The Committee on Judiciary was called to order at 7:40 a.m., on Friday, April 2, 1999. Chairman Bernie Anderson presided in Room 3138 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. Bernie Anderson, Chairman

Mr. Mark Manendo, Vice Chairman

Ms. Sharron Angle

Mr. Greg Brower

Ms. Barbara Buckley

Mr. John Carpenter

Mr. Jerry Claborn

Mr. Tom Collins

Mr. Don Gustavson

Mrs. Ellen Koivisto

Ms. Sheila Leslie

Ms. Kathy McClain

Ms. Genie Ohrenschall

COMMITTEE MEMBERS ABSENT:

Mr. Dennis Nolan

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Harvey Whittemore, Legislative Representative Boyd Gaming Corporation

Arthur Seavey, Executive Director, Citizens for Affordable Homes, Inc.

Michael C. Derloshen, Legislative Representative Nevada Housing Division

Joe Johnson, Legislative Representative Nevada Housing Coalition

Dennis Neilander, Board Member, Nevada Gaming Control Board

Jim Nadeau, Captain, Washoe County Sheriff’s Office

Elizabeth Fretwell, Intergovernmental Relations Director, Henderson, Nevada

Robert Faiss, Attorney, Lionel Sawyer & Collins

Helen Foley, Legislative Representative, Boyd Gaming Corporation

Gina Polovina, Legislative Representative, Boyd Gaming Corporation

Eileen Piekarz, Executive Director, Affordable Housing Resource Council

Robert Nielsen, Legislative Representative, Builder’s Association of Northern Nevada,

Jim Avance, Legislative Representative, Cardivan Company

Stan Olsen, Lieutenant, Las Vegas Metropolitan Police Department

Rob Woodson, Legislative Representative, United Coin Machine Company

Virignia E. Daniel, Director, Regulatory Compliance, Jackpot Enterprises

Dan Musgrove, Legislative Representative, Office of Intergovernmental Relations, City of Las Vegas

Following roll call Chairman Anderson opened the hearing on A.B. 522.

Harvey Whittemore, representative, Boyd Gaming, introduced an amendment to A.B. 522 (Exhibit C) which changed Chapter 452, section 20 of the Nevada Revised Statutes. In 1997, S.B. 208 was designed to make sure gaming was located in proper zones throughout the Las Vegas and Clark County area. Unfortunately, said Mr. Whittemore, the effect of that bill was to limit the planned development by Boyd Gaming of 2 parcels of land which they presently owned. The proposed amendment specifically identified those two locations without broadening additional areas. Mr. Whittemore felt the language in the amendment would satisfy the concerns of the affected districts.

Assemblyman Collins agreed with the administrative correction addressed in A.B. 522. He said the amendment was very specific.

Chairman Anderson commented the amendment was a specific descriptor, and so should be considered in light of earlier legislation rather than in terms of singular effectiveness. He wondered if the original 500-foot restriction still applied.

Gina Polovina, representative, Boyd Gaming Corporation, replied the 500 foot restriction did indeed apply.

Assemblywoman McClain said one of the resorts in question was across from her residence. As long as local jurisdiction had input she was in favor of the legislation.

Helen Foley, representative, Boyd Gaming Corporation, said A.B. 522 gave an opportunity to Boyd Gaming, not a right. The local political subdivisions would be petitioned and hearings would be held.

Assemblyman Manendo stated he supported A.B. 522U since he believed Boyd Gaming should have the opportunity to develop their property.

Dan Musgrove, Office of Intergovernmental Relations, city of Las Vegas, testified in support of A.B. 522. He commented the city appreciated the amendment being very specific and that local jurisdiction would have final approval.

Elizabeth Fretwell, representative, city of Henderson, said the first draft had caused some concern but the amendment as written made it possible to support the bill.

Assemblyman Manendo wondered if the parcel in question between Desert Inn and Sahara Boulevard was in the city of Las Vegas. Mr. Musgrove replied not that parcel, but the Lake Mead Boulevard parcel was in the city.

ASSEMBLYWOMAN MCCLAIN MOVED TO AMEND AND DO PASS A.B. 522.

ASSEMBLYMAN MANENDO SECONDED THE MOTION.

MOTION CARRIED UNANIMOUSLY.

Chairman Anderson closed the hearing on A.B. 522 and opened the hearing on A.B. 540.

Assemblywoman Sheila Leslie, Assembly District 27, introduced A.B. 540. Assemblywoman Leslie thanked Assemblywoman Buckley for her hard work on the issue during the 1997 legislative session. The purpose of A.B. 540, said Assemblywoman Leslie, was to create more affordable housing in Nevada by giving the gaming industry an incentive to become involved in building affordable housing for their employees and for others.

Assemblywoman Leslie said as a representative of downtown Reno, she thought the bill was very important for her district. It was important to note A.B. 540 did not mandate that the gaming industry participate in any way. The bill allowed an unlimited gaming licensee to participate in building an affordable housing project by partnering with a developer. After the gaming licensee determined its partner, an application would be made through the state Housing Division with the Department of Business and Industry. If the application was appropriate and the gaming licensee qualified, the division would provide a written notice of eligibility to the Gaming Commission.

Assemblywoman Leslie provided the committee with a brief overview of A.B. 540.

• Sections 2 through 5 provided definitions for the bill.
• Section 6 explained the application process and criteria for eligibility.
• Section 7 delineated responsibilities of the Department of Business and Industry for the written notice of determination of eligibility and requirements the licensee must meet.
• Section 8 specified limits of credits the Gaming Commission could approve.
• Section 9 addressed agreements between the Gaming Commission and the licensee.
• Sections 10 through 13 provided criteria for compliance with the agreement.
• Sections 14 and 15 required the Housing Division to adopt regulations to carry out the program.

Assemblywoman Leslie expressed the belief A.B. 540 was important not only to Reno but also to Laughlin, Wendover, and other areas.

Joseph Johnson, representative, Nevada Housing Coalition, spoke in support of A.B. 540. Mr. Johnson explained the coalition was a not-for-profit organization which advocated policies to enhance the production of affordable housing in Nevada. The coalition supported A.B. 540 and urged passage of the bill.

Mr. Johnson provided a timeline and flow chart (Exhibit D) of steps for implementation of the program outlined in A.B. 540.

Eileen Piekarz, executive director, Affordable Housing Resource Council, addressed the committee in support of A.B. 540. Ms. Piekarz said the council assisted developers in building more affordable housing in northwest Nevada. She explained she was also secretary of the Nevada Housing Coalition.

Ms. Piekarz said A.B. 540 would allow gaming enterprises to reinvest in their communities (Exhibit E). A federal investment program, the Low Income Housing Tax Credit, had proven to be most successful in terms of the amount of housing produced and in quality and long-term success of that housing. Nevada had an unmet need for affordable housing for moderate and low-income households.

In Washoe County, said Ms. Piekarz, almost two-fifths of renters overpaid for housing, while 60 percent of larger, low-income households lived in overcrowded conditions. Based on projected increases in population, by the year 2015 Washoe County was expected to need an additional 16,000 housing units affordable to households earning less than 80 percent of the area median income. A.B. 540 would allow for additional resources to meet that need.

Chairman Anderson said the fiscal note reflected no impact in the first year, and a projected possible fiscal impact of $150,000 during the second year. Mr. Johnson replied he had not seen that note.

Assemblywoman Leslie stated she had not seen the fiscal note either. She had anticipated the fiscal impact might be lower than $1 million because of startup time and it was not known if the gaming properties would take advantage of A.B. 540. She asked where the $150,000 figure came from, since her anticipation was $500,000. Chairman Anderson said he would provide the fiscal note to Assemblywoman Leslie.

Assemblyman Carpenter asked if the $500,000 would go to all properties or one specific property and if that amount was the total impact to the general fund. Mr. Johnson responded the $500,000 was indeed the total amount and distribution was subject to application and review by the housing division. There was no limitation on geographic location or distribution in A.B. 540.

Chairman Anderson explained the endnote on the fiscal note showed a 60 percent factor in the first year of $300,000 would only apply to 6 months of the second part of the fiscal year, the figure would then be reduced to $150,000. There was potential for a cost of $500,000 but in reality, since it did not apply in the first fiscal year, the numbers were reduced.

Robert Nielsen, representative, Builder’s Association of Northern Nevada, told the committee he was a multi-family homebuilder in Reno. Mr. Nielsen said he was in favor of A.B. 540 because he believed there was an ongoing need for affordable housing throughout Nevada and any program the state could provide would be of benefit.

Harvey Whittemore, representative, Wingfield Springs, stated he supported A.B. 540. He suggested there was potential difficulty in the bill in anticipating the fiscal note. He felt if the bill was put into law after the effective date of the present fiscal year it could be built into any new budget, which would assist in passage of A.B. 540.

Arthur Seavey, representative, Citizens for Affordable Homes, Carson City, supported A.B. 540. He explained his organization built primarily low-income homes and provided home ownership opportunities through the Sweat Equity Program. They also partnered in tax credit projects for multi-family dwellings for those whose income was 80 percent or lower than area median income. Most projects involved families whose income was 50 percent or less of the area median income. A.B. 540 would insure affordable housing for those people.

Elizabeth Fretwell, representative, city of Henderson, spoke in support of A.B. 540. Ms. Fretwell explained Henderson had been attempting to further diversify housing stock and she had worked with Senator Harry Reid to make provisions in the Public Lands Management Act to increase availability of land for affordable housing. A.B. 540 was another tool for businesses in the community to achieve that aim.

Harvey Whittemore suggested an amendment to reflect a later effective date. Assemblyman Carpenter wanted to make sure there was not a fiscal note on the present budget. Chairman Anderson suggested an effective date of July 1, 2001.

ASSEMBLYWOMAN BUCKLEY MOVED AMEND AND DO PASS A.B.540.

MOTION SECONDED BY ASSEMBLYWOMAN LESLIE.

MOTION PASSED.

Chairman Anderson closed the hearing on A.B. 540 and opened the hearing on A.B. 583.

Robert Faiss, counsel, Nevada Resort Association, spoke in support of A.B. 583. Mr. Faiss said the association was pleased to join with the Gaming Control Board in seeking support of section 1 of A.B. 583 which dealt with the malfunction of slot machines and associated equipment.

Mr. Faiss explained the law stated when a patron played a slot machine, that patron entered into a contract with the casino (Exhibit F). A fundamental element of said contract was that malfunctions of the machine voided the contract. The Nevada Gaming Control Board and gaming control boards of other states had applied that principal. Adoption of section 1 of A.B. 583 did not change current law, but provided clarity for interested parties.

Mr. Faiss submitted a copy of an article called "Gaming Law" (Exhibit G) written by Kevin Doty and dedicated to A.B. 583, which he said provided greater detail to his own testimony before the committee.

Dennis Neilander, board member, Gaming Control Board, testified in support of A.B. 583. Mr. Neilander explained the law with respect to malfunction of slot machines was fairly clear but had not been codified. Such was the purpose of A.B. 583. He then addressed section 2 of A.B. 583 which amended Nevada Revised Statute 463.0129. That section covered public policy with respect to gaming. Mr. Neilander said after discussion with representatives from the Nevada Resort Association it was agreed section 2 was not necessary and requested that provision be deleted from the bill. The Gaming Control Board recognized the value of proper exercise of business judgement by its licensees. Nevada’s gaming control system did not seek to interfere with the business judgements exercised within the law. It had been Mr. Neilander’s experience legislators sought to achieve regulatory objectives without creating unnecessary administrative burdens for gaming operators. The board’s current policy was to continually balance legitimate business concerns with the need for strict regulation and there was no reason to include that in the public policy statement.

Chairman Anderson wished to clarify that Mr. Neilander was not recommending removal of the entire section but rather the amended language in that section. Mr. Neilander explained that the request was indeed to remove the entirety of section 2. Further testimony from Mr. Faiss would address another amendment to the bill.

Mr. Faiss concurred with statements made by Mr. Neilander to strike parts of section 2 of A.B. 583 and presented an amendment to the language (Exhibit H). He asked the committee to retain the remainder of section 2 as a vehicle to correct a clerical error made with respect to an amendment to the public policy statement in S.B. 208 of the previous legislative session. Because of an oversight, the language in S.B. 208 applied only to nonrestricted licensees. The Nevada Gaming Commission was presently engaged in adopting regulations which provided more certainty to the licensing and operation of restricted slot machines. In those proceedings the question was raised whether the "quality of life" provision applied to restricted license locations because of the error in S.B. 208. The amendments submitted would answer that question.

Mr. Neilander said he supported the proposed amendment. Existing language needed to be clarified. He had just reviewed the amendment and could not speak for his colleagues on the board, but he personally did not have any problems. If the board members had further input, he would provide that to the committee in a timely fashion.

Assemblywoman Buckley expressed concern about the ongoing debates about whether placement of slot machines in many locations had changed the character of neighborhoods. She wondered if the committee was injecting itself into such debates. She was particularly concerned about language which addressed quality of life issues in surrounding neighborhoods since she thought the idea was to consider neighborhoods as opposed to players in convenience stores and so forth. Mr. Faiss responded he understood Assemblywoman Buckley’s concerns, and said if she felt comfortable removing such language it was not a problem.

Mr. Neilander said he also had concerns with the language as addressed by Assemblywoman Buckley. He understood the reason for the language but agreed it could be interpreted several different ways, and if it was the desire of the committee to remove it, he was in agreement.

Chairman Anderson said it was agreed further definition would be necessary for the first part of A.B. 583. There was concern not only for patrons of an establishment but also for residents of the neighborhoods affected. He said if Assemblywoman Buckley continued to have concerns, the language could be removed. He stated he was hopeful neither the Gaming Control Board nor the committee would enter into the debate.

Assemblywoman Buckley said a lot of time was spent on the issue in the past and a balance was struck between the community and the gaming industry. She wished to be sure that balance was not negated. She said she would like to leave language which referred to holding restricted or non-restricted licenses, but not add language which referred to patrons. Mr. Faiss reiterated his agreement to strike that language.

Jim Avance, representative, Cardivan Company, said he supported A.B. 583. He had not seen the proposed amendments and requested he be given time to send the amendments to his interested people, and if there were problems, he be allowed to notify the committee in writing prior to a work session on the bill. He said again he supported A.B. 583 as drafted.

Chairman Anderson stated his intention to vote on A.B. 583 at the present time. He would supply Mr. Avance with amendments and suggested he address the issue after the floor vote. He asked for a motion on the bill.

ASSEMBLYWOMAN BUCKLEY MOVED AMEND AND DO PASS A.B. 583.

MOTION SECONDED BY ASSEMBLYMAN BROWER.

MOTION PASSED.

Chairman Anderson closed the hearing on A.B. 583 and opened the hearing on A.B. 593.

Jim Avance, representative, Cardivan Company and Slot Route Operators, referred to 2 letters (Exhibit I) from Jackpot Enterprises, Inc. and United Coin Machine Co., both of which discussed the number of employees each had. Currently state law required anyone involved in gaming must have a current work card from whichever county was involved, or a work card issued by the Gaming Control Board if the county did not issue work cards. Slot route operators traveled vast distances into various jurisdictions. Some routes encompassed Las Vegas, Mesquite, Pahrump, and Elko,. Mechanics and change people also traveled through and worked in a number of different counties in a single day. A.B. 593 would allow one license for those people in the major county of their operation.

Mr. Avance said he had just received notification that both Washoe County and Clark County might have problems with the bill, so he would introduce an amendment to restrict the single licensing to only slot route operators. That would ensure casino workers would not be able to change jobs from one location to another without notifying the sheriff’s offices in the various counties.

Virginia Daniel, director of Regulatory Compliance, Jackpot Enterprises, testified in support of A.B. 593. She said she would support additional language by Mr. Avance. Ms. Daniel said Jackpot Enterprises was the second largest route operator in Nevada and had many employees who might go to 15 locations in a day in 3 or 4 jurisdictions. It was necessary to be able to assign employees where they were needed on a temporary or relief basis. It was not practical to restrict an employee to a particular jurisdiction. A.B. 593 would not affect the vast majority of licensees and could be restricted to slot route operators. The bill would reduce the administrative and financial burden for those relatively few who were affected but would not detract from the original purpose of work permits.

Rob Woodson, United Coin Machine Company, testified in support of A.B. 593. He reiterated and supported the testimony of Mr. Avance and Ms. Daniel. He said United Coin Machine Company was the largest route operator in Nevada and had machines in most of the counties in the state. While he was not aware of the problems Mr. Avance discussed with Washoe and Clark counties, he would support an amendment from Mr. Avance.

Jim Nadeau, captain, Washoe County Sheriff’s Office, spoke for both the sheriff’s office and the city of Reno in opposition to A.B. 593. He said both the sheriff’s office and the city were concerned about the bill since there was no central database or repository for gaming licenses. Under the terms of A.B. 593 there could be statewide gaming licenses and with the proliferation of corporations in the state and the ownership of casinos, that was of concern. If an amendment could be drawn as discussed the sheriff’s office and the city of Reno could support the bill.

Stan Olsen, lieutenant, Las Vegas Metropolitan Police Department said the Privileged License Investigation Unit had a problem with the bill as written. Work permits were job-specific. The concern was that people would move from one property to another and possibly into a different area of responsibility which could open the door to theft without a background check. He could support an amendment as discussed, but could not support A.B. 593 as written.

Chairman Anderson stated he understood that in his amendment Mr. Avance would address the issues that people could not change their position or employer without another work card.

Assemblywoman Leslie asked Captain Nadeau who did the work permits in Washoe County. Captain Nadeau replied Reno, Sparks, and Washoe County all issued work permits in their separate jurisdictions. There was a movement in process toward a universal work card for the entire county. Assemblywoman Leslie asked how long that would take to implement, and Captain Nadeau said he understood in some cases it was already in effect, but he could not speak to specific time periods for implementation. Chairman Anderson explained the issue had been addressed in circumstances of food workers who could be involved in gaming in a marginal capacity. There had been discussions with the central repository over the past few years regarding the problem, but funding had an impact.

Lieutenant Olsen commented work cards for banquet waiters were issued to the respective unions. The person could move within whichever hotel the union assigned. Chairman Anderson said union operations in the north and south areas of Nevada were often dramatically different.

Assemblyman Carpenter asked Mr. Avance if there had been contact with sheriffs in Elko, and White Pine counties and how they viewed A.B. 593. Mr. Avance responded he had not addressed the issue with those entities but he certainly would prior to presenting an amendment.

Chairman Anderson asked Mr. Avance to draft a proposed amendment to A.B. 593 for a work session. Mr. Avance said he would do so, and added if the amendment was not satisfactory to Captain Nadeau and Lieutenant Olsen, he would withdraw the bill.

Lieutenant Olsen stated he would contact all sheriffs involved for comments and response.

Chairman Anderson closed the hearing on A.B. 593. There being no further business before the committee, Chairman Anderson adjourned the meeting at 8:55 a.m.

RESPECTFULLY SUBMITTED:

______________________________

Lois McDonald

Transcription Secretary

Chris Casey,

Committee Secretary

APPROVED BY:

Assemblyman Bernie Anderson, Chairman

DATE: