MINUTES OF THE

SENATE Committee on Government Affairs

 

Seventy-First Session

April 4, 2001

 

 

The Senate Committee on Government Affairswas called to order by Chairman Ann O'Connell, at 2:00 p.m., on Wednesday, April 4, 2001, in Room 2149 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Attendance Roster.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

COMMITTEE MEMBERS PRESENT:

 

Senator Ann O'Connell, Chairman

Senator William J. Raggio, Vice Chairman

Senator William R. O’Donnell

Senator Jon C. Porter

Senator Joseph M. Neal, Jr.

Senator Dina Titus

Senator Terry Care

 

GUEST LEGISLATORS PRESENT:

Senator Mike McGinness, Central Nevada Senatorial District

Assemblyman P. M. “Roy” Neighbors, Esmeralda, Lincoln, Mineral, Nye Counties Assembly District No. 36

Assemblyman David F. Brown, Clark County Assembly District No. 22

 

STAFF MEMBERS PRESENT:

 

Scott Young, Research Analyst

Juliann K. Jenson, Committee Policy Analyst

Julie Burdette, Committee Secretary

 

OTHERS PRESENT:

 

Jeffrey R. Taguchi, Chairman, Board of Commissioners, Nye County

Jane Wisdom, Town Board, Town of Pahrump

Henry E. Neth, Board of Commissioners, Nye County

John Pappageorge, Lobbyist, Nevada Outdoor Media Association

James J. Spinello, Lobbyist, Clark County

Richard L. Carver, Board of Commissioners, Nye County

David Pursell, Executive Director, Department of Taxation

Thomas J. Grady, Lobbyist, Nevada League of Cities and Municipalities

Terry Johnson, Labor Commissioner, Office of Labor Commissioner, Department of Business and Industry

Warren B. Hardy II, Lobbyist, Associated Builders and Contractors

Cheryl Blomstrom, Lobbyist, Nevada Contractors Association

Thomas J. Grady, Nevada League of Cities and Municipalities

James Sala, Concerned Citizen

Camille Wright-Rudicil, Concerned Citizen 

Mark Stotdk, Concerned Citizen

Danny L. Thompson, Lobbyist, Nevada State American Federation of Labor-Congress of Industrial Organizations

Jo Elle Hurns, Executive Director, Chamber of Commerce, Laughlin

Samuel W. Tso, Vice President and Area Manager, Parsons Brinckerhoff Incorporated

Tom R. Skancke, Lobbyist, Las Vegas Convention and Visitors Authority

Rebecca Valentine, City Council, City of Needles, California

Jeff Williams, City Council, City of Needles, California

Steven Horsford, Lobbyist, Nevada Resort Association

Daniel Grimmer, Lobbyist, MGM Mirage

Fred L. Hillerby, Lobbyist, Verizon Wireless

Gary H. Wolff, Lobbyist, Teamsters Local 14

Madelyn Shipman, Lobbyist, Washoe County

Bob Gagnier, Lobbyist, State of Nevada Employees Association

Stephanie D. Garcia, Lobbyist, City of Henderson

Mike Nolan, Budget Analyst, Budget Division, Department of Administration

 

Chairman O'Connell opened the hearing on Senate Bill (S.B.) 395. 

 

SENATE BILL 395: Transfers certain territory from Clark County to Nye County.  (BDR 20-1220)

 

Senator Mike McGinness, Central Nevada Senatorial District, representing Mineral, Esmeralda, Lincoln, Nye, Churchill, White Pine and sections of Eureka and Lander Counties, explained S.B. 395 related to a 42 square mile section of Clark County which could be better served if made a part of Nye County.  There had been ongoing discussions between Nye and Clark Counties for a year or more, he said, and the local governments hoped for support and passage of the bill.  Both counties were represented at the hearing, Senator McGinness noted, and individuals from Nye County had formed a panel and were prepared to testify on the bill. 

 

Senator Neal asked if representatives from Clark County were in attendance and if there was agreement on the language of the bill.  Senator McGinness replied he did not want to represent Clark County’s position, but, with the deadlines facing the Legislature, he had wanted to get the issue on the table.  He said he thought there still might be a few points which needed discussion.

 

Assemblyman P. M. “Roy” Neighbors, Esmeralda, Lincoln, Mineral, Nye Counties Assembly District No. 36, said he did not have much to add to Senator McGinness’ testimony.  He stated he had met and discussed the issue with the county commissioners and the Pahrump Town Board, and maps (Exhibit C.  Original is on file in the Research Library.) would be presented to the committee.  Assemblyman Neighbors said he thought Clark and Nye Counties could work together to resolve this issue.

 

Jeffrey R. Taguchi, Chairman, Nye County Board of Commissioners, Nye County, testified in support of S.B. 395, and introduced Henry E. Neth and Jane Wisdom. 

 

Ms. Wisdom, Town Board, Town of Pahrump, explained why they were seeking the passage of S.B. 395.  In 1986, she said, the line had been corrected between Clark County and Nye County due to a survey, and they were before the committee today in an attempt to change the line by 2½ miles or 42 square miles, a full section line, which would negate the necessity for another survey.  She stated the area was homogeneous to Pahrump and Nye County, with residents both working and shopping in Pahrump, their children going to school in Pahrump, and some even voting in Pahrump. 

 

Ms. Wisdom referred to a list of signatures, included in Exhibit C, of residents who had stated they would have no difficulty living in Nye County rather than Clark County.  There were approximately 20 people living in the area, and presently the tax base was $39,397 per year, which was not a large amount of revenue in property tax.  In fact, she said, that amount would not pay for the services provided by Pahrump.  Pahrump had always provided services to the area and had never been reimbursed, she said. 

 

Ms. Wisdom continued, stating, they were presently working on an interlocal agreement, but thought S.B. 395 would be a permanent solution to the problem.  The area was comprised primarily of U.S. Bureau of Land Management (BLM) land, and not eligible for development because there were no water rights, she explained, and water would have to be procured from Pahrump.  There were a few landowners with several large parcels, she said, but again, the land could not be developed because of water procurement issues. 

 

Ms. Wisdom described a development called Frontside which was a school for training in weaponry, submachine guns, large rifles, and storage of weapons.  She maintained tunnels had been dug under the area, which contained a membership club with an initiation fee of $350,000.  Upon joining, a member was given an acre of land for a home in a gated-community in Nye County, although the school was in Clark County, she said.

 

Ms. Wisdom drew attention to the fact, every 2 years the elected officials, such as county commissioners and board members, changed, resulting in differing ideas as to what an interlocal agreement should be.  The land in question, she clarified, was located at the end of the town where roads were needed for access to Route 160, the major highway to Las Vegas.  Ms. Wisdom reiterated, half of the land lay in Clark County and half in Nye County, and stressed the differing requirements of the two counties made it an arduous task to obtain an interlocal agreement in order to build roads.  She asserted another interlocal agreement would only be a Band-Aid, and passage of S.B. 395 was needed in order to service all the people in the area.  She emphasized this was not a “land grab,” noting Nye County was the third largest county in the nation, and the 2½ miles would not make a difference, except for services.

 

Senator Care questioned whether 42 square miles was so significant Rand McNally would have to reprint Nevada maps.  Ms. Wisdom noted there was a diagram showing the small area in the packet, (Exhibit C), and she did not think the maps would be redrawn because of this change. 

 

Henry E. Neth, Board of Commissioners, Nye County, testified he had grown up in Pahrump Valley and had seen phenomenal growth over the years.  He drew attention, especially, to the growth at the south end of the valley and said S.B. 395 would protect the future of the residents, developments, and the ability of the Nye County commissioners to budget responsibly.  He stated he was strongly in support of S.B. 395.

 

Chairman O'Connell asked whether the population figure of 24,000 from the 2000 census was an accurate figure.  Mr. Neth and Ms. Wisdom said they believed it was an undercount.  Mr. Taguchi stated the planning department was presently studying related factors and would have an update for the Nye County commissioners soon.  The commission had looked at the census numbers and thought they were 10 percent to 15 percent lower than expected, he said, but there would be firmer figures available to the committee within the next few weeks.

 

Senator Neal asked for the history of the area, regarding how and why the situation had arisen.  Ms. Wisdom maintained it had become an issue because Pahrump supplied all the services to the area, including sheriff’s department, fire department, and rescue services.  She said the area had been there for years, but no one had ever reimbursed the Town of Pahrump for the services.  Mr. Taguchi said services had been provided as long as the county lines had been in existence, noting the area was private land that had been purchased, and the owners just happened to build in the Clark County section. 

 

Senator Neal referred to a road on the map provided (Exhibit C), and asked if it was near the ranch.  Ms. Wisdom replied the road went right through the ranch.  Senator Neal asked if the ranch owner was in the hearing room?  Ms. Wisdom said, no, he was not, but reported he was in support of the bill.  She said Nye County wanted to extend several roads, one of which was on the ranch property, and would incorporate approximately two-thirds of a mile in Clark County.  She stressed it was not a high priority to Clark County but it was very difficult for Nye County to pave part of a road and then have to wait for Clark County to pave the two-thirds mile in order to finish the road. 

 

Senator Neal asked if the Trout Canyon area would be included.  Ms. Wisdom replied, no, the area being addressed did not extend that far, although Pahrump did service the area, despite its location in Clark County.  Ms. Wisdom, Mr. Neth and Mr. Taguchi clarified to Senator Neal they did not receive any portion of the approximately $39,000 in annual property taxes from the area in question.  Ms. Wisdom distinguished the private, inhabited land from the BLM land on the map, and emphasized they were asking the committee to approve the strip of land to be turned over to Nye County, because Pahrump serviced the area.  She reiterated the area could not be developed because there were no water rights on the land.  In response to Senator Neal, she said she thought one well had been sunk, but there were no water rights. 

 

Mr. Taguchi summarized for the committee, saying the face of Nye County was changing, and the specific area in question had potential for growth if it were under the auspices of Nye County.  There were numerous developments underway at this time, but while the population was low, Mr. Taguchi said, he believed the measure would be prudent because future growth would have significant impact on any action taking place there.  He said interlocal agreements did not necessarily continue in perpetuity, and if the area developed and grew with the assistance of Nye County, the tax base would rise, but part of their budget would be based upon interlocal agreements.  He surmised, if the area was annexed back or the agreement was cancelled by any one particular board, Nye County would be left in a very serious condition. 

 

Mr. Taguchi reiterated the belief there was growth potential for the area, and stated Nye County was looking forward to a future not necessarily dependent upon natural resource mining as had occurred previously.  Although the mining industry had been beneficial for the county, he recalled, the population had dwindled drastically and the county had to reinvent itself economically when two mines had closed.  He stressed the strip of land being discussed represented potential for the southern area and would provide stability in the area.

 

In response to questions from Senator O’Donnell, Mr. Taguchi replied he did not know when the private land had been acquired from the BLM, but assumed it was a long time ago.  Senator O’Donnell asked if there were plans for additional acreage to be acquired from the BLM or if the BLM was selling any acreage.  Mr. Taguchi said there was no intention to go beyond the boundaries marked on the map (Exhibit C).  In other words, he said, they would not come before the Legislature again saying they wanted more and more land. 

 

Senator O’Donnell expressed concern with changing the tax base on the land, which presently went to Clark County.  If additional land was sold by the BLM for privatization, he said, that land would then become part of the tax base.  He asked if there was another reason for acquiring the land into Pahrump other than the fact the land was contiguous to Nye County.  Mr. Taguchi assured him there was no clandestine plan.  Ms. Wisdom maintained much of the BLM land was the backside of Mount Charleston, which had rocky, sheer cliffs, and she did not believe it was “buildable.”  Mr. Neth reiterated the strip had been drawn in order to bring the privately owned land in the valley under Nye County jurisdiction since they provided the services.

 

John Pappageorge, Lobbyist, representing Clark County Commissioner Erin Kenny, reported Ms. Kenny had met with members of the Pahrump Valley Town Board and the county commissioners and was very familiar with the problems in the area.  Further, he said, she had spoken about interlocal agreements, and had talked of annexing Pahrump into Clark County, which had not been well received.  Mr. Pappageorge reported Ms. Kenny was very sympathetic to the issues and was aware Pahrump provided services to the area but did not receive any revenue.  He said Ms. Kenny was also aware of the potential for growth, and she would support S.B. 395, and would place an item on the next Clark County commissioners agenda in support of the bill.

 

James J. Spinello, Lobbyist, Clark County, testified in speaking with the county manager the previous afternoon, he had not been aware of a formal position from the county commissioners, and agreed the item should be put onto the agenda to obtain a decision.  At the staff level, Mr. Spinello stated, the recommendation had consistently been against moving the boundary, because it would set a precedent of moving county lines for what were essentially development issues.  There had been discussions on this issue during the last session, he pointed out, and Clark County was willing to provide payment for any services rendered to Clark County residents on the Clark County side of the boundary.  He said Clark County believed arrangements for reimbursement of various services could be organized, noting interlocal agreements can and do outlive an elected official’s tenure, and could be for as long as the parties wish them to be.  Mr. Spinello remarked Clark County had been a good partner in agreements, living by them even when they are later found to be somewhat disadvantageous.  He reiterated Clark County’s willingness to resolve this issue by an interlocal agreement, and stated the county would like a very circumspect look at this issue.  “County lines are not moved often, should not be moved often, and however the issue is resolved, it should be done in a forward-looking manner,” he said.

 

Richard L. Carver, Board of Commissioners, Nye County, stated Nye County was one of the original four counties of Nevada and when Ione was the county seat, it took in all of White Pine and Lincoln counties and a large part of Clark County.  Mr. Carver said he had been born and raised in Nevada and did not know of a community split by a county line, but looked at the whole Pahrump valley as a community disregarding the county line.  But, he said, there was also another problem in Pahrump regarding the state line that split the valley on the west side.  He emphasized it would be much easier to provide services to the people from one government entity. 

 

Senator Porter later submitted a copy of a letter to him from Senator McGinness, regarding the bill (Exhibit D), and asked that it be part of the exhibits.  Chairman O'Connell closed the hearing on S.B. 395 and opened the hearing on SB. 472.

 

SENATE BILL 472: Provides for disincorporation of City of Gabbs. (BDR S-1178)

 

Assemblyman Neighbors testified the issue had been discussed before.  He said he thought the bill was important enough to be moved to the Assembly side, as an emergency measure, as soon as possible.  He reported he had received only one telephone call from a constituent in Gabbs and that person had supported the disincorporation.  If anything, he said, taxes would probably go down and the county would pick up many services the city had supplied. 

 

Senator McGinness testified no one had wanted this to happen, but it was best for the people of Gabbs.  They had the support of the county commissioners he said, and he would lend his support.  He noted he also had received one telephone call on this issue, and the constituent had been in favor of the bill. 

 

Mr. Taguchi stressed this issue had been discussed for several years.  It had been very difficult for the citizens of Gabbs, he said, and he believed Nye County had a responsibility to further the best interest of the citizens.

 

Mr. Carver stated he represented the Gabbs area, which was in a no-win situation; however, over the past several months, no resident had come to him in opposition to S.B. 472.  He reported he had attended tax commission meetings, had worked closely with David Pursell on this issue, and the people of Gabbs realized the necessity for this action.  The assessed valuation was not there, he said, and the commission would do everything possible to treat the people of Gabbs as any other town in Nye County.  Mr. Carver continued, stating the county provided services and had forgiven a $57,000 debt resulting from an error in the treasurer’s office.  He provided examples of county services, such as ambulance service to Tonopah and the provision of a fire truck last summer.  In short, he said, the county would assist the residents of Gabbs in any possible way.

 

Chairman O'Connell asked whether the water district would be all right.  Mr. Carver replied, yes, it would, and reiterated he and the board of county commissioners were before the committee in support of disincorporation.

 

David Pursell, Executive Director, Department of Taxation, stated for the record he was also a part-time member of the White Pine County School District, the Nye County hospital district, and was currently a part-time member of the City of Gabbs.  He provided an update on an action taken by the Nevada Tax Commission, Monday, April 2, 2001.   The tax commission had prepared, and the Office of the Attorney General had reviewed, a ballot question for voters to consider, if S.B. 472 was not enacted this session, he said.  The ballot question had been approved, and they would meet the deadline for getting the information to the printer by April 6, 2001, he said.  The preparation of the city’s budget, including payment for public services, police coverage, hauling of garbage, et cetera, reflected losses of $5000 in fiscal year 2002, $7000 in 2003, and $13,000 in 2004, he said, and those figures were based on the assumption that Gabbs could re-amortize the loan on the water system at 5 percent.

 

Thomas J. Grady, Lobbyist, Nevada League of Cities and Municipalities, stated they also had received one telephone call regarding the Gabbs disincorporation.  He reiterated Nye County had provided many services to Gabbs, including ambulances, fire trucks, and forgiving the sizeable debt.

 

Chairman O'Connell closed discussion on S.B. 472, and opened the hearing on S.B. 560.

 

SENATE BILL 560: Makes various changes to provisions relating to employment

practices and prevailing wages for public works. (BDR 28-559)

 

Terry Johnson, Labor Commissioner, Office of Labor Commissioner, Department of Business and Industry, stated he was before the committee to discuss S.B. 560 which dealt with public works projects.  He noted, in addition to enforcing a wide number of the labor and industrial relation laws of the state, the labor commissioner’s office had established duties and oversight functions pertaining to public works.  He stated, in the last fiscal year, over $1.8 billion had been spent on public works projects in Nevada.  This amount ranked near the top compared to most other states, based on per capita calculations, he said.

 

Mr. Johnson called attention to the importance of a public works system which ensured respect for the rule of law, provided for fair, but firm regulation, and most importantly, would hold people accountable for their duties as set forth in state law.  He asserted the public works laws and how they were administered and enforced were in serious need of review and reform.  Further, he said, he believed this piece of legislation would be a good start and would move Nevada in a forward direction by having a labor commissioner’s office able to protect the interest of working families and provide a level playing field for Nevada businesses. 

 

Mr. Johnson stated in regard to S.B. 560, the first change occurred on page 2, line 39, and would make it an offense for a contractor to submit falsified, certified payroll reports.  He said the law currently required contractors to accurately report what they had paid their employees on the public works jobs and to submit accurate and correct payroll reports in a timely fashion.  He said he wanted to provide for an administrative penalty, whereas existing language gave the impression it was only a criminal penalty to violate the certified payroll reports requirement.  The new language would give the agency an administrative avenue which would make it an offense to fail to comply with the requirements of submitting certified payroll reports, he said.  The proposed revision was replicated on page 4, line 29, although that fell under a different section and would become effective on a different date, he explained.

 

Mr. Johnson noted the next change occurred on page 5, line 23, with housekeeping language to clarify a maximum fine assessed for a violation.  In addition, he pointed out, they had deleted language which required a report of the violations to the office of the district attorney of the counties in which the violation occurred, and these violations would now be reported to the Office of the Attorney General.  He explained it would be the Attorney General who would prosecute the violator of the law, and stressed most labor commission matters were dealt with by the Office of the Attorney General.  Although, he said, it was possible there could be a matter where a defendant was someone represented by the district attorney’s office, which could cause difficulty.  But, given they utilized the Office of the Attorney General currently, and for the sake of consistency, they wanted to clarify intent in this section of the law, he said.

 

Chairman O’Connell asked Mr. Johnson if the Office of the Attorney General seemed to have adequate time for the issues brought before them.  Mr. Johnson pointed out what typically occurred, was a hearing was held and parties were afforded an opportunity to contest whatever might have been alleged.  If there was an adverse decision to a party, he said, the decision could be appealed in the district court and the Office of the Attorney General would represent the labor commissioner in that appeal.  He pointed out when the Office of the Labor Commissioner was created in 1915, the labor commissioner would do the investigation and turn the matter over to the Office of the Attorney General and the matter would be prosecuted.  However, with the shift toward exhausting administrative avenues for these types of matters, he said, hearings were held, decisions were issued and would be reviewed by an appellate court. 

 

Mr. Johnson drew the committee’s attention to the proposed increase in penalty for disqualification to a period of 5 years.  He gave an example of a contractor who said he did not mind being assessed a 2-year disqualification penalty from public works because he felt he had enough work to carry him over the next 18 to 20 months anyway.  Mr. Johnson stressed, if that was the prevalent attitude, then they needed to raise the bar for those contractors who chose to violate the law. 

 

He reviewed the next proposed change on page 5, line 47, where the word “annually” had been deleted.  He explained his office wanted some flexibility and latitude regarding the frequency of the survey to determine the applicable wage rates.  He claimed they always looked for ways to do a job better and more efficiently, as when, last year, they released the wage survey primarily over the Internet and had been able to reduce expenses related to the survey by approximately 45 percent.  Printing and postage costs were saved and those cost savings had been used in other critical areas of the agency operation, he said.  He noted his office would like the flexibility to consider other options which might be more cost-effective in terms of how the agency was administered.

 

Mr. Johnson drew the committee’s attention to page 6, line 4, and said the language was housekeeping, incorporating information as it appeared in the original version on line 10, for purposes of consolidation and consistency.  This would require the labor commissioner to hold a hearing if there was substantial evidence to change the wage rates by 50 cents or more per hour in any county.  He said it actually added to subsection 2, section 5, requiring, within 30 days, a party must submit information to the labor commissioner which would establish if there was a different prevailing rate.  He said it was important because if there were an incorrect wage rate it would need to be adjusted sooner rather than later.  There had always been a 30-day objection time period, he said, but this time period, by which any person may submit information, had been left as an aside.  The consolidation would clarify if there was information which might suggest a different prevailing wage rate in a community, he said, and the information should be communicated to the labor commissioner as soon as possible. 

 

He explained section 6, line 33, referenced workmen employed by contractors, subcontractors, or public bodies.  This was important because there were instances where someone might be on a public works construction job, he said, but had been hired through an employment agency.  Mr. Johnson stated, since the person was not an employee of a contractor, subcontractor, or public body, he or she would not be subject to the minimum wage provisions as the rest of the contractors in the community had bid the job, creating a disparity and subverting the intent of the statute.  He noted when the bill was originally submitted it had not included the deletion of “at the site of” and this issue was very important to his office, as to whether employees at the site of the work were subject to the wage provisions.  It would apply to workers who might be at an off-site facility, he said, and they would want to revisit the language because it had been the intent to retain “at the site of.”  They were particularly looking at employees performing public work who were necessary to the execution of the contract, and would be deemed employed, regardless of whose employee they might be.  Unless they were excluded by a specific statute, they would be subject to the provisions of this chapter, he said.

 

Mr. Johnson called attention to page 6, lines 41 through 44, and how this language, which was seemingly straightforward, had created so much in the way of investigations, hearings, and litigation in order to determine whose employee the person was, and if they were performing work consistent with the public works contract.  This language was an effort to cleanup the situation, he said, reiterating, unless the employee was exempted by a specific statute, he or she would be subject to the provisions of this chapter.

Continuing on to page 7, line 12, Mr. Johnson explained the deletion had been recommended by the Audit Division of the Legislative Counsel Bureau (LCB).  This section in Nevada Revised Statutes (NRS) dealt with the certified payroll reports which contractors were required to keep, he said, and currently, a contractor was required to send the records into the labor commissioner and the public body.  The labor commissioner had subpoena authority, he said, and if records were needed he could use that authority.  This would eliminate boxes of paperwork, he said, but for the last several decades, the law required the contractor to submit certified payroll reports to two different government agencies.  He noted, in addition to providing the agency some administrative relief, it would also provide the contractor relief as well. 

 

Mr. Johnson pointed out on line 7, page 7, the original penalty had been $10 for each day a contractor did not pay employees correctly or did not report the certified payrolls accurately.  He proposed the penalty be doubled to a minimum of $20 and a maximum of $50.  He explained, a contractor signed a public works contract which stated a number of items would be completed, and the workers would be paid no less than the rates prevailing in the community.  Since 1937, he said, the law provided if the contractor failed to do so, the contractor forfeited the penalty back to the public body awarding the contract. Chairman O'Connell asked Mr. Johnson when the figure had last been changed.  He said the penalty was $5 in 1937, and changed to $10 in 1993.

 

He drew attention to NRS 338.070, line 22, and said he knew this would require considerable discussion.  He referenced the bill summary (Exhibit E) which had been distributed to the committee, and said this statute was very important to the Office of the Labor Commissioner.  When a contractor accepted a public works contract, a project funded by taxpayer dollars, to build a school, roadway or other government buildings, he said, the contractor was required to pay the employees no less than the prevailing rates in the community.  The public body awarding the contract was required to insert these provisions into the contract, he said, and if contractors failed to abide by the terms, they would be subject to the forfeiture of the penalty back to the public body.  What needed to be clarified was this was not an option, he said, and the law stated clearly, “contractor, if you sign this contract, you will pay your employees no less than the prevailing rate of the community, and if you fail to do so, you shall forfeit as a penalty.”

 

Mr. Johnson said, as a result of regulatory hearings over the past several months, he believed there was some confusion in the public body community as to what this was intended to say.  There were some in the public body community who believed their responsibilities were limited to “taking cognizance” of the complaints of violations, he said.  A provision found in NRS 338.070 requires the public body to conduct an investigation prior to the forfeiture penalty, he pointed out, and he proposed to discuss what the Legislature had intended when it directed public agencies to “take cognizance” of complaints of violations.  He explained:

 

There were some in the awarding body community who did not recognize, and either did not understand or did not interpret this to mean they did, in fact, have a duty to monitor contractors on the jobs to ensure the contractor complied with the wage provisions in the contract.  . . . Over the past several decades, the labor commissioner had accepted the responsibility on behalf of the public bodies, and the public bodies, either through lack of knowledge of the law or lack of interest and desire to effectuate it, had not fulfilled their obligations.

 

He asserted this had not served the best interest of the citizens, but acknowledged the language, “take cognizance of complaints of violations,” could be considered ambiguous, which was why it needed to be clarified.  Mr. Johnson maintained his office had proposed language consistent with legislative intent. 

 

As an aside, he said, there was significant case law stating, when statutes were ambiguous, several things had to be done.  Legislative intent had to be ascertained and law interpreted in such a manner as to not produce an absurd result.  Candidly, he stated, to interpret the law to imply all that was needed was to “take cognizance” produced an absurd result and was not consistent with legislative intent.  For example, he said, imagine a police officer who was told while witnessing a violation of law occurring, “just ‘take cognizance’ of the violation taking place; do not do anything about it,” but as long as he was cognizant of the violation, he had satisfied the duties under the law.  Mr. Johnson stressed this was not the intent of the Legislature, and emphasized how critically important this was in terms of examining legislative intent in an obscure statute and what the Legislature intended when it adopted the provision.

Chairman O'Connell asked Mr. Johnson when this had been adopted.  He replied, stating it had been adopted in 1937, and said the purpose of the exhibit package (Exhibit E) was to clarify legislative intent.  He commented he knew many individuals in the awarding body community had heard people saying the state was having fiscal problems, and was shifting responsibilities to other government agencies.  He said he wanted to make it clear this was not about shifting responsibility, but, rather, about accountability as the law was originally written, and about holding people accountable for the duties they had been charged with for the past 64 years. 

 

Mr. Johnson stated the information provided to the committee would sufficiently illustrate what the intent of the Legislature had been.  He drew attention to tab 1, which was the prelude to the NRS, and provided the basic rules as to what to expect when reading through the statutes.  He read, for the record, from NRS 0.010  “This chapter provides definitions and declarations of legislative intent which apply to Nevada Revised Statutes as a whole.”  Mr. Johnson emphasized this laid the groundwork for what the statutes provide, and further pointed out the use of the word “shall,” which imposed a duty to act.  So, he said, “when the statute said ‘shall take cognizance’ and ‘shall withhold monies,’ that was an admonition to act, not to merely be cognizant of a violation.”  Mr. Johnson noted tab 2 was the original bill, passed as the Prevailing Wage Act of 1937.  Since passage, he said, language was added, as on page 2, section 7, “Chapter 139 of the 38^th Session” (Exhibit E).

 

It shall be the duty of any public body awarding a contract, and its officers or agents, to take cognizance of complaints of violations of the provisions of this act committed in the course of the execution of such contract, and when making payments to the contractor of money becoming due under said contract to withhold and retain therefrom all sums forfeited pursuant to the provisions of this section and the further terms of this act; provided, that no sum shall be withheld, retained or forfeited, except from the final payment, without a full investigation being made by the awarding body or its agents.

 

Mr. Johnson indicated the language regarding a full investigation being made by the awarding body or its agents.  In 1973, the Legislature added the labor commissioner to chapter 338 of NRS because there had been allegations the contracts had been awarded without competitive bidding, he said, and this was the only time the labor commissioner was mentioned in establishing the rates.  He asserted limiting chapter 338 of NRS to the labor commissioner was wrong, because from 1937 to 1973, the labor commissioner had not been mentioned, other than establishing the rates.  It had always been the duty of the public bodies to monitor their contracts, he said, and ensure the contractors fulfilled their obligations under the law.  Mr. Johnson said the language clearly reflected the Legislature’s intent for contractors to make their payroll records open to inspection by the public bodies to ensure the wage provisions were being honored.  He stressed the language did not say “make the records available for inspection by the labor commissioner.” 

 

Mr. Johnson then drew attention to tab 3, and explained it was an excerpt of the findings and recommendations by the legislative auditor, which said the prevailing wage laws were not adequately enforced and the labor commissioner had not established methods to adequately enforce the laws.  He noted, the document further stated, the current enforcement methods limited the number of projects the agency could monitor, making effective enforcement nearly impossible.  The auditor had found contractors frequently violated the law by paying employees less than the prevailing wage on public works, he said, and also recommended the Office of the Labor Commissioner improve the method of identifying violators.  Additionally, Mr. Johnson reported, the auditor found the agency used a labor-intensive process by accepting all responsibility for enforcing the prevailing wage law, including those responsibilities belonging to the public bodies and this placed an excessive burden on agency resources due to the large number of public works projects. 

 

Continuing, Mr. Johnson reported, the auditor ended by saying the statutes provided that public bodies awarding contracts had specific responsibilities, including investigating and enforcing the terms of the contracts.  Interestingly, he said, it had been noted, since the public body received the benefit of the contract, the public body should be responsible for ensuring the terms were met.  However, Mr. Johnson said, he had been chided for not holding the public bodies responsible for monitoring their own contracts for prevailing wage law.  He stressed he would hold the public bodies accountable for their duties under the law.  But as a matter of fairness, he added, it would behoove everyone if the language of the law were clarified so there would be no confusion as to what the duties were. 

 

Turning the committee’s attention to tab 4, Mr. Johnson noted the opinion written by the Legal Division of the LCB, which asked if a public body awarding a contract for a public works project was required to enforce the prevailing wage stipulated in the contract.  The opinion was the public body must “take cognizance of complaints of violations” of the wage provisions and, if warranted, the public body must then conduct an investigation to determine whether the contractor had complied with the prevailing wage law.  Thus, he said, the public body had a duty to enforce the prevailing wage law in that manner.

 

Chairman O'Connell asked whether anyone had questioned if the public bodies knew what “take cognizance” meant and how they were complying with it.  Mr. Johnson explained, during a regulatory hearing, he asked a question to ascertain what the public bodies understood the term “take cognizance,” meant.  One representative said he thought the statute was very confusing, Mr. Johnson reported, and another representative said he understood the law to mean the awarding body did not have any duty to conduct an investigation of any kind with regard to the terms of the public works contract.

 

Mr. Johnson reiterated the language was ambiguous and should be clarified.  He characterized the opinion of the representatives of the public bodies to be that most of the labor was incumbent upon the public body to enforce the contracts as they saw fit.  He offered to have copies of the transcript of that meeting made available to the committee members as it would provide background information on what the understanding of the statute was.  He emphasized the significant amount of money involved in public works contracts, asserting the oversight was fairly light.  He said the message obviously had not gotten out, because the contractors knew there would be virtually little or no oversight, and the best way to get the message out would be to clarify the expectations within the provisions of NRS. 

 

Chairman O'Connell asked if the Office of the Labor Commissioner had been audited since 1994.  Mr. Johnson replied an audit had just been concluded and would be released shortly.  He said the above referenced audit had primarily been limited to the information technology systems developed by the Department of Information Technology, so it had not gone into many operational items.  The chairman wondered if the audit would give him some of the same comments made in 1994.  Mr. Johnson said he thought it would, because in 1993 to 1994, the auditor had said the labor commissioner could not do this alone, and that public bodies needed to be held accountable to the duties set forth in the law. 

 

Continuing his review of the bill, Mr. Johnson said tab 5 showed where the state was in terms of public works projects, including prime contractors and subcontractors.  Since 1993, the number of projects had increased from 2350 to 4386 in fiscal year 2000, he said, and the number had almost doubled since the time of the legislative audit.  He suggested if the labor commissioner could not previously investigate the violations without the involvement of the public bodies, it would be reasonable to conclude, given the growth and $1.8 billion spent on public works in the last fiscal year, his office would not currently be able to investigate the violations. 

 

Mr. Johnson said he was aware of concerns among colleagues in the public body community of what was being proposed, and he stressed a new duty was not being imposed upon a public body, but rather an existing duty would be clarified.  There was no shifting of responsibility, he said, but rather, accountability for which the agency was already responsible was being clarified.  In formal and informal discussions, he said, concern had been expressed the agencies did not have the resources to monitor their own projects, but he questioned the appropriateness of awarding $1.8 billion in public works projects, without the ability to oversee those projects to ensure tax payer dollars were being spent as intended.  He explained the labor commissioner and public bodies had independent duties to enforce the public works laws, which was noted in the LCB opinion; however, he said, the auditor had questioned, in light of the facts, why the Office of the Labor Commissioner was performing all of the duties. 

 

In terms of resources, Mr. Johnson noted, when a public body found a contractor was violating a law, the forfeiture penalty should be invoked.  He referred to a case in the district court, which calculated, if the public body had done the investigation and the audit as it was supposed to have done, the forfeiture due back to the public body in that one instance would have been $67,000.  He suggested the forfeiture penalty, of up to $25 per day, could be used by the awarding body, with some due process provisions, to ensure public works projects were being done in accordance with law. 

 

With regard to the quality and completion of public works projects, Mr. Johnson suggested there was a correlation with how the employees were being treated and paid.  He recalled projects with defect issues that were over budget and overdue, citing one case where his staff performed approximately six audits.  In such cases, he said, he would ask if the contractor cheated his employees on wages, or cheated the public in some way, and who would be monitoring the project.  He asserted if a contractor looked for employees to work for $7 or $8 per hour, as opposed to hiring skilled, trained workers who could get the job done on time, without defect issues, there would be a correlation with the quality of workmanship. 

 

Reviewing the issue of resources, Mr. Johnson reported, colleagues in the public bodies stated they did not have the resources to monitor their projects, but wanted the state labor commissioner to monitor all of the state projects.  He explained he had a staff of 20 employees to manage not only public works and prevailing wage, but also to monitor child labor, wage-per-hour issues, and a number of other program areas.  He claimed he had the equivalent of three people working the entire state, and was not prepared to accept that a public body could not watch its own project and expected the labor commissioner to monitor projects.

 

Senator Titus said Mr. Johnson had made compelling arguments, however, if the labor commissioner was not the person responsible for the projects, and responsibility was returned to the local entities or agencies, she asked how would it be determined who would monitor the project.  As an example, she suggested North Las Vegas might be good at monitoring but perhaps Clark County would not.  She asked whether the labor commissioner could implement some standard method for compliance.

 

Mr. Johnson stated the regulations outlined how the investigations would pursue, so there would be consistency.  He explained NRS 338.090 provides any person who violates the provisions of the public works statutes, including public bodies, was guilty of a misdemeanor, which would include a public body failing to enforce the provisions of its own contracts.  In fact, Mr. Johnson noted, the Legal Division of LCB provided this opinion.  He pointed out language under tab 4, page 2, section III, asked the question, “May the Labor Commissioner commence an action against a public body if the public body does not seek to enforce the prevailing wage law?”  The question was answered, he said, stating, if the public body violated the provisions of the chapter, it would be subject to civil penalties, fines, or criminal penalties.  Before it went to that extent, he said, his office wanted the opportunity to work with the public bodies to let them know what the expectations were now, despite how things had gone for the past 30 to 40 years.

 

Mr. Johnson reported his office had been meeting with public bodies to encourage them to look at their own procedures, and drew attention to the example of the Nevada Department of Transportation (NDOT).  Approximately $400 million in contracts were under NDOT, with which the Office of the Labor Commissioner had worked to draft policies and procedures.  In that time, approximately six contractors were found to be violating the law, he said, and after filing complaints with the Office of the Labor Commissioner, hearings had been scheduled, and in every instance NDOT collected the money due on those employees.  He asserted such effort took coordination, and the interest and desire to effectuate the law. 

 

Mr. Johnson again emphasized, they wanted to make clear what the intention was before going to the public bodies, keeping in mind the LCB opinion that those public bodies can be fined and prosecuted for failing to enforce the law.  He stated they wanted to give the public bodies an opportunity to be successful.  If the labor commissioner had to go in and enforce the law, it was no longer the labor commissioner versus the contractor, he said, because if the public body sided with the contractor, it was the labor commissioner against the contractor and the public body with joint liability. 

 

Scott Young, Principal Research Analyst, Research Division, Legislative Counsel Bureau (LCB), pointed out the last time the fine in NRS 338.060 had been raised was in 1993 and it went from $5 to the current range of $10 to $25. 

 

Senator Care described a good faith investigation, by a public body, which yielded results with which the labor commissioner disagreed, and asked what would occur.  Mr. Johnson said the labor commissioner had the overall and ultimate enforcement responsibility, and language had been included in the proposed regulations, which provided a person aggrieved by a decision of an awarding body could appeal the decision to the labor commissioner.  At this point, the labor commissioner could determine whether there was a need for additional information or a different avenue of discussion, he said, but he had the ultimate and overall responsibility to make the decision of whether or not there was a violation.  Either way, there would be a decision from the labor commissioner, he said, and either party had appellate rights available to them as well.  He asserted the Legislature intended the labor commissioner would have the overall responsibility, not the day-to-day responsibilities.

 

Mr. Johnson reported representatives from the awarding body community expressed concern, they did not possess the expertise required to monitor their contracts.  He emphasized people do not have the option of which law they would follow; they could either change the law or enforce the law, but could not ignore it.  He suggested the committee was clarifying a system of multi-level enforcement where the awarding body would do the day-to-day enforcement and the labor commissioner would have the overall enforcement. 

 

He referred to tab 6, page 2, regarding Labor Regulations of Missouri, which provided, “the public body will make examinations of the payrolls and other records,” and further required, if violations of the statutes were discovered by the inspecting public body, it was their duty to withhold payments to the contractor and report the violation to the Division of Labor Standards, the equivalent of the labor commissioner.  Mr. Johnson pointed out this was almost the same language as provided in NRS.  Tab 7, he said, contained an example from the state of Ohio, where they require a public authority to designate and appoint one of its own employees to serve as the prevailing wage coordinator during the life of the contract.  He drew attention to the procedures on page 2, where it clearly stated the coordinator must visit the project, verify posting requirements, and review the certified payrolls.  He emphasized the process would be to establish and follow procedures to monitor compliance by contractors and subcontractors. 

 

Other examples, Mr. Johnson noted, were in tab 8, the state of Oregon regulations; tab 9, the state of Minnesota regulations; and the final example of multi-level enforcement was in tab 10, the United States Department of Labor (USDOL).  He said the Secretary of Labor depended on agencies to monitor their own projects, and cited language on page 1, which stated:  “The Federal agency shall cause such investigations to be made as may be necessary.”  Language under tab 11 defined the duties of the Secretary of Labor as being almost synonymous with those of the labor commissioner, he said, and specified the contracting agencies had a day-to-day enforcement responsibility.

 

Mr. Johnson emphasized, again, for the record, S.B. 560 would “not be a shift in responsibility, nor would duties be added, but rather the bill would clarify the intent of the Legislature.”  When the Legislature created the State Public Works Board, he said, NRS 341.153 provided:

 

1.  The Legislature hereby finds as facts: 

(a) That the construction of public buildings is a specialized field requiring for its successful accomplishment a high degree of skill and experience not ordinarily acquired by public officers and employees whose primary duty lies in some other field.

 

(b) That this construction involves the expenditure of large amounts of public money which, whatever their particular constitutional, statutory or governmental source, involve a public trust.

 

Mr. Johnson stated again, the public agencies were not there to “take cognizance,” but rather to take action when confronted with violations of the law.  Corrective remedies were needed and, he said, would yield positive results.  While the public bodies were investigating their contractors, he said, the labor commission could turn its attention to the 3-year wage backlog.  There was no reason, he said, why people working in the state of Nevada should have to wait 3 years to file a wage claim with the labor commissioner’s office in order to receive the final paycheck from their employer.  He asked the committee to give serious consideration to S.B. 560, asserting it would send a message to the contractors, specifically Nevada contractors, some of whom were second or third generation business owners, that the Office of the Labor Commissioner would not sit idly by while being cheated by wage hustlers.  This would also send a message to the working families of Nevada, he said, the Office of the Labor Commissioner was certainly there to protect their interests.  Mr. Johnson maintained they were trying to build a better state labor commissioner’s office, and build a better climate for working families and businesses.

 

Chairman O'Connell asked for clarification on section 12 and why it was important for the bill to become effective on different dates.  Mr. Johnson said he had not inserted the dates.  Mr. Young explained the July 1 effective date was requested by the labor commissioner, and sections 1 and 2 became effective 1 minute apart probably to avoid a conflict.  He said he was not certain why the October 1 date had been added, but would research the answer and report back to the committee.

Warren B. Hardy II, Lobbyist, Associated Builders and Contractors, testified in support of Mr. Johnson’s efforts to clarify this section of the statute.  He pointed out it had been the association’s raising concern regarding the exclusion or removal of the words in section 6, “at the site of.”  He noted there had been debate and discussion in terms of what qualified as on-site or off-site work for purposes of prevailing wage, and it was their belief if the words were deleted, the Legislature would be sending an unintended tacit message that off-site work would be included for prevailing wage purposes.  Mr. Hardy said he had some recommendations as to where the language might be added (Exhibit F), and would give the information to Mr. Johnson.  With regard to clarifying responsibility, he stated, they would support the best enforcement methods. 

 

Cheryl Blomstrom, Lobbyist, Nevada Contractor’s Association, echoed Mr. Hardy’s testimony.  She pointed out, as Mr. Johnson had said, contractors had a difficult time competing with others who were not paying the appropriate prevailing wage.  She said the association followed the appropriate employment laws and believed everyone should follow the law relating to their employees.  She expressed some concerns with the bill, but said they were willing to work with the labor commissioner.  She claimed the language, “at the site of,” could create a possible conflict with the Federal Highway Administration and their current definitions of “off-site,” which included aggregate pits and other materials pits.  The only significant concern, Ms. Blomstrom said, had been the penalty, which could be assessed for a 1-day late filing with no provision for a first offense, but that language had been struck.  She explained, a contractor, regardless of the severity of the offense, might be following every other piece of the statute and miss the filing by 1 day, for whatever reason, and could conceivably be subject to a penalty of $5000.  The per-day, per-employee penalty to the public body, and the 5-year public work suspension of the contractor did not serve the public interest, she said, but they would like to see a measure of severity included in the statutory authority.  Ms. Blomstrom drew attention to section 10, and the additional language, “or any regulation adopted pursuant thereto,” and expressed concern with a regulation creating a criminal offense. 

 

Senator Neal asked if a regulation based on statute should not require some kind of penalty if violated.  Ms. Blomstrom said she understood the regulation to address process.  Senator Neal said they were not discussing procedures, but rather a governmental entity, charged with a function of law.  The way in which this occurred was by regulation, he said, but the regulation had to be based upon statute, and, therefore, had the function of law.  Ms. Blomstrom agreed it probably did have the affect of law, but said her concern was the criminal penalty attached to the law should not be attached to a regulatory body and a single person.

 

Senator Titus said if there was a violation of a regulation, the individual should not be guilty of criminal offense, and asked whether this was an unusual provision, or fairly common.  Mr. Young clarified, regulations do, in fact, have the force of laws.  Therefore, a violation of a regulation would be a violation of law and could be criminally prosecuted, he said, and he did not believe this was out of the ordinary.

 

Thomas J. Grady, Nevada League of Cities and Municipalities, testified in support of S.B. 560.  He said he was speaking mainly for the rural counties and the lack of education regarding the function of the Office of the Labor Commissioner and what was expected of them.  He stated, in the case of a large project, for example a jail or a school, the construction could skew the prevailing wage in that area because it would be for a single job. 

 

James Sala, Concerned Citizen, testified in support of S.B. 560.  Mr. Sala also stated he was before the committee representing Nevada carpenters who were not represented by an organization.  He pointed out the labor commissioner had made the committee aware of an almost epidemic problem, asserting between 80 percent to 90 percent of public works projects had contractors, primarily subcontractors, who were cheating workers in the community.  He explained, by “cheating,” he was referring to workers who were forced to pay kickbacks, employers paying cash avoiding workers compensation, avoiding taxes and many other laws, not only the prevailing wage law.  He said it was criminal to do this to people who were trying to work and earn a living for their families.  Secondly, he said, he thought it was important for the committee to consider that 80 percent or more of all the violations were committed by approximately 15 percent of the contractors.  He also stated the Office of the Labor Commissioner was understaffed and underbudgeted and this was one of the reasons he supported the bill. 

 

Mr. Sala said he also wanted to talk about compliance and deterrence, which was what S.B. 560 affected.  Prevention, Mr. Sala explained, would help the Office of the Labor Commissioner and the public bodies.  For example, he said, if he cheated a worker, and there was an 18-month backlog in the labor commissioner’s office, but finally the complaint was heard, the employee who persisted with the complaint, might or might not have been fired by the contractor.  The recompense the employee would receive was the amount the employer had taken 18 months ago, which he said, was also criminal.  Therefore, he said, the carpenters were in support of raising the fines on page 5, and in support of the 5-year exclusion, but perhaps not 5 years for all offenses.  They were also in support of raising the penalty from $20 to $50, he said, and the deterrent might be the only action to keep some contractors from repetitive violations.  He asserted some contractors were the same violators, over and over again.

 

Mr. Sala testified communication on the compliance issues was critical.  The awarding bodies, including the labor commissioner and other contracting agencies and contractor associations, communicating these issues were very important, he said, because during the last 2 years the carpenters had started working with the awarding bodies in counties and cities which were becoming more aware of the problem and trying to resolve it.  He reported, when the carpenters first went to the labor commissioner, the labor commissioner had been overloaded; then they had gone to the awarding bodies who had replied, “It’s not our job, go see the labor commissioner.”  Therefore, Mr. Sala stated, he wanted the members to understand and consider the workers on those projects, working at a fairly high-risk job, and wanting to do a good job for the state, were under duress because of the cheating contractors.  He drew attention to the shift of responsibility, supporting the awarding bodies to do more than “take cognizance” of the issues. 

 

Mr. Sala pointed out, current statutes required prevailing wages to be posted outside of a job-site trailer on a board so employees knew what job classification they were and what they should be paid.  He explained the rate was assigned as the project went out to bid, but, he claimed, wage rates were not posted for four projects in the last 2 days for a school, a post office, a federal building, and a veteran’s home.  None of the projects had the rate posted inside or outside the trailer, he emphasized, saying, “A regulation, as simple as that had not been fulfilled.”  He asserted the awarding bodies could have a tremendous impact on this issue and hoped they would accept the responsibility. 

 

Mr. Sala drew attention to language which allowed public bodies to discard their records of a project 1 year after final payment was made on a public work project.  He said it had been his experience that some workers travel with subcontractors from job to job, and sometimes subcontractors would work on an 18-month project, but they might only be on that particular job for 2 months.  Therefore, he said, some workers, until they left the contractor, were reluctant to come forward with a complaint, because they knew if they did they would be laid off from the project.  He stated the Nevada carpenters would like the committee to amend the language, to require records be kept for 2 years, to be consistent with the statute of limitations as far as the labor commissioner was concerned, and the office could refer back to the records.  He reiterated the Nevada carpenters were in support of S.B. 560 and anything regarding the enforcement of maintaining the fair-living wage.

 

Senator Porter asked if Mr. Sala could explain how the kickback worked.  Mr. Sala responded, saying there were several ways in which this worked.  Sometimes the employer would short-hour an employee by giving a payroll check for 20 hours, when the employee actually worked 40 hours, he said, and the contractor would keep the extra money.  Another example was blatant kickbacks demanded by several contractors, he said, explaining: “The superintendent or the foreman of the job, sometimes known by the company, sometimes not, was paid the prevailing wage, but when the employees were given checks on Friday, they were told if they wanted to work on Monday, they should cash the check and bring back $200 for the foreman.”  Some workers would comply, primarily Latino workers, or others, who were not familiar with the laws and protections, he said, especially if the laws were not posted on the job-site.  Other times, Mr. Sala said, the workers would be sent to a job where it was difficult for the labor commissioner to monitor the job–site.  “An employer could have eight people working on a job-site, but only report four people on the certified payroll and divide the payroll between eight people.  Unless the job-site was monitored, the certified payrolls would reflect only four employees instead of eight employees,” he said.

 

Camille Wright-Rudicil, Concerned Citizen, speaking for the National Electrical Contractors Association (NECA) and the International Brotherhood of Electrical Workers (IBEW), Local Union 357, testified in support of S.B. 560.  Specifically, she stated, they were in support of the various changes in language regarding employment practices and the prevailing wage for public works relating to chapter 338 of NRS.  She especially supported the change to NRS 338.040.  As the prevailing wage compliance officer for the southern Nevada NECA/IBEW Labor Cooperation Committee, Ms. Wright-Rudicil said she monitored all the public works projects funded on a state and federal level for the electrical industry to ensure contractors or subcontractors covered by the Davis-Bacon Act, or the state of Nevada public works projects prevailing wage rates, were in compliance.  She pointed out contractors and subcontractors were required to submit payrolls of employees on those projects to the contract awarding body and the Office of the Labor Commissioner.  If in investigations, she found violations of state or federal statutes, she said, those findings were communicated to the labor commissioner or the USDOL, as well as the contracting or awarding bodies.  On May 7, 1998, she reported, she had requested an advisory opinion from the Nevada State Contractors’ Board, as she had found numerous workers from leasing agencies on public works projects, hired by contractors and subcontractors as journeymen electricians and various other trades.  The issue was whether a contractor’s license was required by employment agencies to provide labor to the various subcontractors who were performing work on public works projects funded either by the state or the federal government, she said.  On May 15, an advisory opinion was issued by the State Contractors’ Board which said, based on information provided, it appeared a contractor’s license would be required by the employment agencies who were providing labor to the subcontractors.  In further advisory opinions, she said, the board determined to decide on a case-by-case basis of complaints filed. 

 

Ms. Wright-Rudicil explained the temporary agencies did the recruiting, screening and hiring of employees so their clients could focus on underbidding signatory contractors and operating a job at a reduced cost.  She asserted temporary firms enabled unscrupulous contractors to avoid many of the rules and regulations legitimate contractors obeyed.  Those clients could cut the work force by one-third and rely on the agency to supply additional construction employees on an as-needed basis, she said.  Firms, such as Labor Express, advertised in writing saying, unless a company chose to keep employees, Labor Express could rotate workers, on an as-needed basis, so the company could eliminate overtime expenses, she claimed.  Construction contractors who hired employees through a temporary agency could pay lowered worker compensation costs, she said, because the temporary agency usually had a lower experience rate than a construction contractor. 

 

Most states regulate employment agencies, Ms. Wright-Rudicil said, but the temporary hiring industry had lobbied to exclude themselves from those laws.  Further, she said, workers were often sent out to jobs for which they were not adequately trained and thus faced and caused safety hazards for which they and other workers were not fully prepared.  Temporary firms charged clients 30 percent to 50 percent markup on wages, she said, and paid the workers they had dispatched to a job.  She testified these workers were often cheated because the firm charged them for cashing paychecks as well as using an automatic teller machine (ATM) pay system which charged the worker a fee to collect their pay from the temporary service.  The workers, Ms. Wright-Rudicil explained, were also charged for transportation to the job-site. She again expressed support for S.B. 560, stating, the statute, as currently written, precluded the labor commissioner from enforcing the prevailing wage requirement for workers not employed by a contractor or subcontractor as defined in chapter 624 of NRS.  The changes proposed by S.B. 560 would enable the labor commissioner to establish a level playing field for everyone contracted on a public works project, she said.

 

Mark Stotdk, Concerned Citizen, speaking for the Nevada Interfaith Council for Worker Justice, stated, it was unfortunate some companies were unwilling to obey the law.  He said he believed there had to be a strong and significant deterrent for such behavior, and S.B. 560 would accomplish that.  He thought the level of fines proposed would be taken seriously, he said, and with certain egregious behavior, such as kickbacks, the labor commissioner should be able to bar the contractor from public works projects.  He said the council also thought the bill was important, because it gave the labor commissioner the latitude to craft a resolution appropriate to the company and the violation which had occurred.  Mr. Stotdk said he believed it was also important for the awarding body to take responsibility for their contracts.  It should be clear where the responsibility lay, he said, so workers were not trapped by jurisdictional differences.

 

Danny L. Thompson, Lobbyist, Nevada State American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), spoke in support of S.B. 560.  Mr. Thompson stated he wished to go on the record saying the Governor had “made a fine selection in Terry Johnson, as labor commissioner.” Regarding section 9 of the bill, he stated, the awarding bodies should have the facts and wherewithal regarding their contracts to deal with them in a timely manner.  He reported having attended the meeting of the Clark County School District, in which prequalification of contractors and subcontractors had been discussed.  Although there were many honest contractors and subcontractors in Nevada, he said, there were several workers at the meeting, speaking through an interpreter, who had given the names of contractors demanding kickbacks from employees if they wanted to keep their jobs.  He asserted S.B. 560 would go a long way in correcting those situations and the Nevada AFL-CIO supported this bill.

 

Mr. Spinello stated Clark County, one of the larger awarding public bodies, believed S.B. 560 would add some new duties.  For the record, he said, “Clark County was willing to take on additional duties, but the record should state these would be new duties, and could result in new positions; therefore, there would be added expense as a result of S.B. 560.”  Mr. Spinello said he was certain Clark County would work with the labor commissioner, and added, when responsibility had been centralized and then reassigned, there should be uniform application.  Therefore, he said, an initial phase-in of training would perhaps be beneficial particularly in smaller communities.  He suggested the process should incorporate into the regulations some methodology to ensure there was uniform application of how the prevailing wage was determined by the various bodies.

 

Senator Titus asked what Clark County had thought the Legislature meant by “take cognizance,” up until this point.  Mr. Spinello replied he had been unaware of the term.  Chairman O'Connell asked if there were minutes or records of meetings from those early contracts or hearings.  Mr. Spinello said the county did not have those documents and he could only speak to what the precedent and tradition had been.

 

Chairman O’Connell closed the hearing on S.B. 560 and opened the hearing on S.B. 363.

 

SENATE BILL 363: Authorizes use of proceeds of certain taxes for certain highway improvement projects located wholly or partially outside boundaries of this state. (BDR 20-1049)

 

Senator Porter told the committee this was an historic day.  He emphasized there had been a lot of work done by many individuals and entities over a period of years, including: two Native American organizations, the Bureau of Indian Affairs and the Fort Mojave Indian Tribe; two states, Nevada and California; two state transportation departments; two counties in two different states; two regional organizations; and two communities, Laughlin, Nevada and Needles, California, in conjunction with the business communities of those towns.  They were all working toward one goal.  Senator Porter credited the Laughlin Chamber of Commerce with having spearheaded the effort.

 

Senator Porter noted, in 1998, the state of Nevada received more net revenues from the community of Laughlin than the casinos had made in net profits prior to paying federal taxes.  Since 1994, the total assessed value had dropped in Laughlin by almost $100 million, going from $460 million to $360 million, he reported, and Laughlin was the source of between $34 to $38 million in net tax revenues per year to the state of Nevada.  Last session, he stated, with the assistance of Senator O’Donnell, the Legislature had been asked for a funding source and had secured $175,000 for the study needed to determine the feasibility of the proposed plan.

 

Laughlin was the destination of choice for many tourists despite the $1.5 billion gaming industry in Arizona and California, he said, and tourism brought $1.2 billion a year in economic activity to the Colorado River area.  He reported $440 million was spent in Arizona, and emphasized Nevada needed to capture more of the tourism dollars spent in Bullhead City.  Without the proposed improvements, such as the Needles Highway project, Laughlin and Nevada risked losing essential tourist dollars, he said, in the resorts and the lucrative revenues gained from roadside retail, such as gas stations, restaurants and convenience stores.  He explained they were going to talk about a highway, but more importantly they were going to “discuss the economy and future of Nevada, and the impact the community of Laughlin has had on the economy of Nevada.”

 

Senator Porter introduced Jo Elle Hurns, Executive Director, Laughlin Chamber of Commerce, who distributed a bound document (Exhibit G.  Original is on file in the Research Library.) on the Needles Highway and reported the Laughlin Chamber of Commerce had gone before the NDOT Board of Directors and the Clark County Board of Commissioners to present the Needles Highway story.  She described Needles Highway as a substandard 28-mile, winding, north-south road linking California Interstate 40 to Laughlin, Nevada.  She said 14 miles of the road were located in California and the other half was in Nevada. 

 

Ms. Hurns confirmed to Senator Neal the Needles Highway was on the west side of the river, noting there were only 4 miles left to improve on the Nevada side.  However, she said, on the California side, all 14 miles needed to be improved.  She explained there was a mix of vehicles on the highway, such as recreational vehicles, buses, automobiles towing boats, and there were narrow, unpaved shoulders, with minimal areas for passing.  She emphasized the deficiencies in flood control, and stressed the highway had been closed three times over the last 10 months because of flooding. 

 

Ms. Hurns claimed Laughlin was a regional gaming destination and the majority of the 4.5 million visitors per year came from southern California and Arizona, and 98 percent of those arrived at Laughlin by automobile, bus or recreational vehicle.  She explained, over the past 4 years, transportation consultants had been hired to study both the Needles Highway and US 95 to outline opportunities which might exist to improve either one or both.  They opted for the improvement of the Needles Highway because it had been preferred by the community of Needles and San Bernardino County, California and allowed the pooling of funding sources for the project.  She noted large segments of the highway had already been improved by Clark County.

 

Ms. Hurns said what was needed was a fully redesigned and reengineered road with passing lanes and flood control.  Clark County had spent approximately $14 million improving the Needles Highway, from Route 163 in Nevada to 4 miles short of the Nevada state line, she said, and while Nevada was not the problem, it could be the solution.

 

In fiscal year 1996, at a ratio of 4 to 1 in revenue versus costs for all funds combined, Laughlin had added “almost $34.3 million to the state coffers,” Ms. Hurns reported, and at a ratio of 1.35 to 1 in Clark County, Laughlin contributed revenues of approximately $5 million per year.  In 1998, she said, Laughlin found the ten casinos combined made in net profit, just less than the state made from the community.  In fiscal year 1999 at a ratio of 3.73 to 1, for all funds, excluding enterprise and internal service funds, the state was still receiving the greater portion of Laughlin’s revenue export for a total of $37.8 million.  Ms. Hurns emphasized they wanted the committee to understand they were not asking for money, but rather asking for help in meeting a need.  Laughlin had received guidance from Governor Guinn, former Assemblywoman Gene Wines Segerbloom, Senator Jon Porter, and Bruce Woodbury, Chairman, Board of Commissioners, Clark County, she said.

 

Senator Neal queried if they were not asking for money, what were they asking for.  Ms. Hurns replied they were asking to spend a portion of Clark County funds designated for this project across state lines.  Senator Neal asked for clarification.  Senator Porter explained state fuel taxes could not be spent outside the state of Nevada, and they were trying to create the ability for Clark County to spend dollars in the state of California. 

 

Senator Neal said there had been a bill to permit Clark County to build a road beyond the county boundaries into California, and he asked if this was the money being discussed.  Senator Porter stated he could not answer the question, but knew legislation had been passed which helped fund an airport in Bullhead City via the Las Vegas Convention and Visitors Authority (LVCVA).

 

Senator Titus asked for clarification regarding Clark County’s expenditure of $14 million on the road to date, and how the $14 million had been calculated.  Ms. Hurns replied this was Laughlin’s export to the state in gaming taxes and sales taxes, but did not capture the county money.  She reported Laughlin paid $1.35 for every dollar returned in services, and reiterated they had presented the Needles Highway story to NDOT and the Clark County Commissioners, both of which had provided resolutions of support.  She said NDOT had been key in identifying funding sources and coordinating state and county agencies in order to achieve the goal, and was also finalizing the acquisition of the road from the county.  In Nevada, she said, the road belonged to Clark County, but the state would take over ownership and the highway would become Nevada State Route 162. 

 

Ms. Hurns continued, stating as a result of the 1999 Legislative Session and S.B. 558 of the Seventieth Session, Laughlin had received $175,000 from the state and the county in order to do the study.

 

SENATE BILL 558 OF THE SEVENTIETH SESSION:  Makes appropriation to Department of Transportation to conduct feasibility study of improving access highways in adjoining states.  (BDR S-1790)

 

Ms. Hurns stated the comprehensive feasibility study, almost completed, would accurately specify the amount of money needed to improve Needles Highway.  After 4 years of working on this project, she commented, they had been elated when San Bernardino County agreed to contribute almost $3 million to the effort.

 

Ms. Hurns reported total costs projected, depending on the extent of improvement, would be anywhere from $5 million to $36 million.  A simple overlay of the surface would cost approximately $5 million, but would not improve capacity or solve any of the transportation issues with the roadway, she said.  The study showed solutions ranging in cost from $17 million to $21 million for an acceptable two-lane, fully constructed, redesigned roadway, whereas, she said, the projected cost for a four-lane highway, redesigned at 70 miles per hour, was $36 million.  She identified the following funds obligated to and received for this project:  $175,000 in study money from S.B. 558 of the Seventieth Session; $7 million from NDOT, which could not be spent outside Nevada; $7 million from Clark County and the Regional Transportation Commission; $2.5 million from San Bernardino County; $1 million from the Fort Mojave Indian Tribe; and $300,000 from the City of Needles.  She pointed out Needles had a population of only 6000, and therefore, $300,000 was a great deal of money for them.

 

Ms. Hurns again emphasized they were not asking for money, but rather permission for Clark County to spend part of their funds across state lines.  She continued, saying the Fort Mojave Indian Tribe had pledged right-of-way, substantial construction services, valued at $1 million, and, additionally, the tribe was seeking Bureau of Indian Affairs (BIA) funding and had offered environmental studies for the project.  The San Bernardino Associated Governments (SanBAGs) and the California Department of Transportation (CalTrans) had offered further efforts to secure funds for the project, she said.

 

Commenting further, Ms. Hurns explained the Laughlin resort operators, the LVCVA, and the Laughlin Chamber of Commerce, along with the town board of Laughlin, had worked hard to recover from declining visitor volume.  She said they believed the market softening, and decline in hotel occupancy and gaming revenues, were directly attributable to the proliferation of Indian gaming in their major feeder markets, southern California and Arizona.  In order to recover, she said, the nine casinos formed a resort operators group called the Laughlin Tourism Committee and focused on strengthening Laughlin’s reputation in the southern California and Arizona markets, concentrating on providing a more entertaining and unique destination.  Ms. Hurns stated the LVCVA spent approximately $4 million in marketing dollars for Laughlin, including newspapers, billboards, and television advertisements, et cetera, and had developed a number of special events to attract a diverse customer base.  She noted, collectively, the Laughlin resorts spent approximately $21 million to $23 million per year in advertising and promotions to protect and expand their customer base.  She reported Laughlin had reversed a 4-year gaming revenue decline and was hopeful the final report for this year would exceed the gaming revenue level in their best year, 1993. 

 

Senator Titus asked how many large properties were in Laughlin.  Ms. Hurns replied there were ten, although the Regency was smaller.  Senator Titus asked if they were affiliated with the resorts in Las Vegas.  Ms. Hurns said five of the properties had parent companies represented in the Las Vegas market.  She explained, Don Laughlin’s Riverside Resort was an individual resort; the River Palms Resort, with 15,000 rooms, was owned by a company which also had several hotels in California; the Pioneer was connected with the Sahara Club she believed, but a separate entity operated the Pioneer organization; the Regency was a small hotel, owned by individuals in the Laughlin community; and the Bayshore, with 300 rooms, was also owned by a local couple.  Senator Neal asked if there were any new hotels to be built.  Ms. Hurns responded, saying a property known as Emerald River, which was a Las Vegas interest, had just sold, but she understood the new owner’s intent was to revive the hotel property.  There were also several housing developments beginning to revive, she said, which would provide economic development opportunities for all of the 7500 residents of Laughlin.

 

Senator Titus referred back to the Clark County funds asking where the funds were.  Ms. Hurns said it was Regional Transportation Commission (RTC) of Southern Nevada funding.  Senator Titus asked if this was gas tax paid in Laughlin or gas tax paid in her district.  Mr. Spinello clarified, saying the money in question was not gas tax, but was money replacing gas tax revenues, which had been leveraged and bonded against part of the monies used for construction of the beltway.  Senator Titus asked again where the money had come from.  Mr. Spinello answered, stating the money was coming from other tax funds, such as development taxes, used to offset the gas tax.  He explained this met the legal requirement for gas tax money not to be used across state lines.  Senator Titus asked what the money would be used for otherwise.  Mr. Spinello replied it would be used for other infrastructure development. 

 

Senator Porter explained they were speaking of optional tax on revenues of rentals for transient lodging, imposed by the voters of Clark County.  He clarified these properties were not in the current gaming corridor, but were other properties and could be used for projects related to construction and maintenance of sidewalks, streets, avenues, boulevards, highways, bridges, and other public rights-of-way.  Referring to Senator Neal’s previous question, he said the language of the statute currently provided the funds could not be used beyond one-mile of a transportation district.  He emphasized, what they were trying to do was to expand the language to permit use of funds beyond the one-mile limit, in order to use this tax imposed by the county.  He confirmed this was room tax.

 

Senator Titus asked if this had been part of ballot question 10, which the voters had passed a number of years ago.  Chairman O'Connell said ballot question 10 had been an advisory question as to whether or not the voters thought the entities had to go to the Legislature to ask for the additional quarter-cent tax.  Mr. Spinello elaborated, saying ballot question 10 monies included a range of issues.  He clarified the money anticipated for the project would be used for a transportation project in any event, and the gas tax money had been leveraged to raise more money to accelerate the building of the beltway.  Senator Care asked if this included sound walls.  Mr. Spinello said it was his understanding this project was not replacing any other project.  At the county level, he said, they were anticipating passage, and this project had been built into the county budget.

 

Samuel W. Tso, Vice President and Area Manager, Parsons Brinckerhoff Incorporated, explained his firm was the study consultant on behalf of NDOT.  He also stressed he was not a tax expert, but it was his understanding the monies would not come from the Las Vegas resort corridor, but rather from the Laughlin room tax.  This was not an issue of identifying additional new sources of funding, he said, but rather the authorization to use previously committed funds on the California side to benefit the Nevada interest.

 

With regard to Ms. Hurns’s earlier testimony on San Bernardino County traffic, Senator Care recalled the portion of the highway in question was very dangerous and there had been a number of fatalities.  Ms. Hurns said California had looked at the number of fatalities, which did not exceed the number required before they would be forced to make improvements.  Mr. Tso explained California was similar to Nevada in terms of roadway inventory.  There was a normal expectancy of types of accidents, fatalities, property damage, or injury for the classification of the roadway, he said, and a two-lane, conventional highway, as the Needles Highway currently is, would fall within the normal parameters.  He agreed it is extremely dangerous, but said the roadway being so constrained on the California side probably contributed to the fact there were not more accidents.

Senator Neal asked Mr. Spinello if the gas tax could be used to replace money that would be taken away from the beltway.  Mr. Spinello explained, as he understood this, instead of “paying as you go,” the county had used the flow of the gas tax for bonds.  He said he thought approximately $100 million in bonds had been sold, and gas tax was not providing the principal and debt service on the bonds, but other taxes were replacing what gas tax monies would have done on an annual basis. 

 

Tom R. Skancke, Lobbyist, Las Vegas Convention and Visitors Authority (LVCVA), testified that for the past 12 years he had spent a significant time working on Interstate 15 and Needles Highway funding in California.  He claimed to have a good understanding of how California appropriated dollars, and it was not based upon an end destination, but rather, the warrants and tests conducted for funding.  He noted San Bernardino County was the largest county in the country and the least funded by population; and Needles, California had approximately 2333 voters and, therefore, did not receive the necessary attention from the elected officials in San Bernardino County.  Additionally, he noted, about 80 percent of San Bernardino County funds were spent in the inland area.  He stressed, for the past 12 years they had been trying to attract attention to the Interstate 15 corridor from Las Vegas to Victorville and the Needles Highway.  Because the Needles Highway was a county road, and not a part of the national highway system, the interstate system, or a state highway in California, he said, it did not qualify for any funding, except as allowed by the county.  He reported San Bernardino County had money from “Measure I,” which was similar to Nevada’s ballot question 10, and emphasized Needles had accumulated approximately $247,000 from this measure, based upon their gasoline tax and population.  Needles would never qualify for any significant funding for this road, he said, and for the first time in 11 years, a former supervisor was able to obtain $2.5 million for the Needles Highway.  This had occurred due to efforts made on the Nevada side, he said. 

 

Mr. Skancke emphasized how important this highway was, not only to the future of Laughlin, but also to the continuation of gaming revenues in southern Nevada.  He pointed out California was spending $725 million on the improvement of a 30-mile stretch of highway between Barstow and Victorville.  In 1990, he said, $60 million in appropriations was received for the interchange at Interstate 40 and Interstate 15, which unclogged the bottleneck.  Between California, Nevada, and the federal government, $650 million would be spent on widening the 30-mile stretch between Barstow and Victorville, which would add more traffic to Interstate 40 and would add more traffic to the Needles Highway.  Mr. Skancke stressed again the dangerous nature of the road and remarked it would be shortsighted if Nevada did not try to assist in this effort.

 

Senator O’Donnell clarified the $650 million being spent on the Barstow to Victorville highway was not Nevada money.  It had been allocated to Nevada, he said, but Nevada opted not to take $12 million in funds from the federal highway appropriation, and allowed California to have that $12 million so California could use the money to build the highway.  He reiterated this was a county road, not a state highway, nor a federal highway. 

 

Senator O’Donnell explained this situation existed because of the building of large casinos and a bedroom community, but the artery supplying the bedroom community had remained the same size.  If the number of visitors remained the same but the number of rooms increased, the result then, was just trading rooms, and therefore, there was no net increase, he said.  He took issue with the two-lane highway, emphasizing that for the additional dollars, the four-lane highway was the way to go, and if the problem were solved, the net exports to the state would increase.  When the net exports to the state increase, the state benefits, he said, and it would be shortsighted not to look at the overall dollars our major industry generated to enable the building of more parks, sound walls, et cetera.  He stressed the right thing to do was maintain and increase the size of the Needles Highway.  Senator Porter said they certainly would like to have a four-lane highway, but he applauded the conservative, collaborative effort of the number of agencies working together.

 

Senator Titus clarified, saying she understood the portion of highway in Nevada would be turned over by the county to the state, but she wondered what that would mean in terms of cost to the state once the highway had been turned over.  With regard to the California portion of the highway, she asked whether California would maintain it, once expanded, or if Nevada would continue to maintain all of it from these funds.  She queried what had been meant when they testified this bill would provide for future projects in addition to this project.

 

Mr. Skancke responded, saying the Nevada county road would be turned over to the state.  Mr. Spinello stated, if it became a state road, then future maintenance would be the responsibility of the state.  He believed it was important for the committee to know Clark County was participating in discussions with the state to take over many miles of what were currently state routes but were actually urban arterials, including the Las Vegas Strip, Flamingo, Tropicana and a number of others most would consider streets, but were, in fact, state routes.  Once the transfer had occurred, he said, the county or cities would have the ongoing maintenance responsibilities.  Mr. Spinello stressed there was something of a trade involved. 

 

Senator Titus asked again whether Nevada had any assurances California would maintain that portion of the highway.  Mr. Skancke replied, explaining the way California justified their state roads was, once the county road was improved to a standard which the state could take over, the state would take it over.  Currently, he said, the state would not take on a project if they did not have to.  He emphasized the hope was, once the road was built to a standard, the state would take it over, and it could then become part of the national highway system eligible for federal funding. 

 

Rebecca Valentine, City Council, City of Needles, California, clarified there were 2333 voters in Needles.  She reiterated Needles had secured their funds for the project.  She also confirmed, after speaking with California transportation officials, if the highway met the standard, the state would take it over, although there had been nothing in writing. 

 

Jeff Williams, City Council, City of Needles, California, provided a copy of a support resolution from the City of Needles (Exhibit H), and expanded on the fact they had been able to secure the $2.8 million for the project.  He estimated an approximate population of 6000 equated to about 10 years of local road improvement funds, and emphasized this was an enormous commitment from the City of Needles to improve the roadway for Laughlin and Needles.  He said the two communities supported one another and were economic partners in development.  Laughlin provided 300 or more jobs for residents of Needles, he said, and those residents went to Laughlin to participate in recreational activities, to patronize restaurants, and to shop. 

 

Assemblyman David F. Brown, Clark County Assembly District No. 22, said he wished to go on the record “in support of S.B. 363.”  He asserted Laughlin had huge potential, but also some constraints, one of which was the Needles Highway.  He claimed the benefits would be returned tenfold if Nevada made the investment for improvement on the California side.

 

Steven Horsford, Lobbyist, Nevada Resort Association, wanted to be on the record also, “thanking Senator Porter and Assemblyman Brown for bringing this issue forward.”  Mr. Horsford emphasized how important this project was toward the protection of visitor volume, which provided a tremendous amount of taxable income to the counties and the state.  He reiterated he wished to be on the record “in support of S.B. 363 and would work with the sponsors and the members of the committee to advance the bill.”

 

Daniel Grimmer, Lobbyist, MGM Mirage, drew attention to a letter addressed to Senator Porter (Exhibit I) from André J. Carrier, Chief Operating Officer, Golden Nugget Laughlin.  Mr. Grimmer asked for the letter to be made a part of the record, and echoed the comments made by the Nevada Resort Association and the Laughlin Chamber of Commerce in support of S.B. 363.

 

Senator Raggio indicated, for the record, he “served on the board of directors of Santa Fe Gaming Company and its affiliate, the Pioneer Hotel.”  With no further testimony, Chairman O'Connell closed the hearing on S.B. 363 and opened the hearing on S.B. 563.

 

SENATE BILL 563: Makes various changes relating to telecommunications. (BDR 20-1334)

 

Fred L. Hillerby, Lobbyist, Verizon Wireless, thanked the committee for introducing the bill.  Senate Bill 563 was brought forward, he said, primarily in response to a federal law, House Resolution 4391 (HR 4391) (Exhibit J), signed into law on July 28, 2000.  He drew attention to roaming charges in regard to the use of cellular telephones, and said there had been confusion in the past as to where taxes would be paid on these charges.  For a long time, Mr. Hillerby noted, the law of the land, based on a court case, resulted in taxes being paid where the call originated.  For example, he said, if you were driving in Needles, California, the call would have been subject to California taxes.  The intent of the federal law was to make the tax collection process simpler and to allow wireless taxes to be based on where the primary usage of the cellular telephone took place. 

