MINUTES OF THE

SENATE Committee on Government Affairs

 

Seventy-second Session

February 17, 2003

 

 

The Senate Committee on Government Affairswas called to order by Chairman Ann O'Connell, at 2:01 p.m., on Monday, February 17, 2003, 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 Sandra Tiffany, Vice Chairman

Senator William J. Raggio

Senator Randolph J. Townsend

Senator Warren B. Hardy II

Senator Dina Titus

Senator Terry Care

 

GUEST LEGISLATORS PRESENT:

 

Senator Bernice Mathews, Washoe County Senatorial District No. 1

 

STAFF MEMBERS PRESENT:

 

Michael Stewart, Committee Policy Analyst

Scott Wasserman, Committee Counsel

Tara DeWeese, Committee Secretary

Joseph Bozsik, Committee Secretary

 

OTHERS PRESENT:

 

Robert S. Hadfield, Lobbyist, Executive Director, Nevada Association of Counties (NACO)

Daniel C. Holler, Lobbyist, County Manager, Douglas County

Dan Musgrove, Lobbyist, Clark County

Stacy M. Jennings, Executive Director, Commission on Ethics

Wayne R. Perock, Administrator, Division of State Parks

Mike Osborn, Lobbyist, Executive Director, Nevada Classified School Employees Association

Henry M. Campbell, Lobbyist, President, Nevada Classified School Employees Association

Danny N. Coyle, Lobbyist, President, State of Nevada Employees Association #4041

Lonnie F. Shields, Lobbyist, Washoe County Education Administrators Association

The Honorable Deborah A. Agosti, Chief Justice, Supreme Court

The Honorable Nancy A. Becker, Associate Justice, Supreme Court

The Honorable Mark Gibbons, Associate Justice, Supreme Court

James F. Nadeau, Lobbyist, Washoe County Sheriff’s Office

Renee Parker, Chief Deputy Secretary of State, Office of the Secretary of State

 

Robert S. Hadfield, Lobbyist, Executive Director, Nevada Association of Counties, described BDR 20-172 as a county-flexibility bill. He stated the bill would give local governments the authority to create offenses, unless specifically prohibited by the State, punishable by misdemeanor and citation. Mr. Hadfield noted local governments needed authority to enter into agreements with the U.S. Forest Service and the Bureau of Land Management. Local governments needed to have specific authority to accept certain grants of rights-of-way and other properties, Mr. Hadfield said.

 

BILL DRAFT REQUEST 20-172: Authorizes the Board of County Commissioners to exercise certain additional powers and enact certain ordinances. (Later introduced as Senate Bill 145.)

 

Mr. Hadfield said in 1997, the Nevada Legislature changed the purchasing law to allow counties and local governments to buy off of contracts bid by other local government entities. Mr. Hadfield stated there have been varying opinions from different district attorneys in Nevada as to whether the measure accomplished the intentions of the Nevada Legislature, although the legislative counsel issued an opinion that it did. He said BDR 27‑321 would rewrite the statute to clarify that local governments could purchase off another local government’s national contract bid.

 

BILL DRAFT REQUEST 27-321: Clarifies exception to requirements for competitive bidding by local governments when competitive bidding process was conducted by another governmental entity and resulting contract entitles other local governments to make purchases pursuant to the contract. (Later introduced as Senate Bill 146.)

 

Daniel C. Holler, Lobbyist, County Manager, Douglas County, noted his support for BDR 22‑424. Mr. Holler explained the purpose of the proposal, Exhibit C, was to give local governing bodies the option to require a supermajority vote to amend or change a master plan versus a simple majority vote.

 

BILL DRAFT REQUEST 22-424: Allow a governing body to require by ordinance that a two-thirds majority vote of the governing body is required to adopt or amend the master plan for development of land. (Later introduced as Senate Bill 142.)

 

Dan Musgrove, Lobbyist, Clark County, stated his support for BDR 20-419. The proposal would give counties authority to appoint a public property trustee, who would perform the duties of the public administrator.

 

BILL DRAFT REQUEST 20-419: Allow a board of county commissioners to change the status of the office of Public Administrator from elected to appointed and provide for the appointment of a person to perform the functions of the Public Administrator. (Later introduced as Senate Bill 143.)

 

Mr. Musgrove stated his support for BDR 31-458 on behalf of the County Fiscal Officers Association. The legislation would provide additional language in statute relating to the local government obtainment and use of collateral.

 

BILL DRAFT REQUEST 31-458: Revise provisions governing local governmental financial administration. (Later introduced as Senate Bill 141.)

 

Stacy M. Jennings, Executive Director, Commission on Ethics, stated her support for BDR 23-500. Ms. Jennings outlined the intent of BDR 23‑500 was to remove the subjectivity from the process of assessing civil penalties for late filing of financial disclosure statements, Exhibit D.

 

BILL DRAFT REQUEST 23-500: Makes various technical corrections and makes changes concerning filing of financial disclosure statement. (Later introduced as Senate Bill 147.)

 

Wayne R. Perock, Administrator, Division of State Parks, introduced BDR 35‑493. Mr. Perock explained BDR 35-493 would allow State parks to enter into agreements with local governments to allow them to develop and maintain park facilities on State park property, Exhibit E.

 

BILL DRAFT REQUEST 35-493: Makes changes concerning interlocal agreements with political subdivisions and funding of the Federal Land and Water Conservation Fund. (Later introduced as Senate Bill 144.)

 

SENATOR TOWNSEND MOVED TO INTRODUCE BDR 20-172, BDR 27‑321, BDR 22-424, BDR 20-419, BDR 31-458, BDR 23-500, AND BDR 35-493.

 

SENATOR TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

*****

 

Senator O’Connell opened the hearing on Senate Bill (S.B.) 28.

 

SENATE BILL 28: Provides that certain money set aside for group insurance for officers and employees of school districts must not be used for other purposes. (BDR 23-195)

 

Senator Bernice Mathews, Washoe County Senatorial District No. 1, stated Senate Bill 28 would limit the use of funds set aside that provide group insurance for officers and employees of school districts. Senate Bill 28 would require monies collected to provide health coverage to be set aside and held in trust. Senator Mathews said the insurance fund use would be limited to administering and maintaining the group insurance. It would prohibit a school district or government entity from borrowing from the insurance fund and using it to purchase obligations of the school district or governmental entity.

 

Mike Osborn, Lobbyist, Executive Director, Nevada Classified School Employees Association, noted his support of Senate Bill 28. His concern was school employees have paid into the insurance fund while the school districts have raided the fund for other things. Mr. Osborn commented the money should stay in the insurance fund. He remarked, rising insurance premiums in conjunction with depleted insurance funds have created higher out‑of‑pocket costs for employees. Some employees have spent as much as $600 a month for family insurance coverage and could not afford it, Mr. Osborn noted. He said many people worked for school districts because of their commitment to children, but could have made more money in the private sector.

 

Senator O’Connell asked Mr. Osborn for examples of school districts using employee insurance funds for other things.

 

In response to Senator O’Connell’s question, Mr. Osborn indicated he was compiling the information, but the information was not currently available. However, Mr. Osborn shared one example. He stated the Washoe County School District had taken money from the employee insurance fund and paid for employee salary increases and other noninsurance-related items. Mr. Osborn noted the Washoe County School District did not currently have enough money to pay employee insurance costs.

 

Senator Townsend inquired if the insurance plans were regulated under the federal ERISA (Employee Retirement Income Security Act of 1974) plans or considered a self-funded plan regulated by the State commissioner of insurance.

 

Mr. Osborn indicated he was not sure, but assumed they were self-funded plans regulated by the State.

 

Senator Townsend commented if the State regulated those insurance plans, the State would have to monitor the amount of money in the funds as if it were an insurance product sold. Senator Townsend noted a formula must be met to make sure the reserves covered risk. He stated he had an interest in knowing if the insurance funds were not properly being watched.

 

Senator Mathews explained the school district left money in the insurance fund, but not enough to cover escalating insurance rates. The law did not protect the school district insurance fund, she said.

Senator Townsend stated the excess fund reserves, built up over time, have been used.

 

Senator Mathews stated the insurance funds need a “no raid policy” similar to the Public Employees’ Retirement System of Nevada (PERS). Senator Townsend asked if the employees were given notification the insurance fund would be used for purposes other than insurance.

 

Mr. Osborn answered, to his knowledge the employees were not informed. The insurance fund was used by the Washoe County School District when needed.

 

Senator Mathews added that she requested the bill at the suggestion of a retired school district employee, who had not been notified about the insurance fund issue.

 

Senator Care inquired if the insurance fund money could be invested. Senator Mathews confirmed that, as the bill was written, the money could not be invested.

 

Senator Townsend explained, certain protective investments have been made for the purposes of insurance. He stated some investments have been in equity, government financing, and bonds, with risk spread out to protect the interests of those covered by the insurance. Senator Townsend expressed he was concerned if the money could not be invested anywhere. He said whoever manages the trust fund should be consulted to make sure they have the tools to properly manage the fund.

 

Senator Tiffany asked if S.B. 28 precluded insurance fund investments.

 

Scott Wasserman, Committee Counsel, stated S.B. 28, as worded, prohibited the investment to purchase any obligations of the school district, but if read in conjunction with subsection 2, paragraph (a), S.B. 28 could be strictly interpreted to prohibit all investment. Mr. Wasserman said he did not believe the intent was to prohibit all investment. The committee could clarify the language to allow for investments other than those prohibited in paragraph (c), he noted.

 

Senator Care said the language that got his attention was “or any other governmental entity.” He wanted to know if treasury bills and notes were also prohibited.

 

Henry M. Campbell, Lobbyist, President, Nevada Classified School Employees Association, pointed out there were 3 self-insured school districts in Nevada, Washoe, Lyon, and Clark counties. Mr. Campbell said the Nevada Education Association and 15 rural county school districts in Nevada are looking into forming a self-insurance fund. If all of the counties formed self-insurance funds, virtually every school employee in the State of Nevada would be covered under a self-insurance fund, he noted. Senate Bill 28, Mr. Campbell stated, must be passed to protect those insurance funds.

 

Senator Mathews affirmed she would confer with Mr. Wasserman to determine if an amendment to Senate Bill 28 would be needed.

 

Danny N. Coyle, Lobbyist, President, State of Nevada Employees Association #4041, said the State retirees did not have an official position on S.B. 28, but endorsed the concept of placing insurance funds in trust and thereby “eliminating the proclivity of school administrators to use the funds for unintended purposes.” Mr. Coyle stated he did not have statistics to verify Mr. Osborn’s and Mr. Campbell’s testimony, but he said he believed they gave an accurate accounting of the issues.

 

Senator O’Connell asked Mr. Coyle to clarify his position on S.B. 28.

 

Mr. Coyle affirmed his support to protect the insurance funds from being raided, while still allowing the funds to be used for prudent investments.

 

Lonnie F. Shields, Lobbyist, Washoe County Education Administrators Association, stated once the allowance for investment was clarified, he would support S.B. 28. He described the circumstances concerning the Washoe County School District’s use of its employee insurance fund. Mr. Shields said the school district was in the midst of negotiations and the arbitrator said all money in excess of that needed to secure the fund was negotiable. The school district settled with the teachers, administrators, and classified associations and used a portion of the employee insurance fund to pay for employee salary increases. Mr. Coyle noted the administrators association was aware of the school district’s use of the insurance fund to pay for the salary increases. Mr. Coyle commented the insurance fund was in good shape when the school district used the excess insurance fund money, but was now in bad shape and would support efforts to protect them from similar circumstances in the future.

 

Senator O’Connell asked when the Washoe County school district used the insurance fund money.

 

In response to Senator O’Connell, Mr. Campbell stated the insurance fund was used in either 1991 or 1992, but he was not positive. He told Senator O’Connell accurate information would be provided after he confirmed the year.

 

Senator O’Connell closed the hearing on S.B. 28 and opened the hearing on Senate Bill 111.

 

SENATE BILL 111: Changes dates for filing of declaration of candidacy for certain judicial offices. (BDR 24-617)

 

The Honorable Deborah A. Agosti, Chief Justice, Supreme Court, testified for Senate Bill 111, which she said would shorten the filing period for those seeking judicial office in district court, justice court, and the Nevada Supreme Court. She stated S.B. 111 was the first in a series of judiciary campaign reforms. The second reform would be an amendment to the judicial canons of ethics prohibiting the solicitation of campaign funds until after the close of filing. Only judges facing contested races could raise money, Justice Agosti noted. She explained a method of campaigning has evolved in Clark County that would continue unless changed. Candidates were declaring their candidacies for judicial offices, but not declaring a department. Every sitting district judge had to raise campaign contributions, without knowing if he or she would face an opponent. Justice Agosti stated the No. 1 criticism of an elected system of judges was the need for soliciting campaign contributions. She concluded when sitting judges raised campaign money and at the end of filing had no challenger, a negative impression of the system was created.

 

The Honorable Nancy A. Becker, Associate Justice, Supreme Court, stated S.B. 111 would shorten the 5-month filing period to 1 month. Currently, because filing occurs in May there was a 5-month period of time from January through May, when judicial candidates raised funds, she noted. All elected officials would want the ability to raise funds if they did not know whether or not 5 months later they were going to have opponents. Justice Becker noted judicial candidates and sitting judges used the 5-month period to raise money and in Clark County it had amounted to $1.2 million on uncontested judicial races. Justice Becker indicated one criticism of the elected system of judiciary had been the majority of contributors were individuals or businesses who were most likely to be involved in litigation such as lawyers, gaming companies, labor organizations, doctors, construction entities, insurance companies, and banks. Judges were raising money from the potential litigants within the court system leaving an impression with the general public that either the judiciary was being bought or that there were rampant conflicts of interest, she said. Justice Becker stated the perception hurts the integrity and independence of the judiciary. Moving the judicial filing deadline from May to January would allow sitting judges to know in January if they were free to raise campaign funds, because fundraising would otherwise be prohibited in uncontested races, she said. Judicial races tend to be different than legislative or executive branch office races because judges are not allowed business interests or outside employment. Being a judge is a full-time position, except for a justice of the peace. Justice Becker stated there were not many contested judicial races because they were nonpartisan and opposition was less likely when a member of the judiciary was doing a good job. Senate Bill 111 was an important piece of reform legislation, she commented. Justice Becker said the bill would take judges in uncontested races out of the business of raising money and would allow them to concentrate on the business of the bench during the 5-month period.

 

The Honorable Mark Gibbons, Associate Justice, Supreme Court, said under the Supreme Court Rules, in Canon 5C(2) of the Nevada Code of Judicial Conduct, a candidate for judicial office could start raising money 240 days before the primary election and up to 90 days after the general election, totaling nearly 13 months. He noted, judges on 6-year cycles were also limited to 13 months. The Nevada Supreme Court intended to adjust the fundraising window from 240 days prior to the election to the close of filing, around February 1. Justice Gibbons said judges without opponents would be prohibited from soliciting campaign funds. Justice Gibbons stated the legislation was supported by the Nevada District Judges Association, but noted he could not speak for the Nevada Judges Association who represents justice court judges and municipal court judges. However, he said, municipal court judges would not be affected by S.B. 111 unless their cycle was within the general election cycle. He stated he believed the justice court judges would support S.B. 111. Moving the filing period to 2 weeks in May from 2 weeks in January would not deter anyone from pursuing elected office. Candidates would still have ample opportunity to mount a competitive campaign and contributors would have enough time to support candidates, Justice Gibbons stated. He said candidates could currently announce intentions to run, but not file until the end of the filing period in May. Justice Gibbons said the court felt this was part of campaign reform and concluded S.B. 111 was good campaign reform legislation.

 

Senator Care questioned when a candidate became a candidate. He noted a candidate could hold a press conference and announce an intention to run, form an exploratory committee, and accept contributions. Senator Care asked if the judicial canons could be altered such that an individual could not declare a candidacy unless a judicial department declaration was also made.

 

Justice Agosti responded, the Nevada Supreme Court had not explored altering the judicial canons to regulate candidate declarations. The U.S. Supreme Court decision in Republican Party of Minnesota v. White may prohibit the regulation of candidate declarations as an impediment to free speech.

 

Senator Titus stated if S.B. 111 was enacted, the court would have campaign finance reform, the Legislature has had self-imposed campaign reforms, but local government elected officials could still take a check in the morning and vote on a zoning measure that afternoon without any problem. Senator Titus asked the justices if the Legislature placing restrictions on local government campaign fundraising similar to those proposed for judges would pass constitutional muster.

 

Justice Agosti said it was difficult to prognosticate on a decision the U.S. Supreme Court would make, but admitted the Nevada Supreme Court had been focused only on judicial campaign reform issues. It was an issue of trust and confidence, she said. Justice Agosti concluded, improving the conduct and appearance of judges’ impartiality when deciding cases benefits the system.

 

Senator Titus suggested the Legislature look at regulating local government campaign practices.

Justice Gibbons stated the first amendment was the issue in Republican Party of Minnesota v. White. The question was whether a candidate could advance positions on judicial issues and how that violated the judicial canons of ethics, he noted. Justice Gibbons said he did not believe the case addressed campaign financing. The legislative branch of government had been left to make campaign finance rules for the judiciary or executive branch, Justice Gibbons commented.

 

Justice Becker stated congressional campaign finance reform decisions of the U.S. Supreme Court did not address time limitations for accepting campaign contributions, the U.S. Supreme Court decision limited spending. Justice Becker noted she did not believe there was clear case law about fundraising time restraints. In response to Senator Care, Justice Becker said she was not certain the Nevada Supreme Court could amend the judicial canons to set declaration standards. She noted, if a statute could be amended to create declaration standards, the same 5-month filing period for judicial candidates and sitting judges to solicit funds would exist. Closing the filing gap to 1 month in January would still allow candidates in contested races to raise campaign funds and those in uncontested races would not, she said.

 

Senator Tiffany noted the intent of the Nevada Supreme Court was to instill trust and confidence, but limiting the filing period to be so short could create an opposite effect. It takes new people in competitive races longer to make their cases to potential campaign contributors, and challengers take longer to raise money than incumbents, Senator Tiffany noted. She asked the justices if they thought limiting the filing period limited competition from challengers. Senator Tiffany noted there was a recusal process for judges and she said she did not think judges have risen to a higher standard beyond that of any other elected official. Legislators have raised money from people who sat before the Legislature, Senator Tiffany noted. Senator Tiffany asked the justices why they said they thought they were held to a higher standard than other elected officials.

 

Justice Agosti addressed Senator Tiffany’s question anecdotally, noting when she first ran for judicial office, it was as justice of the peace for the Reno township. When the incumbent justice of the peace decided to seek a different elected position on the last day of filing, everyone in the legal community had 1 day to decide if they were going to run. People who had not thought about challenging the incumbent decided to run. By close of filing on the final day, there were eight candidates including herself, Justice Agosti noted. The short filing period did not appear to chill any person’s desire to run. If the rules were in place, the legal community and lawyers would be aware of them. One could commence planning a campaign well in advance of the day of filing. She stated she did not think it provided incumbents with a fundraising advantage because no one could solicit contributions until a predetermined date after the close of filing. There were judges who for a 5-month period of time had to campaign and that time should not have been taken away from tending to the business of the court, Justice Agosti indicated. Senate Bill 111 would at least reduce the amount of time judges have to spend raising campaign contributions.

 

Senator Tiffany commented she took offense to Justice Agosti’s previous statement and noted she was in the business sector and had to make time during the day to campaign. Senator Tiffany asked why judges were different and should not have to spend time campaigning.

 

Justice Agosti apologized, noting she meant no offense. She commented on how she had homework almost every night. Justice Agosti said she did not mind the work and would not complain about it, understanding it was such a privilege to be a Nevada Supreme Court justice, but, she said, in a campaign season, candidates for non-judicial offices would not bring work home at night. Every spare moment would be spent on reelection.

 

Justice Becker stated judges could not disqualify themselves because of campaign contributions. She noted a judge would rarely be able to rule on any particular issue because campaign contributions are made to all judges from industries or parties who are generally in the court system. The judicial canons indicate judges could not “conflict off” because of a campaign contribution, she noted. Justice Becker said there was a procedure for a preemptory challenge in the district court, but a preemptory challenge can be made to only one judge and neither addressed the negative public perception that existed. When a governor or legislator was elected, it was based on people who believe the candidate would represent a specific point of view, but judges were not elected to represent an interest or point of view, she said. Justice Becker commented, judges were elected to represent impartiality and objectivity and to make decisions on a case-by-case basis. Having to fund judicial campaigns in a judicial race undermined the impartiality and objectivity of the judiciary and has created a negative public perception, she noted. Campaign financing has created a perception of special interests within the judiciary, which Justice Becker indicated she did not believe was fact. The perception existed and damaged the image of the judiciary. In response to Senator Tiffany’s question, Justice Becker stated, whether there was a 3-week filing period in May or in January, those who want to run for public office would take the time to do so. Justice Becker said just as many people have the ability to file in 3 weeks in January as they do in 3 weeks in May. She commented the deadlines were the most important thing to know.

 

Senator Raggio commented, if the people of Nevada had followed the Legislature, which approved the Missouri Plan for the selection of judges, judicial campaign reform would not be an issue. Judges would run on a record, but unfortunately the Missouri Plan was not adopted and, in fact, some judges campaigned against the plan. Senator Raggio noted the U.S. Supreme Court ruled judicial candidates could take positions on issues during the campaign. However unfortunate, Senator Raggio said, he thought it was highly impractical for judges to debate positions on judicial issues facing the court. Contributors are lawyers who are potential litigants and others do not have an interest in funding judicial races until they get into court. Senator Raggio admitted concern about S.B. 111. He said a great deal of time has been spent over whether to have long or short election periods and a majority of the Nevada Legislature has agreed on a limited filing period in May. The Legislature did not want people filing in January and creating a 10-month election period. He further noted reluctance to alter the election-filing date exclusively for the judiciary. Senator Raggio said he thought all elections should occur at the same time, including municipal elections. Senator Raggio concluded he was not convinced S.B. 111 solved the problem because the same problem would occur in May or January.

 

Senator O’Connell inquired if municipal judges have been consulted on S.B. 111 or if the bill would affect municipal elections.

 

In response to Senator O’Connell, Justice Becker answered there would be no effect on municipal judges. Municipal judges were covered under their own election-governing ordinances. Senate Bill 111 would only affect district judges, justices of the peace, and Nevada Supreme Court justices, Justice Becker concluded.

 

Senator O’Connell asked if any of the justices had the opportunity to talk with the secretary of state’s office about S.B. 111 and if it posed a concern for them or with the registrars of voters.

 

Justice Becker responded the registrar of voters in Clark County was consulted and they had been told it did not pose a problem. She noted, they had not heard from the secretary of state’s office, but were not aware of any problems from them on the bill.

 

Senator O’Connell closed the hearing on Senate Bill 111 and opened the hearing on Senate Bill 109.

 

SENATE BILL 109: Requires only name of candidate receiving majority of votes in primary of certain nonpartisan elections to be placed on ballot for general election. (BDR 24-324)

 

Mr. Hadfield stated his support for Senate Bill 109. He said NACO requested the measure for several sheriffs throughout the State. The legislation would mirror the Carson City charter, which he said stated a nonpartisan candidate who received a majority of primary election votes would be the only candidate on the general election ballot.

 

Senator Care said he agreed with Mr. Hadfield, but questioned the turnout for primary elections. Senator Care asked Mr. Hadfield if he felt voters would be deprived of having a choice if a voter did not vote in the primary election.

 

Mr. Hadfield responded Senator Care’s question had been the topic of discussion within NACO and between NACO and various county voter registrars. He noted primary elections traditionally had low voter turnout, however the rural county sheriffs typically generated 60 to 75 percent of votes in a general election and almost always won the primary. Mr. Hadfield said he thought a number of sheriff candidates felt they unnecessarily went through two election processes. Mr. Hadfield agreed primary elections had low turnout, but sheriff races were generally not hotly contested races. The 2002 sheriff race in Lyon County had six candidates, illustrating they could be hotly contested, but generally they were not, he concluded.

 

Senator O’Connell asked Mr. Wasserman to look at the Nevada Revised Statutes (NRS) and check if S.B. 109 affected county school board members. She asked Mr. Hadfield if NACO consulted any school boards about the bill.

 

Mr. Hadfield responded they did not consult any school boards. He said he had believed the bill would only apply to county sheriff races.

 

Senator O’ Connell stated the issue needed to be clarified and county school boards needed to be made aware of S.B. 109.

 

Senator Titus asked Senator O’Connell how S.B. 109 was different from previous legislation introduced by Senator Rhoads.

 

Senator O’Connell stated there appeared to be no difference.

 

James F. Nadeau, Lobbyist, Washoe County Sheriff’s Office, noted if one of at least three sheriff candidates won more than 50 percent of the primary vote in a primary election, that candidate who received the majority would be the only candidate to qualify for the general election. Mr. Nadeau said S.B. 109 would have no effect on a two-candidate sheriff race.

 

Senator Titus asked if only two candidates ran for sheriff, would both then automatically qualify for the general election ballot.

 

Responding to Senator Titus, Mr. Hadfield said she was correct.

 

Following a dialogue between Senator Titus and Mr. Wasserman, it was concluded at least a third candidate was necessary for S.B. 109 to affect the election process.

 

Senator O’Connell concluded, local school boards needed to be informed of the change if it affected them, to allow for their input.

 

Senator O’Connell closed the hearing on Senate Bill 109 and opened the hearing on Senate Bill 112.

 

SENATE BILL 112: Makes various changes to provisions relating to Secretary of State. (BDR 18-557)

 

Senator O’Connell asked Renee Parker if the secretary of state’s office had a position on S.B. 111.

 

Renee Parker, Chief Deputy Secretary of State, Office of the Secretary of State, said with respect to the secretary of state’s office, S.B. 111 would not have a large impact because State filings were for statewide and multi-county elections. She noted her office did not receive many judicial filings. The only difference would be candidate packets would be done two times during the year. Ms. Parker stated she would defer to county clerks for their input on the impact of S.B. 111.

 

Ms. Parker announced support for Senate Bill 112. The main purpose of S.B. 112 was to clarify when a record was deemed filed in the secretary of state’s office, Ms. Parker stated. She noted current statutes provided that a record was deemed filed when it was put in their care, custody, and control. Ms. Parker said when a document was in their care, custody, and control it might not have included the appropriate filing fee or met statutory requirements. On occasion, individuals have wanted good standing on corporate filings needing a specific filing date, she noted. Ms. Parker said those individuals would say the record was filed on a specific date not having paid the appropriate filing fees. Ms. Parker stated S.B. 112 would clarify a record was not deemed filed until it met all criteria.

 

Senate Bill 112 would modify some of the fees contained in chapter 225 of NRS for providing records when the seal was used, Ms. Parker remarked. She said the bill would streamline the process and equalize fees. Ms. Parker noted S.B. No. 577 of the 71st Session changed a number of corporate filing fees in Title 7 of NRS, but missed the similar fees in chapter 225 of NRS that dealt with the certification of documents. The filing fees went from $10 to $20 for corporate certifications. Notary filings in chapter 240 of NRS were $20, and she noted the secretary of state’s office wanted uniformity.

 

Senator O’Connell inquired if Section 2 of S.B. 112 made two processes free by deleting the processing fees from statute.

 

No, Ms. Parker responded. She noted the deletion of the two fees was because NRS 239.052 already provided for the fees as long as they did not exceed the actual cost of providing the information. Ms. Parker said she anticipated the current fee would remain the same, but because there was a default in NRS 239.052, this was less than the actual cost. Nevada Revised Statute 239.052 allowed for a fee waiver in circumstances when customers hand‑delivered filings to the front desk. Ms. Parker stated her office was required to charge $1 for a copy of a statute or the filing. With internal accounting controls, it cost more than $1 to write a receipt and handle the accounting issues. She said her office would like the ability to waive the fee in certain circumstances, but statute currently designated specific fees, she noted. The Office of the Secretary of State wanted to delete the listed fees and not be able to charge more than the actual cost.

 

Ms. Parker stated another change was the addition of reasonable fees for records and documents that were stored on the computer database. Senate Bill 112 would give the secretary of state’s office the ability to charge a fee of not more than $50 for returned checks, she said. Ms. Parker noted the previous fee was $10 and that fee did not meet the cost of staffing issues, research, and check-processing with the treasurer’s office. She continued, other State agencies assess a standard $25 fee on returned checks. She indicated the fee would be at least $25, but no more than $50. She noted a year ago the standard fee was $15 and was now at $25. Ms. Parker concluded the flexibility was wanted to increase the returned check fee commensurate with similar entities.

 

Senator Tiffany asked if the public could access documents and information on the computer at the secretary of state’s office without being charged a fee.

 

Ms. Parker responded there was a computer database in the commercial recordings division and corporate database searches could be done through the Web site. She noted, terminals were available and individuals were not charged for their use.

 

Senator Tiffany asked if the accessible documents were those on the Web site or additional information.

 

Ms. Parker said the accessible documents were those found on the Web site and, in addition, there was some access to the corporate database information. Many resident agents used the computer database, she said.

 

Senator Tiffany asked Ms. Parker what was a reasonable fee for searching computerized documents.

 

Ms. Parker indicated a database search, in certain instances, would be sent to the technology division because the database was currently connected to the Department of Information Technology (DoIT) mainframe. She said, DoIT assessed a $100 charge for a compact disc with all of the corporate database information. Once the database was housed within the secretary of state’s office, a fee would have to be decided on for extended information searches, she noted. Technical staff would be consulted to determine a fee based on what was needed to access the information.

 

Ms. Parker indicated when the new ESOS (Electronic Secretary of State) project was completed at the end of the year the database will be off the mainframe. Right now, with the Governor’s planned fee increases, many requests for information have been received, she said. Ms. Parker noted DoIT must search for some information, put it in downloadable form, and transmit it to the technical assistants in her office, who then transmit the information via modem. The fee increases in S.B. No. 577 of the 71st Session prompted 3 to 4 boxes of documents to be downloaded and sent to ex-Senator James regarding information he wanted on capitalization. Ms. Parker indicated the information was input into the mainframe system, which could only be accessed by DoIT.

 

Senator Care asked about the interplay between section 1, subsection 1, and section 3, subsection 4, of S.B. 112. He said he thought a document would be deemed filed when it was file stamped. Senator Care asked if the document was deemed filed if a check was received for the correct amount, but bounced.

 

Ms. Parker responded the filing would be undone to the degree it could be undone. Explaining, Ms. Parker said in certain circumstances someone would want good standing to show a bank for a loan. They would write out a check and the filing would be processed before the check bounced. Ms. Parker indicated the filing could be undone, but the good standing could not be taken back.

Senator Care asked if section 3, subsection 4, of S.B. 112 negated the “mailbox” rule.

 

Ms. Parker stated Nevada Revised Statute 238.100 provided the default for State agencies to accept a postmark. She noted S.B. 112 would allow the office to not accept a postmark. The office received 250,000 to 300,000 filings a year, she said. Every filed document was not file-stamped each day, it was file-stamped when it met all the statutory requirements and the fees were paid. Ms. Parker said this was why the secretary of state’s office wanted the clarification. The fee issue arose because, under chapter 235 of NRS, State agencies receiving more than $10,000 a day had to deposit the money in the bank within 24 hours. Ms. Parker noted the money had to be receipted and the receipting staff had to ensure to the best of their ability that all appropriate fees were paid before processing. She remarked the secretary of state’s office was 3 to 5 days out for processing annual lists and filings were file-stamped on the date of processing.

 

Senator Care asked for an example of when two or more individuals rushed to file a document. He further asked if a situation had arisen where the urgency of filing on a specific day as opposed to the following day had implications beyond the mere filing of a paper.

 

Ms. Parker answered there had been circumstances where people have rushed to file a paper. Name reservations were one example, she said, if a corporate name was in default, the corporation was revoked and the name became available and people have raced to file for the name. Ms. Parker noted the fiscal year ended December 31 for many companies and a filing was necessary before the end of the year. She indicated the secretary of state’s office had accommodated businesses with same-day file stamps if it appeared all applicable requirements and appropriate fees were enclosed. In those instances, businesses needed the specific filing day and in December, the office was backed up 7 to 10 days for list processing, Ms. Parker admitted. She said processing might not be completed until January 10. She noted, there were certain instances where an entity needed to have a filed corporation document to engage in certain transactions in the New Year.

 

Senator O’Connell closed the hearing on S.B. 112.

 

Michael Stewart, Committee Policy Analyst, answered Senator Titus’s earlier question relating to S.B. 109, saying the “50-plus-1,” simple majority provision was inserted into Nevada Revised Statute 293.260 in 1997. He noted NRS 293.260, subsection 4, paragraph (a) stated, “…If only one candidate is to be elected to the office and a candidate receives a majority of the votes in the primary election for that office, that candidate must be declared the nominee for that office and his name must be placed on the ballot for the general election.” Mr. Stewart noted S.B. No. 10 of the 69th Session changed the statute.

 

Senator O’Connell adjourned the meeting at 3:24 p.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

                                                           

Joseph Bozsik,

Committee Secretary

 

 

APPROVED BY:

 

 

                                                                                         

Senator Ann O'Connell, Chairman

 

 

DATE: