Kim Marsh Guinasso, Committee Counsel

Juliann Jenson, Committee Policy Analyst

Marvin A. Leavitt, Lobbyist, City of Las Vegas

Robert S. Hadfield, Lobbyist, Nevada Association of Counties

Dino DiCianno, Deputy Executive Director, Department of Taxation

Carole A. Vilardo, Lobbyist, Nevada Taxpayers Association

Mary E. Henderson, Lobbyist

Mary C. Walker, Lobbyist

Gentty P. Etcheverry, Lobbyist, Howarth and Associates

Lisa A. Gianoli, Lobbyist, Washoe County

Greg L. Erny, State Board of Architecture, Interior Design and Residential Design

Brett Kandt, Deputy Attorney General, Contract Unit, Civil Division, Office of the Attorney General

Anne Cathcart, Special Assistant Attorney General, Office of the Attorney General

Kathy Augustine, State Controller

Larry Struve, Lobbyist

Mary Boetsch, Chairman, Commission on Ethics

Larry Spitler, Lobbyist, American Consulting Engineers Council of Nevada

Eric Raecke, Manager, State Public Works Board, Department of Administration

Cheryl C. Blomstrom, Lobbyist, Associated General Contractors, Nevada Chapter

Robert F. Joiner, Lobbyist, Nevada Chapter of American Planning Association

Charles W. Joerg, Lobbyist, Nevada Manufactured Housing Association

Vice Chairman Raggio opened the hearing on Senate Bill (S.B.) 470.

SENATE BILL 470: Makes various changes relating to debt management commissions. (BDR 30-707)

SENATE BILL 471: Revises provisions governing legislative measures which require local governments to establish, provide or increase programs or services. (BDR 17-980)

SENATE BILL 473: Creates procedure for dissolution or disincorporation of certain local governments in severe financial emergency under certain circumstances. (BDR 31-702)

SENATE BILL 528: Makes various changes to provisions regarding redevelopment of communities. (BDR 22-982)

SENATE BILL 529: Requires segregation by use of proceeds for property tax levied within general improvement districts. (BDR 25-984)

SENATE BILL 253 OF THE SIXTY-NINTH SESSION: Creates legislative committee to study distribution among local governments of revenue from state and local taxes. (BDR 17-193)

… S.B. 470 relates to the debt-management commission. We had a number of discussions that the debt-management commission is a very important body because they’re [they are] the ones that review all of the general-obligation debt and special tax levies and a number of things. And as we reviewed that, we discovered that they do not really have a staff assigned to them to help them in their deliberations and provide information for them if they need that information. We had come up with several different possibilities, and we finally came up with a recommendation that if it’s [it is] in a county whose population is less than 30,000, that they may request assistance from the Department of Taxation to essentially provide them the staff help as they deliberate these bond issues. And then, in a county larger than 30,000, they would use the staff of the county in which they’re [they are] located to provide them this information. There’s [there is] a stipulation that these staffs would provide them technical information and would not be providing them information as to whether they think it’s [it is] a good idea to do the bond issue or not, but simply provide information as it relates to things such as assessed valuation and overlapping debt and tax rates and all of those kinds of things that are necessary for this body to have in their deliberations.

Now I understand that because of what is in section 1, starting on line 3, relating to the Department of Taxation, that because of that, there’s [there is] a fiscal note attached to the bill because of the requirement that the tax commission provide assistance to these very small counties and these debt-management commissions. So that could conceivably be a problem with the bill, result in a funding problem at least as it relates to that part of the bill.

The second provision of the bill, starting on page 3, line 7, provides that if a person in a county over 50,000, if they’re [they are] going to be appointed to one of these commissions – and these would be one of the nonelected people – they should have such background and experience that would enable them to look at these issues that come before them with some knowledge. So we put the fields of public administration, public accounting, or banking as being somebody that would, by background, probably have knowledge of these types of things. We could’ve [could have] put someone with knowledge in taxation, say for instance, which would’ve [would have] worked just as well. And I don’t [do not] suppose there’s [there is] anything particularly wonderful about these three, but these three seemed to be, as we were deliberating this, to be those professions that would at least have some knowledge of taxation and such enough to … it would help to be on this committee.

And then we provide, in [subsection] 5 [of section 3], that if a person’s [person is] going to be a member of this committee, they should not be involved in the market they’re [they are] dealing with. In other words, you wouldn’t [would not] want the person who serves as the financial advisor on a bunch of bond issues be the one that’s [that is] sitting on the debt-management commission because, obviously, he would have a conflict of interest and, in other words, should be ineligible to serve on
the …

And then finally, in section 4, we provide some criteria that if a person misses meetings, it would be possible for them to be removed. The appointing authority, whoever it is that appoints that particular one, could remove them if they fail to attend meetings. The reason for the differentiation is really the number of meetings that are held, where in some of these small counties, there might only be one meeting a year, and if you miss it, you’ve [you have] missed the entire schedule of meetings for the year. That’s [That is] the reason for that, so that there’s [there is] a way to remove somebody simply for failure to attend. I might just mention that, in the past, there’s [there has] been a real problem with this, getting quorums for this particular board, because it seems like everyone’s [everyone is] busy. And [there have] been, even in the more populated counties, problems with getting quorums on a regular basis for the deliberations of this board. And this provides simply that if someone’s [someone is] not attending these meetings, it would be on a regular basis I’m [I am] sure, that there would be a way to remove them and appoint someone else in their place. That is essentially what this bill does.

I would think that, because of the financial implications, … section 1, subsection 1, lines 3 to 5, would be the ones where there’s [there is] a fiscal effect on the state. I think we had fairly good agreement in our deliberations from the counties that they would be able to do this.

… If my memory serves me correctly, when we had the original deliberations, I think all the counties pretty much indicated they would be able to provide this assistance. The only problem would come in some of these very small counties, where they simply don’t [do not] have anybody on their staff that probably has the technical expertise to really be able to provide that service. And that’s [that is] one of the reasons we went to the Department of Taxation.

That’s [That is] probably about right. … This is a real problem throughout the state. When these small counties go for bond issues, they rely almost totally upon whoever [whomever] they select as their financial advisor. And the financial advisor becomes the one that provides the information to this debt commission. And the financial advisor – and I’m [I am] not speaking disparagingly – but they have a vested interest in this bond issue, of course, because they’re [they are] getting paid to see that everything goes forward with it. The debt-management commission should be an independent body that doesn’t [does not] have this predisposition to do anything. If you’re [you are] the one providing information as staff to that commission, you would want someone that does not have a conflict situation, so to speak. So it is indeed a problem; I think we recognize this is a problem around the state.

In answer to … Senator Raggio’s question, in those counties that are larger, we have these people on staff, and they would be available at no extra cost to handle these responsibilities, so there wouldn’t [would not] be a fiscal note. I do agree with Marvin [Mr. Leavitt]; in the smaller counties, we may not have anybody that has the expertise. And they do rely heavily on bond counsel and heavily on their financial advisors. I frankly wouldn’t [would not] think it would be a tremendous burden on the Department of Taxation because we don’t [do not] have that many bond issues in most of those small counties.

… I do have it. If I might, Madam Chairman, first of all, I’m [I am] not sure that most of the affairs of the smaller counties couldn’t [could not] be handled by a phone conversation and some double-checking. Most of the small counties are at the 3.64 cap right now, so they’re [they are] not going to be floating any bonds. I think that this fiscal note probably anticipates the worst-case scenario, that somebody’s [somebody is] going to be busy all the time going to meetings. And I honestly don’t [do not] feel that that would happen. That’s [That is] my professional opinion.

Well, my concern is if we take it out of there and they do need the help, that perhaps they wouldn’t [would not] get the help that they needed, which is really critical and is going to keep them out of a lot of trouble, I think. And that’s [that is] really why we thought it was imperative that we put this in, seeing some of the problems that they’ve [they have] gotten themselves into that could have been easily avoided.

I suppose you could leave it in and say, "To the extent that resources are available from the Department of Taxation." But I don’t [do not] think we’re [we are] in a situation where we’re [we are] going to be able to provide $100,000 here to meet the fiscal note.

I agree. I think that two things are going to happen here. I’m [I am] sure that where counties do have the capacity, and if they have the ability to help, we’ll [we will] facilitate that. But I do think it would be important for the counties to at least be able to make the phone call to see if there would be any assistance available. And they would have to understand that it would only be available should the Department of Taxation have the ability to do it without incurring added costs.

First of all, given our understanding concerning the assistance with these counties – it would be 11 counties – our concern was that that potentially could have 44 meetings. And the level of expertise that these counties would be requesting from us would necessitate us to have an individual that would have the technical background to be able to provide it to them. Currently, our staff is fairly well stretched when it comes to all the other local government issues. We felt it would be necessary to have that position to be able to offer that kind of technical assistance, and that is the reason why we’ve [we have] provided you with that fiscal note.

I also need to add, if I may, we would be more than happy to assist these counties; that’s [that is] not the problem. The problem is the amount of time that would have to be dedicated to provide that assistance.

I guess the other side of that is, if there are not that many bond issues in those 11 very small rural counties over a 2-year period, you may have somebody in a position sitting there doing practically nothing.

Madam Chairman, this is one of the situations – I’m [I am] sure you can remember and probably everybody who was on the committee – is one of the preludes to getting into financial difficulty is those governments that have issued debt when they didn’t [did not] have the ability within their tax rate to repay that debt. And so, in a way, it’s [it is] almost a help to the department to get involved on this early basis because later on, if they get into financial difficulty, then they’ve [they have] got a lot more work than this, as we endeavor to try to get them out of financial difficulty. And I would think a lot of the work they would have to do would be doing things like computing tax rates. You know, what would the tax rate be if we issued this debt and project it into the future to check the work of someone else [who has] done it, whatever, to try to avoid this situation. Because I think in our White Pine [County] School District situation, which I’m [I am] sure all of you remember very well, is that some of these local officials simply did not understand when that debt was issued that would throw them in a position where they would all have to decrease their operating rates. ... Had they known that before they issued the debt, we could’ve [could have] avoided what’s [what has] turned out to be a multiple-year problem trying to get them out of this situation.

I’d [I would] like to also suggest, because of the change, Carson City, Clark, and Washoe [counties], if you go to page 3 – it would be section 3, subsection 4 – where you’re [you are] going to, to the best of my knowledge with most of the people in these areas don’t [do not] have this current experience that are serving on the debt-management commission. They would normally have their terms on a 2-year term in January, for those that were up. So I would think, so long as you’ve [you have] got amendments going on the bill, that you would allow that section to be effective as of January 1, 2000. This way, for those people that have to be reappointed, they would be reappointed; it would give them more time to take a look for people with these qualifications so that it’s [it is] an easier transition.

If you’ll [you will] recall, we had extensive discussion about this issue, and I think every member of the technical advisory committee felt very strongly that this assistance needed to be available to some of the smaller counties in the state to avoid problems that I’m [I am] sure are much greater than even a $100,000 annual fiscal impact. And I don’t [do not] know that I really recall during our discussion on this that the issue of this sort of fiscal note came forward. So it is of concern because I think we all felt very strongly that this needs to be a piece of what we’re [we are] doing in terms of redoing the debt-management commission.

Another thing that I noticed, on page 3, line 7, when they talked about a person appointed as a member of the commission in a county whose population [is] over 50,000 must have certain experience. I think we need to state in there, "excluding elected members," because it sounds like all of the members of the commission appointed would have to have that experience, and our elected members do not have that experience.

I think the commissions are very important bodies that relate to the issuance of debt. We have so many different local governments that are issuing debt, all the way from counties to cities, the school districts, special districts, hospital districts, all kinds. Unless there’s [there is] some type of a coordination from some body, each one of them could go out and independently issue debt, and pretty soon we’ve [we have] got a hospital district, say for instance, that has thrown the entire county, or a substantial portion of the county, over the $3.64 [limit] without anyone really being aware of it. This commission is so important because they’re [they are] essentially the ones that have almost custody of these tax rates, to try to put some order into this whole debt issuance.

The problem is, is that [there are] a whole bunch of different local government entities, and each one feeds, so to speak, on the same tax rate, so that the city overlaps the county, and the special district might overlap the city, and the school district overlaps everybody. And by the time you get each one of them separately approving debt, pretty soon the combination of all of those throws you over the tax limit, and no one knows it unless there’s [there is] some kind of a body to supervise this.

Each one of the bodies, of course, has the opportunity to appoint people to this. Now the county, of course, is one of the participants in this; they issue bonds like everyone else. So the idea of having this mixed group is that nobody has complete charge of the group, so to speak. … So the county doesn’t [does not] have control over a city, or a city over a county, or either them with control over a school district. You’ve [You have] really got a combination of all the representatives from each one of these kind of entities that issue debt. And that’s [that is] the basic idea, is that you have one group that has the responsibility for approving these, and that way you don’t [do not] have any one entity that’s [that is] in control of the total debt issuance.

SENATE BILL 471: Revises provisions governing legislative measures which require local governments to establish, provide or increase programs or services. (BDR 17-980)

Mr. Hadfield testified:

Senate Bill 471 was brought to the committee by the Nevada Association of Counties and also with the cooperation of the [Nevada] League of Cities [and Municipalities]. The measure, as it is drafted, is attempting to resolve a problem that came out of the passage of the original unfunded mandate bill, which was put in the statutes, NRS [Nevada Revised Statutes] 354.599. And some of you will remember in past sessions – we did this three sessions ago – in past sessions, there have been exemptions appearing on bills that would say that the provisions of NRS 354.599 did not apply to the legislation. What we inadvertently did with the unfunded mandate legislation is we created a legal paradox for the Legislative Counsel Bureau. If they didn’t [did not] exempt the statute, it meant everything was an unfunded mandate because there was no fiscal threshold to trigger the unfunded-mandate measure. So what we’ve [we have] done, in working with legislative counsel and the Fiscal Division, we’ve [we have] drafted a bill that uses the local fiscal note process as the trigger mechanism, uses that threshold of $2,000 as the trigger mechanism to say that in the event one government entity or more is required to establish a new program or increase a program by $2,000 or more, that there would be a requirement that a source of revenue be identified, and also that on the face of the bill, it would state that the measure contains an unfunded mandate. Now realistically speaking, the Legislature certainly can and will always do what they feel is in the best interest of the state. What we’re [we are] attempting to do is make sure that there’s [there is] no confusion on the part of legislators on any specific measure whether or not they should be concerned and take a look at the measure for that added fiscal impact, as opposed to a regular piece of legislation.

I would like to also let the committee know that A.B. [Assembly Bill] 355 is in the Assembly elections committee, and it’s [it has] been heard.

ASSEMBLY BILL 355: Revises provisions governing legislative measures which require local governments to establish, provide or increase programs or services. (BDR 17-518)

Mr. Hadfield continued:

And it’s [it is] my understanding that they are intending to amend that to $5,000 because they feel the threshold is too low. We understand there may be a difference of opinion about thresholds, but what we want to do, primarily, is avoid requiring the Legislative Counsel to exempt this provision automatically because there isn’t [is not] a threshold. And we certainly would like a threshold that would trigger some consideration on behalf of the Legislature regarding the impact legislation might have on local government.

I’m [I am] not sure I understand why this is necessary. I think I heard what you said; you want something in here that sets a minimum threshold. If it were under $2,000, then it wouldn’t [would not] be an unfunded mandate; is that what you’re [you are] saying?

Yes, Senator. … What we’re [we are] saying is that this requirement would not kick in and that that amount of money would not be acknowledged as an unfunded mandate. What we’re [we are] really trying to do is stop that exemption provision from being placed on every bill that could potentially, without a guideline, without a threshold, be considered an unfunded mandate.

Not being an attorney, I would certainly defer to you. My understanding is, however, that it would definitely trigger placing on the front of the bill, printing on the front of the bill that it contains an unfunded mandate, and it would in fact be on that bill. Now, it could be amended out of the bill, but as the bill would be drafted prior to any legislative action, it would say it was an unfunded mandate if this threshold were adopted.

What it does is, last session, we had a lot of legislators come to us. They did not understand why that exemption … they didn’t [did not] know what the exemption provision was, number one, that was in all those bills. It was automatically placed in any bill that had a potential fiscal impact on local government. They didn’t [did not] understand that, so one purpose of this is to make sure that they understand the idea that there could be an unfunded mandate, and that they should consider that. We want that put into the deliberation process clearly, that when someone introduces a bill that’s [that is] going to have an impact on our local governments without a revenue source identified, they have to know the money has to come from somewhere. And that was the purpose of the unfunded-mandate law that the Legislature passed.

Well, I wouldn’t [would not] argue altogether, but I would bring to your attention that in many of those cases, the reason the language was created was because the cities and counties came in and asked for the authority and themselves created an unfunded mandate. That’s [That is] how that language developed, so we put it in there to indicate exactly that. Now, this isn’t [is not] true in all cases, but in many cases, it was requested by the local governments themselves, and we wanted to make sure that we gave them the authority which they were requesting, and it wasn’t [was not] then going to be deemed to be an unfunded mandate. And in many of these cases, that’s [that is] going to be the situation, where the local government has come in, requested the bill draft; it’s [it is] going to cost more than $2,000. They want it whether or not the state’s [state is] providing the money for it, so it cuts both ways.

… I concur with what you’re [you are] saying. It was my understanding that if we made that request, that we could, through Legislative Counsel, exempt this ourselves. And if that’s [that is] not the case, I think it should be made very clear. You are absolutely right; there are occasions where we will come in to the Legislature, on behalf of local governments, and ask you to take an action which has an impact on local government. And I would welcome, if you have any suggested language, I would welcome correcting that.

… [I am] speaking in support of this bill with an amendment that would indicate an unfunded mandate, but showing if it was requested by a local government. But we think it’s [it is] very important that that addition be on the front of the bill. [We] have the same feeling about this as we did about having the fiscal notes changed to show if an appropriation was inside or outside the budget. The majority of members of the Legislature, as the public who views these bills and especially now with the Internet, does not know the intricacies of legislation. And we think, obviously as a taxpayer association, that the more fiscal information we get out there, the better informed the public is. So we are very supportive of this … .

SENATE BILL 473: Creates procedure for dissolution or disincorporation of certain local governments in severe financial emergency under certain circumstances. (BDR 31-702)

As a little background to this bill, in the 1995 session, we had a rather major problem related to the White Pine County School District. If you recall, they had a situation where they were in severe financial problems, that they were unable to meet their payroll. They didn’t [did not] have money sufficient to repay their debts, and so there was put into statute some fairly comprehensive provisions related to the severe financial emergency of a local government. This provided essentially that when local government is in [that] kind of a situation, assuming they are unable on their own to get themselves out of it, the Department of Taxation essentially assumed responsibility for the financial operation, and almost complete operation, of that local government.

For the last while, … Nye County Hospital District has been in this type of a situation, and as we have been discussing this, we realize that there are situations that might arise where the conditions of the local government, their tax base, their ability to provide services on a long-term basis in extreme financial difficulty, really raise the question as to whether this government is ever going to be able to have the resources necessary to fund their operations and get themselves out of this financial difficulty.

So in this particular bill, there’s [there is] a situation where the executive director, when they’re [they are] already in the financial emergency, financial great difficulty, the executive director for the Department of Taxation makes a finding [that] in his belief they have not the ability to get out of this within a 5-year period. In other words, this is a long-term emergency. And if he does that, then he would, as part of that finding, submit his findings and recommendations to the Committee on Local Government Finance. And this committee would review his calculations, computations, his estimation of the tax revenues available, the required resources necessary to fund this local government, and this committee would either agree or disagree. If the committee agreed with his findings, then essentially the question would go to the Nevada Tax Commission. The Nevada Tax Commission then has the opportunity to have the people in this particular entity decide if they want to continue the operation of this local government. So it would essentially go to a ballot question, and when it goes to the ballot question, there’s [there is] essentially … along with the ballot question there’s [there is] an imposition of taxes, the maximum rate, where the people in the local government have the opportunity to decide whether they want it to continue or not. If they do want it to continue, then they state affirmatively, or "we are willing to pay these taxes that are necessary to keep this in operation above, of course, the taxes that would normally be levied."

This has come as a result of several situations in the state, where particularly we’ve [we have] discussed over the last several years the situation existing in the City of Gabbs. They have had such a loss in population and assessed valuation that it becomes unclear whether they have now, or whether they will ever have in the foreseeable future, the ability to provide the services for which a city is organized. Out of necessity, this could not apply to a county or a school district, simply because there’s [there is] no way to dissolve one of these two entities. We have to have a county in all areas of the state, and we have to have school districts. But a city and any other kind of special district could indeed be dissolved if the voters decide that it should be, and if they decide it shouldn’t [should not] be, then they evidence their willingness to pay the increased taxes to keep this entity in existence.

Marvin [Mr. Leavitt], maybe for the committee’s sake, and I’ll [I will] refer the committee to the last thing in your work notebook, where we’ve [we have] done a review for you of the counties [Exhibit C]. But you might talk about what is going on with buy-downs, and why this is an extremely important piece of legislation. And it goes back, Senator Neal, to the question that you were asking before with why the need for an umbrella organization that oversees the different financing. But we’ve [we have] had so many problems with what we call buy-downs, and I think that might be an important piece of information for the committee.

Yes, one of the problems we’ve [we have] had in recent years, when we get within a particular area of a county, a situation where if everyone is allowed to levy their own … allowed property taxes that are computed individually for each one, there’s [there is] only in combination this overlapping rate, which would be the overlapping rate when all the levies are considered – the state rate, the county rate, the school rate, all of their debt rates, any city rate, any special district rate – would put us over the $3.64 statutory maximum tax rate. There’s [there has] been an attempt made in some of these counties to do this situation that we call a buy-down. Say, for instance, that we have a fairly small local government and that that local government levies a tax rate of 50 cents that throws us 40 cents over the maximum rate. Maybe 50 cents only brings in $10,000 in this little tiny taxing district. And so there’s [there is] an agreement that’s [that has] been reached, say between the county, normally, and this little government, that the county says, "If we levy 30 cents, so to speak, we will pay you the equivalent of your 40 cents." 30 cents county-wide, of course, brings in a lot more money than 40 cents in this little town, so there might be a 10-to-1 ratio. So the county levies county-wide a tax at a lower rate to bring them into compliance with the $3.64, and then they make a payment directly to the little government.

The problem that we get into, and there’s [there is] another bill that deals directly with this subject, the problem we get into is essentially you have a county-wide levy that is being used to finance one little section, one little government whose boundaries might be 5 percent of the county. So every taxpayer in the county is essentially paying for the operation of this one little government. One of the basics, of course, of the property-tax system is that those people that are getting benefits from the service are those that are paying for it. And so in this particular case, the way it’s [it is] being done, that is not the case. And so that’s [that has] become a big problem around the state and has been a big problem this last year. And we’ve [we have] had the tax commission turn down several of these, and we’ve [we have] had counties refuse to pay several of these. So it’s [it is] a situation … and we’re [we are] recommending another bill that buy-downs be eliminated, that they no longer have those buy-downs because it sort of flies in the face of the logic of the entire property-tax system in the state.

… I’ve [I have] spoken to, I think, most of the members I could reach on the S.B. 253 [S.B. 253 of the Sixty-ninth Session] committee about S.B. 473. And that is, I would like to propose an amendment to that. After the meeting that Marvin [Mr. Leavitt] had last week on the Nye County regional, where the Nye County Regional Hospital is in severe financial emergency, and looking at White Pine [County] coming out, 5 years is way, way too long, a 5-year length of time, because of what happens. The entity starts having a problem, and then the Department of Tax [Taxation], the way we have the severe financial emergency worked up, starts seeing that their credit-and-debit side is not working out at all and that they don’t [do not] have the money to pay bills. So the department declares a severe financial emergency. Well, that in itself generally takes you about a year to track because you can have it for one quarter, but it can be a cash-flow problem. So now you’ve [you have] had a year where you have this entity that may not be operating exactly right; it takes the Department of Tax [Taxation], again because of all the mechanics of going in, it’s [it is] like a receivership in a bankruptcy of a private business. So now, the Department of Tax [Taxation], if you will, as the receiver, has to come up with a plan to try to put this government on financial footing that is sound. Well, that’s [that is] generally going to take a year. Now we’ve [we have] got what amount to roughly 2 years that have led to this, and if we put another 5 years, I feel that particular governmental entity, like with Nye County Regional [Hospital], would be totally out of business and would be out of business with some major problems.

So I would like to see it where if the executive director of the Department of Tax [Taxation] – now obviously, this entity is in severe financial emergency – but if in reviewing it, they can’t [cannot] see any way that this entity is going to come out within 5 years, that that be reduced to 2 [years] at that point because going 5 years is just way too long. We’ve [We have] got other problems. So I would request an amendment so that we’re [we are] showing a 2-year time frame in any place that is applicable within the bill, and that would be on … line 5 of the first page. On page 2, it is line 8. On page 3, it is on line 35. And if I may, we would, again as an association, not as a member of [the S.B. 253 of the Sixty-ninth Session committee] – we weren’t [were not]; we were just at most of the meetings – would support the committee adopting this bill and request that it be with a 2-year time frame, not 5.

I understand where the committee was coming from, and I guess the question is, what do you do when it is a county or a school district? That’s [That is] the bigger problem. We had one today in [the] Senate [Committee on] Finance that brings this issue right to the front. In most cases, it’s [it is] really the county or the school district that’s [that is] having this kind of a problem. [There are] really some counties that are having a tough time justifying their existence right now. What do we do in those cases? Did the committee talk about that at all?

… If you look at the state, and what’s [what has] been happening in recent years, I think we’re [we are] moving in the direction that sometime that’s [that has] got to be given serious consideration. We’re [We are] talking about some of these counties that are in difficulty all the time, that simply do not have the assessed valuation and resources now within their boundaries to adequately provide services.

The reason I’m [I am] raising it – and I know my colleagues on the finance committee are probably tired of me talking about it – but it’s [it is] going to be a serious problem, particularly with the issue of school construction. We have school districts that are coterminous with county boundaries, and an inability of a county school district to, even if they raised their tax limit to $5, to develop the funding to construct a school. And the body of law now developing which makes that a state responsibility to see to it that schools are fairly and adequately financed or constructed across the state, we may be nearer to that point than anyone realizes. And we can push it aside, or we can deal with it. But I know [there are] some concerns expressed, for example, that "I don’t [do not] want the residents of my county paying for the construction of a school in one of these small counties," but you may get it one way or another. You may get it through reconfiguration of school districts, which move school-district boundaries that are urbanized now into including surrounding areas that are in other counties. Or it may be made a state mandate, in which event the result will be the same. People in the urban areas are going to be asked somehow to contribute for those purposes. Now I just sorted out schools because that’s [that is] the most obvious, and that’s [that is] where the body of law has been developing. But it could be other things, as well.

We’ve [We have] spent a lot of time on this 253 [S.B. 253 of the Sixty-ninth Session] committee and on the Committee on Local Government Finance and the [Nevada] Tax Commission and the Department of Taxation on this very issue, just in recent years. And it seems to be coming more and more, and we’ve [we have] sort of danced around this issue and are trying to use all the available things. We’ve [We have] talked about depreciation; we’ve [we have] talked about increasing the property-tax rate. We’ve [We have] talked about all of it being actually run by the department. But sometime, and I think that probably we’re [we are] going to see it come in the next few years is that we’ve [we have] got to look at the very existence of some of these governments.

When this state created the county school districts to be coterminous with county boundaries, there really wasn’t [was not] a practical problem about the ability of those taxing districts to bond for school construction. But I think we’re [we are] at that point where we really have to be concerned about it.

Senator Raggio, we’ve [we have] been looking at this issue, too. I’ve [I have] been in discussions in addition to what’s [what has] been talked about here. One of the major problems we see, which even the solutions that have been mentioned would be very difficult to accomplish because there’s [there is] not enough privately-held land in these rural counties to be able to do anything. And unfortunately, instead of freeing up more land, we see more and more land being acquired, or the request to acquire the land. And so one of the major things we’ve [we have] identified is that part and parcel of this whole discussion there’s [there has] got to be some kind of state policy, along with the taxation policy, related to freeing up some of the land. We’re [We are] not talking about trying to take precious wilderness lands or anything like that. We’ve [We have] all driven across this state, and a lot of us have walked around a lot of it. There’s [there is] a lot of land out there that’s [that is] tied up needlessly, and we need to break free. Lincoln County, with 98 percent public ownership, how could there ever be an ad valorem tax base in that county? And that’s [that is] happening across the state, and with the decline in mining, these assessed valuations are just dropping like a rock. And it’s [it is] a large solution, but these counties are so big, even when you combine them, you’ve [you have] got that added geographical problem. Mineral County is having a very difficult time right now. Yet if you look at the map, Hawthorne and Mineral County, that works as a unit; it truly does in terms of time and distance. But their problem is, as you pointed out, the school district needed facilities – part of their problem – and the public approved them, and rightly so. And now the county’s [county is] looking to cut 15 positions out of a county that can’t [cannot] have more than 40, maybe 45, to begin with. It is reaching a critical mass, and I agree with you, Senator, that we have to come up with some new solutions.

Senator, one suggestion that we made in testifying before the 253 [S.B. 253 of the Sixy-ninth Session] committee relative to counties was that we felt that counties have just as much a chance of getting into severe financial emergency as do school districts. Counties are a creature of the state, if you will. I don’t [do not] know that anybody has got the wherewithal to suddenly say a Lincoln County can’t [cannot] exist unless we merged, but I think that in all probability, if a severe financial emergency exists for a county or the Legislature, I could see an amendment going on this bill that would require a full report back to the Legislature because, effectively, those are the creatures with possibly some recommendations. I think one of the things that would be helpful – at least I know it was to me in talking to some of the other legislators about these problems, particularly the White Pine [County] issue and Lincoln County issue – was all of a sudden you find out about it because you are in, if you will, as a body, a legislative session. If, in fact, there were a severe financial emergency where the county or a school district, at the very next session there should be a report made to the Legislature showing you why, because it takes you time to figure out. You come in and say, "I don’t [do not] have money." It could be a cash-flow problem. It could be an embezzlement problem. It could be a case where you have lost all of your commercial assessed valuation. And each of those would be treated differently, and I think that you need that ability to be able to look at that.

Bob [Mr. Hadfield] just mentioned unfunded federal mandate. The way it is right now, we share your concern, is the fact that we know we can get a handle on everything below a county, but I guess [we] kind of got stopped at the idea that school districts and counties are creatures of the Legislature, have in part constitutional provisions insofar as the Legislature creates a county, the Legislature can take away. But I think maybe it would be appropriate to put something in to have a report back to you, just another step in the severe financial emergency.

Senator Raggio raised a good question when he spoke of school districts being coterminous with county boundaries. And when you have a situation, since you’re [you are] speaking in broad terms in this legislation about local governments, we do not have the authority in the Legislature to abolish a county. Only the people of that county have that authority to do that. Now we can dictate that election, but the people have to vote to abolish the county. So I guess what I’m [I am] saying, whatever you’re [you are] considering in this particular legislation, it has to be under where the county is. Because cities we have that authority to deal with. We can disincorporate [sic] a city in any setting of the Legislature. But for counties, we cannot do that. And … that’s [that is] Article 4, section 36, of our [Nevada] Constitution.

Senator, may I clarify the amendment I was suggesting? What I was suggesting was that the first step for this bill, which deals with severe financial emergency, is to put a mechanism in there to report back so that you could, in fact, determine what had happened, why it had happened, and if there was, in fact, a remedial action you could take. And maybe the remedial action would be to go to the residents of that county and say, "For you to remain a county, you will have to have a $5 tax rate. Do you agree with that or not?" And if they don’t [do not] agree, then you effectively have gotten them to say they abolish the county. But I think we need to get a more formal dialogue going where the Legislature itself knows why a severe financial emergency occurred and can look at it from that perspective, both a school district and a county, and then figure out what might have to be done.

So we don’t [do not] have any misunderstanding of where we are, just let me read the language here, and it’s [it is] very clear. It says, "The Legislature shall not abolish any county unless the qualified voters of that county affected shall at a general [or] special election first approve ... ." So that’s [that is] where we are. And of course, for cities, we can handle that; but for counties, it’s [it is] a different matter.

… A couple of points … I wanted to make the point Carole [Ms. Vilardo] did about counties being the political subdivisions of the state and created by the state. And I think that the questions that Senator Raggio raised cut both ways, not only in the dissolution of a county, but also the creation of a county. Having been in this building through three sessions where proponents were trying to create counties, there’s [there is] very limited language in statute that really addresses the issue of how a county is formed. And part of that whole discussion that occurs is the fiscal side. So as you’re [you are] creating new political subdivisions, I think we need to look at that as well, and will that political subdivision be in financial emergency? And if you look at how cities are structured, it’s [it is] much different. There is a mechanism in place; there is a set of criteria that they must go through. That’s [That is] not the same for counties. And it’s [it has] created some great difficulty over the years in terms of groups coming forward to want to become a county themselves for whatever reason. So if we look at that issue, I think we need to not only look at the dissolution, but also the creation side, make sure that they’re [they are] fiscally able to handle that responsibility.

… This is an issue that has been hashed over with the counties themselves, and the point of doing that is to try and generate some conversation and ideas from the different counties. And they have talked about doing inter-county agreements. They’ve [They have] talked about establishing regional – kind of like what we’ve [we have] been doing in Clark County – regional boards that can facilitate and share services. And we have been wanting the ideas to be generated at that level and come back to us with solutions for the problem. But it is not as though they are unaware of the problem; they are very much aware of it. And the major situation in cases that corrections could be made is that they have taken the issues to the voters, and the voters have voted down whatever cost would help them out of a situation, which puts the county officials, of course, in a real bind because their people have spoken to them as to their feelings on the issue. And yet they want the service. So just to give you some information on the fact that it has been discussed for, I guess at least the last 2 years, and they are aware of it and talking about different solutions. But whether or not the solutions will come before the major problems come is [another] story.

My concern with the last proposed amendment on 2 years, if financial difficulty seems to exist for 2 years, then defeats the purpose on page 2, subsection 4, when you’re [you are] going to take whatever recommendations come from the [Nevada] Tax Commission before the voters for an election, then dissipates what’s [what is] going to happen within that 2-year period. And it’s [it is] virtually impossible during the budget process – as most of these people on the committee know – and then go before the [Nevada] Tax Commission and do something within 2 years. 5 years seems to be more appropriate time to give those people time to respond and make the necessary corrections. I just want to bring that to your attention because, as financial advisors to several local governments, this is unworkable with the 2-year time frame that you’re [you are] looking at.

SENATE BILL 528: Makes various changes to provisions regarding redevelopment of communities. (BDR 22-982)

Mr. Leavitt testified:

S.B. 528 is a bill dealing with redevelopment. Initially, in section 1, there’s [there is] a statement that the faith of the state is pledged to essentially not do anything to adversely impair the bonds, so to speak. It’s [it is] a provision we see located in many sections of the statutes. In section 3 is where really the meat of this bill is contained. And this was proposed by Ms. Vilardo as a result of a situation … that took place in Douglas County. What this essentially is saying is that redevelopment means redevelopment and doesn’t [does not] mean development without the "re" on it. It essentially says you don’t [do not] redevelop something if it’s [it has] never been developed first, essentially is what that says, that language. It says, just reading there from line 15 at least, 75 percent of the area included within a redevelopment district must be improved. And then it talks about what the improvements may be. But essentially, that’s [that is] all that it does. It says, essentially, that we have mechanisms other than this for original economic development, and redevelopment means exactly what it says, that you try to improve something after it’s [it has] originally been developed and then deteriorated. And then you engage in redevelopment to improve that and hopefully bring it back to the condition it originally existed at, or conditions better than it originally existed at. It doesn’t [does not] take place for raw, undeveloped land.

That’s [That is] very difficult not to, so I would rather not give you the example. I will speak to it in private, but Marvin [Mr. Leavitt] said it. The purpose of redevelopment is to improve an area which has gone downhill, which is, quote, "blighted." And it generally has meant that you’re [you are] spending more money on police and fire because you have boarded up buildings; you have more vandalism, et cetera. And when you turn around, you use that increment, as the assessed value improves, you wind up using that increment to expand your redevelopment. And generally, because you have already covered the services you need to and even at a higher level, you’re [you are] able to fit this all within your existing budgets. When you have no development, and you’re [you are] using it to try to attract development, you then have all these base services that are going to have to be provided that may or may not have a revenue source for them. So this was to ensure that it was used strictly for redevelopment.

Senator Neal, originally I went to the redevelopment agencies. I testified to this before the 253 [S.B. 253 of the Sixty-ninth Session] committee, and then I spoke to the redevelopment agencies. And the original proposal I put forth was to take the original language in redevelopment statute and say that half of the conditions referring to "blighted" would have to apply. They were very uncomfortable with that because in some cases there are only two or three conditions, and I believe it’s [it is] nine that are listed. Mary [Ms.] Walker was one of the coordinating points with the Redevelopment Association of Nevada. We had a number of meetings. This is their language that they, in fact, submitted to all of the redevelopment agencies, and all of the redevelopment agencies agreed to it. So that’s [that is] how we came up with that, and I think Mary [Ms. Walker] can give you some further details.

… Yes, we worked with Carole Vilardo for, I’d [I would] say, 8 to 12 months, at least, on this issue to try and resolve it so that everybody understood what the problems were and could work together and resolve the problem that we had. This language is fairly consistent with what we had agreed to. However, we do have an amendment we would like to make on page 2, line[s] 22 and 23; we’d [we would] like to delete it. And basically, what it talks about is, at least in section 3, paragraph [subsection] 2, it talks about at least 75 percent of the area included in the redevelopment must be improved, and they include [paragraphs] (a) and (b). And that last sentence, "Any remaining land in the area included in the redevelopment area must be subdivided or parceled land." It’s [it is] all subdivided or parceled, so it was just confusing to some of the redevelopment members.

Basically, yes. Basically it is, Senator. You have a redevelopment area that’s [that is] not restricted to certain improvements, but we have a further restriction that at least 75 within that redevelopment area, within at least 75 percent of the area must be improved land. And it’s [it is] strictly because we don’t [do not] want to have redevelopment agencies or authorities being established in desert communities, and you have 90 percent that is unimproved. Because the intent is to really more urban and improved areas.

No, that would be basically part of the 75 percent of the area that would be improved. The 75 percent of the area that would be improved would either be publicly, the public entities have erected improvements, or other types of improvements. So we just wanted to clarify that it’s [it is] not just private development, but it’s [it is] also public development that’s [that is] included in the 75 percent of the area [that] would be improved.

Yes, you could have … for example, one thing that’s [that is] not listed actually in here is private development, your commercial areas. That, of course, is usually where we do our redevelopment is in, for example, downtown Las Vegas, all those commercial areas. So it would also be private development.

SENATE BILL 529: Requires segregation by use of proceeds for property tax levied within general improvement districts. (BDR 25-984)

S.B. 529 is an amendment of NRS chapter 318. I think everyone will recall that chapter 318 is a section of the statute where special districts, general-improvement-type districts are created. In fact, we’ve [we have] gotten so used to that section that we call them "318 districts" in recognizing the chapter that they come from. And they come particularly with the creation of these districts; sometimes there’s [there is] an allowed property-tax levy that’s [that is] determined at the time the district is created many times. And it’s [it is] not differentiated between a levy for operating purposes and a levy essentially for debt, or for capital construction. What happens, many times, is that original capital improvements are completely paid for; the debt is extinguished. But since there’s [there is] no specific designation of how much is for debt and how much is for operating, this debt levy is allowed to continue indefinitely. This bill simply provides that you designate what portion of this is for operating purposes, what portion is for capital purchases or for the extinguishment of debt. And then when the capital is paid off, or the debt is paid off, then that part of the levy would go away, and of course the operating levy would continue indefinitely. And that is essentially what this bill does, that providing for separate designation.

I think if you notice around the state, in almost every local government, probably, other than these special districts, this levy from which originally created, there’s [there is] a separate designation for the two types of levies. In fact, they’re [they are] computed entirely differently; the way that they’re [they are] authorized is entirely different. And so this would bring that to these "318 districts," these general improvement districts.

… Let’s [Let us] suppose we organize one of these districts, and we provide initially for a 25-cent property-tax rate, of which 15 cents is for operating purposes and 10 cents is for purchase of capital. Or say we issued some bonds or something, for payment of debt even. And then 5 years down the road, the debt is repaid; it’s [it is] completely repaid. But the 25 cents, since it wasn’t [was not] specifically designated, this 25-cent rate that I talked about will continue indefinitely. Under the provisions of this bill, if 15 cents was for operating and 10 cents was for debt, the 10-cent portion of that rate would go away and would no longer be levied unless specifically the voters, through an election process, approve the issuance of additional debt. And that’s [that is] exactly how it would work.

… [I am] speaking in support of the bill. This eventually would also help in some of the areas where we’re [we are] at 3.64. If you can start distinguishing what was for capital and having that eliminated, you’d [you would] at least recirculate that amount of the property tax.

SENATE BILL 407: Exempts certain construction and remodeling projects for counties from requirements of competitive bidding. (BDR 20-566)

SENATOR RAGGIO MOVED TO AMEND AND DO PASS S.B. 407.

SENATOR O’DONNELL SECONDED THE MOTION.

THE MOTION CARRIED. (SENATOR NEAL VOTED NO.)

SENATE BILL 408: Revises provisions governing rate of residential construction tax that may be imposed on development of mobile home lots.
(BDR 22-568)

SENATOR RAGGIO MOVED TO AMEND AND DO PASS S.B. 408.

SENATOR O’DONNELL SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

SENATE BILL 342: Prohibits public bodies from requiring contractor or subcontractor to agree to certain requirements as condition of bidding on, being awarded or working pursuant to contract for public work.
(BDR 28-16)

SENATE BILL 409: Establishes provisions governing submission of design document to governmental entity. (BDR 22-871)

SENATE BILL 410: Revises circumstances under which public administrator and public guardian may administer guardianship. (BDR 20-548)

SENATOR RAGGIO MOVED TO AMEND AND DO PASS S.B. 410.

SENATOR CARE SECONDED THE MOTION.

THE MOTION CARRIED. (SENATOR PORTER WAS ABSENT FOR THE VOTE.)

SENATE BILL 472: Makes various changes to provisions governing public administrators. (BDR 20-554)

I had a request from a constituent, and I’m [I am] wondering if this is the bill to add this onto. But the constituent said that when you have intestate, when you have wills and you go through probate, the interest on the amount of money that’s [that is] going through probate goes to the attorneys. So they hold it as long as, maybe I’m [I am] misunderstanding how this works, but they hold it as long as they can before resolving the case so they can make all the interest on the …

I think the issue is this, if I recall. I think what the constituent was saying, he had the understanding that in some courts, the fee for the administrator, which is set by statute as a percentage of the value of the estate. And in some cases, the attorney’s fee is … well, that’s [that is] not by statute. But let’s [let us] talk about the administrator’s fee is a percentage of the value of the estate. And I think his concern was that when you determine the value of the estate, if you add to the original value of the estate at the inception of probate, when all the assets are marshaled, that if you include interest, that would increase the value of the estate and thereby, in some manner, that would increase the fee. And his concern was that there may be a delay in processing the administration of the estate in order to raise the value of the estate upon which the fee is computed, but I don’t [do not] think this would be the place to, nor do I necessarily think that’s [that is] a legitimate concern because there are limits to the time in which an estate must be administered. Now there are, anyway.

SENATE BILL 500: Provides procedures for collection of certain debts owed to state agencies. (BDR 31-293)

SENATOR O’DONNELL MOVED TO AMEND AND DO PASS S.B. 500 WITH THE AMENDMENTS PROPOSED BY THE CONTROLLER’S OFFICE.

THE MOTION FAILED FOR LACK OF A SECOND.

SENATOR TITUS MOVED TO DO PASS S.B. 500.

SENATOR NEAL SECONDED THE MOTION.

SENATOR TITUS REVISED HER MOTION TO INCLUDE SENATOR RAGGIO’S SUGGESTION TO AMEND SECTIONS 13 AND 20 OF S.B. 500 TO INDICATE "TO THE EXTENT RESOURCES ARE AVAILABLE." SHE MOVED TO SO AMEND AND DO PASS S.B. 500.

SENATOR NEAL SECONDED THE MOTION.

THE MOTION CARRIED. (SENATOR CARE VOTED NO.)

SENATE BILL 309: Provides for establishment of program for issuance of state obligations to provide venture capital for development of business in this state. (BDR 30-69)

I checked with [Mr. Burns] before this hearing, Madam Chairman, and he said that he had run this by Bob Shriver, so apparently they are familiar with some of these kinds of concepts in administering other programs through the Commission on Economic Development.

The idea here is that, if GO [general-obligation] bonds were issued, the proceeds go to a charitable corporation set up for the educational purposes we’ll [we will] discuss in a moment. And then the loanable proceeds are loaned to a licensed small-business investment company. What you’re [you are] doing is providing a means to leverage that small-business investment company’s capital and might be a way to attract one of these SBICs [small-business investment companies] to come into Nevada and establish a base of operations here. Apparently, there have been many efforts to try and establish one within the state, but the requirements are very high. They require $5 million of paid-in capital. They have to have very extensive experience in making venture-capital loans, and it just has not been possible. But a bill like this, if it were to go forward, might just be the carrot that would get one of these companies to come in, and of course, that helps us all achieve the objectives we’ve [we have] been talking about.

We were unable to get those bonds sold because the private sector could not see how they could overcome two major hurdles. A double-tax problem, there was a tax on the income to the pool, and then there was a tax when they distributed the income from the program to the bondholders. And if a venture capitalist went through the traditional route, there would only be one tax to pay. And at the time, interest rates were upside down. It was actually better to invest short-term than long-term. We were never able to attract any serious attention outside the state to providing revenue bonds.

The difference with this program is these are state GO [general-obligation] bonds. That means the state is going to be obligated, and that was one of the issues that Dan Tom addressed to the committee, that he was very concerned that if such a program were authorized, there had to be assurance that the debt service could be paid so that the bondholders are never in default. The state’s full faith and credit would be involved.

The regulations shall also specify the procedures to be followed in arranging for the payment of debt service for the bonds issued pursuant to this act, which may provide for advances, with interest, from the proceeds of the abandoned property trust fund deposited for credit to the state general fund pursuant to NRS 120A.370, subsection 5.

SENATE JOINT RESOLUTION 12 OF THE SIXTY-NINTH SESSION: Proposes to amend Nevada constitution to allow investment of state money to stimulate economic development. (BDR C-1471)

SENATE BILL 540: Makes various changes regarding commission on ethics. (BDR 23-641)

SENATE BILL 478: Makes various changes concerning ethics in government. (BDR 23-671)

SENATOR RAGGIO MOVED TO INDEFINITELY POSTPONE S.B. 540.

SENATOR O’DONNELL SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

I was at [the] hearing [on S.B. 409], and I do recall what the board said. And certainly, Todd [J.] Kenner, [C.E., Henderson, State Board of Professional Engineers and Land Surveyors], is a member of ACEC and is on the board, too, so ACEC certainly concurs with the amendments, although they haven’t [have not] officially taken a position.

SENATE BILL 413: Revises provisions relating to state public works board.
(BDR 28-1042)

SENATE BILL 474: Revises procedures for awarding to contractor contract for services which assist architect in design of project of capital improvement and for awarding corresponding construction contract. (BDR 28-736)

SENATE BILL 475: Authorizes public body and department of transportation to use design-build method of contracting in certain circumstances.
(BDR 28-517)

The concern about the boards being able to enforce the standards is probably … similar to all the other boards in that we all, … at this point in time, … have the ability to enforce those standards. And the redundancy that’s [that is] expressed in here is probably true of at least the state board of architecture and, I believe, probably the contractors’ board. But we have no problem with the redundancy and have no problem with the language being stricken on behalf of the engineers.

And while we would like to see the language regarding "uniform" and "jointly" left in the bill, the overall benefit of this bill would allow us to basically not oppose any language revisions here on those issues. And we would not have any opposition to the words "uniform" and "jointly" being stricken, as proposed by the engineers.

SENATOR RAGGIO MOVED TO AMEND AND DO PASS S.B. 472.

SENATOR O’DONNELL SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

ASSEMBLY BILL 605: Revises provisions relating to state public works board. (BDR 28-1578)

I think, originally, there was the thought that the public works board may use design-assist, hire the contractor after the consulting deal to do the contract. The amendment that’s [that is] going to come under [S.B.] 475 will take that out, and I think we would just hire them as a consultant, may use them for construction management, but would not let the contract to them directly through that original process.

SENATOR O’DONNELL MOVED TO INDEFINITELY POSTPONE S.B. 413 AND S.B. 474.

SENATIO PORTER SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

SENATE BILL 323: Makes various changes regarding manufactured homes. (BDR 22-997)

[My building official] is still very concerned about the provisions which he feels are still lacking regarding that this would not be UBC [Universal Building Code] standards, and he’ll [he will] have an inability to deal with them because of the HUD [Department of Housing and Urban Development] restrictions.

What it gets down to is if you go through this zoning process and get a trailer overlay, apparently the building-code provisions aren’t [are not] as important as if you don’t [do not]. And so what it’s [it is] about is the potential location. And I think what you’ve [you have] done with these amendments in terms of requiring when there is not a trailer overlay – and I’m [I am] not familiar with what the exact nomenclature for the Clark County zoning is – when there is not a trailer overlay, you have required UBC standard[s] to be met in terms of the foundation. You have provided plenary authority and local building officials to establish standards where it’s [it is] an infill [sic] scenario to protect neighborhoods. I think you have done something also in a CC&R context, where at page 2 on line 30, you have in state statute kind of given a nod to a recorded restrictive covenant for those people who develop and have a covenant that restricts manufactured housing. I think you have erred on the side of giving local officials phenomenal local discretion on where these go and don’t [do not] go when it’s [it is] an infill [sic] scenario. And we would request your support for the amendment proposed by the vice chair.

That gets you a newer HUD home, but it does not provide you with one that our building inspectors can inspect upon placement or upon addition or complaints, violations, et cetera. They are only versed in UBC. And my building official tells me that they are restricted from dealing with the HUD-standard homes because they’re [they are] not versed in that code, and those come out of Washington, D.C. Mr. … Joerg, before the meeting, was discussing with me this issue and said that manufactured housing from the state is the one that has to inspect these and that they provide in some cases in local governments a contract back to the local building official. But that requires training, training that our county would have to receive at some point before they could deal with these. Our only question is if they’re [they are] infill [sic], why not have them built to that [NRS] 461.170 standard? If they’re [they are] new, and it’s [it is] a new subdivision of them, then that’s [that is] different. Our homeowners would know that those were going to be built, perhaps, to the HUD standard, but they wouldn’t [would not] be expected [in] that infill [sic].

You said they had to adopt these standards, and we amended them. For example, the foundation has to be on a uniform-building-code-approved foundation. We also said they could determine local conditions as far as the roof is concerned, to have a higher pitch than otherwise. But other than that, as I read the bill and the amendment, they could not adopt more strict standards than what we are setting forth there. They could only adopt less strict standards.

There seems to be a real contradiction in this bill from the statements that have been made. If you’re [you are] talking about discrimination, I’ve [I have] given you at least Carson City as an example the first time I spoke to you regarding our housing element. We had 15 percent of our homes in HUD-standard mobile homes, [and] another 4 to 5 percent in UBC-standard manufactured homes. You’re [You are] going to let us limit it by CC&Rs; you’re [you are] going to let us put all these other restrictions on. As Mr. [Senator] Amodei says, maybe that’s [that is] just to limit where it goes. Well, then, what’s [what is] wrong with letting it be done by local option by zoning, like we do now? All of our mobile-home subdivisions are not built out. We have spaces people can bring mobile homes and put them on their own lot; that’s [that is] the testimony that was here from the association. If there are communities in Nevada that discriminate, and they can’t [cannot] deal with it locally, then maybe that’s [that is] where you need to begin the legislation and make it for counties of a certain size or pinpoint it to those counties. Carson City doesn’t [does not] have a problem. It doesn’t [does not] need to begin here. And I think you’re [you are] right that they’d [they would] be back the next session saying, "Well, your CC&Rs are too restrictive. Your standards are too restrictive. We need to undo that." That’s [That is] what’s [what has] happened in other states. So Nevada has a lot of manufactured housing in it already. Carson City has a lot; we’ve [we have] done a good job planning for that. Our community’s [community is] happy with that. We don’t [do not] need to be under the provisions of this bill.

Also, I think you’ve [you have] got it so cranked down that it’s [it is] not going to really mean much because I see Clark County sitting in the back, and I see Henderson. I see those local governments who protest everything that the state does that interferes with their planning and zoning, and they’re [they are] not saying a word. They don’t [do not] seem to think it’s [it is] that big a problem. So I wonder if maybe we’re [we are] not cranking it down too much.

SENATOR RAGGIO MOVED TO FURTHER AMEND AMENDMENT NO. 301 TO S.B. 323 BY ADDING A SUBSECTION (G) BETWEEN LINES 23 AND 24 ON PAGE 2 OF S.B. 323 TO READ "MANUFACTURED AFTER JANUARY 1, 1996." HE MOVED TO SO AMEND AND DO PASS S.B. 323.

SENATOR O’DONNELL SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.