasso replied, "I’m [I am] not aware of any, no."

Senator Neal commented, "And as far as the Legislative Commission is able to review these things, it wouldn’t [would not] give us any problem either." Ms. Guinasso agreed.

Chairman O’Connell closed the hearing on A.B. 612 and opened the hearing on A.B. 626.

Frank Siracusa, Chief, Division of Emergency Management, Department of Motor Vehicles and Public Safety, spoke in support of A.B. 626. He explained the bill would "clean up" and "modernize" language in existing statute. He elaborated the bill would more clearly define terms such as "emergency" and "disaster."

Mr. Siracusa stated section 14 of A.B. 626 would change the composition of the state search and rescue board. He expressed the board would be expanded from eight members to ten members, four of whom would be representatives of the Nevada Sheriffs and Chiefs Association. He asserted Nevada statute provides that the sheriff in each county has sole responsibility for search and rescue. Thus, Mr. Siracusa contended, there should be more representatives from the sheriffs and chiefs association on the state search and rescue board.

Mr. Siracusa distributed a proposed amendment to A.B. 626 (Exhibit G). He stated the proposed amendment would add "or their designee" to paragraph (c) of subsection 1 of section 14 of the bill. Mr. Siracusa explained the proposed amendment is needed because some sheriff’s department employees who would be strong participants on the search and rescue board may not be members of the Nevada Sheriffs and Chiefs Association.

Ms. Guinasso asked, "For a point of clarification, it’s [it is] the designee of the Nevada Sheriffs and Chiefs Association, not the members, correct?" Mr. Siracusa responded affirmatively and reiterated the proposed amendment would allow sheriff’s department employees who are not members of that association to serve on the state search and rescue board.

Senator Neal asked where A.B. 626 gives the Legislature the authority to declare a disaster. Mr. Siracusa replied that information is included in section 8 of the bill.

Senator Neal asked if a declaration of disaster differs from a state of emergency. Mr. Siracusa answered they are "pretty much the same," but a state of emergency could exist without the Governor declaring a disaster. He commented, "It’s [It is] kind of ambiguous."

Senator Neal pointed out section 8 of A.B. 626 addresses attacks on the United States. He asked, "Is that why the Legislature is being involved in this?" Mr. Siracusa responded "war-type" scenarios have been somewhat replaced by natural, man-made, or technological issues as emergency management has progressed. He continued any type of a disaster or emergency could be declared by either the Governor or the Legislature.

Senator Neal asked, "Does this bill anticipate the Legislature calling itself into session to do this?" Mr. Siracusa answered he does not know. He reiterated A.B. 626 is intended to "modernize" and "clean up" existing statutes.

Ms. Guinasso commented the Legislature would have the authority to declare disasters or emergencies during session. She elaborated such a scenario could occur during the regular session or during an emergency session called by the Governor.

Senator Neal asked if an amendment to the constitution had been passed to allow the Legislature to "go into session by itself." He commented such a measure was considered, but he does not think it passed.

Chairman O’Connell closed the hearing on A.B. 626 and opened a work session. (See work session document, Exhibit H). She indicated Jeanne Greene, Acting Director, Department of Personnel, requested an amendment to S.B. 499 when it was heard in the Assembly.

Chairman O’Connell stated Senator Raggio "signed off on" Amendment No. 710, which would provide "that an employee who has worked 80 hours biweekly work schedule is also eligible for overtime if he [or she] has approval for overtime in excess of one scheduled shift of 8 hours or more per day."

Senator Neal asked, "8 hours or more per day, that’s [that is] after he [or she] has worked 8 hours?"

Chairman O’Connell responded, "Right. If he [or she] stays on and he or she has been asked to stay on past the 8 hours, then that employee, even though they’re [they are] like a flex-time employee, they can receive their overtime."

It was the general feeling of the committee to concur with Amendment No. 710 to S.B. 499.

Chairman O’Connell opened discussion on A.B. 255.

Wm. Gary Crews, CPA, Legislative Auditor, Audit Division, Legislative Counsel Bureau, indicated Paul V. Townsend, CPA, Audit Supervisor, Audit Division, Legislative Counsel Bureau, was joining him. Mr. Crews explained A.B. 255 would provide a mechanism for reporting to the Legislature regarding state agencies that have not established appropriate internal controls. He asserted the lack of such controls has cost the state millions of dollars.

Mr. Crews recalled there was concern regarding what happens to the reports after they go to the Legislature. He stated the Department of Administration has assigned this responsibility to Becky Moody, Chief, Office of Financial Management, Training and Controls, Department of Administration. Mr. Crews expressed Ms. Moody would prepare a report and submit it to the director of the Legislative Counsel Bureau, who would provide the report to the money committees.

Mr. Crews continued Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, would include in the budget highlights a reference to each agency that lacks appropriate controls. Mr. Crews maintained that approach would notify the money committees about such agencies.

Senator O’Donnell suggested an amendment to require that a representative from the Audit Division testify in front of the Senate Committee on Finance anytime an agency does not have or comply with appropriate controls. He explained this process would alert the committee, which is sometimes "disjointed" from the Audit Division and the agencies.

Chairman O’Connell asked if Senator Neal wanted to suggest any changes to the bill regarding penalties. Senator Neal replied agencies that are out of compliance can already be penalized according to statute. Thus, he commented, no penalty needs to be added to A.B. 255 since existing statutes can be applied.

Mr. Crews clarified two statutes address this issue. He indicated one statute applies to audit recommendations, but A.B. 255 addresses self-evaluation. He continued agencies are required by statute to evaluate their controls and prepare a report for the Department of Administration, which then evaluates that report. Mr. Crews mentioned, "That’s [That is] where it’s [it is] kind of ending right now." He emphasized the Legislature "needs to know what happens after that," and he indicated a report from the Department of Administration could identify which agencies have not complied in terms of submitting reports or having proper controls.

Mr. Crews expressed the Audit Division might not be involved with agencies which the Department of Administration deems out of compliance. He commented, "I’m [I am] not sure we can provide a whole lot of additional light on it more than the Department of Administration just bringing it to your attention." Mr. Crews agreed the Audit Division could testify in front of the money committees when appropriate, but he suggested the division might not be the best source for information regarding agencies. However, he maintained the division is "in a good position" to testify when it has conducted an audit of the relevant agency.

Senator Neal requested that Senator O’Donnell withdraw his request for an amendment.

Senator Care suggested having the appropriate agency directors appear before the money committees. Senator Neal indicated the directors already testify at budget hearings.

Senator O’Donnell commented agencies do not indicate whether they are out of compliance when they present their budgets to the money committees. He asserted:

Senator O’Donnell again requested that specific information regarding compliance be brought to the budget hearings.

Senator Neal asked:

Ms. Guinasso responded NRS chapter 353 relates to the issue, but addresses overspending. She added A.B. 255 would place a legal duty upon agency directors to comply with the provisions of the bill. She elaborated if an agency director does not comply with the bill, he or she would be in violation of statute.

*****

Mr. Crews commented the Audit Division would be happy to present audit reports to the money committees. He noted the Legislative Commission sends a letter to the chairmen of the money committees before each session suggesting that subcommittees be formed to work with the Audit Division. Mr. Crews concluded, "We can take a look at that, and maybe we can work out a mechanism where we could get more involved in the process, too."

Chairman O’Connell opened discussion on A.B. 40.

Chairman O’Connell reminded the committee A.B. 40 was introduced by Assemblywoman Dawn Gibbons, Washoe County Assembly District No. 25. Chairman O’Connell explained the bill would "include everybody in a primary."

Senator Neal stated, "A primary with the same candidates of the same party running, only one goes to the general."

Chairman O’Connell said, "The only thing that you’re [you are] looking at is a primary, where supposedly the whole purpose of the primary is to select a candidate from either the Democrats or the Republicans."

Senator Neal commented, "We’ve [We have] got three Democrats and three Republicans who are running in the primary; only one goes to the general. …"

Senator Porter stated, "Not the top two." Chairman O’Connell and Senator Neal agreed.

Senator Porter asked, "Right now, you can win in the primary, right?" Chairman O’Connell and Senator Neal responded affirmatively.

Chairman O’Connell commented, "And what they were concerned about is that everybody wasn’t [was not] going to have a choice in the general [election]."

Senator Neal stated:

*****

Chairman O’Connell opened discussion on A.B. 169.

Chairman O’Connell pointed out Assemblywoman Sandra J. Tiffany, Clark County Assembly District No. 21, requested A.B. 169. Chairman O’Connell explained the bill would allow people to register to vote without showing a social security card. She indicated a proposed amendment had been offered (included in work session document, Exhibit H) because some counties do not have the software programs to support the provisions of A.B. 169.

Senator Neal asked if the counties that do not have sufficient software agreed to the proposed amendment. He commented, "The backup behind the amendment is that the secretary can adopt regulations to carry this out, and we’re [we are] just enabling him [or her] to do that."

Senator O’Donnell asked what criteria would be used to prove that an applicant is a United States citizen. Chairman O’Connell responded perhaps a driver’s license could be used for that purpose. Senator O’Donnell stated a driver’s license does not prove a person is a United States citizen.

Senator Neal asserted, "The requirements for voting [are] that you have to be a certain age and you have to be a registered voter. So if you just walk up with a slip, that’s [that is] your qualification."

Senator O’Donnell asked if a voter must be a citizen. Senator Neal commented, "If you are a registered voter, right now, under our law, and you have reached a certain age, 18 or over, then you can vote."

Senator O’Donnell again asked, "Don’t you [Do you not] have to be a citizen, though?" Senator Neal indicated individuals do not have to prove their citizenship when they vote.

Ms. Vilardo asserted when she was a registrar of voters, people had to show proof of residency when they registered to vote. She commented she held that position about 10 years ago.

Senator Care pointed out two people could end up with the same number under A.B. 169, as written. He stated, "For example, it’s [it is] conceivable to me you could have two people with the last name of Smith living in Clark County who were born on the same day of the same year." He indicated the last four digits of their social security numbers would be the only thing distinguishing these two people. Senator Care continued, "I know when you apply for a social security number, there’s [there is] something in there about geographic, where you are applying for and the year you were born and all that." He noted a provision addressing this issue could be added to A.B. 169.

Senator O’Donnell commented, "It should say ‘unique.’"

Ms. Guinasso commented the qualifications to vote are in the constitution. She said, "I was going back to the original bill, which was based on information contained in a driver’s license or an identification card and the proof that you have to supply when you get those." Ms. Guinasso indicated such proof would include a birth certificate or some other specific item to prove your identity. She maintained the state constitution gives the right to vote to all United States citizens who are 18 years old or older and who have "actually and not constructively resided in the state 6 months and in the district or county 30 days" preceding any election. She emphasized citizenship is a requirement.

Senator O’Donnell expressed a person who ran against him in a primary election did not show his driver’s license or any other form of identification. Senator O’Donnell commented this person’s mother vouched for him. Senator O’Donnell indicated the man had to disclose his social security number, and through that number, Senator O’Donnell found out the individual lived in Florida and had never resided in Nevada. Senator O’Donnell commented such information could never be tracked if people were given unique numbers like those proposed in A.B. 169.

Senator Neal asserted:

Senator O’Donnell maintained, "I’m [I am] not talking about somebody [who is] duly qualified to vote; I’m [I am] talking about individuals [who] we need to qualify." He noted people who register to vote are also potential candidates for elective office. He stated people may not be able to know about an individual’s history if he or she is allowed to use an "arbitrary" number rather than a social security number. Senator O’Donnell also raised concern that individuals could lie about the last four digits of their social security numbers.

Senator Neal expressed, "The problem is, Senator, once you begin to add these qualifications, the qualification becomes a mechanism for rejection."

Senator O’Donnell commented a person must be a resident of Nevada in order to vote in state elections. He contended, "Otherwise, you could import hundreds of people to come in and vote out of California."

Ms. Guinasso noted if A.B. 169 passed, the registration form for voting would still include lines on which to enter a residential address.

Senator O’Donnell agreed, but stated his aforementioned opponent in the primary election used his mother’s address for that purpose. Senator O’Donnell stressed his opponent’s social security number provided the only way to track his history.

In the absence of Chairman O’Connell and Vice Chairman Raggio, Senator O’Donnell closed discussion on A.B. 169 and opened discussion on A.B. 414.

Senator Neal indicated the Governor had stated he has no problems with the bill.

*****

Senator O’Donnell adjourned the meeting at 4:30 p.m.

RESPECTFULLY SUBMITTED:

Amelie Welden,

Committee Secretary

APPROVED BY:

Senator Ann O'Connell, Chairman

DATE: