The Committee on Ways and Means was called to order at 4:30 PM, on Tuesday, May 25, 1999. Chairman Morse Arberry, Jr. presided in Room 3137 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. Morse Arberry, Jr., Chairman

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Marcia de Braga

Mr. Joseph Dini, Jr.

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Ms. Sheila Leslie

Mr. John Marvel

Mr. David Parks

Mr. Richard Perkins

Mr. Robert Price

COMMITTEE MEMBERS ABSENT:

Mrs. Vonne Chowning (Excused)

Mrs. Jan Evans, Vice Chair (Excused)

STAFF MEMBERS PRESENT:

Senator Dina Titus, representing Senate District 07, explained that S.B. 363 was related to cleaning up brown fields. She felt that the process was good for the environment, benefited economic development and helped prevent urban sprawl. Before she deferred her testimony to Allen Biaggi, Administrator of the Nevada Division of the Department of Environmental Protection (EPA), she distributed a schedule of the regulatory process (Exhibit C).

Senator Titus then defined a "brown field" for the committee. A "brown field" was an idled or underused industrial or commercial property where expansion or redevelopment was hindered by real or perceived contamination. Often found in urban areas, a brown field ranged from properties such as old abandoned filling stations to urban railroad yards.

In the past, people were reluctant to acquire and develop brown fields, as they feared liability from contamination that occurred before they purchased the property. Furthermore, when a brown field was left abandoned, they became havens for crime and illegal dumping. Brown fields were eyesores that degraded neighborhoods and the children who lived in them.

She promulgated the idea that if economic incentive was provided to clean up the brown field and some limited liability to the people undertaking the renovation of a brown field was provided, there was a good chance that the property would be reacquired and re-developed.

Next, Mr. Biaggi referred to a flow chart (see Exhibit C) of the remediation process for S.B. 363. He stated that the bill provided a framework for the EPA to evaluate properties and to work with the owner and operator as well as with the lending institution of those properties. The bill assisted the EPA in developing an agreement for the cleanup of the properties and to reduce or eliminate the liabilities to the owners, operator, or lenders.

He then pointed out that there had been a fiscal note attached to the bill. After working with federal grant consultants, he stated that the fiscal note could be removed, as work would be done using internal resources. Therefore, he requested that the fiscal note for the first year of the biennium be removed.

Furthermore, the expenses accrued during the second year of the biennium were covered through a funding mechanism with the owners and operators of the bill resulting in a no net cost to the state of Nevada. The program was essentially a self-supported program.

Senator Titus interjected that no new fees or charges were introduced in the bill. Therefore the bill would not be subject to the Governor’s veto. The program was a voluntary program where an individual or company paid a fee to become part of the program.

Mr. Biaggi then added that it was critical that the federal government agree to the terms set forth by the legislation in order to provide the needed liability assurances. Therefore, he asked the committee to consider three minor amendments to the bill.

The first amendment was related to Section 5 of the bill. The amendment added a new subsection 4, which stated "is not proposed or eligible for the national priorities list or subject to federal enforcement under Resource Conservation and Recovery Act (RCRA) or Comprehensive Environmental Response Compensation and Liability Act (CERCLA)." He explained that RCRA and CERCLA were the two federal programs that were concerned with liability and federal clean-up programs.

The second amendment altered Section 11 of the bill by deleting the word "listing" in the first sentence and by replacing it with the word "consideration."

The third amendment added a new subsection 7 to Section 16. The new subsection stated "for a release of any hazardous substance not considered in the remedial agreement."

Mr. Perkins asked if Senator Titus had approved the amendments.

Senator Titus responded that the amendments had been submitted at such a late date due to a late response from the EPA. She was in full support of the changes brought forth by the amendments.

Next, John Sande, representing the Nevada Banker’s Association, stated that he was in support of S.B. 363. He thought that the bill encourage lenders to develop certain property without fearing that foreclosure would render them a responsible party. As long as lenders were acting in good faith the bill had provisions that would allow the lender to foreclose on the brown field property and sell the property to someone who would participate in the clean-up program. The lender would not be considered a responsible party and their security interests would be amply protected by the bill.

Mr. Goldwater commented that the definition of a "responsible party" was an important part of the bill. He asked if Mr. Sande anticipated the responsible party coming into conflict with the user or lessor of the property. For example, should a party volunteer to participate in the program, could they come into conflict with the user of the land, whose interests ran contrary to the goals of the program.

Mr. Sande replied that a program participant did not have the right to expel an individual from the property under the provisions of the bill. However, the legislation understated federal law regarding the actions a lender could take before being considered a responsible party. Merely foreclosing could technically make an individual a responsible party where the lender would be responsible for the total costs of the clean-up even if the lender was not the cause of the damage. Thus, the bill stipulated that a lender would not be held liable if certain action was taken to clean-up the brown field property.

Mr. Sande held that a responsible party was defined by the owner as well as operator of the site, if actions were taken to cause damage.

Mr. Biaggi agreed with Mr. Sande and replied that the intent of the bill was not to exclude the party who caused the damage from liability, but to carve out a niche for the people who had loaned on the property or who had owned or operated the property, but had not caused its contamination.

Mr. Goldwater inquired if remediation was available to adjacent landholders.

Mr. Biaggi responded that regulatory requirements existed in other statutory provisions that considered impacts on third parties as well as owners on adjacent properties. Remediation existed in other areas of the statutory framework.

Next, Joseph Johnson, representing the Toiyabe Chapter of the Sierra Club, affirmed his support for S.B. 363, as he felt that it was a meritorious piece of legislation.

ASSEMBLYMAN HETTRICK MOVED TO AMEND AND DO PASS.

ASSEMBLYMAN PERKINS SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

J. Perry Comeaux, Director of the Department of Administration, testified that S.B. 511 revised provisions related to expenditures for air quality and authorized the transfers, which had been recommended in The Executive Budget from the Pollution Control Account.

He pointed out that the changes made to the first page of the bill were a technical change made by the bill drafter. However, he stated significant changes to the bill did exist.

The first significant amendment to the bill was made on page 2, Section 1, subsection 4. The change provided that expenditures could be made from the Pollution Control Account in priority order. The first priority given was to agencies in maintenance areas for carbon monoxide. The bill stipulated that those agencies must receive funding in an amount that was at least equal to the portion of the money in the Pollution Control Account which equaled one-fifth of the amount that had been received for each form. Second priority was given to the Department of Motor Vehicles and Public Safety (DMV & PS), who would carry out the provisions of the chapter. The third priority was assigned to the Division of Agriculture for tests required under Chapter 590, which was related to the inspection of petroleum products. Fourth, priority was given to the Tahoe Planning Agency and to the Nevada-Tahoe Regional Planning Agency. Finally, fifth priority was given to state or local agencies to pay for expenses that had been incurred by such agencies to attain or maintain the environmental threshold carrying capacities related to air quality. This was established pursuant to Nevada Revised Statutes (NRS) 277.200 or the Tahoe Regional Compact.

Mr. Comeaux then explained that the department had also recommended an amendment to the bill in the Nevada Senate. For some reason, he indicated that the amendment had not been made. Nevertheless, he felt there were flaws in the bill that needed correction. Distributing a rough copy of the amendment (Exhibit D), he pointed out that the amendment added a sunset provision to the bill.

Chairman Arberry wondered what effect the bill would have in the Nevada Senate, should the Nevada Assembly choose to amend the bill.

Mr. Comeaux hoped the bill would not be tabled should the Assembly choose to amend the bill. Furthermore, he remarked that he was unsure as to why the amendment was not considered by the Senate.

He related that the problem with the bill was that as the bill was written, priorities placed under of Section 4, subsection 1 would read, "the Department of Motor Vehicles and Public Safety shall by regulation establish a program to award grants." He felt that most of what had been included in terms of priority expenditures were included in The Executive Budget as direct appropriations. A grant process was irrelevant to the bill. Therefore, he thought that the addition of the prioritized list needed to be made under Section 1, subsection 2. He emphasized that was the only effect of the proposed amendment.

Speaker Dini commented that the bill was set to sunset by June 30, 2001.

Mr. Comeaux stated that he did not have the first reprint of the bill, only the original version and the proposed amendment. He did not know the first reprint of the bill had already been published.

However, after reviewing the first reprint of the bill, Mr. Comeaux averred that the reprint edition mirrored the original version of the bill, except for the addition of the sunset requirement in Section 2.

He explained that the proposed amendment would place the language for the priority spending of the funds into Section 1, subsection 2 f the bill. Then in subsection 4, which contained the grant language, the amendment provided language to separate the two different kinds of expenditures.

He then stated that another problem with the bill as it was currently written was that it did not contain the authority for expenditures or for transfers from this fund to the Division of Environmental Protection. He articulated that the state had been transferring those funds in that manner for a number of years under subsection 4b, which had been proposed to be eliminated. Even though that appropriation was in the budget, the authority for the transfer would no longer exist in the NRS.

Therefore, he felt it was critical to include the amendment with the passage of the bill. He then noted that specific language for the sunset provision of the bill, as the only portions of the bill needing the provision were provisions for new spending that was recommended by The Executive Budget for the current fiscal year. This was evidenced by item’s e, f, and g on the amendment.

Next, Pamela Wilcox, Administrator for the Division of State Lands and Executive Officer for the Nevada-Tahoe Regional Planning Agency (NTRPA), apologized for the confusion the bill may have created, as it had been delayed in the Senate and had just recently cleared. She had not been aware that the amendment requested by Mr. Comeaux was not incorporated into the bill. She noted that the amendment distributed to committee members was the same amendment that had been given to the Senate Finance Committee.

Ms. Wilcox then remarked that the only objections to the bill, exhibited by the Senate Finance Committee, were that committee members had wanted the new Tahoe provisions to sunset. She indicated that the amendment submitted by Mr. Comeaux would provide for that sunset provision.

Otherwise, Ms. Wilcox stated the amendment simply provided language that would keep her from having to undergo a grant process under regulations not yet written in order to have the NTRPA’s budget operational by July 01, 1999.

Mrs. de Braga referred to item "e" in the original version of the bill and asked why local agencies would be removed from that regulation in the proposed amendment, item "g".

Ms. Wilcox replied that inclusion of state agencies was related to these funds supporting one position located in the Division of State Park’s budget and one position in the Division of Forestry budget, which were both wholly dedicated to Lake Tahoe issues during the upcoming biennium, were supported by this fund.

Mrs. de Braga asked if local agencies would be involved at all. Ms. Wilcox responded negatively.

Next, Allen Biaggi expressed his concern over the elimination of the authority to transfer DMV fund dollars to the Division of Environmental Protection in the original version of the bill. He stated that the division conducted the air quality control programs in rural Nevada, exclusive of Clark and Washoe Counties. By eliminating this authority, the division’s funding would be severely reduced and would threaten the delegation process of their air quality program in Nevada. Therefore, he concurred with Mr. Comeaux’s comments that the Division of Environmental Protection needed to be placed back into the bill.

Next, Joe Johnson, representing the Sierra Club stated that he was in support of the bill as long as it contained the sunset requirement. He had reviewed the proposed amendment and was in agreement with the changes it made to the bill. However, he would prefer to see Lake Tahoe funding be derived from the General Fund as a statewide priority.

ASSEMBLYMAN HETTRICK MOVED TO AMEND AND DO PASS.

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

John Slansky, Assistant Director of the Department of Prisons, testified on behalf of A.B. 690, which would provide the department with the start-up supplies needed for the new prison in Las Vegas.

He noted that there were 1,202 items on the list, where the first item listed was an O-ring tool and the last item listed was a waste basket in the warehouse.

As no other testimony regarding the bill was submitted, Chairman Arberry closed the hearing on A.B. 690.

Assemblywoman Kathy Von Tobel next testified that some of her constituents had suggested changing the name of the Cold Creek State Prison to Snake Ridge.

Ms. Giunchigliani noted that the prison had developed a list of names for the prison with historical value.

Mr. Slansky testified that A.B. 691 provided for the Remote Area Differential (RAD) for the Department of Prisons facilities in Las Vegas. This included the new prison near Indian Springs.

Next, Bob Gagnier, Executive Director for the State of Nevada Employee’s Association, noted that the legislation was necessary because as of September 01, 2000, employees transferring from the Jean facility would lose the RAD that they currently received.

He then asked that the amount indicated on line 9 of the bill be changed from $6.00 to $7.50 in accordance with A.B. 273. He explained that the RAD amount had never been increased and since some of the employees would be commuting over one hundred miles in one direction, the increase was drastically needed.

As contained in the fiscal note in A.B. 273, the cost to increase the RAD for the current facilities was $223,000 per year. Mr. Gagnier stated that only costs added to that amount would be related to new employees.

Mr. Parks asked how many people would be making the commute from Sande Valley.

Mr. Gagnier could not respond.

Paul Iverson, Administrator of the Division of Agriculture, testified that A.B. 693, had been prepared at the behest of the committee during budget presentations. He explained that the bill eliminated fees currently set in statute and provided that the Board of Agriculture set those fees through the regulatory process.

This would provide the division with the opportunity to develop a cost allocation to adequately fund all of the division’s programs. Also, at the request of the committee and of the auditors, the bill allowed the division to develop funding policies and goals. This meant that during the next legislative session, funding policies that met the needs of the division would be in place.

Mr. Iverson then addressed an amendment to the bill. He asked that the committee provide the agency with the opportunity to establish and collect fees for products, which the division sold and distributed.

Renny Ashelmann, representing Clark County, presented copies of the proposed amendment to A.B. 287 (Exhibit E). He stated that the amendment was a replacement amendment that allowed all legal proceedings to enforce the right of eminent domain to take precedence over all other causes and actions so that it could be quickly heard and determined.

He explained that the amendment was critical to Clark County because or their concern that they would automatically be in the over two-year provision because of the congestion of the Clark County courts, should the priority not be received. Cases could be heard in a timely fashion with the priority provided by the bill.

In regard to the cause of the delays, Mr. Ashelmann indicated that Clark County had directed the courts to make a written finding as to whether the plaintiff, which in most cases was a governmental agency, or whether congestion or backlog on the courts calendar were the source of the delays.

Chairman Arberry asked how the bill would be funded.

Brian Hutchins, representing the Office of the Attorney General, responded that a fiscal note had been submitted on the amendment that indicated that the previous concerns of the office had been reduced. He remarked that some of the existing statute that prompted the landowner to get the issue to trial had been left in the bill. The two-year delay provision had also been left in the bill requiring a written finding by the courts.

Chairman Arberry asked if Mr. Hutchins could accept he changes. He replied affirmatively.

ASSEMBLYMAN GOLDWATER MOVED TO AMEND AND DO PASS.

SPEAKER DINI SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

There being no other business before the committee, Chairman Arberry adjourned the hearing at 5:30 p.m.

RESPECTFULLY SUBMITTED:

Janine Toth,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry, Jr., Chairman

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