The Committee on Government Affairs was called to order at 8:15 AM, on Wednesday, April 7, 1999. Chairman Douglas Bache presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mr. Douglas Bache, Chairman

Mr. John Jay Lee, Vice Chairman

Ms. Merle Berman

Mrs. Vivian Freeman

Ms. Dawn Gibbons

Mr. David Humke

Mr. Roy Neighbors

Ms. Bonnie Parnell

Ms. Gene Segerblom

Mr. Kelly Thomas

Ms. Sandra Tiffany

Ms. Kathy Von Tobel

Mr. Wendell Williams

COMMITTEE MEMBERS EXCUSED:

Mr. Harry Mortenson

GUEST LEGISLATORS PRESENT:

Assemblyman Donald G. Gustavson, Assembly District 32

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Joseph L. Johnson, representing Nevada Housing Coalition

Charles L. Horsey, III, Administrator, Housing Division,

Irene Porter, Executive Director,

Thomas J. Grady,

Janine Hansen, representing Nevada Eagle Forum

Guy Zewadski, representing Arlington Towers Home Owners Association

Lesa Coder, Assistant Director and Zoning Administrator,

Bristol S. Ellington, Assistant Director of Community Development,

Chris Knight, Manager, Comprehensive Planning Division,

Martha Tittle, representing Clark County School District

Warren B. Hardy, II, representing city of North Las Vegas

Barbara A. McKenzie, representing city of Reno

Irene Porter, Executive Director,

Maddie Shipman, representing Washoe County

Alex F. Ortiz, representing Clark County

Assemblywoman Gene Wines Segerblom, Assembly District 22, testified. She explained the purpose of A.B. 484 was to update legislation passed in 1943 to clarify the conditions under which housing authorities could participate in creating varied types of housing for moderate and low-income residents of Nevada. In the recent past, two bond counsels informed Clark County Housing Authority because current statutory language was unclear, they could not issue a "clean" opinion.

Ms. Segerblom explained when the current law was written, the only lower-income housing program in existence was a federally subsidized, public housing program. Congress no longer provided funds for public housing. If housing authorities were to meet the growing need of low-income and moderate-income families for housing, they needed clarification regarding their authority to combine forces with nonprofit and private sector allies to carry out new programs. A.B. 484 clarified housing authorities had the power to so combine forces and specified the manner and under what terms and conditions they could do so.

Ms. Segerblom said Nevada’s housing authorities requested passage of A.B. 484 to enable them to meet the growing need for housing in areas of Nevada where populations were increasing at the rate of up to 5,000 new families per month and which experienced little or no increase in affordable housing.

William F. Cottrell, Executive Director, Clark County Housing Authority, testified. He said several years previously, developers approached Clark County Housing Authority on the subject of creating housing in conjunction with members of the private sector. They referred the subject to two bond counsel, both of whom said Nevada’s state law was very unclear about the housing authority’s ability to participate with members of the private sector to create housing.

Mr. Cottrell said Nevada Revised Statutes (NRS) 315 remained essentially as it was written in 1943. At the time that law was written, there was no expectation housing authorities would be involved in the kinds of programs in which they were currently expected to be involved. The law was based on assumptions contained in federal statute at the time the law was written.

Mr. Cottrell stated as recently as the early 1980’s, Congress funded nearly 100,000 new public housing units per year. Approximately 3 years previously, federal funding dropped to zero and had remained at zero for the past 2 or 3 years. It was not expected any new public housing would be authorized unless some cataclysmic change occurred in either the economy or some other factor. However, the need for housing for low-income and moderate-income families had not abated, and Clark County Housing Authority had been unable to locate resources, different from traditional ones, through which to create such housing.

Mr. Cottrell maintained A.B. 484 did not extend housing authorities’ powers. They currently had rather extensive powers pursuant to the legislation passed in 1943, including the power to issue bonds and the power of eminent domain. The question was did their powers pertain to development which did not consist 100 percent of low-income housing; in that regard current law was unclear. If bond counsel would not issue a housing authority a "clean" opinion on its bonds, it wasn’t going to "go anywhere."

Mr. Cottrell explained not every housing development created through a cooperative effort of the public and private sectors would require a bond issue. Each such development constituted a separate package for which someone would provide land, someone else would provide bonding authority, yet someone else would provide management experience, and so forth. Such a development might involve money from both nonprofit organizations and members of the private sector, as well as federal funds, and the capacity of a local authority to issue bonds.

Mr. Cottrell said A.B. 484 was entirely permissive; none of its provisions were mandatory. At the time Clark County Housing Authority discovered the problem he discussed, it learned the Housing and Development Law Institute was in the process of producing model legislation, which could be utilized anywhere in the United States. The Housing and Development Law Institute was a nonprofit corporation in Washington D.C., which worked with people engaged in housing and redevelopment. Clark County Housing Authority selected pieces of the institute’s model legislation which appeared to fit needs in Nevada and submitted them to the legislative bill drafters. The Legislative Counsel Bureau made some modifications to those pieces of model legislation, and the resultant language appeared in A.B. 484.

David Morton, Executive Director, Reno Housing Authority testified. He said Reno Housing authority supported the concept of A.B. 484 but recognized the need for people with a high degree of expertise to review the bill. Therefore, he asked the firm of Swendseid and Stern to review the proposed legislation and ensure it contained nothing which would create problems. John Swendseid would present some technical amendments Mr. Swendseid believed would improve the bill.

John Swendseid, Swendseid and Stern, representing Reno Housing Authority, testified. He submitted proposed amendments to A.B. 484 (Exhibit C), which he said fell into three categories. He explained when an attempt was made to meld a federal housing authority law with a Nevada state law, the words and concepts of the two laws did not always fit together well. Therefore, one purpose of the proposed amendments was to clarify areas in which federal law employed one term and Nevada law employed a different term.

Mr. Swendseid stated the second purpose of the proposed amendments (Exhibit C) was to provide specific standards for financing. The federal bill tended to establish certain standards which were difficult to apply, such as telling a housing authority " . . . you won’t do anything that will unreasonably jeopardize your financial wellbeing." Reno Housing Authority wanted the ability to do a bond issue it could look back on in 20 years and say it had utilized objective standards in determining whether or not to do that bond issue, and the proposed amendments would establish objective standards. For example, the proposed amendments established a housing authority could not pledge to bond property other than financed property which had a value of more than 1 ½ times the financed amount. That standard was similar to the standard established for local governments and was one attorneys could easily determine had or had not been met.

Mr. Swendseid said the third purpose of the proposed amendments (Exhibit C) was to cause the language of A.B. 484 to conform to not only NRS 315 but other provisions of Nevada law as well. For instance, if housing authorities engaged in public/private partnerships, the Nevada Supreme Court said certain language must be employed concerning those housing authorities not pledging the credit of the state or any political subdivision of the state, and it was suggested that language be incorporated into A.B. 484.

Mr. Swendseid said all the proposed amendments (Exhibit C), essentially, fell into one of the three categories he described.

Chairman Bache observed one or two of the proposed amendments (Exhibit C) appeared not to fall into the categories Mr. Swendseid described and asked whether Mr. Swendseid wished to discuss those particular amendments. Mr. Swendseid replied one additional amendment should be noted. He explained amendment number 6, on page 2 of the proposed amendments (Exhibit C), removed from A.B. 484 a section taken from the model legislation which was believed would make it difficult for Reno Housing Authority to sell bonds. Essentially, that section said bond underwriters were responsible for all disclosures about a bond issue made on behalf of a housing authority and for protecting that housing authority against liability for any misinformation contained in those disclosures. Such a requirement was not customary in the municipal bond market. Typically, disclosures were developed jointly by underwriters and issuers of bonds, and it would probably be difficult to find an underwriter who would agree to the requirement established by the model law. It was suggested that requirement be deleted from A.B. 484; however, deleting it would not preclude a housing authority from entering into a contract with an underwriter which required the underwriter to accept the responsibility that requirement established if the underwriter was willing to do so.

Ms. Segerblom asked to which section of A.B. 484 Mr. Swendseid referred. Mr. Swendseid replied the amendment to which he referred amended section 26, lines 6 through 18.

Ms. Segerblom asked why A.B. 484 reflected a fiscal note for both state government and local governments. Mr. Cottrell responded Clark County Housing Authority conferred with Kevin Welsh of the Legislative Counsel Bureau’s Fiscal Analysis Division. Mr. Welsh said he received no response from either Nevada’s cities or counties (regarding whether or not A.B. 484 would impose a fiscal impact on them), and he intended to issue a fiscal note to that effect.

Ms. Segerblom asked whether Mr. Welsh received any response from state government. Mr. Cottrell replied as far as he knew state government provided a negative response.

Assemblywoman Von Tobel referred to pages 10 and 11 of A.B. 484. She observed much of the language on those pages was deleted, and new language had been inserted between lines 16 and 23 of page 10 and lines 3 and 9 of page 11. She asked the purpose of that new language. Mr. Cottrell replied as far as he knew, the deletions and additions to which Ms. Von Tobel referred were accomplished by the bill drafter.

Mr. Swendseid interjected some of the language at the top of page 10 of A.B. 484 dealt with bond provisions, which were covered elsewhere in the bill. For instance, he said, section 42, on page 14, began to include terms utilized in a bond issue. The purpose of the amendment at the bottom of page 10 and the top of page 11 was to clarify a housing authority was not restricted to financing only housing facilities for people of very low incomes. There was a desire to expand housing authorities’ power to allow them to finance affordable housing for people other than just those with very low incomes.

Ms. Von Tobel referred to language on page 11 of A.B. 484, which required a housing authority to give disabled veterans’ families first preference when selecting tenants. She asked whether that requirement constituted a change in existing law. Mr. Cottrell replied it did not. That requirement had been contained in law since at least 1947.

Chairman Bache remarked much of the language on pages 10 and 11 of A.B. 484 had been in the law since as long ago as 1947 and, because of changing federal conditions, was now obsolete.

Assemblywoman Freeman asked whether she was correct it had been testified no federal funds had been available for affordable housing for approximately 2 years. Mr. Cottrell replied affirmatively. He said appropriations made 2 fiscal years previously, for the first time since 1937, reflected no appropriations for public housing. There were appropriations for other programs, such as the program under section 8 of the United States Housing Act of 1937 (hereafter referred to as the section 8 program); however, the appropriation for that program was much smaller than it had been since the program commenced in 1976. All kinds of federal housing had been gradually but substantially reduced over the past 15 to 20 years. Creation of public housing had gone from 100,000 units per year to none. There had not been as drastic a reduction in section 8 program housing, but there had been a reduction. The federal deep subsidy programs to which housing authorities were accustomed were no longer available.

Mrs. Freeman asked whether the Federal Government established any mechanism to make it easier for state and local governments to help create public housing. Mr. Cottrell responded although it was sometimes difficult to know what Congress intended, it appeared fairly obvious it expected states and local government to do more than they previously did. Few states had deep subsidy programs. Many states had permissive legislation, such as that sought through A.B. 484. Such legislation bill would allow Nevada’s housing authorities to engage in new activities to produce housing.

Mrs. Freeman asked how active the private sector had been in responding to loss of federal funds. Mr. Morton testified in response to Mrs. Freeman’s question. He said the private sector had been quick to pick up on tax credits; however, tax credits did not equate to a deep subsidy program. A person had to have a good income, for a person of low income, to be able to afford to move into most "tax credit properties." There was virtually no money for creation of new deep subsidy housing, which consisted of housing complexes in which people with little or no income could live, and it was not feasible to expect the private business sector to create such housing. The private business sector had to at least break even and, hopefully, make money, which could not be done through a deep subsidy program.

Mrs. Freeman observed it did not appear a tax break was adequate encouragement for builders to become involved. Mr. Morton replied it was not sufficient to encourage them to become involved in deep subsidy programs. For the most part, people had to have an income between 40 to 50 percent less than the median income to qualify for the tax credit program. The program provided for a reduced rent, substantially lower than that established by the rental market. However, someone with absolutely no income would still be unable to pay that reduced rent. For that reason, many tax credit properties sought assistance from housing authorities under the section 8 program, and many tax credit developments were being subsidized twice. It was not the private business sector’s responsibility to provide all money necessary to assist someone on welfare. A large family of which only one member worked, earning minimum wage, would be unable to afford the rent in many tax credit housing units.

Mrs. Freeman asked what was meant by the term "deep subsidy program." Mr. Morton replied a deep subsidy program would provide whatever amount of money was required to enable a person to pay his full rent. He explained an individual who had no income would be unable to pay $300 per month in rent. However, through a deep subsidy program, he would be able to meet his rent because the program would pay whatever amount of money was required, even to the full extent of the rent, to enable him to do so.

Mrs. Freeman said she knew local governments were experiencing financial problems and had no money to expend on public housing. She asked whether the state provided any funds for public housing over the previous few years. Mr. Morton replied the state was doing some very good things but was more interested in promoting home ownership and things of that nature than in promoting public housing. The state did not assist low-income renters as housing authorities did nor did it participate in deep subsidy programs for those who had no income at all.

Joseph L. Johnson, representing Nevada Housing Coalition, testified. He stated Nevada Housing Coalition supported A.B. 484. However, the coalition was concerned about how the bill would impact the normal relationship between landlord and tenant. He submitted a letter from John L. Sasser (Exhibit D), whom he described as an advocate for low-income people. He read aloud a portion of Mr. Sasser’s letter as follows:

Mr. Johnson said Mr. Sasser, in his letter, stated the need for affordable housing was critical. He read aloud an additional excerpt from Mr. Sasser’s letter as follows:

Charles L. Horsey, III, Administrator, Housing Division, Department of Business and Industry, State of Nevada, testified. Mr. Horsey said he would not classify his position on A.B. 484 as one of opposition. However, he did have some serious concerns about the bill as currently drafted, particularly its lack of financial safeguards.

Mr. Horsey proclaimed the Housing Division to be Nevada’s version of its own, very large, financial institution. He said in 1975, the legislature determined there was a need for a housing division, at the level of state government, which would specialize in financing. It was believed expertise beyond that available through local housing authorities would be beneficial to the state. Whereas the Housing Division was a financial institution, housing authorities, historically, acted more as hands-on property managers, property developers, and placers of tenants, as opposed to being involved in financing. As written, A.B. 484 would expand housing authorities’ scope of authority to include specialized areas of finance without establishing the safeguards under which the Housing Division had operated so successfully for a number of years.

Mr. Horsey stated since its creation in 1975, the Housing Division had financed approximately 17,000 single-family houses and had also financed 12,500 multi-family or apartment-type dwellings. It accomplished that while adhering to some of the highest financial standards in the nation. The Housing Division was the first housing finance agency in the history of the United States to obtain a triple A rating on a bond issue without benefit of outside credit enhancement.

