MINUTES OF MEETING
ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS
Sixty-seventh Session
March 30, 1993
The Assembly Committee on Government Affairs was called to order by Chairman Val Z. Garner at 8:10 a.m., Tuesday, March 30, 1993, in Room 330 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mr. Val Z. Garner, Chairman
Mr. Rick C. Bennett, Vice Chairman
Mrs. Kathy M. Augustine
Mr. Douglas A. Bache
Mrs. Marcia de Braga
Mr. Pete Ernaut
Mrs. Vivian L. Freeman
Mr. Lynn Hettrick
Mrs. Erin Kenny
Mrs. Joan A. Lambert
Mr. James W. McGaughey
Mr. Roy Neighbors
Mrs. Gene W. Segerblom
Mr. Wendell P. Williams
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Assemblyman Joe Dini, District 38
Assemblyman Robert Sader, District 32
STAFF MEMBERS PRESENT:
Dana Bennett, Research Analyst
OTHERS PRESENT:
Bob Kelso, Fernley Town Board; Rebecca Harold, Fernley Town Attorney; Irene Porter, Executive Director, Nevada Homebuilders Association; Nancy Howard, Program Assistant, Nevada League of Cities; Karen Larson, Clark County; Larry Struve, Director, Nevada Department of Commerce; Kirby Burgess, Clark County; Dusty Dickens, Clark County School District; Roger Means, Washoe County School District.
ASSEMBLY BILL NO. 352 -Authorizes unincorporated towns to impose impact fees.
Assemblyman Joe Dini, District 38, introduced Rebecca Harold, Attorney, Fernley, and Bob Kelso, Fernley Town Board. Before turning the floor over to Mr. Kelso, Mr. Speaker pointed out Fernley was one of the few unincorporated towns which owned its water and sewer systems. As it was now becoming difficult to keep up with new growth in the area, the utility systems were running behind. He said Fernley was too big to be a little town, yet it was not big enough to be a city.
Mr. Kelso recommended passage of AB 352 by reading prepared testimony (Exhibit C).
Mrs. Segerblom asked what the population of Fernley was. Mr. Kelso replied it was 8,000 according to the Post Office. Mrs. Segerblom then asked if Fernley was ready to incorporate, the answer was no.
Mrs. Lambert questioned how much the hookup fee for water was. Mr. Kelso acknowledged it was $1,650 for sewer and approximately $1,500 for water.
Ms. Harold then spoke in favor of AB 352 and urged its passage.
Mr. McGaughey wanted to know what items would be impacted and what the price structure would be. Ms. Harold replied the fees would be for running new water and sewer lines, new facilities, or new developments or expansions of the utility system to serve new customers.
Mr. McGaughey asked what the current practice was for extending water and sewer mains and who paid for it. Ms. Harold responded it generally was the developer of a development or subdivision. A further discussion ensued between Mr. McGaughey and Ms. Harold regarding hookup and impact fees. In conclusion, Mr. McGaughey asked that the utility manager, who was out of town and unable to attend the hearing, provide a written explanation in support of the fees.
Mr. Neighbors wanted to know the number of customers, the answer was 1,500. When asked whether water was sold utilizing a flat rate, Mr. Kelso replied, "It's a flat rate up to 10,000 gallons a month. Then it goes in increments above that." Ms. Harold added, "It's a usage. It's a flat base rate, then a usage rate on top of that for any amount over." When asked what the flat rate was, Mr. Kelso replied $32.00 per month per household. Further discussion followed regarding credits for customer hookups, reimbursements, and budgeting for new construction.
Mr. Garner asked if the water was metered, Ms. Harold answered yes.
Speaker Dini concluded his testimony by saying, "The Fernley utilities are facing major revision in overall planning because of the Reed settlement on the Truckee River. It is going to have a serious impact on the people living in the fringe areas of Fernley. They have shallow wells in that area. That is how they operate, out of the surplus waters, much as they do in Churchill County. In this drought, they started having serious problems with the shallow wells drying up last summer. There will be a demand to bring the water services out to these outlying areas. That is one of the things behind this. How do we get the money to extend the lines out to these areas where the usual source of water is drying up because of the change in the use of the water upstream or diverting it to Pyramid Lake?"
Mr. Bache stated both the city and county imposed impact fees, therefore, he asked if the county could impose them for Fernley's use. Ms. Harold responded, "The county could, but then the town would have to request the county, the agendized meetings and hearings would have to be done in Yerington, an hour's drive away, which is not the affected area. The county could, but it would be the county who would have to impose that. We would like to be able to have the town do it, where the impact is."
Mr. Hettrick asked if a master and capital improvements plan was already in place, the answer was yes.
Irene Porter, Executive Director, Nevada Homebuilders Association, testified, "When the interim study on infrastructure financing was done between the 1987-1989 sessions, Mrs. Lambert served as a member of that interim study committee. The interim study committee determined at that time, in view of the many court cases in the United States on the issue of impact fees and what really has to be done to implement them, that only general purpose unit of government should have the ability to impose an impact fee." She then stated she was in opposition to AB 352, giving her reasons why: the general public did not understand what impact fees were, impact fees could not be used to cure existing deficiencies or new environmental issues, and a system development fee was being charged to new construction to repay an indebtedness on an existing system. In conclusion, she said, "All the things I have been talking about take a lot of expertise and a lot of time. They take a government that is working with issues and things on an everyday basis. They take money up front, they take scientific studies. Unincorporated towns are not created to do those kinds of things, general purpose units of government are. It sounds as if what Fernley really needs to do is to begin the process to incorporate into a city. We are opposing it because we do not want to see it proliferate into other than general purpose units of government."
Mr. McGaughey asked if general purpose bonds would be the easiest and best way for Fernley to solve its problem. Mrs. Porter responded she was not familiar with Fernley's method, but she suggested Fernley needed to handle it at the county level.
Further discussion followed as to what might be the best method.
Mrs. Freeman questioned the court cases mentioned by Mrs. Porter, and asked if any had reached the Supreme Court. Mrs. Porter replied yes, two regarding impact fees. She also stated the state of Nevada's impact fee legislation had been praised as being the finest in the United States.
Mr. Neighbors asked if Fernley had applied for bonding or grants under legislation which had been passed last session. The answer was yes, for both sewer and water projects. But Ms. Harold pointed out, the issue was not whether bonds or other alternatives should be used, it was whether Fernley or other unincorporated towns could use the legislation pertaining to impact fees.
Mrs. Augustine asked how long it would take to incorporate. Ms. Harold responded years, but the real issue against incorporating was the responsibility which would have to be taken in the area of roads, law enforcement, etc. Ms. Harold said, "We own a utility system. We are probably not at this moment ready to take on a police force, and a lot of other expenses for the community. We own the water and sewer system, that's the area we need to work with. The county does provide law enforcement, it takes care of the bulk of the roads. Those things are already handled and they don't need to be changed. If it is not broken, it doesn't need to be fixed at this point. The utility system is a different matter. Lyon County cannot run the utility system from Yerington, the county seat. Fernley is where the impacts are on the water and sewer."
Nancy Howard, Program Assistant, Nevada League of Cities, testified over the years, the league had spoken to Fernley about incorporating. She suggested incorporation might be the best avenue to pursue at this stage of development. She admitted Fernley had the best of both worlds, but she thought it was bad policy.
The hearing on AB 352 was closed with no action taken. Mr. Garner asked the Fernley representatives to meet with Mrs. Porter and Mr. McGaughey to find a satisfactory solution.
ASSEMBLY BILL NO. 339 -Revises provisions relating to specialized or local ethics committees.
Karen Larson, Clark County, explained AB 339 had been proposed by Clark County at the request of the Ethical Standards Committee. She gave the history of the committee's formation and its purpose, and said AB 339 would expand the committee's role to provide advisory opinions on the code of ethics and questions of general ethics. Currently, the inquiry rate was one a year because people were not sure what kind of questions could be asked.
Larry Struve, Director, Nevada Department of Commerce, told the committee his agency has had a departmental ethics committee since 1983. He said his was one of the few departments which had exercised the authority in Nevada Revised Statute 281.541. Mr. Struve suggested AB 339 would greatly improve this section of the Nevada Ethics and Government law, but thought there was a provision in AB 339 which could also be strengthened. He proposed an amendment, and said he would strongly support AB 339 with the amendment included.
Kirby Burgess, Clark County, speaking for Karen Larson, supported the amendment by saying, "We think the amendment will strengthen the bill."
Chairman Garner asked Mr. Struve to provide the committee secretary with the proposed amendment (Exhibit D).
Mr. Hettrick asked if the proposed amendment would affect lines 24 and 25. Mr. Struve assured Mr. Hettrick the language would not be conflicting, as he had discussed it with Spike Wilson, Chairman, State Ethics Commission. He said the statutory ethical standards were contained in another section of Chapter 281.
Chairman Garner stated it was the intent of the chair to pass the bill with the amendment, once it was obtained. The hearing on AB 339 was closed with no action taken.
ASSEMBLY BILL NO. 353 -Provides date for valuing land purchased by school district within subdivision.
Dusty Dickens, Clark County School District, stated AB 353 was an effort to clarify the language in Nevada Revised Statute 278.346, because the Clark County School District had been in a very active building program. She explained how the school district currently identified a school site and negotiated with the subdivider at fair market value, determined by an appraisal, for the acquisition of the site after the subdivision's tentative map was filed. She stated AB 353 would spell out in law what point in time fair market value was established. She pointed out tentative and final maps were sometimes filed on top of one another in Clark County, therefore, the school district wanted the legislation amended to identify "fair market value" as the amount determined at the time of the tentative subdivision map filing and to hold to the amount for one year. In concluding statements, Ms. Dickens referenced a proposal by Washoe County School District to change the wording of AB 353 and said Clark County School District did not agree to the proposed changes.
When asked by Mr. McGaughey if it would not be better to establish the land value at the time the land was purchased by the school district, Ms. Dickens disagreed. A discussion followed regarding the cost of schools and those who would be required to pay those costs, and the free enterprise system. Mr. McGaughey closed by saying, "My philosophy is schools should be supported by people that don't have children, by the entire community, and the costs should be spread accordingly, not zeroed in on a few people."
Mrs. Lambert referenced the confusion when tentative and final maps were filed at approximately the same time, and asked Ms. Dickens to expand her comment. Once again, Ms. Dickens referenced Washoe County's proposed amendment which would give a "raw land value" at the time the tentative map was filed, and thereafter, an appraised value. She said the same problem which AB 353 was attempting to address would continue to exist, i.e., at what point in time would "fair market value" be determined, at the time the final map was filed or at the time the school district acquired the property.
Mrs. Kenny cited an illustration for purposes of clarification. Ms. Dickens agreed and countered with another illustration to drive the point home.
Mr. Hettrick cited permissive language, and stated that what was being asked was already provided for in the law, the school district merely had to negotiate and buy the land. Ms. Dickens countered, "At the beginning of this building program we felt the same way." She then stated the problem was in identifying sites for appraisal. Unless specific boundaries of the site were identified, the school district had nothing more than a vague appraisal to deal with. Further discussion followed.
Mrs. Augustine suggested the legislation in AB 353 might apply to Clark County, but it might not be a good idea for the whole state, as it would lock a developer into the tentative map as filed. She did not think it was in the spirit of competition.
Ms. Dickens reiterated it was only a one-year lock after approval.
Irene Porter, Executive Director, Nevada Homebuilders Association, spoke in opposition to AB 353. She gave the historical background for the existing legislation, and said in addressing a problem in its development, Clark County School District had been given the ability to identify and purchase a subdivision site at the time the tentative subdivision map was filed. She then gave reasons for the tentative subdivision map, and added, upon checking, the Clark County School District had acknowledged receipt of tentative maps for the last 12 or 13 years from the City of Las Vegas. But when the City of Las Vegas had been asked if there had ever been a reply from the school district regarding the tentative map and the necessity for a school site, the answer was no. Mrs. Porter then charged the Clark County School District with not using the law which they already had, suggesting AB 353 was more than it appeared to be on the surface. She then proceeded to give reasons why the legislation was not practical.
Chairman Garner interrupted Mrs. Porter to allow Mrs. Kenny to ask, "Are you saying when a developer purchases land, he or she has no idea they are putting a school there? Don't even think about putting a school there? I would be stunned if the people from Summerland and Desert Shores didn't even have a little inkling that a school was going to be put in there, and that's what I hear you saying, or else I am very confused." Mrs. Porter replied, "I would hope the school's district has taken a look at the Summerland master plan, which I am sure they have, and the Green Valley master plan, which I know they did years ago, and the school district has communicated with the developer that they are going to want a school site in the area. The problem is the school district doesn't purchase the land when it is at raw land price. What they want to do here is wait until the developer has put a million dollars worth of improvements into the property, and then purchase it for the raw land price. That's a taking, you can't do that." A further discussion followed regarding the implications made by Mrs. Porter, Mrs. Kenny disagreed. When asked at what point the developer asked for financing, Mrs. Porter concurred it was at the time the tentative maps were drawn.
Mr. Bache asked Mrs. Porter for her input regarding the filing of the tentative and final maps at the same time. Mrs. Porter said it had been more frequent in times past, whereas today, the builder did not take the risk of doing both maps at the same time because the engineering costs to develop the final map were very high. So, although it did occur, it was not as common as in past years due to cost. When asked for an approximate time line between the two maps, Mrs. Porter answered 60 to 90 days, if no problems occurred. Nevertheless, the school district had 15 days in which to reply to the tentative map. She added if the school district replied it stopped the process. The school district would then be given the time to work with the developer to negotiate and purchase the school site.
After answering the committee's questions, Mrs. Porter continued to give her reasons why the legislation was not practical, pointing to the language which showed the school district was attempting to get into the full real estate business, buying cheap and selling high, if they did not develop a school site as intended. In conclusion, Mrs. Porter said, "I think we have a taking's issue involved here, and perhaps a constitutional issue. We don't object to selling them the school site at the time of the tentative map, for the price that it is appraised at, and at that time, if the sale is consummated immediately. We do have an objection when the developer goes in, or the builder, and puts another quarter of a million, or a half a million into that property, and then the school district says no, we don't want to pay the bill."
Mrs. Segerblom opined a subdivider should be interested in helping with the social problems of Clark County and its growth, and be willing to help acquire a school site. She said she had seen many a subdivider make a great deal of money by selling land back to a school district. Mrs. Porter assured Mrs. Segerblom the school district received a lot of help from developers which was not necessarily known to the public.
Roger Means, Washoe County School District, testified Chapter 278 currently worked for his school district. He verified he received all tentative maps from Washoe County, the City of Sparks, and the City of Reno. He said he reviewed and responded to every project. He added, "Site acquisition under Chapter 278 is really a minor force in the way we acquire school sites. Most of our school sites are either acquired by outright dedication from developers or through negotiated land deals that take place prior to the tentative map. The major engineering firms in Washoe County that do most of the land development contact us prior to the time the tentative map is submitted, and we work out our differences and locations of school sites at that time. In closing, all I would do is indicate to you that Chapter 278 works the way it is for us, and we would like to see you leave it the way it is."
The hearing on AB 353 was closed with no action taken.
Chairman Garner told the committee he was aware a bill draft was being requested to incorporate the City of Pahrump. He said he had asked the person making the request to withdraw it, as the committee had heard a similar bill last session. It had been decided the measure should go to the vote of the people, the people defeated the measure 2 to 1. Therefore, Mr. Garner said he was not interested in hearing another incorporation bill as the best information indicated, "The people are not interested in doing that at this time."
ASSEMBLY BILL NO. 31 - Revises requirements for filing documents with county recorder.
Mrs. Augustine presented the proposed amendment (Exhibit E) to the committee.
Mr. McGaughey said the problem he had with AB 31 was when a document conditionally recorded had to be replaced by a suitable copy within 10 days. The instrument had conditionally been accepted. Then Mr. McGaughey acquiesced to Mr. Garner's suggestion to amend the bill on the Senate side.
Mr. Ernaut commented he still disagreed with leaving the words "legible" and "may" in the bill, stating his reasons why. Mrs. Augustine replied the one word the county recorders did not want deleted was "legible." Further discussion followed. Mr. Garner interceded and stated he was convinced the word "legible" needed to be kept in, referencing the letter the committee had received from the Carson City County Recorder indicating the word should not be removed.
Mrs. Lambert asked what happened if the county recorder conditionally accepted a document, and the person did not return with a legible copy within 10 days. Was the conditional copy thrown away? Mrs. Augustine admitted currently no one came back. It was hoped the language would encourage people to come back, but the language was not enforceable.
ASSEMBLYMAN AUGUSTINE MOVED TO AMEND AND DO PASS AB 31.
ASSEMBLYMAN BENNETT SECONDED THE MOTION.
In further discussion, Mr. McGaughey stated he had never felt comfortable with the bill, and he believed the county recorder was merely a repository for information which should be recorded. He added, "If any one of us typed up a document, signed it, went down and paid a fee, I think they are duty bound to record that information. I think one of the problems is the reproduction equipment is not up to where it should be. They take an original document, they reduce it by about 35 percent, it runs the copy together, and I am going to be opposing this bill. I am going to vote against it. I think it is just going to create more problems than it did."
Chairman Garner called for a roll call vote.
THE MOTION DID NOT CARRY.
ASSEMBLYMEN AUGUSTINE, BENNETT, LAMBERT, SEGERBLOM, AND GARNER VOTED YES.
ASSEMBLYMEN BACHE, de BRAGA, ERNAUT, FREEMAN, HETTRICK, KENNY, MCGAUGHEY, NEIGHBORS, AND WILLIAMS VOTED NO.
Mr. Garner informed the committee AB 253 would be ready for a vote on Thursday, April 1, 1993.
ASSEMBLY BILL NO. 337 -Clarifies certain provisions of water law and ratifies past actions of state engineer.
Chairman Garner stated it was the intent of the chair to form a subcommittee to work on the concerns which had been expressed relative to AB 337, particularly water speculation and public interest. He addressed a response which he had received from the State Water Engineer and had copies distributed (Exhibit F) to the committee.
Assemblyman Robert Sader, District 32, explained the proposed amendment (Exhibit G). He stated there was a fear AB 337 was too open-ended or too broad, and might be interpreted to support decisions of the state engineer, which the bill was not intended to do. After reading the bill, Mr. Sader said he agreed with the testifiers, therefore, the amendment was for the purpose of tightening up the language of the bill so that it could not be misused to interpret the state engineer's decisions for unintended results. In conclusion, Mr. Sader added the amendment did not satisfy the concerns of everyone who testified, nor was it intended to, it merely dealt with the language issues.
Mrs. Freeman said she did not disagree with the amendment but she queried if it went far enough. She quoted from Nevada Revised Statute 533.450 regarding a 30 day appeal period, and said, "In Washoe County, specially to Honey Lake scheme, apparently in this bill we are talking about water already appropriated, but, if I understand correctly, the Truckee Meadows project involves a transfer of water. Will you explain to me how this bill relates to that issue?" Mr. Sader replied, "The term 'water already appropriated,' as it is used in those statutes, includes permitted water rights. That's the whole issue here, whether permitted water rights as opposed to certificated groundwater rights, is included in the term 'water already appropriated.' The issue raised by the judge's decision in the Honey Lake case was, specifically, that you couldn't appropriate water until you proved it up for beneficial use. Therefore, it had it certificated. But the practice of the state engineer for the last 80 years has been to interpret 'water already appropriated' as any water for which the state engineer has issued a permit."
Mrs. Freeman then asked, "If we were to pass this bill, with the amendments, would it overturn the opinion of the district judge on the Honey Lake project." Mr. Sader answered, "That portion of the opinion which ruled that permitted water rights are not 'water already appropriated' would be overturned, and it should be." A discussion followed regarding the court process which would ensue on passage of the bill.
Mrs. Lambert wanted further clarification. She said, "It would settle the issue on one point of the three points raised in the Honey Lake issue." Mr. Sader said, "Right."
ASSEMBLYMAN BENNETT MOVED AMEND AND DO PASS ON AB 337.
ASSEMBLYMAN MCGAUGHEY SECONDED THE MOTION.
In further discussion of the bill, Mr. Williams asked what was the purpose for the formation of the subcommittee mentioned earlier. Chairman Garner clarified the subcommittee was for the purpose of dealing with speculation, and the determination of public interest. Mr. Garner added it would be in a separate bill. Mrs. Freeman then asked if she could handle the bill, Mr. Garner said he had no problem with Mrs. Freeman coming forth with the bill. Mrs. Augustine queried if the subcommittee on AB 314 would also be dealing with some of the same issues, the answer was yes.
THE MOTION CARRIED. (Mrs. Freeman voted no).
Mr. Ernaut made a request to have a bill drafted addressing portable fire extinguishers. Chairman Garner acknowledged the motion.
ASSEMBLYMAN ERNAUT MOVED TO HAVE A BILL DRAFTED ADDRESSING PORTABLE FIRE EXTINGUISHERS.
ASSEMBLYMAN LAMBERT SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
There being no further business to come before committee, the meeting was adjourned at 10:04 a.m.
RESPECTFULLY SUBMITTED:
BETTY WILLS
Committee Secretary
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Assembly Committee on Government Affairs
March 30, 1993
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