MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-First Session
February 22, 2001
The Committee on Government Affairswas called to order at 8:07 a.m., on Thursday, February 22, 2001. Chairman Douglas Bache presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Douglas Bache, Chairman
Mr. John J. Lee, Vice Chairman
Ms. Merle Berman
Mr. David Brown
Mrs. Vivian Freeman
Ms. Dawn Gibbons
Mr. David Humke
Mr. Harry Mortenson
Mr. Roy Neighbors
Ms. Bonnie Parnell
Mr. Bob Price
Ms. Debbie Smith
Ms. Kathy Von Tobel
Mr. Wendell Williams
GUEST LEGISLATORS PRESENT:
David Goldwater Assemblyman
STAFF MEMBERS PRESENT:
Eileen O’Grady, Committee Counsel
Dave Ziegler, Committee Policy Analyst
Linda Utt, Committee Secretary
OTHERS PRESENT:
Doug Walther, Chief, Office of Business and Planning, State of Nevada
Henry Rollings, Attorney at Law, Las Vegas, Nevada (teleconference from Las Vegas)
Coy Raynor, District Manager, Horizon/IDG, Mesquite, Nevada
Judy Stokey, Governmental Affairs Executive, Nevada Power, Sierra Pacific
Maureen Brower, Director of Government Relations
Tom Grady, Executive Director, Nevada League of Cities
Kurt Segler, Chief Legislative Advocate, City of Henderson
Colleen Wilson-Pappa, Legislative Team, Clark County, Nevada
John Toth, Acting Traffic Manager, Department of Public Works, Clark County, Nevada
Kimberly McDonald, Management Analyst, City of North Las Vegas
Marvin Leavitt, Lobbyist, City of Las Vegas
David Howard, Lobbyist, Reno Sparks Chamber of Commerce
Daniel Musgrove, Lobbyist, City of Las Vegas
Warren Hardy, Lobbyist, National Federation of Independent Businesses
Ray Bacon, Lobbyist, Nevada Manufacturers Association
Carole Vilardo, President, Nevada Taxpayers Association
John Slaughter, Strategic Planning Manager, Washoe County, Nevada
Assembly Bill 87: Makes various changes concerning confidentiality of certain information relating to bonds for industrial development. (BDR 30-550)
Chairman Bache opened the hearing and called Mr. Walther to present A.B. 87.
Mr. Walther, Chief of the Office of Business Finance and Planning, Department of Business and Industry, presented A.B. 87 and stated it was a simple “housekeeping bill” to clarify provisions regarding confidentiality of information submitted in connection with applications for industrial development bonds. He explained the law currently provides for confidentiality of information; however, his office and local governments found it hard to determine what was confidential. A statement from the applicant in writing in order to make information public was required.
Mr. Walther explained A.B. 87 shifted the burden of confidentiality to the applicant and made them request proprietary information and financial statements be kept confidential when their information was submitted. He stated a line would be drawn between what was confidential and public information and, therefore, his office could easily provide records for public inspection.
Mr. Walther introduced another portion of the bill, which added language to shield state and local government from liability in case of accidental, unintentional, or negligent disclosure of information deemed confidential. He advised this protected the state from liability.
Assemblywoman Gibbons referred to Section 1, part 3, which referred to the word “unintentional” and questioned where the accountability was for that word. Mr. Walther replied that it would be an accidental disclosure of confidential records. Mr. Walther gave an example of the secretary in the office who received a request from someone to look at a file and not knowing the file was confidential gave the requestor access. Ms. Gibbons wanted to make sure there was no protection of governing bodies from purposely revealing information rather than unintentionally releasing it.
Mr. Walther agreed and stated at some point proving unintentional or intentional would be difficult and therefore would ultimately end up being one person’s word against another. He argued the idea of the language was to protect against all but intentional malicious types of disclosures. He felt the bill as whole would allow them to clearly identify the confidential information and make it easier to separate from the public records.
Mr. Walther testified his current records are scattered in files and do not have designations of what was confidential or public information. A judgment call had to be made each time information was requested for review. Also, if they were not sure the information was confidential they would ask the applicant if the information could be released.
Assemblyman Mortensen asked if most occurrences dealt with public companies that have stock traded and therefore financial information became public anyway. Mr. Walther stated they dealt with some public companies but the bond program and the manufacturing portion of the bond were intended for small companies with projects of $10 million or less. He stated they would see new applicants with innovative activities which have proprietary information attached regarding their business plan. While they seek financing they may wish to protect their plan.
Assemblyman Humke asked if Mr. Walther stated there were “protected” trade secrets and information that a private company tried to protect. Mr. Walther agreed and stated there was an existing definition of what proprietary information means. The definition made it clear if the information was to be disclosed they would be competitively harmed. Mr. Humke stated an industrial development bond helped a gas station on one corner versus the station on the opposite corner by giving them a benefit. An example was the state policy of a service station deserving Industrial Development Revenue Bond (IDRB) and on the opposite corner another station was not entitled to the same benefit. They would protect the trade secrets of the first station. Mr. Walther said the bond program was intended to promote economic development and there are other provisions that dealt with the competitive affects. The Office of Business and Planning was not prone to issuing bonds to projects that have adverse affects on existing businesses. He explained they were trying to build an economy and not harm an existing economy.
Mr. Humke stated he had a reservation about A.B. 87 and had a personal experience that he wanted to check out with Mr. Walther to make sure it was appropriate. His reservation was with the Office of Business and Planning benefiting from the sovereign immunity statute. Mr. Walther confirmed the $50,000 limit for all but intentional acts of the state or a public entity of the state were protected under the sovereign immunity statute.
Mr. Humke explained the bill was just “icing on the cake” and questioned why it was needed. Mr. Walther indicated Mr. Humke’s statement applied to Section 3 regarding the liability portion, but felt it did not apply to the change in subsection 1 regarding a shift in the burden to an applicant designating confidentiality. Mr. Humke felt the burden was on the plaintiff who attempted to show an act was intentional and was a disclosure in violation of the law. The secretary may not have safeguarded the information and a file may have been left open or possibly may have purposely been given to someone who did not have a right to view the document. He stated that would be the plaintiff’s burden in acquiring damages. Mr. Walther responded positively but stated that the law was not clear about what is or is not confidential and places the burden on the government to disprove the confidentiality. Therefore the government had more trouble with its defense in that type of lawsuit, which was the other part of the bill.
Mr. Humke wanted to tell his own experience about bond confidentiality that took place in the previous Legislature. The city of Reno was about to sell bonds pursuant to the railroad trench project prior to the 1997 legislative session and created a funding source for that project. Mr. Humke stated he attempted to amend the legislation before the Legislature in 1999 and was informed through the bill drafter that the bond council said they would be unable to give him information on the bonds that were about to be sold. He questioned if the same confidentiality provision is contained in the law that governed those bonds. Mr. Walther stated he was not familiar with that legislation and he could look into it further. He was not sure the bonding authority was administered through his office. He had no knowledge nor had he seen anything in any historical document to indicate his agency had anything to do with those bonds. He felt it might have fallen under another statute other than the one on which they were speaking of that day. Mr. Humke apologized and said he had not checked the statute under which those bonds were issued with the city of Reno. He also said he was quite surprised when he was told he could not obtain the information requested.
Mr. Walther then indicated he was fairly new on the job and had limited experience, but from what he saw on historical documents the program operated under the general rule to provide the information to the public on request. He stated A.B. 87 would accomplish making the general rule “public” and would make narrow exceptions for specific things, which were not public. He explained it would be easier to separate and keep separate those that should remain confidential. Sometimes negotiations were very sensitive and there may be a critical point before bonds were issued when one may want things kept confidential. Mr. Walther stated there might be attorney-client privileges where the bond council advised certain financial conditions should be confidential at a certain point. Making certain information public might upset the negotiations and possibly result in an unfavorable bond for the public.
Assemblyman Humke expressed concern about the balance and how the public could be protected when public funds were being used for the purpose of confidentiality. He said he was not opposed to protected trade secrets and he would not want to violate attorney-client privilege.
Assemblyman Brown asked if the burden was going to be shifted to the applicant to make a request in writing, would the applicant receive proper notification. Mr. Walther said “very definitely” and he would amend his application and put in “bold italics” that the issue be considered when they applied and would be up to them to comply with the requirement. Mr. Brown thought to keep things fair A.B. 87 could be amended to state that the director or governing body needed to provide notice and would make the applicant take the initiative if they wanted confidentiality. Mr. Brown wanted to ensure adequate notification would be given. Mr. Walther replied he would have no problem with such an amendment.
Assemblyman Brown requested knowledge of the standards the director would have or their disclosure upon which an applicant could bring a claim. He questioned if it currently reached the level of intent. According to subparagraph 3, the director of the governing body was the only one liable if the disclosure was intentional. He wondered if that was the current standard and was it incorporated into A.B. 87, or did subsection 3 modify that standard. Mr. Walther responded his answer was similar to the question asked by Assemblyman Humke and, although he was a lawyer, had no such cases for years. He pointed out there were many places in the law that stated standards for non-liability even though there could be a duplication of the general immunity statute.
Mr. Walther said to make it clear that an activity would not subject someone to liability, it was written into the law. As an example, there was a provision in the manufactured housing law that said the employee would not be held liable for any unintentional or negligent handling of a title to a mobile home. There would be protection under the general immunity statute, but the Legislature felt it wanted to focus on employee procedure for applications and encouraged them to not be concerned when they tried to process titles that could hold them liable.
Mr. Brown requested Ms. O’Grady, Committee Counsel, check on modification of the language in subsection 3. He wondered if there were any current complaints that had have been brought against a director or governing body for disclosure. Mr. Walther replied he was not aware of any in his office and the bill would only affect his office. He said there had never been a claim in his office and he did not think there had been any controversy. In general things were public, but some information was sensitive but had not been an issue. The intent was to improve the statutes and make them clearer.
Chairman Bache stated he had a problem with subsection 3 of A.B. 87. He mentioned that immunity was limited to $50,000 and by adding accidental, unintentional and negligent to the wording he felt “negligent” was a higher standard than the other two words. Basically that would totally protect them from release of information that was confidential and it would have a ruinous affect on a business. Secondly, Chairman Bache was curious as to the shift in language, and if someone stated the entire document was confidential how that would be handled. Would the client make the determination on what was confidential or what was not, or would the whole document be declared confidential?
Mr. Walther replied they would need to designate what portions of their application should be confidential and the protection would be limited to the statute. If an applicant stated the entire application should be confidential and there were parts that did not fit into that criteria, his office would have to clarify up front their concern to the applicant. He said with a requirement to take that step they would be able to bring the issue to a head before there would be a question about what portions of their application could be released. Mr. Walther also responded to Chairman Bache’s concern about the liability language. He declared he would prefer the language remain but the most important part of the bill would be the procedure set forth in Section 1, rather than the liability language in subsection 3. He again stated it was not a controversial program and they were not anticipating lawsuits or controversy over the release of information. They could probably get by with the general immunity statute, which was limited to the $50,000 liability cap. He wanted to point out that anyone working with the program, unless they were personally motivated to do otherwise, would not have a motive to release confidential information. He said their purpose was to work with the applicants and issue them bonds.
Chairman Bache asked if changing the burden to the applicant would have an affect on how their agency would handle requests from the press that could be considered confidential. Mr. Walther stated it would make it easier when reviewing files. His agency would be able to advise the press of what they would not release even if they pushed for information.
Chairman Bache asked for further questions from Carson City and with none recognized Henry Rollings, attorney, via teleconference from Las Vegas. Mr. Rollings stated he was opposed to A.B. 87. He had concerns about information that was protected when they were involved with government bond public fund issues. He read the bill and the words “the applicant determines what was confidential” and said he struggled with the determination between confidentiality and proprietary under Section 4. In Section 4 it stated proprietary information meant any trade secret. He was found it hard to believe any applicant would seriously submit a trade secret as part of an application for public funding.
Mr. Rollings also felt “mischief” would occur in another area where an applicant could claim certain information confidential. He read “other information which is disclosed to members of the general public and may result in a competitive disadvantage to the obligor including subsection 2 data, studies and reports concerning the development of new products.” He remarked patents on new products were one thing, but when the word “services” was included there were problems. An example would be a business that wanted to provide a service to the state, such as a public transportation issue where they might seek protection from disclosing public information under the guise of confidential information. He felt the public’s right to know was important and objected to the bill on that basis. He thought the easier thing to do in the application process would be to tell applicants they were not required to disclose financial information or trade secrets unless requested or necessary for the approval of the application. He repeated the bill was too broad and felt it meant that people could cover up information the public had a right to be aware of under the services in Section 4. Also, the discretionary function of the government’s responsibility for negligent acts in Section 3 was already covered in the statutes.
Mr. Rollings stated he was an attorney for 30 years in Las Vegas and had clients who were concerned about the bill and felt the bill could be used as a cover to hide information the public had a right to know.
Chairman Bache closed the hearing on A.B. 87.
Chairman Bache changed the order of the agenda and switched A.B. 101 and A.B. 104, so a gentleman in Las Vegas could testify. He then opened the hearing on A.B. 104.
Assembly Bill 104: Makes various changes concerning collection of charges for services provided by certain general improvement districts. (BDR 25-880)
Assemblywoman Von Tobel, District 20, said she represented the rural areas of Clark County and the bill would affect two of the rural valleys. The areas affected would be Moapa Valley and Virgin Valley, which included the communities of Overton, Logandale, Mesquite and Bunkerville. She stated A.B. 104 had to do with Overton Power, which was a general improvement district. She distributed the statute originally setting up Overton Power as a general improvement district (Exhibit C) in 1959.
Ms. Von Tobel read a section of the statute that provided for the existing lien powers. On page 2 of the handout, Section 39, she read, “Until paid, all rates, tolls or charges shall constitute a perpetual lien on and against the property served and any such lien may be foreclosed in the same manner as provided by the laws of the State of Nevada for the foreclosure of mechanics’ liens.” Ms. Von Tobel claimed Overton Power began to charge tenants’ bills back to apartment owners approximately a year-and-a-half ago. They took liberal notice with their lien rights. She explained that if a tenant moved from their apartment complex and failed to pay their power bill the company looked to the apartment complex for payment rather than collecting from the original subscriber. Also, she stated, the tenant subscribed to Overton Power for electric service, not the apartment complex. When an apartment was rented the water, sewer, and garbage might be included in the rental fee, but the power and phone were subscribed to on an individual basis because there was no average rate for usage. When bills were unpaid, the company chose to bill the landlord rather than to the tenant. She emphasized if a tenant did not pay their power bill, it often meant they also had not paid their rent. In some cases, they might have been evicted or caused damage to the apartment. Ms. Von Tobel said the landlord often did not have a sufficient security deposit to cover those power expenses.
Ms. Von Tobel explained the statute does not provide that apartment owners were responsible for tenants’ power bills. According to statute, a lien could be placed against the property. Ms. Von Tobel had spoken to Delmar Leatham of Overton Power who claimed they needed the money because they were a co-op and not a “for profit” power company. Since he was threatening liens against those properties, the money would not go to him anyway. She advised the lien on the property was only satisfied when the property was sold. Ms. Von Tobel stated it was not likely the apartment properties in Mesquite would be sold. As a former landlord, she could not imagine being contacted for tenants’ bills when they failed to pay their power.
Ms. Von Tobel introduced Coy Raynor, District Property Manager for Horizon Management, from Mesquite, Nevada. He was videoconferenced from Las Vegas and would testify for A.B. 104.
Chairman Bache asked for committee questions of Ms. Von Tobel before turning the testimony over to Mr. Raynor.
Assemblyman Mortensen questioned if the power company collected deposits from its subscribers so that, in the event they left without paying their bill, the power company could retain the deposit to cover lost revenue. Ms. Von Tobel responded that a deposit was collected and, according to Delmar Leatham, they collected deposits from tenants not from homeowners. The deposits were not enough to cover the power bills.
Mr. Coy Raynor, representing Mesquite Bluff Apartments in Mesquite, Nevada, testified about the deposits requested by Overton Power (Exhibit D). The deposit normally ran $100 per tenant and if the power was paid over a six-month period the deposit was automatically refunded to the customers.
Mr. Raynor stated Overton Power used the apartment complexes as collection agencies to collect their money. They had removed their responsibility of collecting and had placed the burden on landlords and property owners. The interpretation of NRS 318 concerning mechanics’ liens placed on properties had been omitted. He explained his company received billings on the community center bill, with tenants unpaid power bills attached. They had received disconnect notices that threatened to disconnect their business lines because of those unpaid tenant accounts.
Mr. Raynor noted Overton Power had no method of tracking their subscribers after they had left unpaid bills. Because his company paid on their bills the original subscriber could connect power again with no recourse. Overton Power hooked up subscribers with no arrangements to reimburse the apartment complex.
Chairman Bache asked for questions from members of the committee. He asked Ms. O’Grady, Committee Council, to check on the legal obligation of the landlord in this case and the legal ability of Overton Power and Light to conduct business in that manner.
Assemblyman Lee suggested that Ms. Von Tobel stated that Overton Power, although a co-op, should be considered the same as any other business and the same rights should be extended to their customers as regular businesses. Mr. Lee hypothesized if a tenant vacated a home, would the landlord be responsible for outside maintenance that had been contracted for such as newspaper delivery, plumbing repair, swimming pool service and all other extra services a person might choose to use. He questioned if Overton Power continued to send tenants’ bills to the landlords, would other businesses also confront landlords for payment of unpaid services. Ms. Von Tobel replied they currently had lien powers and the bill would remove their ability to continue. She said A.B. 104 only stopped their ability to put a lien on the property of a tenant. Mr. Lee agreed with Ms. Von Tobel and felt it was a good bill.
Ms. Von Tobel stated anyone who had ever owned property would be able to understand the frustration. Currently, property owners were put in positions of having to include power in their rent if they wished to be fully compensated. That was unfair to tenants because tenants use different amounts of power and the costs vary. Some delinquent tenants have paid their past-due power bills in order to have service connected elsewhere, but the money has never been credited back to the apartment complex bills. Ms. Von Tobel finalized by saying she recognized Overton Power was a co-op and was not attempting to hurt the company, but they had singled out one segment of the population where they knew there was a tenant-landlord relationship. They had not tried to collect from individual homeowners because they were unable to determine if the homeowner had rented out their house.
Assemblyman Mortensen stated he also felt it was a good bill.
Assemblywoman Gibbons asked if this co-op should be audited. Ms. Von Tobel replied she was only requesting A.B. 104, but an audit could be a consideration in the future.
Assemblywoman Von Tobel stated the committee might have received e-mail from Delmar Leatham. He had requested that the meeting be teleconferenced to Las Vegas. She later received another message from Mr. Leatham requesting the bill be “killed” because he would be unable to appear to testify. She disclosed that she had gone out of her way to make the meeting available for him to testify.
Mr. Bache said he would read Mr. Leatham’s statement into the record after all testimony had been taken on the bill.
David Howard, representing the Silver State Apartment Association, was in favor of A.B. 104 and stated he did not have much to add; however, a lien was a very serious problem and a cloud on a title in the process of being sold was undesirable. He urged support of the bill.
Judy Stokey, a Lobbyist representing Nevada Power and Sierra Pacific Power, stated Ms. Von Tobel had discussed the bill with them and confirmed Nevada Power and Sierra Pacific did not have a process to place liens on property of landlords if tenants did not pay their bills. They contracted with the tenant and the tenant was responsible for paying their power bills. If they tried to connect power elsewhere, they must pay their delinquent bill first. Also, the power companies collected security deposits, which were used to cover unpaid final bills. Ms. Stokey advised the companies supported Ms. Von Tobel’s bill.
Chairman Bache questioned Ms. Stokey about the security deposit and the six-month period of return with Overton Power. Ms. Stokey replied the deposit was returned, but believed it was held for a period of a year. She confirmed it was returned if they had good credit.
Maureen Brower, representing the Nevada Rural Electric Association, testified. Overton Power District was not a client but they had been contacted by them. They were asked to let the committee know they would send written comment, and apparently had e-mailed their comment.
Assemblywoman Gibbons questioned Ms. Brower on whether she was for or against the bill. Ms. Brower stated since she was not officially representing the client or the Overton Power District they were neither for nor against. She stated they all knew where Overton Power stood on the bill.
Mr. Coy Raynor, videoconferenced from Las Vegas, asked to make one last comment. He stated if there was a potential for a future audit between the dates of May and October of 2000, his company had paid Overton Power a total of $809 in delinquent amounts. There were currently several hundred dollars pending and outstanding for former tenants.
Chairman Bache clarified there were former tenants who left unpaid bills and Mesquite Bluff Apartments was required to pay those bills in order to maintain service for future tenants. Mr. Raynor stated that was correct, and explained on May 10 there was an attached bill for a delinquent tenant amounting to $315.85; on September 18 they received a bill for $261.68, and on October 16 they paid a bill of $232.04. Mr. Raynor stated the bills were all paid in a timely manner with their regular community center billing. All the bills had a ten-day pay by date and there was no amount of time given to debate with the power company on their validity.
Chairman Bache read the statement that had been e-mailed to the committee by Delmar Leatham.
Dear Assemblyman Bache,
A.B. 104 is scheduled to be heard before the Government Affair’s Committee on February 22. The management of Overton Power District was unable to make flight arrangements to be in attendance at the hearing. We strongly object to the passage of this legislation. We feel there are adequate safeguards available to landlords without limiting the ability of a non-profit electric utility (N.R.S. 318 special improvement district) to lien a landlord’s property for a renter’s bad debt. Should the bill be enacted the debt would transfer from the landlord to the customer of the power district. We question why electric utilities are being singled out for this type of action in these troubled times. If the committee chooses to go forward with this legislation we believe it should be amended to include all special improvement districts, not just the electric utility districts. We will be in Carson City on February 26th and would be happy to meet with you and discuss this issue with you. Once again, please consider killing this bill in committee or at least amending it to include all special improvement districts. Please submit these comments for the record on behalf of Overton Power District, # 5.
Sincerely,
Delmar Leatham
Manager of Administrative Services
Overton Power District # 5
Assemblywoman Von Tobel stated she had made copies of the e-mail (Exhibit E), which she distributed to the committee. She read the e-mail received earlier in the day to the committee.
Dear Kathy:
We are wondering if the hearing on A.B. 104 can be delayed until the 26th or 27th. If the hearing cannot be delayed can we testify from Las Vegas over the videoconference?
Sincerely,
Delmar Leatham
Ms. Von Tobel assumed he would be in Las Vegas for the committee meeting and indicated it was not a matter of air transportation. He had asked if he could testify from Las Vegas.
Assemblywoman Gibbons reiterated the statement Chairman Bache read, “if the bill were passed they would want it applied to all GIDs (general improvement districts).” She questioned if there was competition within the GIDs for the same customers. Ms. Von Tobel replied that general improvement districts, such as sewer, should have the capability to set liens because a tenant would not turn on the sewer. A tenant may claim they did not use sewer but they turned on the water in the sink and flushed toilets so they used the sewer service. She stated they had every right for the sewer district to be a GID and use full lien powers. It was not appropriate to change the law to encompass all GIDs. Ms. Von Tobel reiterated that power is something a tenant can elect not to pay knowing it would be turned off and the landlord would be stuck with the bill. She reiterated that most landlords did not include power as part of the rent because individuals use different amounts of electricity.
Chairman Bache closed the hearing on A.B. 104 and advised the committee that if Mr. Leatham should arrive in Las Vegas between now and adjournment of the committee meeting they would reopen the hearing on A.B. 104 to hear his testimony.
Chairman Bache then opened the hearing on A.B. 101.
Assembly Bill 101: Requires inclusion of certain portions of county roads, state highways and railroads in territory annexed by cities in larger counties. (BDR 21-362)
Tom Grady, Executive Director of the Nevada League of Cities, gave background on why they were presenting A.B. 101. The city of Henderson worked through the League and their government affairs committee, whose staff members lobby at the Legislature. They then went through a panel and through general membership to obtain support for the bill. The general membership accepted the bill on behalf of the city of Henderson.
Mr. Grady introduced Mr. Kurt Segler with the city of Henderson who gave the technical points of the bill. Mr. Grady stated A.B. 101 only addressed the counties above 400,000 populations, which was Clark County. They subsequently met with Clark County officials who had a problem with Section 1, subsection 3, page 2, and lines 1 to 3. They were pleased to announce that the city of Henderson, the local lobbyists for Clark County, the Clark County folks and the Nevada League of Cities accepted the proposal to delete the language he referred to in Section 1, Subsection 3, page 2, lines 1 to 3. He asked the committee to accept their amendment and then turned over the meeting to Mr. Kurt Segler.
Kurt Segler, Chief Legislative Advocate representing the city of Henderson, explained the bill as originally drafted placed counties with populations over 400,000 on an equal basis with smaller counties. A.B. 101 allowed for the orderly development of streets and instead of two jurisdictions having control over the same street it would be the responsibility of each city where the street was located. He explained the city would take on the extra burden of maintaining those streets and the city of Henderson felt it would be better for the public.
Chairman Bache asked how the bill would work with the Regional Transportation (RTC) being involved with the streets in Clark County. Mr. Segler responded that currently when there are two agencies with jurisdiction over one street, one agency adopts or becomes the sponsor for the street for RTC purposes. That would be an additional responsibility for the city of Henderson as to those portions of RTC projects there.
Colleen Wilson-Pappa, Lobbyist for Clark County, stated if Section 1, Subsection 3, page 2, beginning with “if the annex territory is the subdivision ending with and becomes city streets” was deleted, Clark County would remove their opposition to the bill.
Chairman Bache recalled how his home state of Michigan handled its road maintenance. Major roads were county roads whether they were in an unincorporated section of the county or the city, and the county was responsible for them. Residential streets were the city responsibilities. He stated they had a different system in Nevada that dealt with streets and roads. Ms. Wilson-Pappa responded in Section 1, Subsections 1 and 2 actually were current practices with local entities. A.B. 101 would make it statutory.
Assemblyman Lee was perplexed with the reference to “railroad” in the bill and did not believe that either counties or the state owned rights-of-way for railroads.
John Toth, Acting Traffic Manager, Clark County Public Works, responded that Mr. Lee was correct and the railroad right-of-way was owned by the railroad. He stated he did not understand why that language was in the bill.
Assemblywoman Gibbons wanted Mr. Toth to share information concerning the city taking over both sides of a railroad and questioned if it made the city responsible to the railroad for any extra expenses. Mr. Toth replied the only liability the city would have regarding railroads would be where the road crossed railroad tracks. It depended on the number of trains on the track. Also, the road could cross a grade and be controlled by flashing signals and crossarms or may need to be grade-separated which would be over or underneath the tracks. He indicated that would be a liability for whichever entity had the railroad crossing.
Assemblywoman Berman stated there were some places where buffers were needed near railroads and wondered if that would also be the cities’ responsibility. Mr. Toth replied if developments front a railroad right-of-way there were certain setbacks required for buildings. Typically the railroad right-of-way would be delineated from the development by a block wall. Ms. Berman asked who would be responsible for paying for a wall. Mr. Toth replied the developer of the subdivision would be responsible for installing a block wall and would need to comply with the distance requirements.
Kurt Segler, representing the city of Henderson, stated it was true the cities did not own the right-of-way; however, if one took the centerline of a railroad and annexation of each city was to the centerline; and a street crossed this railroad, then that city would have been responsible for full improvements.
Kimberly McDonald, Lobbyist, City of North Las Vegas, expressed support for A.B. 101 with the proposed amendments.
Chairman Bache closed the hearing on A.B. 101.
Assembly Bill 117: Revises provisions regarding rules adopted by local governments that affect businesses. (BDR 19-495)
Assemblyman Goldwater, District 10, stated A.B. 486 of the Seventieth Session, or the “Small Business Regulatory Reform Act” was passed last session. Local and state governments were required to get impact statements from the business community before any regulations were passed. When the bill was implemented there were questions and hurdles that were unintended. Mr. Goldwater clarified that A.B. 117 attempted to forge a compromise on the workability of the bill while keeping the bill’s original intent. He stated there was new language in Section 1, which made the implementation of the thought more permissive and there were also deletions along with further defining rules and ordinances.
Marvin Leavitt, Lobbyist, explained there were attempts made to adopt regulations that would serve to implement the bill. He realized there was no provision in NRS for anyone to adopt regulations and was not sure of the procedures they should follow or the forms they should use. Section 1 of the bill provided a procedure in which the committee of local government finance would start the process and eventually receive approval from the Nevada Tax Commission.
Mr. Leavitt stated the major portion of the bill related to the definition of “rule.” The old definition said “rule” meant an ordinance, regulation, resolution or other type of instrument by the adoption in which the governing body of a local government exercises legislative powers. When they tried to determine what that meant there were a variety of definitions. He revealed the bond council indicated there were court decisions and with approval of bonds would be a legislative act. If there was no process to determine the business impact then the bond council was unwilling to give an opinion on bonds because they could affect the legality.
Mr. Leavitt pointed out Section 2, line 10, and described that section. He said they got everyone together that was interested in the bill to more accurately define what Mr. Goldwater had in mind when the bill was originally drafted. He said this bill did not change the intent, but rather specifies exactly what local government needed to do to implement this procedure.
David Howard, Lobbyist, Reno Sparks Chamber of Commerce, said the spirit of A.B. 117 was to put business or government on notice when a change was made that would impact their business. One entity in northern Nevada had its form entitled “Business Impact Statement” and it was very clear. They had three entities in northern Nevada and one was doing a good job at notifying business and one was confused and the other one was not doing anything. He stated the bill would clear up any uncertainty of those parts in question and would maintain the spirit of the same bill that had been introduced by Mr. Goldwater. Businesses could be put on notice when governments would impact their business. He stated government is very complicated and from time to time it must be cleaned up.
Mr. Howard asked Mr. Leavitt a question regarding the exclusions in Section 2 on page 10. He surmised they were covered under other sections of the law. When government bodies raised the sales tax a public notice would be necessary.
Mr. Leavitt replied exempted items by the definition of rule were things that had definite procedures. They did not affect business any differently than anyone else in the community. Local governments had no intention for improvement districts to be affected by A.B. 117. When reading the definition of “rural” itcould include a GID. Also, taxes went through budget processes with public hearings and definite approvals are required by governing boards and were approved by the voters. Another example would be the issuance of bonds, which would go to the debt management commission in the county. After an approval it would go to voters and then return to the governing board, which would then go through the ordinance to issue bonds, and then on to a public hearing. There was plenty of protection written into existing statute.
Assemblyman Goldwater stated his constituents wished to side with local business rather than government.
Assemblyman Lee asked Mr. Leavitt on page 2, line 5, what was meant by an “action.” Mr. Lee questioned if it was a legal term and said his definition had always been “through an ordinance, regulation or resolution and maybe exercise of legislative powers.” Mr. Lee was concerned with “action” italicized and still questioned if it was a legal term. Mr. Leavitt responded that an action taken by a local government was written to include an ordinance or resolution or any motion by member of a governing board and approved by the board. He summarized that included any action or anything a board approved that affected those businesses outlined. There were some instances where fees were adopted by ordinance and others by resolution. He described local governments as very different and with the bill’s verbiage the intention was to catch anything done by a local government.
Assemblywoman Gibbons asked if the word “action,” for example, would be the county treasurer changing the way in which property taxes were calculated. Mr. Leavitt stated he did not believe the county treasurer had any obligation or right to change the way property taxes were calculated. He thought they were exempted. He felt it related more to government changes of a business license and their regulation and abilities to do different things.
Assemblyman Goldwater stated that requests by the treasurer to change the way real property was assessed would have no problem publicizing. Mrs. Gibbons replied that she was sure the treasurer was protecting property and would not allow something like that to happen. Mr. Goldwater responded that property taxes and things the treasurer does have plenty of public notice and public input. He felt very comfortable about making that one of the exempted items.
Mr. Howard gave another example of when county commissioners do not raise taxes, everyone knows about it. There was an announcement made for no tax increase, but if they tried to increase taxes there were specific laws that required two public hearings. To raise taxes there are specific laws, which require a public hearing not only once but twice. Ms. Gibbons questioned whether the word “action” included a recalculation of the fee. Mr. Goldwater responded “yes.”
Dan Musgrove, Lobbyist, City of Las Vegas, stated the bill was a joint effort and appreciated Assemblyman Goldwater’s efforts to bring the bill forward and make certain technical changes that would help every local government make sure they were fair and consistent. From the biggest government to the smallest local entity there would be consistency in their application of A.B. 486 of the Seventieth Session.
Mary Walker, Lobbyist, representing Carson City, Douglas County and Lyon County, stated she supported A.B. 117. She was also on the committee that looked at the different types of changes. One of the things they found questionable were the “fees.” The original language basically covered all fees handled by local governments; some pertained to businesses, but others to fees on individuals for services provided. They looked at the ability to fine tune A.B. 117 to make it conform more closely with the original intent, which would be applicable to only those fees paid in whole or part by businesses. She said they now could look at actual fees relating to businesses and not fees paid by individuals for types of services. Ms. Walker voiced her appreciation for the opportunity to work with Assemblyman Goldwater, the Chambers of Commerce, Carole Vilardo, and the local governments.
Warren Hardy, Lobbyist, representing the National Federation of Independent Businesses (NFIB), stated the federation is the largest small business association in the United States. It represents over 600,000 small business members nationwide and 2,500 small business within the state of Nevada. Over- regulation by government was consistently identified by membership as the number one issue that was difficult for them to deal with as a small business owner. He revealed it was never the intent to shift the burden back to local government, which was what A.B. 117 did to a degree, but with the changes it went to the core of what the original legislation intended.
Assemblywoman Gibbons mentioned page 2, line 21 to 23, defined “action.”
Tom Grady, Nevada League of Cities, stated his support of the bill.
Ray Bacon, Lobbyist, representing Nevada Manufacturers Association, said they would have liked to support the entire concept of A.B. 486 of the Seventieth Session. He mentioned they had a specific case, which happened after the bill was passed, where a member was hit with a 656 percent increase in a fee. They were asked where the business impact statement was, and how were they able to justify the increase. Subsequently the fee was dropped to approximately 70 percent. Since it had not fluctuated in about 15 years the 70 percent, although high, was justifiable and a step in the right direction.
Carole Vilardo, President, Nevada Taxpayers Association, said she was supporting the bill.
John Slaughter, Lobbyist, Washoe County, said he also supported A.B. 117. He felt they may have been confused in the past with prior legislation, but this bill cleared up any confusion they may have experienced.
Colleen Wilson-Pappa, Lobbyist, Clark County, also expressed support of A.B. 117 and thanked Assemblyman Goldwater for his assistance.
Chairman Bache closed the hearing on A.B. 117. Mr. Bache advised the committee they would only have one bill the next day and the committee should be prepared to vote on seven or eight bills the next day to move them out of committee.
Chairman Bache addressed Ms. Von Tobel. He stated it was indicated Mr. Leatham would be available to testify against A.B. 104 on Monday. He would continue for the purpose of receiving his testimony and would include it on Monday’s agenda. He said he would like Mr. Leatham’s testimony on the record for the committee before processing her bill.
Chairman Bache adjourned the meeting at 9:53 a.m.
RESPECTFULLY SUBMITTED:
Linda Utt
Committee Secretary
APPROVED BY:
Assemblyman Douglas Bache, Chairman
DATE: