MINUTES OF THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session June 7, 1995 The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:33 p.m., on Wednesday, June 7, 1995, in Room 227 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Ann O'Connell, Chairman Senator Randolph J. Townsend, Vice Chairman Senator Jon C. Porter Senator William J. Raggio Senator William R. O'Donnell Senator Dina Titus Senator Raymond C. Shaffer GUEST LEGISLATORS PRESENT: Senator Maurice Washington STAFF MEMBERS PRESENT: Dana Bennett, Principal Research Analyst Teri J. Spraggins, Committee Secretary OTHERS PRESENT: Nora Trevino, Concerned Citizen Robert Gagnier, Executive Director, State of Nevada Employees Association Barbara Willis, Director, Department of Personnel Gary Yles, Lobbyist, Service Employees International Union Joe Guild, Lobbyist, Nevada Mobile Home Park Association Frank W. Daykin, Attorney at Law Irene Porter, Executive Director, Nevada Home Builders Association Mary Lardino, President, Nevada Apartment Association David M. Frazza, Executive Director, Nevada Apartment Association Larry Osborne, Executive Vice President, Carson City Chamber of Commerce Joe Cain, Lobbyist, Las Vegas Chamber of Commerce Tony Raymond, Representative, Reno Sparks Chamber of Commerce Madelyn Shipman, Assistant District Attorney, Washoe County Pat Coward, Lobbyist, Nevada Associated Realtors Marshall Shultz, President, Skyline Residents Association Jesse C. Paulk, President, Associated General Contractors, Las Vegas Kurt Fritsch, Lobbyist, City of Henderson Jack Jeffrey, Secretary/Treasurer, Southern Nevada Building Trades Council Tom Grady, Lobbyist, Nevada League of Cities Max Christianson, Lobbyist, Sheet Metal and Contractors Association Warren Hardy, Lobbyist, City of North Las Vegas John Madole, Executive Director, Nevada Chapter of Associated General Contractors Dallas Kunard, Lobbyist, Las Vegas Associated General Contractors Tom Skancke, Attorney at Law, Skancke and Associates Luke Pushnig, Legal Counsel, Las Vegas Convention and Visitors Authority John O. Swendseid, Bond Counsel, Las Vegas Convention and Visitors Authority Marvin Leavitt, Legislative Coordinator, Las Vegas Michelle Gamble, Program Assistant, Nevada Association of Counties Bill Berrum, Treasurer, Washoe County Senator O'Connell opened the hearing on Senate Bill (S.B.) 544. SENATE BILL 544: Provides for use of catastrophic leave by state employee for death in his immediate family. Senator Washington was the first to testify for S.B. 544. He explained this bill is the result of a request by a constituent. He said the bill extends catastrophic leave by state employee for a death in his immediate family. He introduced Nora Trevino, Concerned Citizen, to the committee. Ms. Trevino told the committee her father had been terminally ill. She had used up all her sick leave and annual leave while caring for him. She was granted catastrophic leave to care for her father. Upon his death, she learned that her catastrophic leave ended, allowing no time to bury her father or to grieve. She explained the Department of Personnel should extend the catastrophic leave long enough for a person to finish family business when an immediate family member is ill and dies. Senator O'Connell asked Ms. Trevino how much catastrophic leave time she used? Ms. Trevino explained she used 2 1/2 months of her own sick and annual leave to care for her father. She stated she used 2 weeks of catastrophic leave time, for a total of 3 months that she was absent from her position. Senator O'Connell asked if someone replaced Ms. Trevino while she was absent. Ms. Trevino responded that her coworkers covered the office work. Senator O'Connell asked Ms. Trevino what position she held? Ms. Trevino responded that she is a secretary at the State Industrial Insurance System. Robert Gagnier, Executive Director, State of Nevada Employees Association, testified this is a hole in the existing law. He told the committee when the law was passed 6 years ago, only two other states had this policy. He said 16 states now have this policy. He stressed that Nevada was on the leading edge of a program at its inception. He stated: . . . It is one of the things I think Nevada can point to that is a good program and is copied by other states. We feel this addition is necessary, because before you are eligible for catastrophic leave, you must use up all of your sick leave and annual leave . . . I think this is a good bill and we certainly support it. Senator O'Connell asked how many state employees take advantage of catastrophic leave a year? Mr. Gagnier responded this information would be available from Barbara Willis, Director, Department of Personnel. Ms. Willis testified next. She noted this bill would clarify that a family death is a catastrophe. She stated the current language in law is silent on the issue and said there have been mixed interpretations by different agencies. She stated some agencies approve catastrophic leave for a family death and some do not. She outlined some statistics for the committee from the past 6 years. An average of 103 employees use catastrophic leave per year. The average length of time they are absent is 5 weeks. There is an average of 529 donors a year. The average donation is 51 hours of leave time. There is currently a balance of more than 38,000 in the catastrophic leave funds retained in respective agencies. The value of the leave is much higher by the donors than that used by the recipients. Most of the donors are longer term employees who have the hours on the books and are being paid at a higher rate. Most of the recipients have not been employed quite as long as the donors so they are paid at a lower rate. This affects cost savings. Senator O'Connell asked Ms. Willis to explain her statistics again. Ms. Willis did so. Senator O'Connell asked if the person who is donating the time fills in for the position of the person who is on leave? She asked who covers the job positions. Ms. Willis responded individual agencies decided how to cover the job positions in their own agency. She stated usually existing staff fills in. She testified there have been no complaints from agencies that they are unable to get the work done. She stated 5 weeks is usually something agencies can cover by reassigning duties on a temporary basis. Senator O'Connell questioned why there is no fiscal note attached to the bill. Ms. Willis responded that she does not see an increase of costs for the existing program. Senator O'Connell asked if there were temporary hires for positions that are temporarily unfilled. Ms. Willis stated, "Not that we are aware of, there may be some, but it is something that we are not controlling in the Department of Personnel. It has not been an issue. We have had no complaints in that regard." Senator O'Connell asked Ms. Willis to start logging to see if there is a fiscal cost to the bill. Ms. Willis asked if she meant an increased cost for the provision for family death. Senator O'Connell commented, "I think that is why we had a sunset on it originally, that we were interested in the cost impact and you are telling me those figures have never been collected?" Ms. Willis responded, "Yes, they have been collected. When I talked about the unused hours, the 38,000 that are still in the bank and unused, we can certainly convert that to a dollar amount based on the average hourly rate of pay, as well as the hours that have been used. We have been keeping those figures." Senator O'Connell asked, "And if anybody has had to hire any additional help in order to cover . . . we would appreciate that too." Gary Yles, Lobbyist, Service Employees International Union, stated support of S.B. 544. He stated the addition of the bereavement clause in the catastrophic leave act was the humanitarian thing to do. Senator O'Connell closed the hearing on S.B. 544 and opened the hearing on S.B. 545. SENATE BILL 545: Prohibits local governments from adopting ordinances limiting rental rates for private residential property. Joe Guild, Lobbyist, Nevada Mobile Home Park Association, testified in favor of S.B. 545. He told the committee that S.B. 545 is not about rent control. He explained this bill corrects an anomaly that currently exists in the statute. He said the bill puts the issue of who should decide whether Nevada should have rent control in the proper forum. He said any future discussion of rent control should be in the Legislature. He provided materials, (Exhibits C, D, and E). He said in 1992 the attorney general issued an opinion that paved the way for Clark County to attempt to enact a rent control ordinance. He stated the opinion concluded that Clark County had the authority to establish a rent control ordinance. He testified the opinion was based on Nevada Revised Statutes 244.335 and 244.357 that are in the county chapters of the statutes. He discussed Exhibit C, which is the attorney general's opinion. He said the attorney general's opinion is incorrect and discussed Exhibit D, which is a rebuttal of the attorney general's opinion. Mr. Guild stated three reasons the attorney general was wrong. He said the attorney general relied heavily on California supreme court cases interpreting California's constitution that upheld local government ordinances establishing rent control. He cited Nevada had retained authority over local governments, and has not established home rule. He said reason number three is there is no broad grant to the counties to enter into ordinance making. He discussed California "home rule power" at their constitutional level. He gave the committee a breakdown of rent control status by state (Exhibit E). He continued his discussion of the constitutional structure differences of Nevada and California. Mr. Guild reiterated there is a cloud in the law because there is an attorney general's opinion which says local government can do something he feels they absolutely cannot do. He testified they should address this issue at the state legislative level because of the impact it will have on all 17 counties. He stated local government should not be allowed to create variations of rent control, such as those that exist in California. Senator O'Connell asked if the attorney general's decision could be applied to other areas of the law? Mr. Guild responded the opinion was so specific, he does not think it will apply to other areas. He said the attorney general only based the opinion on the question, "Could Clark County enact a mobile home park rent control ordinance?" A discussion of home rule and analogies to the attorney general's opinion ensued. Frank W. Daykin, Attorney at Law, testified the counties and cities in Nevada have only those powers expressly granted to them by the Legislature. He said if this bill is passed, they are not taking away a power that Clark County already has. He said they are only clearing up a confusion, which the attorney general's office gratuitously introduced into the law. He reiterated that California has home rule; Nevada does not. He said rent control was never intended to be included in the business license portion of Nevada's statutes, nor was it ever intended to be included in the police, fire, and sanitation ordinance portions of local law. Senator O'Donnell asked if this bill includes apartment complexes. Mr. Guild stated the language on page 1, line 20 addresses residential property such as apartments and mobile homes. Senator Raggio asked if this bill were enacted would it repeal any existing ordinances? Mr. Guild responded there are no existing ordinances. Irene Porter, Executive Director, Nevada Home Builders Association, stated support of S.B. 545. She testified they are against rent control. She said the ordinance was defeated at the largest public hearing in Clark County. She said this bill is necessary because of the opinion rendered by the attorney general's office. She reminded the committee there will be an interim study committee on government structure, including home rule. She suggested the committee include this topic in that study. She stated in 4 years if there is establishment of home rule, more bills like S.B. 545 will provide preemptive or prohibitive legislation or else the local governments will go without adequate governmental oversight or control. Mary Lardino, President, Nevada Apartment Association, supported S.B. 545. She gave the committee a copy of the quarterly apartment survey report (Exhibit F). She referred the committee to the survey summary, page 2. She stated the law of supply and demand, and the occupancy rate regulates those rental rates. Referring to Exhibit F, she provided statistics from the survey to the committee. David M. Frazza, Executive Director, Nevada Apartment Association, testified in favor of S.B. 545. He offered to send reports to the committee quarterly. He said if there is a rent control issue, it would cut down on the out-of-state investors. He told the committee that 70 percent of all of the people who move to Las Vegas move into apartments first. He said the last thing they want is a restriction on available housing for the residents moving into Nevada. Larry Osborne, Executive Vice President, Carson City Chamber of Commerce, stated support of S.B. 545. He said because of the legal decision that was rendered, Carson City could have to address this problem. Joe Cain, Lobbyist, Las Vegas Chamber of Commerce, stated for the record that the Las Vegas Chamber of Commerce supports S.B. 545. Tony Raymond, Representative, Reno/Sparks Chamber of Commerce, stated for the record that the Reno/Sparks Chamber of Commerce supports S.B. 545. Madelyn Shipman, Assistant District Attorney, Washoe County, testified next. She stated, "I see this bill as simply putting into place what in essence has been the law all along." Pat Coward, Lobbyist, Nevada Associated Realtors, stated the association supports the bill. Marshall Shultz, President, Skyline Residents Association, provided the committee with a copy of written testimony (Exhibit G). His main points were that there are 100,000 mobile home owners in the State of Nevada. He said that mobile home owners are at the mercy of mobile home park owners who can raise fees without notice to the renters. He stated there is no limitation on profit or rent increases now. He suggested this is an unlevel playing field. He told the committee that every time rent increases, the people on fixed incomes are hurt. He said no one builds mobile home parks any more due to county regulations and planning commissions. Discussion ensued regarding surrounding states and rent control. Senator O'Donnell reminded Mr. Shultz that he has to balance the lifestyle he had in California with the lifestyle that he has now. Mr. Shultz asked how many of those out-of-state developers were creating affordable housing? He reminded the committee of the entry level wages at most of the new casinos. He told the committee that people cannot afford to pay $800 or $900 a month for an apartment. He said a mobile home affords some equity, but when the rents reach $500 or $600 per space, those entry-level people "are trapped. Literally trapped . . . I am not asking for rent control. I am asking to work it out." Senator O'Connell closed the hearing on S.B. 545 and opened the hearing on S.B. 543. SENATE BILL 543: Exempts certain public works projects from provisions governing local government purchasing and public works. Jesse C. Paulk, President, Associated General Contractors, Las Vegas, began to testify against S.B. 543. He said this bill deteriorates the competitive bid process. He told the committee that public works should not be taken out of the competitive bid process. He said although the bill says water and sewer projects, some of those are large public projects. Senator O'Connell asked him to hold his testimony until the proponents of the bill had an opportunity to present their side of the bill to the committee. Ms. Porter testified in favor of S.B. 543. She explained the rationale behind the bill. She reminded the committee that this is the "pipe bill." She explained A.B. 138 was passed as an emergency measure early in the session and affected the Las Vegas Valley Water District and Clark County Sanitation District regarding sewer and water mainline extensions. ASSEMBLY BILL 138: Exempts certain arrangements by general improvement districts with private developers from certain laws governing public contracts. Ms. Porter told the committee they have heard companion bills to S.B. 543. She provided a background of the bill. She explained: ...Here is a builder, a home builder. Here is the piece of property that he is going to be building on. He has to extend water and sewer mains from the existing location to his project. The local government involved . . . says to the builder, `Okay, you need a 10-inch line to service your project, but we will want to service other projects in developing properties along the route of this pipeline. So to prevent the public agency from having to go back and tear up the streets to replace the pipe and make it bigger, we will ask you to do what we call sewer- water oversizing. The builder then meets with that local government and negotiates the pipeline costs and money involved. He has to pay for his part, or his 10-inch line. He pays for the trenching; he pays for everything else. The local government says, `When you get this project done, we either, out of our connection fees, can pay you the difference of the oversizing of the pipe, or we can do a refunding agreement with you (which varies from entity to entity of 7 to 10 years in length). As people connect in, we will give you your money back from the oversizing. The builder then goes in . . . and builds that total pipeline. Either at the end, or over a period of 7 to 10 years, gets part of that oversizing money back. The builder is able to select his contractor to do the work and doesn't go through the long competitive bid process. ...The bill was to bring back, because of the district attorney's opinion, back to today what we had been doing for many, many years. To allow the builders to go forth with their projects and make their own decisions with their own money. She told the committee there is an amendment in process. Kurt Fritsch, Lobbyist, City of Henderson, told the committee that Henderson has used this practice for 20 years. He said if this practice were not available to Henderson, the master plan communities would be "dead in the water. Because we simply don't have the money to front for those infrastructure costs." He explained when a second developer comes on line, that developer gives money to the city, which they refund to the initial developer. He explained the oversizing is a necessary for completion of projects. He said the larger projects in Henderson have worked with the four master plan communities. He said the initial developers oversize knowing that other developers will come on line and the money will be refunded to the initial developer. Senator O'Donnell asked Ms. Porter and Mr. Fritsch to address the concerns of Mr. Paulk. Jack Jeffrey, Secretary/Treasurer, Southern Nevada Building Trades Council, stated the bill was never intended to provide for competitive bid, because the developer is paying for all of the costs out of his own pocket and therefore, it is not subject to competitive bidding. Discussion of definitions of public works projects ensued. The discussion included other utilities, fire hydrants, oversizing, and bill language. Tom Grady, Lobbyist, Nevada League of Cities, shared the proposed amendment with the committee (Exhibit H). He testified in favor of S.B. 543. He told the committee all of the proponents of the bill agreed with the amendment. Max Christianson, Lobbyist, Sheet Metal and Contractors Association, agreed with the previous testimony on the bill. Mr. Paulk told the committee that he has no problem if the developer is paying all the funds, and if there are no public funds paid. He told the committee that this bill will take the non-collusion process out of the projects. He said when projects require 36-, 42-, or 48-inch diameter transmission rate, the project is classified as a major public works project and should be put out to competitive bid. He said this bill takes those rules out of the process. He reiterated he does not want to tell any developer how to spend funds, but if public funds are involved, then the rules should not be suspended. Ms. Porter stated the intent of the legislation is to deal with the developers and the oversizing situation. She agreed that sometimes, the developer only needed to install a 10- or 16-inch line and the local government may be requiring a 36-inch line due to the oversizing of the area. The local government asks the developer to put up the money to pay for the oversizing. She said the intent of the bill is to let the developer service his project and work with the local government's water or sewer company to determine the oversizing. She said the developer will front all of the money on the project. She said there will be a contractual or refunding agreement to pay that developer back for the money he has fronted for the project. She reminded the committee that the developer is only paid back for the amount of the oversizing. She said they are not talking about projects where there is a large public investment. She told the committee many developers open their projects up for competitive bid. Mr. Fritsch told the committee that when developing the bill, they tried to talk with the labor unions about a 10 or 20 percent cut off. He said they decided that it would not work so that is why the language says when the developer puts up 100 percent of the money, this option kicks in. Discussion ensued again regarding building codes, fire hydrants, oversizing, unjust enrichment, and base pipeline. Ms. Porter told the committee that developers have to look at benefit ratios. They discussed another possible amendment for the bill. Warren Hardy, Lobbyist, City of North Las Vegas, told the committee they support the bill because they have three projects pending the outcome of this legislation. Mr. Paulk stated he is puzzled why there is no refunding for oversizing unless another developer ties into the system. John Madole, Executive Director, Nevada Chapter of Associated General Contractors, stated support of Mr. Paulk's position. He said since there is no private money involved, they support the bill. If there is a large project going on, which involves public funds, then the provisions of Nevada Revised Statutes 338 should prevail. Dallas Kunard, Lobbyist, Las Vegas Associated General Contractors, reiterated that any time public funds are being used, it is in the best interest of the taxpayer that the competitive bid process be utilized. He said if the developers want to front the money and no public money is involved, then they support the bill. Mr. Christianson supported Mr. Paulk, Mr. Madole, and Mr. Kunard's positions on the bill. Ms. Porter told the committee the amended bill before them deals with NRS 332, 338 and 339 that are competitive bid and prevailing wage chapters. She said that is what this bill addresses. She said it does not deal with the refunding issue, or the contractual issue. She said those are dealt with under separate local ordinances and are not contained in these chapters. Discussion of the full scope of the bill ensued. Senator O'Connell asked the proponents of the bill to consider an amendment that states if any public revenue is involved that the work must go to competitive bid. Mr. Fritsch stated the language in A.B. 138 deals with up-front costs. He asked them to use that language for the amendment. Senator O'Connell closed the hearing on S.B. 543 and opened the hearing on S.B. 521. SENATE BILL 521: Authorizes certain small cities in larger counties to elect not to participate in county fair and recreation board. Senator Porter read the Overview of Mesquite from the Mesquite Executive Summary (Exhibit J). He explained the room tax generated by Mesquite in 1994 was $465,000. He told the committee that Mesquite wants to create their own authority board by recouping those particular room tax dollars. Senator O'Connell asked if there it is true that an agreement has been reached, and an amendment will be proposed? Warren Hardy, Lobbyist, City of Mesquite, testified that after speaking with some members of the Las Vegas Convention and Visitors Authority board, as well as county commissioners, an agreement has been reached. He stated they are scheduled for the Mesquite city agenda for June 13 to discuss the request. He apologized that the amendments were not ready. Senator O'Connell asked Mr. Hardy if he would like the bill to be held until after the Mesquite city meeting. Mr. Hardy said this would be agreeable. Senator Porter suggested that the committee go ahead and hear testimony on the bill, so that some people would not have to make a second trip from Las Vegas to Carson City. Tom Skancke, Attorney at Law, Skancke and Associates, representing Las Vegas Convention and Visitors Authority (LVCVA), told the committee he brought legal and bond counsel with him. He asked that they give testimony regarding concerns about Mesquite withdrawing from the LVCVA. Luke Pushnig, Legal Counsel, Las Vegas Convention and Visitors Authority, testified that LVCVA has a couple of concerns about the present draft of the bill. He said their major concern is that it seems it could be interpreted to be in derogation of the rights of the bond holders that hold the bonds issued by the LVCVA. Mr. Hardy told the committee it is not now, nor has it ever been the intent of the City of Mesquite to get out of their bonding obligation. He said that is the focus of the negotiations. Mr. Pushnig reiterated his concerns of the derogation of the rights of the bond holders. He said if they are, he has a contractual obligation to go to court. John O. Swendseid, Bond Counsel, Las Vegas Convention and Visitors Authority, testified next. He said Mesquite has made a commitment to the authority, during the term of its outstanding bonds, which is until the year 2008. He said Mesquite did not have a choice in committing their room tax to the LVCVA; they were incorporated after they made the commitment. He said under provisions of the NRS, they were required after incorporation to continue that commitment that Clark County had previously made of room taxes to the LVCVA bond issue. He said when 2008 comes around, this 4-cent room tax that they are talking about can go to Mesquite. However, he contended that until 2008 Mesquite's commitment to the LVCVA is irrepealable. He said it is something they rely upon when selling bonds. He stated when they sell the bonds they tell the buyer how much revenue they receive from Mesquite. Senator O'Connell asked Mr. Swendseid the amount of the outstanding bonds that have commitment from Mesquite? Senator Porter stated, if Mesquite is able to set up their own authority, they intend to keep their responsibility whole with the LVCVA for the outstanding bonds. Senator O'Donnell stated, "Let me understand this. The LVCVA has sold some bonds. At some point in time, Mesquite develops. As Mesquite develops, they are generating income that you [LVCVA] are using to support the bond payments that LVCVA has acquired." Mr. Pushnig responded, "That is true, senator." Senator O'Donnell continued, "If the Mesquite property had never been developed, you would be receiving basically zero funds from Mesquite to pay for the LVCVA bonds." Mr. Pushnig stated, "That may be true, senator, but . . . " Senator O'Donnell interjected: It is true. There is no `maybe true'. It is true. Right? So what you are saying is, you do not want them to go off and do their thing without making sure that the money that is presently being used from Mesquite to pay off the LVCVA bonds stays intact. If it stays intact, they can do their own thing as long as they keep paying LVCVA for their stuff . . . Mr. Pushnig responded: There's a little bit more to that than just payment, senator. Payment is just one aspect of that. They also rely upon the payment of these additional funds to be able to keep the Las Vegas Convention Center up and running . . . to run the marketing programs that also benefit Mesquite. There is much more than just the payment that is relied upon. Senator O'Donnell asked, "How do they benefit Mesquite?" Mr. Pushnig responded, "They directly benefit Mesquite because what happens is the marketing also goes to Mesquite. There is also the indirect benefit that every dime that comes into Las Vegas also works toward the benefit of Mesquite. When the . . . " Senator O'Donnell interjected again, "Wait . . . I think I am unraveling this agreement." Mr. Skancke stated the intent is if LVCVA allows Mesquite to withdraw, to grant that request, then Mesquite is responsible for those bonds in a contractual agreement. He said Mesquite has agreed to that. He said if Mesquite did not exist, they would not be part of the bonding. He said they are part of the bonding by default because they have made the obligation. He stressed when their obligation is finished, then they are out of the picture. Senator O'Donnell emphasized: The reason they are making these payments is because of the NRS which says once you build a hotel, and once you have gaming revenues and hotel room tax, then you are a part of the county and therefore you are part of paying that bond issue. It is nothing to do with the fact that they are receiving benefits. It just happens to be that's a part of the law that they fall under. If they want to get out from underneath the LVCVA, and they want to start their own convention and visitors authority, then why would you force them to continue to make these payments on the bonds they are not benefitting from? You are stretching the argument. I'm sticking up for Mesquite here, even though I live in Las Vegas. Fairness is the issue here. Mr. Swendseid stated: Senator, it's a commitment that the convention authority has made to the holders of the bonds, committed a 4-cent room tax in all areas of Clark County that are more than 35 miles from the main convention center and high room tax in areas that are further away, and it's been a promise we have made to the bond holders that that is what is pledged to the bonds. We can't now just say, `Here, Mesquite, we'll just let you have this because it is fair.' Because that means the bond holders security has then been depleted. Senator O'Donnell responded, "I thought you said you sold the bonds prior to Mesquite ever developing." Mr. Swendseid stated: Some of the bonds. Mesquite initially adopted this irrevocable room tax after they were incorporated because NRS said they had to do that. Since then, Mesquite has adopted another ordinance reaffirming that. Our bond sales, LVCVA issues bonds probably about every 3 or 4 years. Our most recent one was in 1993 for $80 million. We have about $110 million outstanding in response to that question. Every 3 or 4 years we issue another bond and we rely on the taxes that are pledged and we tell the bond holders what those are and how much money they are. Senator O'Donnell stated, "I understand, but I'm not sure that I think it is fair." Senator O'Connell told Mr. Hardy the committee will hold onto the bill until they hear from him. Senator O'Connell closed the hearing on S.B. 521 and opened the hearing on S.B. 542. SENATE BILL 542: Provides for collecting delinquent charges for municipal sewerage on general tax roll. Marvin Leavitt, Legislative Coordinator, City of Las Vegas, testified first on S.B. 542. He said the bill provides that delinquent sewer charges can be added to the property tax billings. He explained that the Clark County Sanitation District can do this now. He stated it is a primary collection method for delinquent sewer bills. He stressed the bill will add this provision to chapter 268 of the Nevada Revised Statutes that will enable the various cities of the state to do the same thing which can be done by general improvement districts now. He explained the proposed amendment will reimburse the county treasurer for costs incurred in the administration of this act, for 4 percent. He stated this was agreeable to the people to whom he talked. Senator O'Connell asked if there was a way to charge the delinquent payer, instead of having the 4 percent paid out of the city coffers? Mr. Leavitt responded when a bill becomes delinquent, they add a 10 percent charge to that bill. He said they propose that the 4 percent to pay for the collections would come from the 10 percent that they already charge. He stated there is a mechanism in place already where they reimburse them. He stressed this would not be a burden upon the general rate payer. Senator O'Connell asked if the city would turn the information over to the county treasurer and then have the county apply it to the property tax bill? She asked if the taxpayer is going to pay that money directly to the county, and then the county reimburses the city for the cost? Mr. Leavitt responded that this is correct. Mr. Leavitt said because the smaller rural counties are not specifically authorized in the statute to add this delinquent sewer charge to the property tax billing, the bill is needed. He suggested if smaller rural counties had to modify their computer system, they should be reimbursed. He reminded the committee that Clark County has procedures in place and does this process already, but other counties do not have this process. Senator O'Connell asked if a lien is placed on the property now? Mr. Leavitt responded this is correct. The problem with a lien is that eventually they get the money, but it might be a long time. He explained that when there are substantial delinquencies, everyone is charged a higher rate because of the delinquencies. He said everyone else in the community is essentially paying the costs of that. Michelle Gamble, Program Assistant, Nevada Association of Counties, testified next on the bill. She stated several rural counties expressed concern about the bill. She submitted a letter from Pershing County to the committee (Exhibit I). Bill Berrum, Treasurer, Washoe County, stated he is conceptually in favor of the bill, but the additional cost incurred should be addressed in Mr. Leavitt's proposed amendment. He said there were some inconsistencies in language and agreed to meet with Mr. Leavitt and Ms. Gamble to address all the concerns of the rural counties to agree on language for the amendment. Hearing no further testimony, Senator O'Connell closed the hearing on S.B. 542. She gave the committee a proposed amendment for S.B. 225. SENATE BILL 225: Makes various changes relating to Airport Authority of Washoe County. (BDR 30-517) Senator O'Connell gave floor session assignments to the committee and adjourned the meeting at 4:50 p.m. RESPECTFULLY SUBMITTED: Teri J. Spraggins, Committee Secretary APPROVED BY: Senator Ann O'Connell, Chairman DATE: Senate Committee on Government Affairs June 7, 1995 Page