Senate OKs plan to privatize insurance

Friday, April 30, 1999 | 12:17 p.m.

CARSON CITY -- It was dubbed "Midnight Madness" as the Senate convened at 12:40 a.m. today to approve Gov. Kenny Guinn's plan to convert the state's industrial insurance system into a private company.

The history-making session turned bizarre when Republicans prohibited any debate, passed the bill 12-6 and then walked off the floor and went home without adjourning the session, leaving the nine Democrats.

Sen. Joe Neal, D-Las Vegas, angry at not being allowed to speak on the bill, invoked Senate Rule 11, which requires the sergeant-at-arms to round up the absent members, take them into custody and bring them back to the Senate floor.

An hour passed and the Democrats had to remain in the chambers until some of the Republicans, who had gone to bed, were contacted by telephone and straggled back. Those who returned were Sens. Mark Amodei of Carson City, Mike McGinness of Fallon, Ray Rawson of Las Vegas and Lt. Gov. Lorraine Hunt.

The recess ended after a quorum was reached. Routine business was conducted and the Senate recessed at 2:20 a.m. until 10 a.m. today.

While the Legislature in past years has worked past midnight in the closing days of the session, rarely, if ever, has one house started at midnight to conduct its business.

But it was the way used by Senate Majority Leader Bill Raggio, R-Reno, to teach testy Democrats a lesson.

Senate Bill 37 had to be passed by today's deadline or it was dead. By a party-line vote Thursday, Republicans tacked on the Guinn amendment. The GOP then sought to make it an emergency measure so it could be approved Thursday.

Raggio and Sen. Dean Rhoads, R-Tuscarora, leave today for an out-of-town legislative conference. Without those two votes, the bill wouldn't pass. Democrats blocked the move to declare the bill an emergency measure Thursday, which required a two-thirds vote. It meant the bill had to wait for today for passage.

An angry Raggio then ordered the midnight session. He told reporters later, "They (the Democrats) wanted to stall. There was no reason not to agree (to the emergency measure). We don't have time to waste."

Senate Minority Leader Dina Titus, D-Las Vegas, described Raggio's tactic as "childish" and said the midnight session was "called in a fit of pique."

"It costs overtime for the staff, it's inconsiderate for the older members of the Senate and those who have to commute in the bad weather." She said it was inappropriate for the two Republican senators to leave for a trip at this time during the session. And the session could have been held in the morning, she said.

Rawson, assistant majority leader, defended the Republican strategy in cutting off any debate, a move that is seldom used. He said the bill had to be passed by today. There will be plenty of debate in the Assembly, where SB37 goes, he said. And any changes to the bill would come back to the Senate for discussion.

But Titus called this a case of "bad leadership" by Raggio. She said Democrats tried Thursday to work out a compromise to the bill, including raising benefits for workers injured on the job by 10 percent. She said Raggio rejected the offer.

Despite the early hour, a big contingent of lobbyists attended and witnessed the chaotic session.

When the bill came up for final passage, Raggio moved to cut off any debate. That passed on a voice vote with Republicans in favor and Democrats opposed. The bill was then approved with Sen. Bernice Mathews, D-Reno, joining 11 Republicans. Sens. Neal, Jon Porter, R-Boulder City and Bob Coffin, D-Las Vegas abstained.

After the vote was tallied, Neal stood up and complained that Lt. Gov. Hunt had allowed the Senate to be turned into a dictatorship. He said he cannot remember, in his more than 25 years, when debate on an important bill was stopped before it started. During Neal's speech, Republicans stood up and left the chambers. Hunt then departed, leaving the Senate in limbo. Coffin yelled, "This is an absence of democracy."

Neal, using his parliamentary skills, then asked for a "Call of the House," which requires the sergeant-at-arms to gather up the absent senators to return to the chambers.

Neal warned that, "If they (Republicans) want to play games, I can play games."

The confrontation threatens to disrupt future business as the Legislature heads for adjournment May 31. Several lawmakers and lobbyists said the bitter feelings that erupted over the bill will hinder any harmony as the lawmakers head down the home stretch.

And it may not help the chances of the bill in the Assembly, controlled 28-14 by Democrats. Republicans have the majority in the Senate 12-9.

The parliamentary moves and the bitter accusations overshadowed the bill.

Starting July 1, private insurance companies will be able to compete with the Insurance Company of Nevada, which has operated the workers compensation system for the state for more than 80 years. The bill provides that the system would become a private mutual company next January. The money, buildings and other equity will be transferred to the policy holders.

When the Guinn amendment was attached to the bill Thursday, Sen. Randolph Townsend, R-Reno, said the $1.6 billion debt of the system would be sold to one or more re-insurance companies. The debt is the money needed to pay medical and other costs over the next 40 years for workers injured on the job prior to July 1995. And Insurance Company of Nevada would transfer $775 million in cash to these re-insurance companies.

With the start of competition this July, Insurance Company of Nevada could lose 50-60 percent of the more than 44,000 employers who pay premiums for the coverage. So anywhere from 300 to 600 employees of the 900-person staff may have to be laid off.

Guinn has included money to buy five years of retirement credit for those close to leaving the state, giving those who are laid off first right to any opening of a state position and putting aside $2 million to train the workers for new occupations.

Raggio and Sens. Mark James, R-Las Vegas, and Maurice Washington, R-Reno, all have ties to the insurance industry but they read legal opinions from the Legislative Counsel Bureau that they were free to vote as long as they disclosed their interests. So they voted for the Guinn amendment and for the bill.

Sen. Mathews voted against the Guinn amendment Thursday but voted for the bill today. She said she had committed to voting against the amendment but decided to support the bill and became its only Democratic backer.

Amodei had opposed the Guinn plan in committee but voted for the bill. "This is the first time in my two sessions I am voting against my instincts." He said he was going to "give Gov. Guinn an opportunity to make this a good thing."

"This is the first time in my two sessions I am voting against my instincts."Sen. Mark AmodeiR-CARSON CITY