Mr. Horsey said he wished to discuss some issues the Housing Division discussed with both its bond counsel and its underwriters and did not believe were addressed by A.B. 484. He explained the Housing Division had made approximately 17,000 loans, and all its loans were either insured by the Federal Housing Authority, guaranteed by the Veterans Administration, or insured through private mortgage insurance. The reason the legislature saw fit to require loans to be either insured or guaranteed was to reduce potential risk to the issuers of those loans. With respect to loans on which the Housing Division foreclosed or which went into default or were the subject of bankruptcies, the housing Division probably sustained no greater than a $2,000 loss per loan.

Mr. Horsey said all bonds issued by the Housing Division were, at minimum, rated double A. The Housing Division found it a sound public policy and one acknowledged by the State Board of Finance that no unrated bonds be publicly issued. All bond issues for multi-family dwellings were " . . . either direct private placement or have a credit enhancement protecting the bond-holder . . .," which was one safeguard installed to help the Housing Division achieve its bond ratings.

Mr. Horsey said in 1995, the Housing Division worked with Mr. Swendseid and representatives of local governments to expand the debt issuance capacity of local governments under certain limited circumstances. Therefore, the Housing Division had worked with A.B. 484’s proponents, in the past, to provide them greater access to various methods of financing.

Mr. Horsey stated all the Housing Division’s bond issues were approved by both the State Board of Finance and at least one major rating agency before being marketed by the division.

Mr. Horsey said his final point was construction risks were entirely avoided in the Housing Division’s single-family dwelling program, and the division went to great lengths to reduce such risks with respect to its multi-family dwelling program.

Mr. Horsey said Housing Division representatives were willing to work with Mr. Swendseid to develop amendments to A.B. 484 which would address the division’s concerns.

Chairman Bache asked whether particular sections of A.B. 484 caused the Housing Division concern. Mr. Horsey replied in general, what A.B. 484 in its current form accomplished was to provide housing authorities ability to enter into the same type of bond financing as that employed by the Housing Division; however, it did so without providing financial safeguards. The bill was very permissive, and the Housing Division believed some of the safeguards under which the division operated should be incorporated in the bill.

Chairman Bache asked Mr. Swendseid to respond to the concerns expressed by Mr. Horsey.

Mr. Swendseid explained the Housing Division issued only bonds rated double A or better and made only insured or guaranteed loans. However, housing authorities were " . . . not of that quality." In Nevada, state government and Clark County were the only two issuers of bonds with a double A rating. Housing authorities were interested in a different program than that of the Housing Division, and the program in which they were interested did not comport with the extremely high financial parameters Mr. Horsey discussed in connection with the state’s program. In order to develop low-income housing, both types of program were necessary.

Mr. Morton provided further testimony. He maintained housing authorities were public entities and did not want to do anything irresponsible. However, to require all bonds issued by housing authorities to have double A ratings would prevent housing authorities from undertaking many projects which would benefit their communities and were reasonable and solvent undertakings.

Chairman Bache asked whether he was correct A.B. 484, as written, would not affect the state’s housing program. Mr. Swendseid confirmed it would not.

Chairman Bache asked whether Nevada Rural Housing Authority would fall under the provisions of A.B. 484. Mr. Swendseid replied it would not. The bill affected only local housing authorities such as Clark County Housing Authority and Reno Housing Authority.

Ms. Von Tobel asked who would be liable if housing authorities were given greater bonding authority than they currently had, and one of their projects failed. Mr. Swendseid replied a bond’s terms would determine who was liable. However, if a bond issue was done on behalf of a housing authority itself, and its project failed, the housing authority would be responsible for repaying the bonds. He said if a housing authority did a bond issue pursuant to a public/private partnership, A.B. 484 stated the housing authority " . . . cannot be responsible for that bond more than the project itself and whatever else they pledged to the bond, which can’t be more than 1 ½ times what they borrow. So, it limits how much housing authority can get behind other projects, but if the project fails, and there’s not enough there from what’s pledged, then the bondholders get that risk . . .."

Ms. Von Tobel asked, "And that would no way reflect on the bond rating of the county?" Mr. Swendseid replied it would not reflect on the general-purpose government’s credit rating. Ms. Von Tobel asked whether it would reflect on the rating of state government’s bonds. Mr. Swendseid replied he did not believe so but would defer to Mr. Horsey to answer Ms. Von Tobel’s question.

Mr. Horsey gave further testimony. He said, "I want to make it clear and state for the record, once again, that actually I have nothing but the utmost respect for the gentlemen that are representing A.B. 484, and I don’t think it would be a good time benefit for this committee for us to get into an argument on the pros and cons."

Mr. Horsey said as the Housing Division interpreted A.B. 484, the bill established a program which could be in direct competition with the Housing Division. Congress imposed a limitation on all states with respect to the total number of tax-exempt bonds which could be issued in a calendar year. Currently, Nevada was limited to $150 million in tax exempt bonds, of which $75 million was under the control of Dan Tom, director of the Department of Business and Industry, State of Nevada, and the remaining $75 million was under the control of Nevada’s local governments. There was much competition for the right to issue tax exempt bonds, and the Housing Division and housing authorities might be in direct competition for the right to issue such bonds.

Mr. Horsey maintained under one school of thought, if junk bonds issued by a governmental entity went into default, that fact tainted the reputation of associated governmental entities. Although Clark County Housing Authority was a separate and distinct governmental subdivision, if its bonds went into default, that fact might harm the reputation of Clark County’s county government in the minds of investors.

Ms. Von Tobel commented Orange County, California, had a bond problem and went "belly up," and she believed that greatly affected " . . . the standing throughout California." She said she would hate to see that happen to Nevada and believed it best to exercise caution.

Chairman Bache asked Mr. Morton what rating bonds issued by Reno Housing Authority generally had. Mr. Morton replied Reno Housing Authority did one bond issue in which its bonds had two different ratings. The bulk of the bonds had an A rating, and it was his recollection the remainder had a B rating. In any event, the remainder of the bonds did not have a double A rating. The program for which those bonds were issued was very solvent, and the program worked well for the housing authority and had been good for the community. In Reno Housing Authority’s opinion, it was overly conservative to impose a restriction against issuing any bonds other than those with a double A rating.

Mr. Swendseid gave further testimony. He explained when local governments issued unrated bonds pursuant to the economic redevelopment revenue bond program, they first sought approval from the State Board of Finance. If Mr. Horsey believed a housing authority’s bond issue would put "us" at great risk, he could raise that issue before the State Board of Finance, which could then review the bond issue and determine whether it was or was not appropriate. Reno Housing Authority was amenable to a requirement that a housing authority seek the State Board of Finance’s approval before issuing any bond with less than a double A rating.

Mr. Horsey indicated the safeguard Mr. Swendseid proposed was not necessarily the only safeguard the Housing Division might wish included in A.B. 484. He reiterated his offer to meet with the bill’s proponents to determine whether an accord could be reached.

Chairman Bache referred to Mr. Horsey’s testimony about competition between the Housing Division and local housing authorities for money. He said that testimony conveyed the impression the Housing Division’s concerns about A.B. 484 had to do solely with competition for money, and the Housing Division was attempting to prevent local housing authorities from doing things they needed to do by causing various amendments to be made to A.B. 484. He said it was because of that impression he asked Mr. Morton about the rating of Reno Housing Authority’s bonds.

Chairman Bache asked Mr. Cottrell what kinds of bonds Clark County Housing Authority generally issued.

Mr. Cottrell replied Clark County Housing Authority had been involved in only two bond issues, one for financing and one for refinancing. The circumstance under which those bonds were issued was very unusual because a nonprofit organization, not the housing authority, issued the bonds. The bonds were issued for a development in Henderson, which consisted of 120 housing units subsidized under the section 8, deep subsidy, program. Therefore, it was a "gold plated issue." He believed the bonds were rated triple A; however, they might have had only a double A rating. Those bond issues did not represent a typical bond issue; therefore, the housing authority’s experience with bond issues was not pertinent to the instant discussion.

Chairman Bache said he would allow the parties involved with A.B. 484 to confer and report back to the committee the following morning. However, he perceived the argument over the bill as a squabble over money and believed Mr. Swendseid’s additional proposed amendment addressed the concerns raised.

Chairman Bache closed the hearing on A.B. 484.

Mike L. Baughman, Ph.D., President, Intertech Services Corporation, representing Eureka County testified. He submitted a handout (Exhibit E) and a proposed amendment to A.B. 641 (Exhibit F). He explained A.B. 641 authorized counties and cities of Nevada which adopted master plans pursuant to NRS 278 to represent their own interests in dealings with the Federal Government which involved public land management and planning. In addition, the bill would authorize them to institute or be involved in litigation concerning public land management within their counties which affected or impaired either their ability to implement their master plans or the goals and objectives of their master plans. He pointed out the language of A.B. 641 was permissive rather than mandatory.

Dr. Baughman explained currently, the State Lands Division of the Department of Conservation and Natural Resources, State of Nevada, was specifically authorized by statute to represent the state with respect to public land issues. Nevada’s counties and cities did not have such statutory authorization, and in some instances, public land management agencies had denied Nevada’s local governments standing to participate in public land management planning matters. Granting cities and counties specific statutory authority to participate in such matters would remove lack of authority as a reason for denying them participation.

Dr. Baughman referred to the first page of his handout (Exhibit E). He said the graphic set forth on that page highlighted the significance of public lands in all Nevada’s counties and underscored the need for Nevada’s cities and counties to be involved in planning and management issues related to public lands.

Dr. Baughman read aloud a letter from Eureka County’s board of commissioners, dated April 6, 1999, and contained in his handout (Exhibit E) seeking support for A.B. 641. He pointed out the handout also contained correspondence between Eureka County and the federal Bureau of Land Management (BLM). In a letter dated August 5, 1997, the county requested cooperating agency status with respect to the Leeville mining project, which involved a large underground mine. He read aloud portions of a letter of response from BLM, which said NRS appeared to provide Eureka County no authority with respect to public lands, and therefore, it was not believed appropriate for BLM to entertain Eureka County’s request. Next was a letter from the county’s legal counsel to BLM asking BLM to reconsider. The following document was a copy of a memorandum of agreement in which BLM granted Eureka County standing as a cooperating agency but limited the county’s role to technical review of socioeconomic issues.

Dr. Baughman pointed out his handout (Exhibit E) also contained copies of resolutions adopted by the boards of commissioners of Nye County and Lander County expressing support for A.B. 641 and a letter from White Pine County’s board of commissioners, which said the board adopted a resolution supporting the bill. He stated Nevada Association of Counties supported A.B. 641, and he believed the State Lands Division did also.

Dr. Baughman asserted Nevada’s counties took seriously the requirement for master planning imposed on them by NRS 278. It was believed passage of A.B. 641 would send federal agencies the message Nevada’s counties had standing to participate in public land management planning issues.

Dr. Baughman said Eureka County authorized Lincoln County and Nye County to submit the proposed amendment to A.B. 641 (Exhibit F). He explained that amendment dealt with habitat conservation plans, and its language was nearly identical to language in NRS 255.368 authorizing Clark County to collect an impact fee to implement the county’s desert tortoise habitat plan. He pointed out, " . . . there is a one or two word change . . . where it refers to a committee advising the board of county commissioners on certain implementation activities. The three counties are relatively small. They don’t have a lot of people. They don’t have a lot of committees, and so they elected just to have the board of county commissioners make those decisions. I would note though that in both – certainly in Lincoln County – they have what’s called the public land use advisory commission. So, they still could do that."

Dr. Baughman explained the proposed amendment (Exhibit F) authorized Lincoln County, Nye County and Esmeralda County to impose a "wildlife mitigation fee" with which to implement their desert tortoise habitat plans. In addition to the desert tortoise, Lincoln County also had to deal with another form of wildlife which constituted an impediment to development. The southern portion of Lincoln County was experiencing a lot of growth pressure, and the county was in the process of developing habitat conservation plans which could be adopted as an element of its master plan. Revenue from the proposed mitigation fee would be used, in part, for purposes pertaining to public lands. Lincoln County would use funds generated by the fee to help fund measures to preserve the desert tortoise and also measures related to critical environmental concerns identified by BLM.

Assemblyman Neighbors asked whether there was " . . . any constitutional problem with that 37^th parallel." Dr. Baughman deferred to Eileen O’Grady, Committee Counsel, to answer Mr. Neighbors’ question. Ms. O’Grady said, "We can put this portion of the amendment into a special act, and they can still be in the same bill, but it will just be a special act really into Lincoln, Nye and Esmeralda counties."

Chairman Bache asked how situations in which state government and local governments might be at cross-purposes with respect to some issue would affect what A.B. 641 attempted to accomplish. Dr. Baughman replied there were instances, particularly with respect to public lands, when the state would elect not to become involved in an issue in which case, the county would want to be involved. He cited evaluation of grazing allotments as an example. He explained such evaluations occurred continuously, and Eureka County had sought cooperating agency status in order to be involved in them because the county had people with technical expertise who could participate with BLM in evaluating pertinent factors. The state, typically, did not become involved in such issues, which were numerous and localized. However, Eureka County would like to participate in such issues as a cooperating agency.

Dr. Baughman indicated he did not believe A.B. 641 would cause conflicts to arise between state government and local governments any more frequently than such conflicts had arisen in the past.

Assemblywoman Parnell said she liked A.B. 641 as currently written but was uncertain about the proposed amendment (Exhibit F), which discussed scholarships, wildlife, and a coordinator of services for veterans and appeared to muddle the bill’s purpose. Dr. Baughman clarified the proposed amendment consisted of only one page. The page attached to the proposed amendment (which contained the language to which Ms. Parnell referred) set forth existing statute.

Irene Porter, Executive Director, Southern Nevada Home Builders Association, testified. She said she had not seen the proposed amendment to A.B. 641 (Exhibit F). However, having spent 10 years dealing with the entire issue of endangered species and, in particular, the desert tortoise, she knew the issue was not as simple as it sometimes appeared. Because of the vast area encompassed by Clark County and the amount of development in the county, the statutory fee of $550 per acre was sufficient to allow the county to do everything necessary to develop and maintain both the short-term and long-term habitat conservation plans required by federal law. However, she believed less sparsely populated counties would find a fee of $550 per acre inadequate to pay for the things necessary to develop a habitat conservation plan. She asserted developing a habitat conservation plan was a long, complicated, and very expensive process.

Ms. Porter suggested representatives of Lincoln, Nye and Esmeralda counties should meet with members of the steering committee for habitat conservation in southern Nevada, who might be able to assist those counties in developing their habitat conservation plans. She reiterated a fee of $550 per acre would be insufficient to allow a sparsely populated county to develop such a plan.

Ms. Porter reiterated developing a habitat conservation plan was a complicated process. It took those involved in developing Clark County’s plan 10 years to arrive at the point they had currently reached. Initially, she had to obtain a total of $1 million dollars from 10 Clark County builders to build the desert tortoise research center and habitat conservation center in southern Nevada to institute the county’s program.

Ms. Parnell asked whether Ms. Porter was comfortable with A.B. 641 as written and was concerned only about the proposed amendment to the bill (Exhibit F). Ms. Porter replied Southern Nevada Home Builders Association took no position on A.B. 641 as written. She was not certain the association would have any position on the proposed amendment either as long as the amendments did not affect that section of NRS governing what Clark County did with respect to the county’s habitat conservation plans. She was present before the committee more for the purpose of pointing out problems Nevada’s small counties would encounter in developing habitat conservation plans and offering them assistance than for the purpose of expressing a position on A.B. 641.

Assemblyman Lee asked whether it was possible for the three counties to engage in a cooperative effort to acquire funds for their habitat conservation plans and " . . . still make it legal to do it in that county, to give them that in a master plan option?" Ms. Porter replied when dealing with the federal Endangered Species Act and the threat to endangered species, master plans were not the issue. The issue was development of both short-term and long-term habitat conservation plans under the auspices of federal agencies and pursuant to federal law. She said, " . . . I’m sure that you can take larger areas . . . and put them together and develop those habitat areas and develop the whole plan, but . . . it has nothing to do with our locally adopted master plans."

At Chairman Bache’s request, Thomas J. Grady, representing Nevada League of Cities and Municipalities, testified. He said Nevada League of Cities and Municipalities’ board of directors had numerous questions about A.B. 641. However, because the board was unable to obtain satisfactory answers to all its questions, it took no position on the bill. The league had asked cities who expressed interest in the bill to contact and work with Dr. Baughman.

Chairman Bache closed the hearing on A.B. 641

Assemblyman Donald G. Gustavson, Assembly District 32, testified. He stated through passage of the Gibbons Tax Initiative, which required the legislature to have a two-thirds affirmative vote in order to pass legislation to increase any tax or fee, voters sent the legislature a clear message. He asserted it was time for the legislature to send that same message to all other governing bodies in Nevada. Nevada’s citizens were growing tired of tax increases imposed on them both by the legislature and by local governing bodies. A.B. 508 required all local governing bodies to have a two-thirds affirmative vote in order to increase any tax, fee, or assessment. If two-thirds of the members of a local governing body did not vote affirmatively for such an increase, the issue could be submitted to the voters at the next general election or city election, as applicable.

Mr. Neighbors pointed out members of local governing bodies were elected officials just as legislators were. A requirement for a two-thirds majority affirmative vote would work well in counties which had boards of commissioners comprised of three members. However, many counties boards of commissioners were comprised of five members, which required three and one-third members to constitute a two-thirds majority.

Mr. Neighbors said it seemed as though the legislature was continually mandating things it expected other governing bodies to do. He maintained if county citizens didn’t like what their county commissioners did with respect to tax or fee increases, those commissioners would be voted out of office.

Mr. Neighbors asked Mr. Gustavson how a two-thirds majority of a five member governing body could be obtained. Mr. Gustavson replied it would require four members of a five-member body to constitute a two-thirds majority.

Janine Hansen, representing Nevada Eagle Forum, testified. She declared support for A.B. 508. She submitted a copy of "Nevada Journal" (Exhibit G) which she said contained an article discussing the incredible tax increases which had occurred in Nevada. She asserted during the previous 18 years, Nevada’s governors signed into law more tax and fee increases than had governors of any other state during the same time period. State government and local governments, combined, currently collected nearly as much money in taxes as the Federal Government collected.

Ms. Hansen said in 1996, "Readers Digest" published an article concerning the tax burden imposed on the average citizen. That article said approximately 60 percent of a family’s income went to pay federal, state and local taxes. She said people wondered why families were suffering economically and why both parents of families of children must work, one merely to pay taxes. She asserted it took less of a family’s income to pay for housing, food, health care, and education, combined, than it took to pay taxes. She contended many social problems could be traced directly to the fact parents were no longer in the home, and one reason they were not was they had to work in order to pay taxes.

Ms. Hansen read aloud a portion of the article contained in "Nevada Journal" (Exhibit G), which said during the decade of 1980 to 1990, Nevada’s population growth was 50 percent, its tax revenue growth was 190 percent, and the average tax revenue growth of all states was 104 percent. Further, the article stated during the years 1981 to 1993, Nevada’s tax revenue was up 223 percent, its population was up 59 percent, and the U.S. Consumer Price Index was up 49 percent.

Ms. Hansen contended there was a need to reduce the size and scope of government. One way to accomplish that reduction was to require local governments, before they could impose a tax increase, to meet the same requirement as that imposed on the legislature.

Ms. Hansen stated the fact some of Nevada’s smaller counties were having difficulty meeting their obligations was of particular concern. She asserted one solution to that problem could be found in Assembly Bill 672, which established " . . . new enforcement for Nevada’s public lands." Everyone knew the Federal Government claimed 86.7 percent of the land in Nevada. However, the Federal Government controlled between 97 and 98 percent of the land in Esmeralda, Lincoln, Mineral, Nye, and White Pine counties. None of the federally administered lands in Nevada were "taxable;" however, the Federal Government’s activities were extensive and created a tax burden for private property owners in Nevada who were required to meet the needs of federal employees’ children.

Ms. Hansen contended passage of the Nevada Public Lands Enforcement Act would assist local communities to expand their tax bases and raise the money they needed in order to provide local services.

Mr. Neighbors asked Ms. Hansen whether she could cite one property tax imposed by Nevada’s state government during the preceding 8 years. Ms. Hansen replied since 1981, there had been five increases in the state’s portion of property taxes; however, she did not think such an increase had occurred in the past few years.

Mr. Neighbors said he wished to keep the record straight that the 20-year period being discussed was one in which Nevada led the nation in growth. Ms. Hansen responded Nevada’s growth rate did not correspond to the percentage by which its taxes increased.

Mr. Neighbors stated he did not recall when state government last imposed a tax increase. Ms. Hansen responded she did not recall state government having done so at any time in the past few years.

Guy Zewadski, representing Arlington Towers Home Owners Association, testified. He explained he was a resident of Arlington Towers and a citizen of the city of Reno. He expressed support for A.B. 508.

Mr. Zewadski said the community in which he resided was located in Reno’s redevelopment area, and the community’s residents had been faced with an increasing number of special assessments. In addition, he believed the city of Reno proposed several pieces of legislation, during the current legislative session, which would generate additional assessments. He maintained in most instances, when Reno’s city council voted on tax measures, not every council member was present; therefore, the voice of Reno’s citizens was not heard. He believed A.B. 508 would do much to re-enfranchise citizens with respect to the taxation process.

Thomas J. Grady, representing Nevada League of Cities and Municipalities, testified. He said Nevada League of Cities and Municipalities had some genuine concerns about A.B. 508. He stated when listening to the bill’s proponents testify, one did not hear terms such as "open meeting" and "public hearings." He contended tax issues were debated at length in hearings open to the public.

Mr. Grady said Nevada League of Cities and Municipalities was concerned about the point Mr. Neighbors raised. The fact it required votes of four members of a five-member body to constitute a two-thirds majority vote equated to rule by the minority. For that reason, the league opposed that requirement. Under that requirement, if one member of a 5-member governing body was on vacation, that body would be unable to effect good local government.

Marvin A. Leavitt, representing city of Las Vegas, testified. He pointed out A.B. 508 specified the two-thirds majority requirement it established pertained to any action of a governing body which created, generated or increased public revenue. He said, "If you think about the way the local governments have property tax levies, they essentially do that through the budget process every year." He explained revenues for operating expenses and repayment of debt were generated through the same process. Therefore, if one member of a five-member governing body of a local government was absent, one of the remaining members could control that local government’s entire budget by voting against it. The requirement for a two-thirds majority affirmative vote would apply to a property tax generated through a local government’s budget even if there was no increase in the tax or if there was a reduction in the tax. That requirement would also apply if revenues were increased through an increase in a community’s assessed valuation even though there was no increase in the community’s property tax rate.

Lisa A. Gianoli, representing Washoe County testified. She explained Washoe County opposed A.B. 508. The county’s main concern was the bill was too broad. A local governing body would be reduced to having to submit issues such as raising a golf course fee to the voters if it was unable to obtain a two-thirds majority vote of its members to pass such measures.

Ms. Parnell said her main concern about A.B. 508 pertained to section 1, subsection 2. That section discussed the fact if a governing body did not approve a fee or assessment, it then had to determine whether or not to place the issue on the ballot in the next general election or city election. She pointed out in some cases it could be a long time until the next election, and there could be a delay of as long as 2 years before an issue could be resolved.

Michelle M. Gamble, representing Nevada Association of Counties (NACO), testified. She said she echoed Mr. Grady’s comments. Ten of NACO’s members had boards of county commissioners comprised of more than three members. With respect to those boards, A.B. 508 would establish rule by the minority, which NACO opposed.

Chairman Bache closed the hearing on A.B. 508.

Assemblyman Kelly Thomas, Assembly District 16, testified. He submitted proposed amendments to A.B. 349 (Exhibit H). He explained the amendments to section 2, subsection 2, addressed nonconforming zone change applications. If someone wished a piece of property rezoned, and the proposed new zoning did not conform to the community’s master plan, notice must be sent to all residents who lived within walking distance of the affected area. In that regard, the biggest change the proposed amendments made to A.B. 349 was to increase the notification distance to 1,320 feet in counties with a population of 400,000 more. Rural counties requested the notification distance be left at 660 for counties with a population of less than 400,000, and their request had been respected.

Mr. Thomas said the proposed amendments (Exhibit H) amended the requirement for notice to a superintendent of schools by providing notice could be given either to the superintendent or his designee. He pointed out a superintendent of schools might not able to address the subject matter of the notice as efficiently as some other school staff member could address it. In addition, they incorporated language into A.B. 349 which would allow notice to be sent by e-mail if a governmental entity requested it be given notice by that method.

Mr. Thomas explained the notification requirements being established mirrored those established with respect to changes in master plans.

Mr. Thomas explained (with respect to section 2) the proposed amendments (Exhibit H) increased the notification distance in rural counties from 300 feet to 660 feet. He explained 300 feet was the equivalent of the length of five houses and maintained everyone would like to know what was occurring in their neighborhoods beyond merely those things which occurred within a distance of five houses from their homes. With respect to counties with a population of more than 400,000, the distance was increased to 1,320 feet. With respect to providing notice to a school district and providing notice by e-mail, some of the same changes made to section 1 were incorporated in section 2.

Mr. Thomas said with respect to notice of applications for variances and use permits (discussed in section 3), the proposed amendments (Exhibit H) established a 660 foot notification distance in counties with a population of 400,000 or more unless such an application pertained to an establishment which served alcoholic beverages. He suggested an individual would wish to know if a bar or casino was to be built within walking distance of his home. Therefore, the notification distance for such establishments was greater.

Chairman Bache asked whether Mr. Thomas had considered the fiscal impact the notification requirements he proposed would have on local governments. Mr. Thomas replied he had and said there would be a fiscal impact on local governments. Generally, local governments deferred a portion of the cost of notification requirements by passing those costs on to applicants.

Mrs. Freeman expressed approval of A.B. 349 but said she did have a question. She referred to the provision contained on the last page of the proposed amendments (Exhibit H) which allowed a governing body to charge a fee to cover the cost of erecting a sign. She asked Mr. Thomas whether he perceived that fee would offset the fiscal impact of the bill. Mr. Thomas replied affirmatively. He said it cost approximately $150 to construct and post the sign discussed in the provision to which Mrs. Freeman referred. He anticipated most local governments would pass on a portion of that cost through fee increases.

Ms. Parnell asked whether Mr. Thomas received any feedback from rural counties regarding the proposed 660-foot notification distance. She was concerned because she knew rural counties were fairly content with the previous 300-foot requirement. Mr. Thomas replied, "They state that they are still happy with 300, and they would like that to be the minimum." It was his philosophy people in rural counties had the same right to know what was going on in their communities as people in urban counties. He conceded to a notification distance in rural counties equal to half that required in urban counties because of the fiscal impact on rural counties.

Chairman Bache referred to the provision set forth at the top of the proposed amendment (Exhibit H) which required notice to owners of at least the 30 parcels nearest an affected boundary. He explained that requirement was established to address notification in rural areas where development might be sparse. In some instances, the requirement to notify the owners of the nearest 30 parcels might extend the notification distance well beyond 660 feet.

Lesa Coder, Assistant Director and Zoning Administrator, Current Planning Division, Comprehensive Planning Department, Clark County, testified. She explained Clark County’s primary concern about A.B. 349 was cost as it related to one-time applicants for zoning changes, use permits, and variances. She submitted a one-page document (Exhibit I) which contained an estimate of how significantly the proposed notification radius would affect either the county’s budget or the fees it charged. She pointed out various items of information on the document and said the net increase in cost imposed by the notification requirements would generate in increase in fees, with respect to zone changes alone, of approximately $88,000. Had the law created by A.B. 349 been effective the previous year, it would have increased the fees currently charged by the county by $123,000.

Ms. Coder discussed some amendments Clark County proposed be made to A.B. 349. First, the county proposed the increases in notification radii be phased in to enable the county to budget for increased costs. Secondly, the county requested widespread use of electronic notification be permitted. The county believed over time, electronic mail would allow the county to be more efficient in its delivery of notices and thereby reduce the cost of providing notice.

Ms. Coder referred to section 1, subsection 2(c), of the proposed amendments submitted by Mr. Thomas (Exhibit H). She said Clark County suggested that section be amended to read, "To be mailed to each owner as listed on the county assessor’s records of real property located within 700 feet of the portion of the boundary line being changed if the property is in a county whose population is 400,000 of more as of the effective date of the ordinance and 1320 feet of the boundary as referenced above after or following January 1, 2001, except that properties less than 5 gross acres shall only be required the notification radius of 500 feet." That language caused some immediate increase in notification. It also allowed for an additional budgetary cycle in which to implement the ultimate notification radius of 1,320 feet.

Ms. Coder referred to section 1, subsection 2(g), of the proposed amendments (Exhibit H) and said Clark County suggested that section be modified to state, "all mailed notices may be alternatively sent by electronic means if receipt of such electronic notice can be verified." In terms of cost and efficiency, that change would allow the county to give notice by electronic means to recipients other than governmental entities, for instance special interest groups or people with whom the county did business on a continual basis, who might prefer to receive their notices electronically.

Ms. Coder referred to section 2, subsections 4(b) and 4(f) of the proposed amendments (Exhibit H). She proposed subsection 4(b) be replaced with the language, "each owner as listed on the county assessor’s records of real property located within 700 feet as of the effective date of the ordinance and within 1,320 feet of the boundary as referenced above following January 1, 2001, except that properties less than 5 gross acres shall only be required a notification radius of 500 feet." She proposed subsection 4(f) be amended to say "any other government entity that requests such a notice." Further, she suggested an additional subsection, to be designated subsection 4(g) be added to provide all notices customarily mailed could be sent, alternatively, by electronic means if receipt of electronic notice could be verified.

Ms. Coder referred to section 3, subsection 2(b)(1) and proposed that section be modified to read "within 500 feet of the property in question if the property is located in a county whose population is 400,000 or more as of the effective date of the ordinance and within 660 feet of the boundary as referenced following January 1, 2001, except that properties less than 5 gross acres shall only be required a notification radius of 300 feet unless the application is for the issuance of a special use permit for an establishment which serves alcoholic beverages," with the remainder of that section to read as it currently did in Mr. Thomas’ proposed amendments (Exhibit H).

Ms. Coder referred to subsection (2)(e), found at the top of page 5 of the proposed amendments (Exhibit H). Clark County proposed that subsection be amended to read "any other governmental entity that requests such a notice." The county further proposed an additional subsection, to be designated subsection (2)(f), be added which would read "All mailed notices may be alternatively sent by electronic means if receipt of such an electronic notice can be verified."

Ms. Coder said although the amendments proposed by Clark County might seem extensive, they effectively applied two goals to several sections of A.B. 349. Those goals were 1) to phase in costs over time and 2) to capitalize on electronic notification methods.

Chairman Bache pointed out Ms. Coder, in reciting Clark County’s proposed amendments, cited the date January 1, 2001, rather than July 1, 2001, which was the date on which Clark County’s fiscal year would commence. In response, Ms. Coder indicated Clark County would be satisfied with the use of either date but would prefer July 1, 2001.

Ms. Von Tobel asked whether the amendments Clark County proposed would reduce the amount of the fee increases A.B. 349 would necessitate. Ms. Coder replied the county could deal with the increased costs imposed by A.B. 349 in one of two ways: 1) it could absorb a portion of those costs through its budget process or 2) it could increase its fees to recoup those costs.

Ms. Von Tobel asked to whom the county would pass on the costs reflected by increased fees. Ms. Coder replied those costs would be passed on to applicants, who might be developers. Most applications for zoning changes were submitted by developers, while use permits and variances were sought, predominantly, by individuals.

Ms. Von Tobel asked whether the time frame established by Clark County’s proposed amendments would give the county sufficient time to provide adequate notice of its fee increases so people would be aware how much more expensive an application for a variance would be than it had been. Ms. Coder replied affirmatively. She explained the Current Planning Division of Clark County’s Comprehensive Planning Department recouped approximately 45 to 47 percent of its costs through fees; the remainder was paid from the county’s general fund.

Mr. Lee said he favored A.B. 349 in its current form. He would hate to see a pawn shop, tattoo parlor, or other establishment of that nature brought into his neighborhood faster than it otherwise would be because someone knew they had to beat a deadline. With respect to Clark County’s proposed amendments he told Ms. Coder, " . . . I almost think that if we make the commercial notification and keep it the same, we’re actually preserving property rights a little bit better. The residential I have no problem with . . . but I think the commercial application needs to stay intact, and that’s my concern."

Ms. Coder asked whether Mr. Lee’s comments pertained to immediate expansion of the notification radius with respect to commercial development. Mr. Lee replied they did. He said he believed many people would try to " . . . get underneath the wire of this . . .," which might result in a decline of property values.

Bristol S. Ellington, Assistant Director of Community Development, Community Development Department, city of Henderson, testified. He concurred with Ms. Coder’s testimony. He said based on a sampling conducted by his department, A.B. 349 would increase notification costs related to applications for zone changes and land use amendments by a minimum of 42 percent. Although his department’s application fees were currently low, they would be increased to offset increased costs.

Chris Knight, Manager, Comprehensive Planning Division, city of Las Vegas, testified. He said he, too, concurred with Ms. Coder’s remarks. He stated with respect to rezoning, Las Vegas currently employed a 750-foot notification radius. Occasionally, some of Las Vegas’ city councilmen preferred a larger notification radius, sometimes as much as 1 mile. Although those larger notification radii increased the cost of providing notice, they did not increase public participation in the city’s planning process.

Mr. Lee said he begged to differ with Mr. Knight. He cited a proposal to establish a pawn shop near the Red Lobster restaurant (in Las Vegas) and said many people were interested in the issue, the issue had an impact on people well beyond a 750 foot radius, and there was a great deal of public response. He invited Mr. Knight to respond to his comment. Mr. Knight conceded in specific instances, there might have been a great deal of public response; however, his previous statement concerning public participation was based on his division’s overall experience.

Martha Tittle, representing Clark County School District, testified. She said the fact A.B. 349 included the superintendent of schools or his designee among the parties to be notified of proposed master plan and zoning changes constituted a positive step in communicating development changes which might affect school planning. In the past, Clark County School District had not always received notice of master plan and other land use changes which might affect school enrollment, school site issues, and planning for future school facilities. Clark County School District supported the proposed amendments to A.B. 349 which required the school district be informed of such changes.

Warren B. Hardy, II, representing city of North Las Vegas, testified. He said most of North Las Vegas’ concerns about A.B. 349 pertained to additional costs associated with the bill, and for the most part, those concerns had been addressed.

Barbara A. McKenzie, representing city of Reno, testified. She said she had no problem with most of A.B. 349; however, she felt compelled to discuss the issue of unfunded mandates. She contended the cumulative effect of unfunded mandates on local governments’ revenues could be devastating because all such revenues were capped. Local governments continuously received unfunded mandates and experienced reductions in their revenues as a result of legislative bills. She suggested legislators should be mindful of the cumulative effect of bills which imposed unfunded mandates and reduced revenues would have on local governments’ ability to continue to provide services to their communities.

Irene Porter, Executive Director, Southern Nevada Home Builders Association, testified. She indicated over the course of many years, the amount of notice provided citizens had been continuously increased. She cited a number of current notification requirements and asserted there were wonderful information networks to inform people of what was occurring in their neighborhoods and communities.

Ms. Porter said she believed it unnecessary to increase the current notification radius to 1,320 feet. Local governments were statutorily permitted to establish notification radii, and local governments throughout Nevada currently established notification radii of a minimum of 500 feet. It was now proposed to increase notification radii to 1,320 feet in all instances, regardless of what was being noticed, with an exemption for parcels of less that 5 acres. She asserted most things people objected to having inserted in their neighborhoods were things such as gasoline stations, 7-11 stores, small commercial strips, and pawn shops; therefore, " . . . that isn’t going to work to exempt the 5 acres. The small guy trying to do something is going to end up having to pay the same bill."

Ms. Porter contended the cost of unfunded mandates imposed on local governments, with respect to residential development, was ultimately included in the price of houses. Local governments could not continue to absorb such costs and had passed them on for a long time. She said she hoped everyone remembered in Clark County, for every $1,000 increase in the price of a house, 1,500 people were eliminated from qualifying to purchase that house.

Ms. Porter suggested if there was a concern about people’s desire to know about commercial developments in their neighborhoods, perhaps A.B. 349 should be amended to address solely that issue. Rather than causing the bill’s increased notification requirements to apply to all residential development, the cost of which would be passed on to housing prices, perhaps those notification requirements could be limited to commercial projects proposed to be constructed in residential neighborhoods. Narrowing the bill’s applicability in that manner would reduce its impact on local governments’ budgets.

Ms. Porter said she agreed with the requirements for additional notice to school districts. School districts currently received tentative maps of subdivision projects, and she believed they should also receive notice of proposed amendments to master plans. Conversely, she believed school districts should share more information with their local governments.

Ms. Von Tobel contended the legislature was caught up in a vicious circle of being presented with both bills to create affordable housing and bills that placed more burdens on homebuilders. She pointed out homebuilders had a right to make a profit and had to pass on costs imposed on them in order to establish a profit margin, which was the basis for her previous question about to whom local governments would pass on the costs imposed by A.B. 349.

Ms. Von Tobel said her assembly district might be unique. However, when two particular commercial developments were proposed for construction in residential neighborhoods in her district, neighbors informed one another of those proposals and appeared en masse before the city council. In those instances, there did not appear to be a lack of dissemination of information nor did there appear to be such a lack whenever controversy arose over a project. Residents of her district were very well informed and certainly informed her when a project they did not like was proposed.

Mr. Thomas explained A.B. 349 originated from a need to provide notice to school districts because of the methodology they utilized in determining school sites. School districts utilized master plans to generate information regarding population densities and student populations and determine where to site schools. A.B. 349 arose from a need for school districts to take a more proactive approach to planning for schools. The additional notification requirements established by the bill reflected his personal philosophy regarding notification.

Mr. Thomas said he agreed with the phased-in approach proposed by Clark County. He also agreed the 5-acre exemption would not solve any problems. His only concern about limiting A.B. 349 to apply only to commercial development pertained to whether or not people would wish to know if a high-density residential project was proposed for construction in their neighborhoods.

Mr. Thomas addressed the issue of fee increases. He said if a 40-acre parcel was developed, 200 homes would be constructed on that parcel. The current cost of a zoning application was $400, which equated to $2 per home. He asked, rhetorically, whether committee members would be willing to pay an additional $2 for their homes, over a 30 year period, for the privilege of knowing what was going on in their communities.

Chairman Bache closed the hearing on A.B. 349.

Chairman Bache distributed a proposed amendment to A.B. 461 (Exhibit J). He reminded the committee it previously heard testimony on the bill, and no opposition testimony was presented. However, there was much confusion about the bill, and he consulted with former assemblywoman Joan Lambert because of her expertise in land use issues. Mrs. Lambert immediately noticed the bill’s language did not comport with testimony regarding its purpose, and she worked, together with Maddie Shipman, to develop the proposed amendment.

Madelyn Shipman, representing Washoe County, testified. She explained Washoe County proposed A.B. 461. At the time of the hearing on the bill, concern was expressed about the manner in which the bill’s provisions pertaining to second and subsequent reviews of parcel maps were drafted. The proposed amendment (Exhibit J) essentially caused the bill to say what Washoe County originally intended it to say. In addition, the amendment established a specific filing fee. Washoe County’s original proposal was that the county be allowed to set the amount of all fees pertaining to planning matters; however, concern was expressed about there being no fee cap.

With respect to the proposed amendment to NRS 278.468 (contained in Exhibit J), Ms. Shipman explained under current law, a parcel map might be conditionally approved, but the conditions might never be met and the map might never expire. The proposed amendment allowed a local government, if it chose to do so, to extend the period of time in which a parcel map must be recorded; however, that period of time could not exceed 2 years. Two years corresponded to the time period in which subdivision maps must be recorded.

Chairman Bache presented a memo from Assemblywoman Christina Giunchigliani (Exhibit K) containing a proposed amendment to A.B. 598 and a request that the committee amend the bill and rerefer it to the Assembly Committee on Ways and Means. Ms. Giunchigliani and the various parties involved with the bill were attempting to resolve certain issues related to requirements under the Americans with Disabilities Act. The bill was previously concurrently referred to the Assembly Committee on Ways and Means, and rerefering the bill to that committee would provide the parties more time to resolve their issues.

Chairman Bache clarified Mrs. Freeman’s motion was to amend A.B. 598 by deleting sections 2 and 3 of the bill and then rerefer the bill to the Assembly Committee on Ways and Means.

Chairman Bache presented a proposed amendment to A.B. 538 (Exhibit L) submitted by Clark County.

Alex F. Ortiz, representing Clark County, testified. Mr. Ortiz explained Clark county representatives spoke with the sponsor of A.B. 538 about deleting from the bill the reference on page 5, lines 19 through 24, to hazardous materials, chemicals, and toxins. The provision set forth in those lines referenced chapter 9 of the Department of Defense Ammunition and Explosive Safety Standards, which did not address hazardous materials, chemicals or toxins, and Clark County believed those items were adequately addressed by the county’s zoning ordinances.

Ms. Gibbons indicated she had some notations indicating Douglas County opposed A.B. 538 and asked whether Mr. Ortiz conferred with Douglas County regarding the bill. She also asked whether A.B. 538 constituted an unfunded mandate. Mr. Ortiz replied he did not speak with Douglas County about Clark County’s proposed amendment (Exhibit L). He spoke with the bill’s sponsor who approved the deletion effected by the proposed amendment.

Assemblywoman Tiffany commented it was her recollection there was testimony, at the hearing on A.B. 538, that " . . .this type of information is better placed in a land use map than it is [in] a master plan," which was the basis for her primary objection to the bill. She pointed out there was a movement to reduce flexibility in master plans and allow them to be amended no more than once or twice a year, and the information A.B. 538 required be included in a master plan might need to be amended more frequently.

Chairman Bache asked Dave Ziegler, Committee Analyst, to briefly summarize the testimony given at the hearing on A.B. 538.

Mr. Ziegler advised Allen Biaggi, Administrator, Nevada Division of Environmental Protection, testified in support of A.B. 538. Mr. Biaggi said the bill was generated by the Commission on Workplace Safety and Community Protection after the Sierra Chemical explosion and was one of a number of measures recommended by the commission.

Mr. Ziegler said Ms. Tiffany asked whether A.B. 583 would create an unfunded mandate, and the answer to her question was "possibly."

Mr. Ziegler said John Doughty, Planning and Economic Development Manager for Douglas County objected to A.B. 538 based on the language of NRS 278. Mr. Doughty said Douglas County believed the zoning provisions of NRS 278 addressed the subject of the bill; a lengthy discussion was held on that point.

Mr. Ziegler stated he believed Douglas County’s objection to A.B. 538 could be reduced to the fact the county objected to being required to create a separate safety plan and believed such a safety plan could be addressed through the land use element of the county’s master plan.

Mrs. Freeman said she would prefer to confer with representatives of Washoe County before voting on A.B. 538.

Assemblywoman Berman said as members of the Assembly Committee on Labor and Commerce, Ms. Segerblom, Mr. Humke, and she had seen five bills which regulated explosive materials and their storage, and she believed A.B. 538 might be redundant.

Mr. Thomas expressed the opinion the matters A.B. 538 addressed were adequately addressed in local governments’ zoning ordinances.

Assemblyman Humke concurred with Ms. Berman’s and Mr. Thomas’ comments. He said the Assembly Committee on Commerce and Labor considered a number of bills dealing with hazardous materials, and he believed the function of dealing with such materials was currently well regulated. He believed local governments were on notice to exercise great caution in the siting of facilities dealing with hazardous materials.

Mr. Humke said he wished to make it clear virtually nothing was located within half a mile of the facility which experienced the explosion to which previous reference was made.

There being no further business to come before the committee, Chairman Bache adjourned the meeting at 10:50 a.m.

RESPECTFULLY SUBMITTED:

Sara Kaufman,

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

DATE: