MINUTES OF THE
SENATE COMMITTEE ON GOVERNMENT AFFAIRS
Sixty-seventh Session
March 8, 1993
The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:00 p.m., on Monday, March 8, 1993, in Room 227 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator Ann O'Connell, Chairman
Senator Sue Lowden, Vice Chairman
Senator William J. Raggio
Senator Dean A. Rhoads
Senator Thomas J. Hickey
Senator Leonard V. Nevin
Senator Matthew Q. Callister
GUEST LEGISLATORS PRESENT:
Ernest E. Adler, Senator, Capitol Senatorial District
STAFF MEMBERS PRESENT:
Caren Jenkins, Principal Research Analyst
Tanya Morrison, Committee Secretary
OTHERS PRESENT:
George Yan, Mayor, City of Wells
Mike Cosgrove, Manager, City of Wells
G.P. Etcheverry, Former Executive Director, Nevada League of Cities
Marvin Leavitt, City of Las Vegas
Henry Etchemendy, Executive Director, Nevada Association of School Boards
Marcia Bandera, Elko County School District
Greg Betts, Nevada Rural School Districts
Bob Seale, Treasurer, State of Nevada
Wayne Perock, Chief of Field Operations, State of Nevada, Department of Conservation and Natural Resources, Division of State Parks
Chairman O'Connell opened the meeting on Senate Bill (S.B.) 185.
S.B. 185: Exempts certain small municipalities from limitations on amount of tax revenue which may be paid to redevelopment agencies and tax increment areas.
George Yan, Mayor, City of Wells, spoke to the committee in favor of S.B. 185. He told the committee the redevelopment agency as stipulated under Nevada Revised Statutes (NRS) 279.382 to 279.680 inclusive can be interpreted as a tool which may be used to encourage or attract private investment in the blighted areas of the communities so the blighted areas will no longer be a social or economic liability. He explained the blighted areas in Wells may be characterized by NRS 279.388 in economic dislocation, deterioration or disuse resulting from faulty planning and loss of population and reduction of proper use of some parts of the area, resulting in further deterioration and added cost to taxpayers for the creation for new public facility and services elsewhere. He stated the most important item on the Wells agenda is to enhance the quality of life and achieve economic self-sufficiency. Mayor Yan pointed out state and federal assistance is limited and must be shared equally with other communities. He explained private businesses have experienced the scarce capital resources and all of the adverse factors have necessitated cities to seek and employ economic development or economic redevelopment. Mr. Yan told the committee the city plans to use the redevelopment agency to formulate industrial development incentive packages to attract small industry to come to Wells.
Mayor Yan stated that in the NRS 279.676, subsection 2, paragraph a and b it states the law restricted usage of the redevelopment agency by fiscal size of the improvement. He explains this limitation significantly restricts small communities like Wells to use this effectively. He stated the function of the redevelopment agency is funded by property tax and when an agency is formed, an area within the corporate boundary of the governmental entity shall be defined. He explained the assessed value of all properties in that area would be recorded and all property taxes paid by property owners, based on the recorded values, shall be distributed to the taxing entity in the same manner prior to the formation of the agency. He stated the only property tax the agency will receive are those additional improvements made after the formation of the agency and that funding may only be used according to the stipulations in the redevelopment plan to improve the areas infrastructures, to construct buildings and to create incentive packages.
Mayor Yan told the committee the current limitation imposes limits to the size of the agency. For metropolitan areas with a great sum of assessed value, the limitation would not deter any redevelopment effort. He stated Wells current assessed valuation is $11.5 million. He explained the 15 percent caps allow the City of Wells to construct a maximum improvement of $1.75 million and a tax increment of $52,425 to the agency. He further explained the agency may limit the city to one project or less than one project.
Mayor Yan stated by amending the current NRS 279.676 subsection 2, to impose a physical boundary limitation to a smaller governmental entity of 10,000 population or less will allow Wells the opportunity to effectively utilize this to further their economic development effort.
Mayor Yan told the committee he feels this amendment would work for the City of Wells and he asked the members of the committee to evaluate the proposed amendment, suggest any improvements and pass the bill.
Senator Raggio asked if Mayor Yan was going to use the entire city for the redevelopment plan and what impact it would have on other entities in the Wells area. Mayor Yan stated they would not use the entire city and they would restrict it to just the industrial development area, which is the downtown district and the industrial park district. He explained they are trying to exclude all residential areas from the redevelopment area.
Senator Raggio asked if the Nevada League of Cities had looked at this proposal and whether they have any concerns with it. Mayor Yan stated the Nevada League of Cities gave him the support resolutions and they support this effort.
Mike Cosgrove, Manager, City of Wells, spoke in favor of S.B. 185. He told the committee the City of Wells is only dealing with two areas which were mentioned by Mayor Yan. He explained one of the downtown areas has 17 vacant stores and that area has not been touched for many years. He stated it needs a definite shot in the arm and possibly taking the whole block down. He pointed out they are not looking at any residential zones at all.
Senator Hickey stated he would be interested in knowing what the fiscal impact would be with this bill. Chairman O'Connell echoed this interest and asked Mayor Yan if he could explain this. Mayor Yan told the committee there would be no affect on the current fund, but whatever is brought in for potential growth will then affect the fund.
Mayor Yan gave the committee members a copy of the resolutions from the Nevada League of Cities, in support of this measure (Exhibit C).
G.P. Etcheverry, Former Executive Director, Nevada League of Cities, spoke in favor of S.B. 185. He told the committee the City of Wells did bring to the attention of the Nevada League of Cities at various legislative meetings during the interim, as well as during the annual conference in Winnemucca in September, the issue of this proposal. He stated the Resolution 92-19 which is Exhibit C was passed by the league with full consideration. He did iterate the league members were questioned quite strongly and this was the result of them discussing with their bond council what they should do for redevelopment districts. Mr. Etcheverry stated this proposal is well worth looking at and he suggested some type of study be done.
Chairman O'Connell asked if Mr. Etcheverry knew how many more communities may benefit from this proposal by enticing more businesses into the rural areas. He stated during the discussions and deliberations there was major concern regarding what affect there would be on other small jurisdictions, but he has no exact numbers for the committee at this time. He pointed out a fiscal note might be of some help.
Senator Raggio concluded there would be no way to get a fiscal note on this proposal because what this is saying is any city which adopts this will have a fiscal impact within its own self.
Senator Rhoads agreed with Senator Raggio as to the difficulty of putting a fiscal note on this bill because there is no idea what type of business may come into the area, which makes it very hard to estimate.
Marvin Leavitt, City of Las Vegas, spoke in support of S.B. 185. He told the committee he agreed it was difficult to estimate the fiscal impact because they are dealing with unknown future events with regard to the increments. He explained it could be if the City of Wells is not successful, there would be no increment, but if they are very successful they will pick up some funds. He pointed out it would be very difficult to estimate the tax growth.
Senator Hickey asked Mr. Leavitt if there would be any impact on the schools. Mr. Leavitt told the committee the area would not only be improved, but the community would be improved by moving new families into the area and all of the entities benefit.
Henry Etchemendy, Executive Director, Nevada Association of School Boards, spoke in opposition to S.B. 185. He told the committee they are opposed to the bill because of the initial impact, but they are not opposed to the improvements the City of Wells is trying to accomplish. He explained with this proposal there are a lot of areas with a population of less than 10,000 which it would impact. He told the committee if they remove the cap already in existence, it would not only affect Wells, but it will involve a lot of other localities including unincorporated towns such as Minden, Wendover and Jackpot. He pointed out a redevelopment area gets the amount of revenue which arises in the increased valuation from the date it is established, multiplied by the overlapping tax rate. He explained all the tax rates which would normally go to the city, schools, state and county would go directly to the redevelopment district subject to the caps. He pointed out under the current law with the 15 percent cap on the city could raise more money than if they took the cap off, therefore, he stated it does not seem realistic there would be that great of a need to take the 15 percent cap off.
Mr. Etchemendy told the committee the Nevada Association of School Boards is opposed to S.B. 185 because of the potential impact in the future.
Marcia Bandera, Elko County School District, spoke in opposition of S.B. 185. She told the committee she would not add a lot to what Mr. Etchemendy has said, but she stated Elko County School District finds themselves in the awkward position of not desiring to be in conflict with certain municipalities in their area. She suggested some more discussion with the introducers of the bill and with other interested parties to see if they could work out a bill which would prevent future negative impact. She requested the committee allow some subcommittee work on this bill to try to achieve some compromised language which might negate any harmful impact to the school districts.
Greg Betts, Nevada Rural School Districts, spoke in opposition of S.B. 185. He stated he cannot add to what the two previous speakers said except to strongly encourage a meeting of all interested parties to talk this through in a subcommittee. He suggested the problem may be resolved so the school districts and counties will not be hurt by this bill and yet let the redevelopment take place as is clearly is needed across the state.
Chairman O'Connell asked Senator Rhoads to work with all the interested parties on this bill to change the language to suit the needs of all the entities.
Chairman O'Connell closed the hearing on S.B. 185 and opened the hearing on Bill Draft Request (BDR) 31-745.
Bill Draft Request 31-745: Establishes local government arbitrage rebate pool investment fund.
Bob Seale, Treasurer, State of Nevada, spoke on BDR 31-745. He told the committee the treasurer administrates the Local Government Investment Pool (LGIP). He explained that pool takes from all of the local entities throughout the state and invests on their behalf. He stated that particular fund is intended to be a short-term fund with the average maturity being about 90 days. He stated they have been able to move this fund from about $100 million when he took office and
now it is approximately $300 million in size. He explained this is a tremendous opportunity for the local entities to increase the yield they can get because of the economy of skills that is offered.
Mr. Seale told the committee what he would like to do is create another fund of a similar nature except it would be a long-term fund which will allow local entities to pool their money with the state treasurer in a way which will offer them significant return on their funds. He explained most of these funds are bond funds and there is a requirement that there be a capulation made for arbitrage and the rebate requirements and this fund will be able to take care of those. Therefore, he stated he submits this BDR for introduction.
Chairman O'Connell asked Mr. Seale if he had a chance to go over the BDR and make sure there is no correction in language. He stated he had gone over the BDR and he found nothing which needs to be changed.
SENATOR RAGGIO MOVED FOR INTRODUCTION OF BDR 31-745.
SENATOR NEVIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman O'Connell closed the hearing on BDR 31-745 and opened the hearing on Senate Bill (S.B.) 188.
Senate Bill 188: Revises provisions governing preference given to local contractors on public works projects.
Ernest E. Adler, Senator, Capitol Senatorial District, spoke in favor of S.B. 188. He told the committee the purpose of this bill originated due to constituents who owned small contracting businesses. He explained these small companies usually do not buy the materials for the jobs they do, they do not receive the credit for the sales tax to qualify for bidder preference. He told the committee one of these constituents has continually worked in Nevada for 25 years and had done few, if any, jobs outside the state, but he still does not qualify for the bidder preference even though he is almost exclusively a Nevada contractor.
Senator Adler stated he spoke with Associated General Contractors of America (AGC) and the Nevada State Department of Transportation (NDOT) and they stated the language in this bill, however, creates problems for them. He explained he would like to see the various groups try to work out some exceptions so the very small contractor is not
precluded from bidding these projects, just because they are small. He pointed out the law right now states the contractors must come up with documentation to show $5,000 in sales tax in materials over a 5 year period.
Senator Raggio asked Senator Adler if he stated he does not support S.B. 188 in its present form. Senator Adler stated since he spoke with AGC and NDOT, he thinks this bill needs some language change to close a loophole which was drafted in it inadvertently.
Senator Raggio told Senator Adler he had problems with this bill other than the language. He explained this type of bill cuts both ways and there have been a lot of discussions in the legislature over preferential bidding. He stated he felt one side of the argument is when the state requires a local contractor to get a preference, it increases the cost to the public. He pointed out the state compromises when it gives preferential treatment and causes the taxpayer to pay more money for the job. Therefore, he explained if a company was given preference, they would show proof of compensation by showing the contractor had been a substantial payer of these taxes.
Senator Adler disagreed with Senator Raggio. He stated he felt it was unfair that a large contractor gets a preference for a small job when a small businessman could not possibly qualify for it, because of the way the current law is designed. He feels the state punishes small contractors in that respect.
Senator Raggio stated the taxpayers are paying the bill and that was the reason for the current law. Senator Adler stated if the smaller business gets the job, it is presumed they had the lower bid and therefore the taxpayers are saving money.
Chairman O'Connell asked Senator Adler to get together with all interested parties and come up with a change in the language to be fair to everyone and still have the bill do what it was intended to do.
Chairman O'Connell closed the hearing on S.B. 188 and opened the hearing on Senate Bill (S.B.) 180.
Senate Bill 180: Increases number of members on city council of City of Las Vegas.
Chairman O'Connell stated Senator Joseph Neal was informed this bill would be heard today and he stated he was not going to be speaking on this bill.
Senator Nevin stated this bill seems to work in conjunction with Senate Bill (S.B.) 140 and therefore maybe it should be held until the report is finished on the consolidation of Las Vegas.
Senate Bill 140: Creates advisory committee to study consolidation of Clark County and Las Vegas.
Chairman O'Connell stated the mayor of Las Vegas, Jan Laverty-Jones, called and asked the committee to refrain from taking action on S.B. 180 until they have the report from the committee which is working on the consolidation of the county and the city.
Marvin Leavitt spoke on S.B. 180. He stated his comments are essentially the same as Mayor Jones'. He explained they would like to see the results of the study which is underway right now.
Chairman O'Connell closed the hearing on S.B. 180 and opened the hearing on Bill Draft Request (BDR) 35-887, Bill Draft Request (BDR) 35-263, Bill Draft Request (BDR) 28-265, Bill Draft Request (BDR) R-266, Bill Draft Request (BDR) 35-269 and Bill Draft Request (BDR) 35-270.
Bill Draft Request 35-887: Changes notice requirements for meeting of state park advisory commission.
Bill Draft Request 35-263: Makes state park advisory commission subject to Open Meeting Law.
Bill Draft Request 28-265: Expand exemption for state parks from requirement that state public works board furnish engineering and architectural services.
Bill Draft Request R-266: CR: Direct division of state parks to work with interested parties to securing the Steamboat Ditch Train in Washoe County.
Bill Draft Request 35-269: Requires use of fees for sewer and water systems at Lake Tahoe Nevada State Park for renovation of sewer and water systems.
Bill Draft Request 35-270: Authorizes Division of State Parks of State Department of Conservation and Natural Resources to charge senior citizens for special services.
Wayne Perock, Chief of Field Operations, State of Nevada, Department of Conservation and Natural Resources, Division of State Parks, spoke on behalf of the BDRs. Mr. Perock stated these are from an interim Study on State Parks and he stated his department supports the entire package as they are written.
SENATOR HICKEY MOVED TO INTRODUCE BDR 35-887, BDR 35-263, BDR 28-265, BDR R-266, BDR 35-269 AND BDR 35-270.
SENATOR NEVIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman O'Connell closed the hearing on the BDR 35-887, BDR 35-263, BDR 28-265, BDR R-266, BDR 35-269 and BDR 35-270 and opened the hearing on Bill Draft Request (BDR) 18-1062.
Bill Draft Request 18-1062: Requires executive branch of state government to prepare assessment of takings implications on private property for certain governmental actions.
Senator Rhoads brought in this BDR to ask for committee introduction. He stated there are two other bills which would accompany this one and he would like this BDR held until the others come into the committee.
Chairman O'Connell agreed to hold the hearing on these BDRs until they were all in the committee together.
SENATOR RHOADS MOVED FOR INTRODUCTION OF BDR 18-1062.
SENATOR CALLISTER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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There being no further business, Chairman O'Connell adjourned the meeting at 3:00 p.m.
RESPECTFULLY SUBMITTED:
Tanya Morrison,
Committee Secretary
APPROVED BY:
Senator Ann O'Connell, Chairman
DATE:
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Senate Committee on Government Affairs
March 8, 1993
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