Assemblywoman Christina R. Giunchigliani, Clark County Assembly District No. 9

Kim Marsh Guinasso, Committee Counsel

Juliann Jenson, Committee Policy Analyst

Dean Heller, Secretary of State

Marlene Lockard, Director, Department of Information Technology

Robert Gastonguay, Lobbyist, Nevada State Cable Telecommunications Association

John E. Jeffrey, Lobbyist, Southern Nevada Building and Construction Trades Council

Elizabeth N. Fretwell, Lobbyist, City of Henderson

Madelyn Shipman, Lobbyist, Washoe County

Marta Golding Brown, Lobbyist, City of North Las Vegas

Warren B. Hardy II, Lobbyist, City of North Las Vegas

John O. Swendseid, Lobbyist, City of Las Vegas

Naomi Smith Duerr, State Water Planner, Division of Water Planning, State Department of Conservation and Natural Resources

Julie A. Wilcox Slay, Lobbyist, Southern Nevada Water Authority

Chris D. Weiss, Lobbyist, Southern Nevada Water Authority

John M. Bonaventura, Lobbyist, Nevada Well Owners Association

Pamela Crowell, Deputy Secretary of State for Elections, Division of Elections, Office of the Secretary of State

ASSEMBLY BILL 674: Provides for establishment of provisions regarding use of digital signatures. (BDR 59-672)

ASSEMBLY CONCURRENT RESOLUTION 55: Urges public bodies to allot equal time for certain testimony at public meetings. (BDR R-1721)

ASSEMBLY BILL 369: Requires public body to allot equal time for certain testimony at public meeting. (BDR 19-1116)

ASSEMBLY BILL 213: Establishes provisions governing information obtained in investigation of conduct of officer or employee of executive department of government. (BDR 23-346)

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

ASSEMBLY BILL 297: Requires employer or former employer of applicant for position as peace officer with law enforcement agency to make certain information regarding applicant available to law enforcement agency under certain circumstances. (BDR 19-546)

SENATOR O’DONNELL MOVED TO AMEND AND DO PASS A.B. 297 WITH THE AMENDMENT TO DELETE SECTION 1, SUBSECTION 5.

ASSEMBLY BILL 298: Requires bidders on public works projects to qualify before bidding in certain circumstances. (BDR 28-991)

SENATOR RAGGIO MOVED TO AMEND AND DO PASS A.B. 298 WITH BOTH AMENDMENTS SET FORTH IN EXHIBIT D.

ASSEMBLY BILL 306: Revises provisions governing community redevelopment. (BDR 22-15)

ASSEMBLY BILL 493: Makes various changes concerning regional planning. (BDR 22-282)

ASSEMBLY BILL 349: Makes changes to provisions governing notice of certain amendments to master plan or zoning regulation and applications for granting of variances, special and conditional use permits and other special exceptions. (BDR 22-1339)

THE MOTION FAILED. (SENATORS O’CONNELL, RAGGIO, O’DONNELL AND PORTER VOTED NO. SENATOR NEAL WAS ABSENT FOR THE VOTE.)

ASSEMBLY BILL 388: Makes various changes to process of land use planning in certain counties. (BDR 22-507)

THE MOTION CARRIED. (SENATOR TITUS VOTED NO. SENATOR NEAL WAS ABSENT FOR THE VOTE.)

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ASSEMBLY BILL 424: Makes various changes to process of regional planning in certain counties. (BDR 22-1362)

SENATOR TITUS MOVED TO RESCIND THE MOTION TO DO PASS ON A.B. 493 AND TO AMEND AND DO PASS A.B. 493 WITH THE AMENDMENT SET FORTH IN EXHIBIT F.

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

ASSEMBLY BILL 563: Establishes provisions to promote infill development in smart growth zones. (BDR 22-1337)

THE MOTION FAILED. (SENATORS O’CONNELL, RAGGIO, O’DONNELL AND PORTER VOTED NO.)

ASSEMBLY BILL 566: Makes various changes concerning land use planning. (BDR 22-1336)

… You are absolutely correct. We already have similar developments in the works, because obviously the market is interested in that. The way the bill is written right now, it is enabling, and we could certainly live with it. … If somebody is looking through, trying to figure out what kind of neighborhood they want to develop, they could look in 278 [chapter 278 of NRS] and see this traditional neighborhood language; and it might spur an idea. But we can do it through the planned-unit development process. There was some other testimony yesterday that maybe that process wasn’t [was not] as smooth as this one might be, but not having it in ordinance, I would not be able to speak to that.

THE MOTION FAILED. (SENATORS O’CONNELL, RAGGIO, O’DONNELL AND PORTER VOTED NO.)

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ASSEMBLY BILL 590: Revises provisions of North Las Vegas City Charter regarding election of city councilmen. (BDR S-1547)

The only thing the bill does is cause the scattering of people who are running for office. You have three people who live within three blocks of one another. It does not change anything; but in the next election when they do run, they have to run from a ward, from a designated area. That is it. Then the whole city votes upon them. So what is wrong with that? It is good government, I would think.

This has been a confusing, contentious, misunderstood issue from day one. I think, personally, no affront to anybody, or any mayor or any councilman or any lobbyist. I personally think that we ought to do the right thing, and we ought to do the right thing this year. And the right thing, is to let them run in the districts that are designated by the council. I know you guys want to wait for 2 more years. I know there is going back and forth, whether or not the mayor wants this or does not want this …. The mayor votes for it, then comes up here and lobbies against it. And I appreciate the fact that you have been given marching orders on both sides, and I can’t [cannot] even remember now, which side I am supposed to be on. But all I am going to do now is just tell you, I think we ought to do the right thing, and the right thing is to do what Senator Neal has suggested ….

The council had a 3-to-2 vote. I have spoken with representatives, and because they have got an election in just a couple of weeks, they do not want to come out with a change in position .... Initially the bill was to make you choose a candidate to run against, like in districts courts …. The bill was amended in government affairs on the Assembly side to divide into wards, so there were physical boundaries. This is more acceptable than the original bill, and that is why it was supported in the other house. … That is why it would be good for you to support it. There is not as much opposition, because they get to draw the boundaries, as there was to the initial bill draft that came up here. But like I say, with the election in a couple weeks, they do not really want to come out and get another thing going.

… I know this has been an issue that has been widely debated in Las Vegas and in other areas. This has not become a real public issue before the North Las Vegas City Council until recently. I know there were several citizen’s groups that were passing around petitions to get this on the ballot, and that was supported by, in one way or another, by most of the members of our council. Again, nobody on the council, that I have spoken to, is opposed to making the change. They recognize that the time has come in this community to make this change. … This is the first time that they have really had an opportunity to deal with this and get their arms around it as a public issue. They are asking for the opportunity, and again, nobody is opposing the concept of making this change. The council is simply asking. And I think this whole confusion illustrates the need to have a unified council position on these types of issues because this is how it gets confusing. And they would like the opportunity, that as a city council, to hold hearings, and to make a recommendation to their community on how they want to handle this based on public input. And from my understanding, that is their intention to do in the very near future, is to address this issue, head on, as the duly elected council people from North Las Vegas.

… I have lived in North Las Vegas for 31 years. And I was there with the old community, and I saw the new community develop where you now have the three councilmen living within blocks [of each other] in the Eldorado section. That old community does not have the necessary representation in terms of getting money for street improvements and a lot of other things that are needed there, you see. But, if you go out to Eldorado, and you see … the infrastructure … in place … because that is where the power is. That is where the votes are on the council, to get those things out there. So the only thing that we are trying to do is trying to spread that representation out where the older community can now get some of that benefit.

ASSEMBLY BILL 604: Provides for creation of districts for maintenance of roads. (BDR 25-674)

ASSEMBLY BILL 569: Makes various changes relating to zoning regulations, restrictions or boundaries in certain circumstances. (BDR 22-151)

ASSEMBLY BILL 484: Extends powers of housing authorities to new types of development. (BDR 25-1513)

No, it isn’t [is not], but if the party to whom you loaned the money cannot pay it back, and some of this might be smaller stuff; … it may be a loan that you made just to give someone some down payment assistance on a house, and if they lose their job, they have no money. … You can say, ‘Well, we will force you into bankruptcy,’ and then the court will tell you, you cannot collect any money back. But … sometimes it is not worth forcing everybody through that legal expense even, if they … have no job and cannot pay back. … Housing authorities do deal with the segment of the community that is the very, very low income. It is not just the middle-income home buyer that they deal with. It is the whole spectrum.

… You have already, generally, said a private corporation that files articles of incorporation under Nevada Law … can have all of the powers that a private corporation can have. That is much broader than what you have given housing authorities here. … The noncontrolled affiliates probably already have far more powers than housing authorities, because you do not regulate nongovernmental entities very much.

In section 34, rather than have a list here of what housing authorities can invest in … instead, there is a cross reference made just to what local governments can invest in, which is chapter 355 of NRS. And the idea there is, Senator, you look at chapter 355 a lot. Maybe every other session, somebody says, this investment is a good idea or a bad idea, and you amend [NRS] chapter 355. The housing authority act, you never look at it; it just does not get that much attention. So we thought that it would be better to identify what is a legal investment for a housing authority to just look at what you say for every other local government in [NRS] chapter 355; and allow housing authorities to do what other local governments do; and prohibit them from doing what you have prohibited other local governments from doing.

The controlled affiliates; it gives us the power to create those. The reason that we would like that are, there are some federal lending programs where the federal government requires that the borrower be what is called a ‘single-asset entity.’ That the borrower, be it a company or a limited-liability company or something like that, that its only business is to own one apartment. And then the federal government makes a loan to that company for the apartment and that is called a ‘single-asset entity.’ And they are just federal programs that … don’t [do not] make loans unless it is to an entity that just owns the asset that they are making the loan for. The idea between the controlled affiliate is so that a housing authority, if they wanted to participate in that federal program, could create … such an entity that is a single-asset entity.

The housing authority, they may make money on them, Senator, but they are not somebody who is going to distribute their profits to shareholders. They are still a government; and their money, just like any other government, they have enterprise funds. And the money they get from their enterprises they have to use for purposes that you allow them to spend money on.

In the abstract, Senator, I don’t [do not] know. I think, probably, I mean these organizations have bondholders to pay; they have commitments to pay. So I don’t [do not] think they are going to forgive loans where it would put them in jeopardy. But if they have made a loan to a person … maybe for down payment assistance on his house. And that person subsequently loses their job, maybe gets evicted from the house. It is not worth the housing authority’s while to pursue that loan. It is not worth it financially for them to pursue the loan. And so it would be financially prudent then, to forgive the loan or forebear on the loan. If a lot of money is involved and the person has assets … then financial prudence would dictate that you try and collect on the loan. But the times you forgive or forebear, I think, are small amounts of money involved and no assets to go after, or where the costs of collection exceed … what you could collect.

The property exemption is just for property of the authority and a controlled affiliate. A controlled affiliate is really just like a subsidiary corporation of the authority that you create to be one of these single-asset entities. Property of the authority and the controlled affiliate is exempt from property tax. Property of the authority is exempt under existing law, so that is not a change; except for if they create one of these single asset entities. For a noncontrolled affiliate, if we do the public-private partnership with either a nonprofit company or a for-profit company, this bill does not exempt the portion of the property that is owned by the for profit [entity]. Now there may be something else that exempts it. I think the YMCA, for example, is exempt under other provisions of law, and for-profit housing projects that receive some types of federal assistance are exempt from property tax under another provision of Nevada law. But this law [A.B. 484] does not exempt property owned by an uncontrolled affiliate, whether it be nonprofit or for profit. This law says … if we both have an interest in the project, the interest of the for profit or of the uncontrolled nonprofit is not exempt. Only the interest of the controlled affiliate.