 

Mr. Hillerby pointed out the primary place of use meant the street address representative of where the customer’s use of mobile telecommunications service primarily occurred, which must be either the residential street address or the primary business street address.  He stated the customer would make such election when they signed for the service, and the bill would go into effect in August 2002.  He reported they had searched through the state statutes to find where the taxing source might be different than what the federal law required to ensure consistency, noting many of the taxes wireless companies paid in the state were based on total revenues and not on the address of the subscriber.  He referenced a provision to establish an expedited process for customer concerns or grievances regarding whether or not they were being taxed and billed appropriately, and recommended an amendment to the bill adding the provision (Exhibit K). 

 

Chairman O'Connell suggested an explanation of the amendment be made to the committee.  Mr. Hillerby responded, saying it would set up a procedure whereby if the customer believed the amount of tax, charge or fee was inappropriate, the customer could then appeal to the provider.  He asserted this would be a more expeditious way to correct an error. 

 

Senator O’Donnell asked whether S.B. 563 would coincide with the federal government timetable or whether it would just be codified into state statutes.  Mr. Hillerby replied the federal bill had been signed the year before, but the effective date, so that companies could be prepared to change any taxing methodology in place, was August 2002.  Mr. Hillerby also stated he appreciated the question, because they would further like to amend the bill to make the effective date of S.B. 563 the same as the federal bill.

 

Mr. Hillerby clarified to Senator Neal his cellular phone taxes would be based on his home address in North Las Vegas, and any taxes assessed by Clark County or the City of Las Vegas would be based upon his primary base of usage, in this instance, Senator Neal’s residence.

 

Chairman O'Connell asked if anyone else wished to testify on S.B. 563.  Mr. Hillerby commented he had been authorized by other wireless companies to speak in their stead.  The chairman closed the hearing on S.B. 563 and opened the hearing on S.B. 556

 

SENATE BILL 556: Prohibits reprisal or retaliatory action against officer or employee of local government who discloses improper governmental action. (BDR 23-793)

 

Senator Porter noted Senator Titus would present the bill to the committee, but pointed out the bill had come out of the interim study on the air quality programs in Clark County.  He stressed they had found serious management deficiencies and problems with air quality inspection, and had continually heard from employees of the Clark County Health District regarding improprieties.  He emphasized many of the employees had been afraid to testify because of repercussions, and because they were whistle-blowers, and it was felt they needed additional protection.  He noted Senator Titus had taken a lead role with this particular legislation. 

 

Senator Titus explained the importance of S.B. 556, particularly in regard to the whistle-blowers.  They had learned the state whistle-blower statute offered protection only to state employees, not to local employees.  She stressed the language of this bill would also apply locally.

 

Gary H. Wolff, Lobbyist, Teamsters Local 14, stated he represented 9000 Teamster employees in southern Nevada including municipal and county employees in Boulder City, Henderson, North Las Vegas and Mesquite.  Mr. Wolff testified they wanted to go on the record “in support of S.B. 556.”  He emphasized the bill was good for both government and employees, and asserted the legislation would tend to save a lot of money in litigation.

 

Madelyn Shipman, Lobbyist, Washoe County, said she wished to make a comment on page 2, section 3, subsection (b), line 4, where the language said an appeal must be filed within 2 years after the information was disclosed.  She claimed the point was not to give someone 2 years in which to think about a retaliatory action, and suggested an amendment to make the time frame not later than 30 days after the retaliatory action was taken.  In other words, she said, any time within a 2-year time frame, after the disclosure was made, but within 30 days, the employee would have to request an appeal because they would know whether they had been retaliated against.  Ms. Shipman explained Washoe County had an internal procedure, but it was not as formal as this ordinance would require.  She stressed they were not opposed to S. B. 556, but were concerned with the possible lag in time, and she believed these actions should be addressed quickly.

 

Senator Neal asked for clarification, if a person was retaliated against after the 30-day time period, would that become a whole new charge.  Ms. Shipman asked Senator Neal whether he was speaking about a series of retaliations.  The senator agreed.  Ms. Shipman responded, saying each would be a separate appeal in and of itself within the 30 days, as long as they occurred within the  2-year time frame.  Senator Neal asked, if they imposed a 30-day limit, would it become disconnected from the original charge.  Ms. Shipman stated she would assume this would be an internal procedure to be followed within a local government, which would be aware of previous charges.  She stated she would not have a problem fixing this, but was simply saying the local government needed to know within a shorter period of time than the 2-year period when an employee believed they might have been retaliated against.

 

Chairman O'Connell asked Senator Titus or Senator Porter to give the logic behind the 2-year time frame.  Senator Titus said the 2-year time frame was in existing state statute.  Ms. Shipman noted the bill provided 2 years from the disclosure, when the employee thought they might have been retaliated against, and she understood a time frame was needed for the employee from the time they made a disclosure.  Senator Titus said she thought the language reflected what was in section 7 of existing statute. 

 

Ms. Shipman restated her concern was if a retaliatory action had been taken and an employee waited up to 2 years to notify the local government, it would be too long ago to go back and recreate what had happened.  As a practical matter, Ms. Shipman stated, it might not happen that way.  Senator Titus clarified, saying she thought the language referred to, if the reprisal or retaliatory action took place within 2 years.  Ms. Shipman maintained the way she read the language was the information needed to be disclosed within 2 years. 

 

Bob Gagnier, Lobbyist, State of Nevada Employees Association (SNEA/AFSCME), said he thought Senator Titus’ interpretation of NRS was correct; the 2 years in the state statute was the time frame between when an individual disclosed an inappropriate action and when the retaliatory action was taken against the individual.  He said, if the retaliatory action was taken within the 2-year window, it would be presumed to be in retaliation for the       whistle-blowing, and once the 2 years were up, the individual would no longer have that presumption.  Senator Titus stated perhaps S.B. 556 had been written incorrectly, but they wanted to make the local governments the same as the state, and the language had been taken from existing statute.  Mr. Gagnier clarified, under the statute, once retaliation had taken place against the individual, the person could not wait 2 years to file an appeal.

Senator Neal, restating the procedures, said the local governments were to allow employees to file an appeal within 2 years after the information was disclosed.  He said he did not think they would want the local government to have 30 days in which to appeal.  Further, it seemed a local government, by ordinance, would establish a procedure for hearing an appeal from a local government officer or employee within the 2-year time frame, he said.

 

Ms. Shipman said she understood the language was the same as in state law.  However, she said, if someone disclosed an inappropriate act on the part of an official, then up to the end of the 2-year period, there would be a presumption that any action fitting within a claimed retaliation, could be appealed by the individual.  She clarified what she had said was, within that 2-year period after the actual retaliatory act, there was nothing in the statute to define how long the claimant had to file an appeal.  She suggested this should be added.  The local government or the state agency would have the opportunity to have fresh information, she said, as opposed to dealing possibly with something that happened almost 2 years previously. 

 

Mr. Young stated there were two separate provisions which applied in two separate circumstances.  Section 7 dealt with state employees, he said, and section 3 copied the language from section 7, but dealt with local government employees.  He explained, after the information had been disclosed, the employee would have up to 2 years in which to file an appeal for any action taken by the local government, and the presumption would be it had been a retaliatory action.  In his opinion, he said, if a change was made, it would not be to delete the 2-year limitation, but rather to add a provision saying, it must be within 30 days after the retaliatory action was taken.  In other words, he said, if the action took place 6 months after the employee disclosed the information, and there was the belief a retaliatory action was taken, then the additional language would say the employee had 30 days in which the appeal had to be filed, if the retaliatory action was taken during that 2-year period.  He stressed this would be in addition to the language found for state employees at the current time. 

 

Senator Titus understood some limitation would be acceptable, but wanted to be careful it would not be too limiting.  She noted one of the problems heard from employees of the health district, who were covered under the Federal Clean Air Act provisions, was those provisions were so restrictive as to be virtually ineffective.  She said she did not want to see the language so restrictive it could never be used to protect whistle-blowers. 

 

Ms. Shipman replied to Senator Titus, saying she did not wish to delete the     2-year time period, and certainly, 2 years was a presumptive period for retaliatory actions.  Senator Titus suggested perhaps 60 days could be added in which the employee could file a complaint.

 

Chairman O'Connell closed the hearing on S.B. 556 and opened the work session on S.B. 198.

 

SENATE BILL 198: Establishes bill of rights for persons whose financial or other business records are subject to examination by commissioner of financial institutions. (BDR 18-53)

 

Senator Raggio explained he had been asked to chair the hearing for this bill, and noted the committee had asked to see a draft of the suggested amendment.  He stressed the important factor was, S.B. 198 would apply to chapter 232 of NRS, extending to the commissioner of financial institutions.

 

Mr. Young explained the bill, as amended, would apply only to people who were regulated by the commissioner of financial institutions.  He called attention to section 6, and the language, “except as otherwise provided by specific statute, each person who is subject to regulation by the commissioner has the right:”  which, he said, had been added to ensure the provisions enacted to protect mortgage investors from deceptive and fraudulent practices by mortgage brokers would not be compromised.

 

Senator Raggio maintained the committee would not need to consider the request for exclusion because they were excluded by virtue of the fact it was not under this chapter.  Mr. Young confirmed this and said any protections set forth in another statute would be an exception to section 6. 

 

            SENATOR O’DONNELL MOVED TO AMEND AND DO PASS S.B. 198.

 

            SENATOR PORTER SECONDED THE MOTION.

 

            THE MOTION CARRIED.  (SENATOR O’CONNELL ABSTAINED FROM THE VOTE.)

 

*****

Chairman O'Connell opened discussion on S.B. 265.

 

SENATE BILL 265: Requires city or county to pay just compensation or authorize alternative location for certain structures under certain circumstances. (BDR 22-156)

 

John Pappageorge, Lobbyist, Nevada Outdoor Media Association (NOMA), suggested the committee would recall LCB had prepared an amendment to S.B. 265, and Mark Fiorentino (Lobbyist, Nevada Outdoor Media Association) had given testimony at the hearing.  Mr. Pappageorge recalled the committee had proposed the continuation of meetings with local entities in order to resolve problems before considering an amendment.  He reported Mr. Fiorentino had met with the local entities and had been able to address some of the problems, but not all.  Specifically, he said, NOMA had not been able to come to terms with concerns regarding amortization.  He emphasized the intent of the bill, noting they had not been considering new sign locations, but rather the protection of the property rights of sign owners of existing signs.  He explained NOMA’s amendment (Exhibit L), and the amendment provided by LCB (Exhibit M), both addressed their concerns, and NOMA would accept either amendment. 

 

Chairman O'Connell clarified there were amendments from NOMA and LCB, as well as an amendment proposed by Clark County, the City of Las Vegas, the City of North Las Vegas, and the City of Henderson (Exhibit N).  Mr. Pappageorge testified there had been an error in that NOMA was also listed on the amendment from local governments, and should not have been, as it could not agree with that amendment. 

 

Senator Care asked for clarification regarding the ability to establish an appropriate amortization schedule.  He pointed out the City of Henderson established an amortization plan in 1991, and if the committee agreed to the language, then the amortization plan would lapse in 2001.  Mr. Pappageorge responded, saying this was not what they understood, but NOMA’s amendment would replace that language and amortization would not go into effect. 

 

Senator Care said he was looking at subsection 1, section 1 of S.B. 265, noting one of the options a local entity had was to establish an amortization schedule for the eventual elimination of the nonconforming use.  The City of Henderson has had that in effect since 1991, he said, and therefore, there would be no compensation beyond the amortization which would expire in 2001.  Mr. Pappageorge replied he would agree with the senator’s statement, but this was why NOMA objected to the amendments. 

 

Senator Porter commented on the confusion due to the number of amendments presented and the inaccuracies.  He suggested the committee review the documents further.  Chairman O’Connell asked the members to review the work session documents and the proposed amendments and be prepared for further discussion at the next work session.  Senator Care agreed and drew attention to the fact the amount of money involved had not been brought out in testimony.  He asserted, conceivably, several million dollars would be involved in the City of Henderson. 

 

Senator Porter clarified, saying there were three different amendments, noting the City of Henderson had agreed to an amendment, along with Clark County, the City of Las Vegas, and the City of North Las Vegas, and there was an amendment proposed only by the City of Henderson.  Stephanie Garcia, Lobbyist, City of Henderson, requested the committee members remove the proposed amendment which named only the City of Henderson.  She reported the local jurisdictions had met, and together, developed the amendment with the heading Clark County, City of Las Vegas, City of North Las Vegas, and City of Henderson.  She apologized for the error in listing NOMA as a participant.

 

Senator O’Donnell drew attention to the language “establish an appropriate amortization schedule,” and said a number of factors would be involved in dealing with an amortization schedule, for example, interest rates and the time-value of money.  He asked if those factors would be determined by the county, the city, or a collaboration of the owners and the county or city.  He pointed out an amortization schedule could have zero interest or zero cost and would basically be a buyout whereby the property owner could lose a lot of money.  Mr. Pappageorge responded saying how the amortization would be determined was part of the problem.  He stressed they were discussing value of property or signs.

 

Senator Raggio stated the proposed amendment by NOMA did not provide for any amortization schedule; however, the other amendment language provided for amortization.  Senator Neal asserted the discussion concerned existing billboards, which might have to be moved sometime in the future.  The option was to either pay for the sign or allow movement to another location, he said.  Chairman O’Connell agreed, saying that was what NOMA was asking for.

 

Senator Titus pointed out these were conforming billboards, but something had changed and now they were nonconforming, and not special or conditional use.  These were signs that had met all requirements and then the requirements had changed, she said.

 

Mr. Pappageorge replied that was correct.  He further stated NOMA did not want to interfere with any permits for new billboards or permits on existing billboards, but were referring to billboards at permanent locations on permanent properties which had met the existing requirements.

 

Chairman O'Connell closed discussion on S.B. 265 and opened the work session on S.B. 268.

 

SENATE BILL 268: Requires current public officer to resign before running for

            different public office under certain circumstances. (BDR 24-13)

 

            SENATOR O’CONNELL MOVED TO DO PASS S.B. 268.

 

            THE MOTION FAILED FOR LACK OF A SECOND.

 

*****

 

Chairman O’Connell opened discussion on S.B. 306.

 

SENATE BILL 306: Makes various changes relating to emergency management. (BDR 18-1231)

 

Mr. Gagnier drew attention to subsection 1, section 1, where the language “clearly indicated” the director of emergency management would be appointed by the Governor and would then be in nonclassified service.  He clarified it had been pointed out this would include all employees of the emergency management section and SNEA/AFSME would object to that.  He reported, after inquiries to the legal division, they had been informed the only nonclassified employee, under this bill, would be the director.  He emphasized if that was the case, there would be no objection.

 

Chairman O'Connell called attention to previous testimony on S.B. 306, and said she did not believe that had been the intent.  She maintained the intent had been to make the director nonclassified.  Mr. Gagnier clarified, the other employees would transfer in their current status.  The chairman replied that was correct.  Mr. Gagnier said, if that was the intent, and part of the record, they would have no objection.  Chairman O'Connell stated for the record, “that was the committee’s understanding of the issue.” 

 

            SENATOR TITUS MOVED TO DO PASS S.B. 306.

 

            SENATOR NEAL SECONDED THE MOTION.

 

            THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman O'Connell opened committee discussion on S.B. 329.

 

SENATE BILL 329: Prohibits certain public bodies from taking action by vote without affirmative vote of majority of entire public body. (BDR 19-640)

 

Senator Care stated, after discussion with Robert Barengo, lobbyist for the Board of Medical Examiners, his problem had been resolved.  The committee policy analyst had not received the proposed amendment, and in fairness to   Mr. Barengo, Senator Care suggested perhaps the committee would hold the bill until the next hearing.  Senator Raggio noted the concern had been that cases could be heard with less than a majority of the board.  Senator Care agreed, saying his recollection was there were nine members, three of whom investigated, and thus only six members could vote on the matter.  He said he believed the amendment language was that six would be considered as a full board; in other words, it would take four votes out of six as opposed to five out of nine votes. 

 

Chairman O’Connell recalled Senator Titus had questioned extensively on the matter.  Senator Porter recalled discussion of alternates, and said this would not have to be part of the motion, but rather an available option for those boards.  Senator Titus said the bill was complicated, but in her opinion, the committee could simplify the language to say no elected body could pass something without a constitutional majority, just as in the legislature.  She suggested this might be a way to accomplish Senator Care’s intent, and said she would propose that language as a possible amendment.  Senator Care said if the committee were going to say elected bodies only, he would move to amend and do pass.  He asserted this would address the problems for the Board of Medical Examiners and members of other boards that had approached him.

 

            SENATOR CARE MOVED TO AMEND AND DO PASS S.B. 329 WITH THE             AMENDED LANGUAGE STATING THAT FOR AN ELECTED BODY NO             AFFIRMATIVE ACTION COULD BE TAKEN ABSENT A VOTE OF THE             MAJORITY MEMBERS OF THE ELECTED BOARD ITSELF.

 

            SENATOR TITUS SECONDED THE MOTION.

 

            THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman O’Connell opened discussion on S.B. 350 and remarked there had been no opposition to the bill, but indicated the amended language proposed by the Reno Sparks Convention and Visitors Authority (RSCVA).

 

SENATE BILL 350: Increases membership of county fair and recreation board in certain counties. (BDR 20-685)

 

Senator Raggio questioned whether the county fair and recreation board had any opposition to this.  Chairman O'Connell replied no, there had been no opposition.

 

            SENATOR TITUS MOVED TO AMEND AND DO PASS S.B. 350.

 

            SENATOR RAGGIO SECONDED THE MOTION.

 

            THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman O’Connell opened the work session discussion on S.B. 353.

 

SENATE BILL 353: Establishes procedures for certain state agencies to provide             uniforms for certain employees. (BDR 23-406)

 

Mr. Gagnier offered an amendment (Exhibit O), which included the Highway Patrol Association.  He stressed there was opposition to S.B. 353 expressed by the Department of Administration, as noted in a letter to Chairman O’Connell and the committee (Exhibit P).  Chairman O'Connell requested testimony, for the record, regarding opposition to S.B. 353. 

 

Mike Nolan, Budget Analyst, Budget Division, Department of Administration, stated:

 

We have opposition, unfortunately, to most everything that has been proposed.  We believe . . . the employer needs to determine when the uniforms need to be replaced based on their procedure and uniform standards.  I understand there is some concern from SNEA’s point [of view], but we believe the procedures written into SAM (State Administrative Manual), as well as into each agency’s uniform allowance procedures, . . . will address a lot of the concerns.  [Under] the lead section 2 of the bill, which deals with when an employee is working at an agency and gets promoted, he is entitled to receive the additional items that go with that promotion.  For example, if you are a correctional sergeant and you get promoted, you need to have the captain’s stripes and captain’s bars, and we felt that a simple statement [which] said, “the employer will provide uniformed employees with the appropriate uniform and accessories for their rank,” would sufficiently replace section 2 and make it clear and enable a couple of other things that SNEA had proposed to be deleted.  The SNEA has asked that it be included that “no used uniforms may be used as an employee’s allotment” (Exhibit O).  We also understand their concern, and it is not our intent to have the agency force used uniforms on the employee, and we would just add to that, “without the employee’s written consent.”  So if that were added to their statement, we would have no problem with that.  They want to rewrite section 4 (Exhibit O) to provide that any employee gets a chit or gets a purchase order or a card from purchasing and [goes to] buy that stuff directly.  We believe it needs to remain the same, so the agencies have the flexibility of ordering in bulk. 

He said there were a number of items, such as ball caps, that were a staple of a number of uniforms, and it makes much more sense for the agency to be able to order 2000 ball caps and then distribute them to the employees, rather than giving the employee a purchase order to go buy one ball cap, 2000 times.  He pointed out, vendors start to “sharpen their pencils” and increase discounts for bulk purchases, even within an existing contract.  A company which has the contract for the wildlife pilot program suggested ordering cases as opposed to single items to get a better discount, he said, but agreed to stock single items as well.  He noted there are also many “nonpersonal things,” such as, handcuffs, cuff cases, leather duty belts, which he thought were better to order in bulk.

 

Mr. Nolan said he talked with Mr. Wolff previously about the dry-cleaning concern, but he believes it is a separate issue, and should be considered on its own merits.  He noted the bill, as proposed, had no fiscal impact.  It reallocates some resources and may provide some savings to be used in the upcoming budget, he said, not in 2002, but possibly 2003, 2004, and 2005.  He calculated, if dry cleaning were added, figuring an average of $3 a week, it would add over $400,000 a year to this bill, which would basically kill it, because there is no money available for that.

 

Senator Neal pointed out an organization like the highway patrol was stationed in various places throughout the state.  In his opinion, he said, it would be unwise to place them in a situation where there was bulk buying.  However, he noted, the situation for prison guards, at a specific location who report to work at a designated place would be different.  The uniforms could be issued and stored, he said, but as far as highway patrolmen who work all over the state, this would not seem to be an advantage for them.

 

Mr. Nolan responded to Senator Neal reiterating there were a number of items, particularly accessories, better ordered by bulk and shipped.  If this program paralleled the wildlife pilot program, he said, the agency would place the order with the vendor in Las Vegas, and the item would be shipped directly to the employee.  For example, Mr. Nolan said, shirts, trousers, coats, et cetera, would be shipped within 10 days via United Parcel Service (UPS), which was a part of the contract.  He asserted by the time an agency had submitted a large order to the vendor, the small orders would have already been sent out to Caliente, Pahrump, Pioche, Elko, et cetera.  Also, Mr. Nolan stated, the individual could have a form approved by the supervisor and the order could be telephoned or faxed to the vendor.

 

Senator O’Donnell pointed out, in issues such as this, there was a cost associated with the bill.  He said he would be more in favor of a salary increase for patrolmen and others in uniform, rather than giving them a perquisite, where they would have no choice of whether to clean their uniform or not.  In his view, he said, it made more sense for the individual, rather than the state, to make that determination.  In that regard, he stated, he would like to move to indefinitely postpone the bill.

 

            SENATOR O’DONNELL MOVED TO INDEFINITELY POSTPONE S.B. 353.

 

            SENATOR NEAL SECONDED THE MOTION.

 

Chairman O’Connell asked for discussion on the motion.  Senator Porter questioned whether the problems would just continue if the committee indefinitely postponed the bill.  Chairman O'Connell explained the system would continue as it had in the past.

 

Mr. Gagnier said, currently, each employee was provided with an initial uniform allowance and a quarterly uniform allowance.  He noted the allowances were different among different agencies, and there was a large number of employees who received a cash allowance, which, he emphasized, would remain in place if S.B. 353 was not processed.

 

            THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Chairman O'Connell asked for committee action regarding S.B. 472, regarding the City of Gabbs, which was heard earlier.

 

            SENATOR PORTER MOVED TO DO PASS S.B. 472.

 

                SENATOR CARE SECONDED THE MOTION.

 

                THE MOTION CARRIED.  (SENATOR RAGGIO WAS ABSENT FOR THE VOTE.)

 

*****

Chairman O'Connell opened discussion on S.B. 473. 

 

SENATE BILL 473: Authorizes public bodies to use indefinite quantity contracts for certain public works projects. (BDR 28-746)

 

Chairman O’Connell explained the bill would allow Clark County School District to attempt a project through the public works system.  She pointed out there had been requests to make this a pilot project for 2 years. 

 

Senator O’Donnell explained the school district would save money, but the bill would only allow for contracting with one contractor.  He said all the other contractors who had been working for the school districts for a number of years would be placed on hold for a year, then everyone would bid on that contract.  He asserted this would cause cronyism, and suggested the bill be amended, perhaps with a dollar amount or a time frame restriction. 

 

            SENATOR O’DONNELL MOVED TO INDEFINITELY POSTPONE S.B. 473.

 

            SENATOR CARE SECONDED THE MOTION.

 

Senator Titus said she was in favor of saving school districts money.  She recalled, and Chairman O’Connell agreed, the committee had restricted the design build legislation when it was put into place.  Chairman O'Connell pointed out there were three votes against indefinite postponement.  Senator Porter said if adequate protections and review were built in he would be in favor of a pilot project.

 

            THE MOTION FAILED.  (SENATORS O’CONNELL, TITUS, NEAL AND             PORTER VOTED NO.)

 

*****

 

            SENATOR TITUS MOVED TO AMEND AND DO PASS S.B. 473 WITH             AMENDED LANGUAGE PROVIDING FOR A 2-YEAR PILOT PROGRAM.

 

            SENATOR NEAL SECONDED THE MOTION.

 

Senator O’Donnell clarified, saying, as he now understood the motion and amendment, there would be a 2-year pilot program without any other restrictions.  Chairman O'Connell asked for opposition to the motion.  Senators O’Donnell and Care were opposed to the motion.

 

            THE MOTION CARRIED.  (SENATORS O’DONNELL AND CARE VOTED             NO.  SENATOR RAGGIO WAS ABSENT FOR THE VOTE.)

 

*****

 

Chairman O'Connell adjourned the meeting at 6:43 p.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Laura Hale

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Senator Ann O'Connell, Chairman

 

 

DATE: