The Senate Committee on Legislative Affairs and Operations was called to order by Chairman Jon C. Porter at 2:05 p.m., on Tuesday, March 30, 1999, in Room 2144 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 Jon C. Porter, Chairman

Senator Mark A. James, Vice Chairman

Senator Raymond D. Rawson

Senator Dina Titus

Senator Bernice Mathews

Senator Maggie Carlton

COMMITTEE MEMBERS ABSENT:

Senator William J. Raggio (Excused)

GUEST LEGISLATORS PRESENT:

Senator Michael (Mike) A. Schneider, Clark County Senatorial District No. 8

STAFF MEMBERS PRESENT:

Robert E. Erickson, Committee Policy Analyst

Scott G. Wasserman, Chief Committee Counsel

Emory L. Crews, Committee Secretary

OTHERS PRESENT:

Chairman Porter opened the meeting and hearing on Senate Concurrent Resolution (S.C.R.) 19.

Secretary of State Dean Heller presented a video that showed incentives and procedures for incorporating in the State of Delaware. He said Delaware’s revenues are approximately $400 million a year from incorporation fees where Nevada looks at approximately $20 million annually. He referred to a chart handout entitled "Secretary of State Revenues Vs Expenditures" (Exhibit C) which depicts revenues versus expenditures for fiscal years 1987 through 1998. Mr. Heller said the secretary of state’s office filed over 40,000 corporations during 1998 and anticipates a 10- to 15-percent growth in 1999. He said the video reveals the stability of the legal environment in Delaware as opposed to the legal environment in Nevada. He said that he supported S.C.R. 19.

Senator James said S.C.R. 19 was substantially expanded resulting in a first reprint of the bill. He stated for the record the secretary of state should be commended for his support and his efforts of bringing forth the facts and figures. He also commended John LaGatta for his efforts on S.C.R. 19. He said because of economic development S.C.R. 19 is very important, and if there are going to be any studies approved by the Senate this session, the study requested by S.C.R. 19 should be one of them. He stated a full analysis of the Delaware-type model would encourage businesses and corporations, particularly financial institutions, to conduct business in Nevada, generating good clean revenue for the state.

Chairman Porter stated over 50 percent of the world is in recession, and gold is at an all-time low. He said with the expansion of unregulated Indian gaming nationwide, Nevada is looking at some serious challenges in the next few years. He stated that even in Nevada’s robust economy, there are counties and school districts that are near bankruptcy. He pointed out that Nevada’s economy is like a stool with two legs. He said encouraging businesses to come to Nevada would be an area where state revenues could be gained, providing the third leg of the economy stool.

John H. O. LaGatta, concerned citizen, provided a written statement with attachments (Exhibit D. Original is on file in the Research Library.) He said that he was in support of S.C.R. 19. He emphasized a need for a specialized business court, not necessarily a Chancery Court. He suggested a panel of judges appointed by the Nevada Supreme Court or some other device. He stated it is the whole body of law and the predictability of the law that is the issue.

Mr. LaGatta said Delaware has a cluster of highly-paid lawyers, corporate agents, trustees, accountants, and printers in the private sector thriving on Delaware’s prominence in being the preferred corporate domicile. He said Nevada, by virtue of its income tax posture, should not only attract these entities but could be a favored headquarters for many operations in modern finance. He said Nevada has two advantages: 1) No one is moving to Delaware and a lot of high-powered and successful people are moving to Nevada. He said blue ribbon committees could be formed to analyze how to attract corporations to Nevada. 2) Nevadans and corporations are not taxed on income earned within the state.

Robert E. Shriver, Executive Director, Commission on Economic Development, said his intent was to include development of some capital formation in the State of Nevada commensurate with economic development. He stated he had not spoken with Senator Raggio, who was the original author of this legislation, and would be reluctant to suggest any possible additions not knowing Senator Raggio’s views.

Chairman Porter suggested it would be appropriate if Mr. Shriver addressed his interest of an amendment to S.C.R. 19 at this time.

Mr. Shriver said a study committee should look at other states that have anti- donation clauses and have court-tested cases that have been proven to be correct. He referred to the State of Oklahoma as an example. He said the more learned about ways to develop capital to help small business and help in the economic development diversification of Nevada is critically important. He said he would prepare a proposed amendment for the committee.

Chairman Porter closed the hearing on S.C.R. 19 and opened the hearing on Senate Joint Resolution (S.J.R.) 17.

Senator Michael (Mike) A. Schneider, Clark County Senatorial District No. 8, said the extension of terms of office for members of the Assembly and Senate fits with the current 12-year term limits. He stated that as the bill reads half of the Assembly would run every year and a third of the Senate would run every election cycle; this would have to be changed. He said the Assembly legislators are on a 10-month campaign cycle to serve a 120-day session and are then out campaigning for office again. He stated the extended terms would give the voter a clear picture of their legislators. He said S.J.R. 17 could almost be considered campaign finance reform, because the legislators would not have to raise money every couple of years.

Chairman Porter revealed that staff provided a list of terms in office in other states. He noted that five states and one territory have 4-year terms for members of the Assembly.

Senator Carlton pointed out the chart does not show if legislators are full-time or part-time citizen legislators.

Senator Schneider stated because of the 120-day session, and the increase in interim studies, the extension of terms in office is appropriate. He said because of the constitutional change the voters would have the final decision on the extension of terms.

Senator James said the study must determine if the overall change of terms would bring better and more responsive government to the people.

Janine Hansen, Lobbyist, Nevada Eagle Forum, said there are 12 states that have 2-year terms for the Senate as well as the Assembly or the House. She said a significant number of states have a 2-year term for the Senate. She stated there is a good precedent for a 2-year term for the House and that is found in U.S. Constitution, Article I, section 2, "The House of Representatives shall be composed of Members chosen every second Year by the People of the several States…." Ms. Hansen said it is important to maintain that those elected by the public are responsive to the public. She stated the best campaign finance reform we have today is frequent elections. She said Nevada Eagle Forum opposes S.J.R. 17 and encourages the committee to also oppose the resolution.

Senator Titus said she opposes extended terms. She stated to compare the Nevada State Senate to the United States Senate is not valid. She said state officials and federal officials are two entirely separate entities and represent different interests. She said she does not think the public would believe the extension of terms in office would be a way to achieve more accountability from elected officials.

Bonnie S. Weber, Lobbyist, Nevada Republican Assembly, stated the Nevada Constitution should be left alone as far as terms for elected officials.

Allan R. Walker, Lobbyist, Concerned Citizen, said the Nevada Constitution is set up with 2-year terms for those officials who are thought to be closest and most responsible to the constituents. He said this should not be changed. He stated he is opposed to S.J.R. 17.

Chairman Porter closed the hearing on S.J.R. 17 and opened a work session on S.C.R. 14.

Chairman Porter stated that District Judge Cynthia (Dianne) Steel, Department G, Family Division, Eighth Judicial District, had testified on S.C.R. 14 and recommended an amendment of only 3 years instead of 4 years as originally prescribed by the resolution. He asked for a vote from the committee.

SENATOR MATHEWS SECONDED THE MOTION.

THE MOTION CARRIED. (SENATOR RAGGIO AND SENATOR RAWSON WERE ABSENT FOR THE VOTE.)

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Chairman Porter adjourned the meeting at 3:37 p.m.

RESPECTFULLY SUBMITTED:

Emory Crews,

Committee Secretary

APPROVED BY:

Senator Jon C. Porter, Chairman

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