Yes, there are. As we mentioned before, Senator, it does have to be for a housing purpose and it has to be investment grade, which means it cannot be a junk bond. It has to be a project that the market will look at and that the housing authority takes to a rating agency, and a rating agency rates investment grade. Also if the project involves a for profit where the project would need what is called bond-volume cap, approval of the State Board of Finance is required before the bonds are issued.

ASSEMBLY BILL 237: Revises provisions relating to grants for certain improvements to conserve water. (BDR 30-951)

Because of a glitch in the wording of our current law, the state gets paid after we do most of our work in reviewing and evaluating and proving and signing contracts with these grants. We do not collect money until we sign a contract. We do not sign a contract until a community has all their water rights in place; all their local government permits. Sometimes that takes quite a while, and it means that sometimes there is not enough cash flow to pay the staff to administer this program. Due to a glitch and a hold up in signing contracts about 9 months ago, I had to lay off the staff who administer this program. And so, for all intents and purposes, currently, the program is not operational. You have heard the phrase, ‘If it ain’t broke, don’t fix it,’ well in this case, it is broke and I need you to fix it. I need you to fix it because even if you do not want to get involved in any of the new programs proposed in this bill, you have to recognize that you have $20 million of capital-improvement projects that are underway now. And we have no one to monitor those projects; no one to monitor expenses on those projects; no one to review the pay requests; or send the counties the money that they are due. This means that communities all over Nevada, including communities in Clark and Washoe counties who have these grants, will not be able to get paid to pay their contractors, if we do not re-staff the program.

The second part of the program was provided in an amendment [Exhibit D]. I think you all know that the Las Vegas groundwater basin is fully appropriated, and, in fact, is losing water everyday. This program would help take homeowners off using groundwater and hook them up to surface water. If you are concerned about the money, that there may not be enough money to pay for these new programs, one thing that I would recommend to you is that on the last page of the bill where it talks about increasing the bond fund which is now $40 million to $50 million. And it says, "the state board of finance shall issue general obligation bonds … in the face amount of not more than $50 million," I would suggest you change that "shall" to "may" and give the board the authority, if there are funds, if it will not include an increase in taxes; only in those cases could these bonds be issued. We have not had a problem to date. The bonds are only issued when the state treasurer gives us the go ahead; when the director of administration gives us the go ahead and tells us that there is room within the 15 cents now, to issue those bonds. We had never proposed … to increase taxes with this. All of the bonds are issued in small amounts. And speaking to the treasurer’s office, they tell me that these bonds are usually so small that they wait until they get other, larger bonds to group the bonds up with so that we do not incur any kind of extra costs; so we get more favorable rates. So that is one idea that you may want to do that would help give you a cushion. It would … make sure that you do not increase taxes, and make sure that you only sell bonds when the state has an ability to sell bonds.

Now if you do not have money, and you do not want to move forward with new programs; or if you do not have money period, but you are interested in moving forward with the programs, I would suggest that you do put the language to authorize moving forward with these programs in place. And that is because, like any other program, in order to get started, there is quite a bit of start-up time in terms of developing regulations. For example, under what scenarios could we issue a conservation grant; under what cases can we show a benefit to the state. And it would only be under those cases that the state would authorize grants. You have to recognize that when we first set up the … grant program, it took several years to put all of the protocols and administrative features of the program in place. It will take some time. If you feel like you cannot deal with the money at this time, you may want to just give us the go-ahead to start looking at the outlines of the program, and deal with the money issue during the next session. So that is what I have to offer to you. I think it is extremely important that you fix what is broken in the current grant program. I urge you to consider the new programs, and I have provided you a way to ensure that you do not end up raising taxes, you do not end up exceeding the 15-cent cap to repay bonds ….

ASSEMBLY BILL 408: Revises provisions relating to appropriation of water (BDR 48-1541)

… Because of the growth of the Las Vegas Valley increasing connections, there are many people that are facing the possibility of having to hook on to a municipal system in which costs have gone up. The average hook up is about $15,000 per home, and that is within 180 feet of a municipal line. What A.B. 408 does, is it provides several conditions to help well owners if they are faced with the fact that their well is threatened … and they are within 180 feet, that they would get benefit of the state or federal loan. Specifically in 237 [A.B. 237], we are talking about the … grant from this program ….

The connection charges that are charged when someone connects to a municipal system … are about $15,000 a home. These are the costs that are paid by everyone. If you buy a stick-built home, every individual has to pay connection charges. There are regional charges, and there are local charges. And what that is, is an equity buy in into the system, and that is what makes up the charge. In addition to that, the stick-built home then takes that, the developer pays it up front, they mortgage it over time, and pay for it through their house payment. The one cost that a well owner would have that a stick-built home person does not have would be the cost of retiring a well; capping a well within state engineer standards so that there is no problems with contamination of the principal aquifer. The groundwater management program and the citizen’s advisory committee came up with a way that they would fund the capping of the wells; that is about $5,000. So that piece is taken care of. Then together with the Nevada Well Owner’s Association, we were looking for another way to assist these people who one day wake up and their wells are dry; they are within 180 feet; they cannot redrill; they cannot go deeper; and they do not have a permanent water right. The amendment that we provided last week [Exhibit D] allows this program to be used for those people. In negotiations with the Nevada Well Owners Association … trying to iron out language that would work, that amendment was refined and … specifically holds a piece of this program out for those well owners in southern Nevada.

It shows that after the current projects are paid for and the … pending projects total up to about another $17 million, that we will have about $3.8 million remaining in the fund. And that $3.8 million, if you did not add any money, would need to cover projects that we do not know about today … that come up in the future; … the Clark County wells, perhaps the conservation programs. I can represent to you that I don’t [do not] believe that unless you increase this fund at some point, we would definitely run out of money ….

… An issue here that needs to be mentioned … this has to be understood. When this was created, for whatever the purposes, the authorization was granted to the amount authorizing up to $40 million in bonds … $25 [million] and then it was increased. And I can tell you, I do not have any problem with any of these purposes that are being suggested. But I need to draw your attention to the fact that this bill would mandate that they authorize up to $50 million. Now, these are general obligation bonds; they have to be serviced by the state; the debt service has to be paid by the state. We have an artificial limit of 15 cents on the tax rate. That is the limit that the state can or will obligate itself to be bound for. And all I am telling you is, it does not matter whether you put $50 million or $100 million or whatever, do not leave here thinking that if you pass the bill that it is going to be available for these purposes. Those on the money committee I think understand that we, in the budget currently under consideration, when all of the capital-improvement projects and everything else has been recommended, are at the 15 cent rate. So if you pass this, this is not going to give you any opportunity, and that is going to have to be somewhere understood or addressed in the bill, that, at this point in time, there is not opportunity to issue any bonds for either the existing purposes or for the proposed purposes. So … if you do not have that understanding; that is the limit. And we cannot do anymore than 15 cents on the state rate. That is the commitment the state has made to all of the other entities who need to have tax money to operate.

… We did not know there was a linkage either, until just recently. … We did not get an amendment to A.B. 408 until Wednesday morning. … We could not agree to that amendment, essentially, because, in our reading, it would extend permanent rights of water to those holders of revocable permits, which puts the basin in jeopardy and all other owners and holders of permanent water rights. As soon as we got that amendment from Senator James [Senator Mark A. James, Clark County Senatorial District No. 8], we started working on some compromise and what we could get out of it. … That hearing lasted until about 6:00 on Wednesday night. After the hearing, we continued to talk, … and at that hearing we made our position very clear that we do not believe that we should change state water policy having to do with revocable and non-revocable rights. Those decisions were made back in 1955 and those people who have paid for permanent rights would be affected. And everybody in the basin would be affected. We made that clear. At that time, we went into discussions with the well owners association; and we came to agreement on words, but our position at that time, and that night, was still that in order to make that wording work in reality, we had to have a source of funding. Because if you do not have a source of funding, the way that the bill is written, you are, in our interpretation, and the state engineer testified in the same way, extending permanent rights of water; creating a new class of water right which would interfere with all the other water rights that were there. So Thursday … we got the revised version of the amendment to 408 [A.B. 408] and presented that to our people. I confirmed that we were able to go ahead; support that, which I stated at that meeting I had to do, and that our position was going to be to go on with that. So I apologize to you, but truly, this has only happened in the last couple of days also. On Tuesday we did not realize that there was a linkage involved in that at all; we had not gotten the amendment.

Essentially what that amendment does is add two provisions to the original amendment we provided the committee [Exhibit D]. One would require that a grant provided to a well user pursuant to paragraph (c) [Section 2, subsection 1, paragraph (c) as proposed in the amendment set forth in Exhibit D] would be in the amount of no less than 85 percent which ties into A.B. 408 and language agreed to there. And it would also add a provision, setting aside a specific amount, in this case, $2 million to apply to these situations.

… I think Julie [Ms. Wilcox Slay] had mentioned that the state engineer said there could be 200 wells, and I suppose if you used an average of about $15,000 that is about $3 million. They are recommending setting aside $2 million. I think Julie [Ms. Wilcox Slay] has testified that, and she has told me personally, … the maximum that they could foresee would be 100 in the first year. And that would be at a great maximum; and I think what she is telling you is they only know of 8 today that would need this money. So I think that … there would be enough to cover, obviously, those 8. And I think what you may want to consider is putting the funding in as it becomes available. But I would urge you to bring along matching funding based on the amount of exposure that this district expects … in the next 2 years, at least, to cover that.

These funds are available right now, or have been since 1991, in some shape or form. And we have been making those grants available to the bulk of the state. I believe that we need to find a mechanism to help our residents in southern Nevada … when the money is available. It may not be today, but I think they should be included, as is the balance of the state. And when there are funds and grants that are available, then we should certainly make those available. But they may not be today, but I think that our folks in southern Nevada should have the same ability.

I have a lot more questions on this myself. It does not seem to me that this is going to be an adequate source of funding for this. And I do not know how you are going to pick and choose who you are going to give the money to and who is going to be left out. If you have exhausted the money, and … we have no wiggle room as far as the 15 cents goes, then what are you going to tell the next guy who immediately is required to be hooked on to the system and there is not any money there to help him; but we helped the other people.

I do not know what the exact number … but I can shed some light on this problem. This problem that we face in southern Nevada is truly a southern Nevada issue; for all of those of us who represent that area of the state and all of those of us that represent, in particular, the situation of these well owners. This is a problem that was created by the Legislature. It was created by the Legislature in the 1955 session when this bill was passed that created NRS 534.120 and created the revocable or temporary permit. This was a bad policy that the Legislature enacted. It enacted a policy of deliberately, essentially mandating the over-appropriation of the Las Vegas Artesian Basin. And the theory behind it, was I suppose, sound. And that is that we will go ahead and over-appropriate it while we get the southern Nevada water project developed, and then once the river water gets here, it will replace all of this water and we will just go merrily back on the system. Well the problem is that nobody considered the cost, and so this statute was passed. And when you look at it, I found it remarkable 10 years ago when I started practicing water law, and I looked at this statute, and it had no criteria whatsoever for a revocation. It did not have anything about a hearing; it did not have anything about a distance requirement; it did not have anything about a cost associated with it. Nothing. It just said, the state engineer can revoke your water right and make you hook back on to the system at such time as he decides that there is water available from the municipality.

Well, the state engineer has developed some criteria, but they have never been codified, they have never been enacted pursuant to the administrative procedures act or anything else where he has held hearings and adopted regulations. No one has ever gotten to speak about it. He has just decided, unilaterally; … I do not know if there is even a memorandum in his office somewhere that contains this policy. He just says, ‘It is 180 feet;’ nothing about cost or anything. And so the people who are in this situation, are in this situation because we put them there. This Legislature put them there. They went out and bought their house. The average person that goes out an buys a house does not go, ‘Oh, is that a revocable water right?’ No, they just say it is on a well, and they go and they buy it. And then they find out that it is a revocable water right. And it is going to cost them, with all of the accelerating and the escalating costs of connection charges and everything else, and construction charges. It is going to cost them $20,000 at a minimum to hook on to the system. Well, first of all, they have already invested in the home with all of the infrastructure for the well. So that is a total loss. And it is not a business so they have not been able to depreciate it over the years, take a tax deduction on it or anything, they are just going to lose that money. Then they are going to have to come up with $20,000 more to pay to get on the system. It is an untenable situation. It will bankrupt a lot of those people; your constituents, and my constituents. Yeah, there are 200 right now who are in this category. They are in this category remember because the state engineer just … says, ‘This is my policy.’ I think it was 300 and some feet before, now it is 180 feet. Tomorrow it could be something else. It is not even a regulation; you cannot even find it. You have to just get it from him.

Now, with respect to domestic wells, which are also covered by this, those, it says right in the statute, that the state engineer cannot require you to cap your domestic well and hook on to the system, unless it would cost less than $200 to do so. … But, nevertheless, he is able to get those people to hook on by saying, ‘Well, I cannot make you hook on unless it is $200, but I can just refuse the well driller a permit to drill your well any deeper.’ So if their well fails, they are out of luck. Well all of these people are in that same category. Now, you might say, ‘Well this is just a problem of the well owners, and it is just too bad that they got sucked into this situation. And they got themselves onto revocable rights, and they will just have to pay.’ Well, I do not feel that way. I do not think you feel that way, and I do not think that anybody wants to do that.

Well, let me give you a different perspective. If these people are going to be put in this situation, and with the costs have gone up now, I think the Curtis Park Manor case, which was decided by the Supreme Court, … said it was constitutional to make these people hook on to the system. Well, the facts have changed, and there is going to be litigation over this. And so … we are going to have to at least pay for the cost of the litigation. And they may win. And then we are going to have to have that price tag on our heads, and we are going to have to find a way to pay this. What I was trying to seek to do in this thing, it came to me through Senator Porter, because it was a lot of his constituents who were contacting him, was find a resolution. … The first thing I did was to say, ‘Okay, if it is 180 feet, let’s [let us] codify it.’ So we codified that. Now it is going to be in the statute, in the law, that it is 180 feet. And that is the way it should be. And then I thought, ‘… If we are going to hook on, then let’s [let us] make some kind of a reasonable effort to help them with the cost.’ And this is something that is going to benefit; their investment is going to benefit all of us. And I am familiar with in legislation, because the groundwater replenishment district was a bill that I proposed in the [19]95 session to try to replenish the groundwater basin down there; and it is all just coming to fruition now. …If we get these people off of that and onto the system, and we enact the other bill … and we start to manage this basin better, we will deal with the environmental problem there; and we will be in a better situation down there. But, I think, we cannot just say, ‘It is their problem.’ We cannot just say, ‘These people there, the well owners, there is only a few thousand of them,’ and there is few thousand, not 200. 200 are within the 180 feet. But you know, as the set town grows, and the lines get moved out, there will be … 200 more and 200 more. And there are several thousand who are in this predicament. We have to deal with it some way. What the Southern Nevada Water Authority people are saying is, ‘Here is a bill that has money for water projects, and this is a water project.’ That, in their judgement, is worthy of some of this money going there. And that is all we were trying to do. The thing about it is just a lack of communication …. I did not know what this bill was. I thought this bill 237 [A.B. 237] was a bill that was … sailing merrily along in here. I did not know that it had a problem or would be perceived as a potential tax increase. And I do not even know that it is ….

I am just here to tell you … that, that is the situation. It started many, many years ago. It was a theory that these revocable rights would be beneficial and then that they would all go away. But there is a cost to pay now, and it is happening at a time when the cost is really substantial. And, yes, it is on these people, but through litigation, it might be back on us. And then we will have to figure out a way to help them anyway …. I do not want to create a problem. I just want to tell you what the problem is.

To answer your question as to what would happen. If there was not any money in the fund, and say 8 people in a 6-month period were forced by the state engineer not allowing them to drill deeper or fix their well … to hook up to the municipal system, and there was not any money left after those 8 people. …The ninth person comes along, and there is no money in there … under A.B. 408, … the state engineer would not be allowed to not let those people either fix their well or drill deeper. So those people would just do what they have been doing for years. They would call up somebody to come in and fix their well, and the well would be fine and everybody would go along merrily until there is more money in there ….

… That is the problem; therein lies the linkage between the two bills. … I do not agree with either the state engineer or with the water authority that this is going to create a new class of water right. However, I understand the logistical problem with it, and so … I have told them that I want to work so the two bills can both pass. I do not know if there is some compromise somewhere, but right now, they have no remedy whatsoever. If the state engineer sends them a letter and says, ‘You have got to hook on,’ they have got to hook on. And if he changes the distance requirement tomorrow to 500 feet and sends out a letter, there is noting … in the law they can deal with. All they have is a lawsuit.

… If you have a well; … tomorrow you wake up and you do not have any water …. So you call up somebody to come fix your well, because … your water is not coming out of your faucet. So you call somebody up to come fix your water and they tell you, ‘Well, you have to drill your well deeper because the water table is below your pump.’ So you say, ‘Okay, fine. How do I do that?’ And the person that comes out to fix your well says, ‘Well, first of all, you have to call the state engineer and you have to get approval.’ So you do that, and the state engineer says, ‘I am sorry; you are within 180 feet of a water line.’

ASSEMBLY BILL 130: Repeals certain provisions related to campaigns. (BDR 24-857)

The amendment [Exhibit D] was proposed by Allen Lichtenstein who is a first amendment attorney from Las Vegas; quite active in that area. And … his amendment is based on a lot of the same thoughts contained in the Washington State case [State of Washington v. 119 Vote No/Committee] that I distributed to all of you. And, basically, it says that if you are going to have something like this, the state should not be in the business of imposing penalties. It does not have the authority to do that because political speech is free speech. And then it also goes on to say that the state has no business making a determination of malice. It is okay to make a determination about whether a particular statement in an advertisement or a flyer or whatever is true or false, but the question of malice is so difficult to determine that that is why even the courts have a problem with that, let alone, something like the ethics commission. So in essence, what the amendment does is delete those provisions allowing the commission to determine malice and also to define candidates for political speech. I think that would be consistent with the constitutional concerns.

The net effect of this would be that you could still have the ethics commission, and it could still look into these complaints, but it could only determine the truth or falsity of a particular advertisement. And it could issue a public statement, or let’s [let us] say an advisory opinion. I know that we all want the law to have some teeth in it. I do not know that constitutionally, in fact, I am sure constitutionally, in my judgement, it cannot be a fine. The teeth, it seems to me, would be for the commission to, as soon as possible, make its findings public. And that would be disseminated, I am sure, over the broadcast ways in the newspapers. Let the voters then make that determination.

… The differences between version A and version B relate to an additional concern that is not related to the Commission on Ethics and its determination of violations of those provisions with regard to false statements made with malice, etc. … The bulk of the sections that makes these so weighty are with respect to the reporting requirements. During the hearing of A.B. 130, Senator O’Donnell had brought up some concerns with regard to reporting, and as we were instructed, we included these provisions to address those concerns. So that is why you have version A and version B in front of you.

If I may get back to the initial concern with regard to the Commission on Ethics and its determination. We have looked again at the body of law surrounding the issue of false statements during campaigns, and it is the opinion of our office that the provisions of NRS 281.477, 294A.345, and 294A.346 remain constitutional. What we have done is looked very carefully at the different cases and have suggested some amendments to bolster their constitutionality. Those amendments begin with the amendment made to [NRS] 294A.345, and as I have said before, both of these amendments also contain the reporting requirement amendments. … In version B, that is section 10, the first change in the language, you will note, changes the prohibited conduct to include the actual impediment to the success of a campaign, so that the publishing of a false statement of fact, would not only have to be one with actual malice, and the intent to impede the success of the campaign. It would also actually have to … impede the success of the campaign. In addition, on page 16 [section 10] of version B, you will see that we have eliminated the language that relates to questions on the ballot. That was the issue on point with the Washington case [State of Washington v. 119 Vote No/Committee] that we heard testimony on. Although we believe that those provisions could remain, we did think that there was some merit to the argument that a ballot question did not have the interest in maintaining its reputation as a natural person would. And so … that is what you will note to be the deleted language.

Now skipping again, because we do have more reporting requirements because of our drafting conventions and the order in which we must take the statutes, the next statute that is at issue with regard to this ethics commission point, appears in version B, in section 13. What we did there was to correct the situation that occurred during the last campaign cycle where apparently the ethics commission failed to find that there was a false statement made; that the falsity was not at issue, which was not in the statute. The statute absolutely requires there to be made a false statement of fact. And so what this does, is prohibit the commission from rendering a final opinion determining that a person has violated 294.345 [of NRS] unless they have made the following specific findings, and these findings directly track the seminal case of New York Times v. Sullivan. There are four elements that must be found. First, …’the person caused to be published a false statement of fact concerning a candidate;’ that is not a statement of opinion. That is a statement of fact. ‘The person acted with actual malice in causing the false statement to be published. The person acted with the intent to impede the success of the campaign of the candidate in causing the false statement to be published.’ And finally, that ‘the publication of the false statement did in fact impede the success of the campaign of the candidate.’ And then you will note, also at the end of that section, we have, again, the definitions of what constitutes actual malice and what constitutes publishing that appears in existing language in 294A.345 [of NRS].

... Now this is where the two amendments differ, and … this is with regard to the reporting issue. Version A simplifies the reporting requirements for candidates only. Version B simplifies the reporting requirements for all entities that are required to report. … If you look at section 1, that is … representative of the changes that we have made throughout. They do not reduce the requirements at all. All of the reporting requirements remain the same; the stringency remains the same. What is simplified are the accounting requirements on the people who are required to report. So if you will note, on section 1, either version, it is section 294A.120 [of NRS]. The reporting requirements remain the same. The periods remain the same, but you will note the change in language that requires the candidate to ‘list each of the campaign contributions he receives during the period on forms designed and provided by the secretary of state.’ … Down in subsection 6 [section 1, subsection 6] which appears on page 3 … of both versions. The listing requirements are basically what you will find to be … a daily, cumulative listing. ‘The name and address of the contributor and the date on which the contribution was received must be included on the list for each contribution in excess of $100 and contributions which a contributor has made cumulatively in excess of that amount since the beginning of the first reporting period.’ So again, none of the stringency of the requirements are being changed. ‘The form designed and provided by the secretary of state for the reporting of contributions pursuant to this section must be designed to be used by a candidate to record in the form of a list each campaign contribution as he receives it.’ And so that language was getting at what Senator O’Donnell was describing when we first heard the bill in terms of being able just to record, not having to go back and categorize everything.

… The next section deals with those candidates who receive in excess of $10,000 in those special circumstances. But then if you will look on 294A.200 [of NRS] which deals with … expenses for a candidate specifically, that there is similar language dealing with those. On page 9 of version B, subsection 6, [section 5, subsection 6] you have a description of what is required there. ‘The forms designed and provided by the secretary of state for the reporting of campaign expenses pursuant to this section must be designed to be used by a candidate to record the form of a list of each campaign expense as he incurs it.’ You will note that because of these changes, we are repealing which is 294A.385 [of NRS] which required the secretary of state to adopt simplified forms for candidates who receive less than $1,000 in campaign contributions. We believed that if … you were to adopt these provisions, that that would become somewhat repetitive. … That is … the entirely of what appears in version A. That relates only to candidates.

Yes, Senator. But because it did not cover it, I do not know that I could derive from that the fact that it would be unconstitutional to require reporting only. I believe the popular wisdom on that issue would be … by requiring reporting of the expenditures in some manner or another, you are providing the secretary of state, or … the policing entity would be there to be able to see how much you have received and how much you had expended in order to apply the statutes which dictate what you may and may not do with campaign contributions.

… The broad categories that are required by the secretary of state; what is dictated now in this proposed language is not having, as Senator O’Donnell is describing, not having to go back and aggregate them. What you would be doing would be listing out your expenditures as you make them. That is what we were asked to do; we were asked to amend the language to make it simpler to comply with the requirements.

… I think I know where Senator Neal is going, and this is, in fact, the way the language is drafted here, is going farther than where we are today. However, if we delineated a category of expenditures, even though we list all of the expenditures, but we list expenditure and then the category it belongs to and not the detail per se of what the check was for. For instance, let me give you an example. If the category was political consulting, but you happened to write a check out to a certain individual for political consulting, you are saying that the freedom of speech would be violated if you had to disclose who the individual was rather than what we do now, and that is political consulting. I do not have a problem with listing out every single expense that we have, but I do have a problem with delineating exactly who is. … So I agree with the fact that we should list out the expenses and categorize them as you go, but I do not think you should get as detailed as to who the actual check went out to ….

Well, I think we have the prerogative, if both sides agree that this is what we want to do, because it is going to affect both parties here. And I think what we ought to do is put it in the language in the amendment that this is what the Legislature intends. Let me give you another example. You write a check out for radio spots, and you might do $5,000 worth of radio. But why would you want to delineate which radio station got the check. Do they want to be appearing on some report? Is it violating their privacy in a business transaction? I do not know. I think it is probably so. We do not need to get that detailed. But if you wrote a check and you said, ‘This is for radio. Put radio down there. And this is the date I wrote the check and this is how much it was for.’

I would like to point out, in version B, the other sections that we treated. They are all of the sections that relate to campaign reporting. Beginning in section 3, this relates to those entities and persons who make expenditures on the part of a campaign who are not under the direction or control of the candidate or group of candidates. Included in that are committees for political action, political parties, and committees sponsored by a political party who make expenditures on behalf of candidates. It is the same language that you saw in 120 [NRS 294A.120]. In 150 [NRS 294A.150] you will find those groups that are organized formally or informally, who advocate the passage or defeat of ballot questions, including any recall or special elections.

Section 5, which is 200 [NRS 294A.200] which is, again, related to the candidate. Section 6, which is 294A.210 [of NRS], relates to expenditures made by persons who are ‘not under the direction or control of a candidate or group of candidates,’ committees for political action, political parties, or committees sponsored by political parties. 294A.220 [of NRS] section 7, the same provision for expenditures made by persons or group of persons who seek to advocate the passage or defeat of ballot questions. Section 8 is 270 [NRS 294A.270]. This is a committee for the recall of a public officer. And this relates to contributions …. 294A.280 [of NRS] which is section 9, which relates to expenditures made by committees for the recall of a public officer. … Section 11, 294A.360 [of NRS]; this relates to city elections for candidates. Section 12 is the direction to the secretary of state. It is actually directing him to prescribe these forms in accordance with the provisions of the chapter; so in accordance with the amendments that are proposed to be made. Section 13, again, relates to the Commission on Ethics issue as does section 14. And then finally, as I mentioned before, section 15, 294A.385 [of NRS] which relates to the simplified form which is repealing that section in the thought that that would no longer be required.

… I tried to work out some language here. And this is the language that appears throughout this amendment number B. ‘The forms designated provided by the secretary of state for the reporting of campaign expenses pursuant to this section must be designed and used by the candidate to record in the form of a list of campaign expense as he incurs it.’ This is the new language, ‘The list shall contain at a minimum the amount and the date and the category of the expense.’ And that way the secretary of state, if they feel, in their wisdom, they have to have a little bit more or a little bit broader for some reason or another, they can draft regulations to do that. But at a minimum, it should have the date of the check, the amount of the check and the category of the expense.

What we do now is we have to go through each check and we have to say, ‘Okay, this is radio. And then, over here, this one is radio, and then this one. And I have got to add these two together now. And then over here this is radio, and I have got to add that one. Now, I have got to make sure that this total that I have got for radio, adds up to all of the other radios that I had in my check register. And if they do not add up, then I have to go back through and see if I missed one. And then after I go through my entire register, and I put all of the categories down there, now I have to go back and get a total. And that total should be the total of all my expenses. And if they do not agree, now I have got a problem. I have to go back and find out which category, and they are totaled now.’ So it is a nightmare. So if you just have a list … and this is where your expenses are, and this is what category they belong to …. If there is another candidate out there, and believe me, this is just the expenses, to me, in my estimation, are just for the other candidate to find out what you are doing so they can do as much as you are doing. But if they want to aggregate them and find out exactly how much money you spend in radio, let them add it up.

I do not like the form at all that we use now. I do not mind listing everything that I have; it is just the system is so difficult. I think it is even difficult for those that are trying to check up on us. And I want them to see everything I have, but it is a challenge to do it. And I hired an accountant to take care of it, and even she was pulling her hair out. We called … and the secretary of state was so patient with us … we called all of the time trying to make sure we were doing it right. So whatever, if we could just make it simple for everyone, the public and us, I think that is the intent.

And I had the same problem. I had a CPA [certified public accountant] working on mine for 3 days trying to make sure everything was right. And then, once everything was right, we put it on the simple form. And we were told that that was not the right one. We had to go back and do it over again on the regular form because we were over the $1,000. But we listed everything, we just put it on the wrong form. So I applaud the fact that we are going to get rid of this simplified form and go to one form. But I agree. I just think … we have got to simplify this thing. And I know, making it into broader categories is a little less disclosure than what we are doing now, but I think that the disclosure, having more disclosure and less problem in … mistakenly putting down the wrong number or the wrong amount or something, and getting caught for something you really did not intend to do, I think outweighs the fact that we are giving out more information.

… I would like to stress the importance of consistency in this reporting process; that there not be a form that is mandated for one group as in candidates, and another form mandated for all of the other groups: the political parties, the committees for political action, for independent expenditures, etc. I would like to stress the importance of the consistency. And once again for the record, if I may say that it was Senator Porter with whom I have had conversations relative to the need for, once again, redesigning the forms, which we do every 2 years. And his input has been very valuable, and is noted in our work files.

Is the main point of contention, at this juncture … is it that separate page whereby the categories names run down the left-hand column? Then the next column is devoted to a letter designation. Such as campaign consultants would be category … B, and then at the right hand, you have to total it. You want to be able just to take an expense report and just list, ABC consulting, and the date of the check and the amount.

Let me tell you what happens, I know, in my case. Invariably, I will get a bill and it is not broken out. So then you call back and you say, ‘I need to have … the breakdown of what is included in this billing.’ Then you wait, maybe 2 or 3 days. Then you drive over, and you say, ‘I really need this because this report is due, and I have a lot of things to do in here, so I cannot wait any longer for it.’ So then they have to try and run down the receipts. Well, they might have … done Dina’s [Senator Titus’] mailing and my mailing at the same time, and maybe Senator Care’s mailing. And then they have to go through and try and break out … to see how much the cost … was in order to identify it on your bill. Then they have to verify that on their checks to make sure they have not overcharged or undercharged you. And then you will get a number, and then they will say to you, ‘Well I either overcharged you or undercharged you.’ Now then you are trying to correct it on your thing, and you have got a credit with them …. It is a nightmare …. Those are the kinds of things we run into that makes it extremely hard to try and break it out. And if they come back and correct their figures, then you have to correct it on this …. So that we do not have the right amount in that category, and it can be over or under, depending on their billing process.

SENATOR NEAL MOVED TO AMEND A.B. 130 WITH THE AMENDMENT OFFERED BY SENATOR CARE AS SET FORTH IN EXHIBIT D.

THE MOTION FAILED. (SENATORS O’CONNELL, O’DONNELL AND PORTER VOTED NO. SENATOR RAGGIO WAS ABSENT FOR THE VOTE.)

SENATOR PORTER MOVED TO AMEND AND DO PASS A.B. 130 WITH VERSION B (EXHIBIT D).

SENATOR O’DONNELL SECONDED THE MOTION.

For the reasons given by Senator Porter, I am going to vote for the bill. We have got to get it out of here; we can worry about it later. But … the case from Washington State [State of Washington v. 119 Vote No/Committee], and I am just going to read a few sentences from it …, ‘The very purpose of the first amendment is to foreclose public authority from assuming a guardianship of the public mind. In this field, every person must be his own watchman for truth because the forefathers did not trust any government to separate the true from the false for us. The supreme court has recognized that to sustain our constitutional commitment to uninhibited political discourse, the state may not prevent others from resorting to exaggeration, to vilification of men, who have been, or are prominent in church and state, and even to false statement. At times such speech seems unpalatable but the value of free debate overcomes the danger of misuse. For even false statements make valuable contributions to debate by bringing about the clearer perception and lively impression of truth produced by its collision with error.’

It is my understanding that the issue that was brought forth in the Washington case [State of Washington v. 119 Vote No/Committee] did relate to the ballot question issue only. However, the opinion is a plurality opinion. It is difficult to determine what some of the concurring opinions went to. And in many regards, the language of the concurring opinions could be construed as dissenting opinions. What the result of the case was, was that the entire statute, including that relating to candidates, speech about candidates, as well as ballots, was removed from the Washington revised statutes.

My other point is, I am looking at this language that is supposedly going to make this unconstitutional law more constitutional. On page 11 on version A, and I think the same language is in version B. But it says that this is determining whether a person has violated this provision of telling a lie, and it says the commission has to make specific findings that you caused to be published a false statement, you acted with malice, you acted with intent to impede the success, and the publication did, in fact, impede the success. So wouldn’t [would not] that mean the commission could not even make a ruling until after the election on any of these cases. And what good would that be?

We did discuss that. We do not know that it would be required. Impediment to the success of campaign, does not require there to be a finding that one lost the campaign. We would believe that to include that one’s reputation was sullied in the minds of people who heard the statement. We would believe that to be evidence to the effect that perhaps numbers in polls went down after the statement was made. We do not believe that it would require, although that is certainly would be compelling evidence, but it would not require one to lose a campaign.

… I had come to the same conclusion as Senator Titus …. There have been cases where somebody has received an awful lot of so-called negative campaigning and yet that person still won. And I do not know how, in the course of a campaign, you could ever demonstrate that someone has impeded the success of your campaign. It just could not be done. The presumption would be if you said something false, with or without malice, that you have somehow impeded someone’s campaign. I just cannot believe that to be true, especially in a country that, on occasion, that elects dead people to office.

THE MOTION CARRIED. (SENATORS NEAL AND TITUS VOTED NO. SENATOR RAGGIO WAS ABSENT FOR THE VOTE.)