ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS

MINUTES OF THE meeting

of the

ASSEMBLY Committee on Government Affairs

Seventy-First Session

April 11, 2001

The Committee on Government Affairswas called to order at 8:16 a.m., on Wednesday, April 11, 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:

Assemblyman John Marvel, Assembly District No. 34

Assemblyman Don Gustavson, Assembly District No. 32

Assemblyman Jerry Claborn, Assembly District No. 19

STAFF MEMBERS PRESENT:

Eileen O’Grady, Committee Counsel

Dave Ziegler, Committee Policy Analyst

Glenda Jacques, Committee Secretary

OTHERS PRESENT:

Al Bellister, Lobbyist, Nevada State Education Association

Richard Daly, Lobbyist, Laborers Union Local No. 169

Tom Burrous, President, Redevelopment Association of Nevada

Carole Vilardo, Lobbyist, Nevada Taxpayers Association

Kimberly McDonald, Lobbyist, City of North Las Vegas

Kent Lauer, Executive Director, Nevada Press Association

Kathy Naumann, Business Agent, Teamsters Local No. 14

Jane Nichols, PhD., Chancellor, University and Community College System of Nevada

Tom Ray, General Counsel, University and Community College System of Nevada

Joe Crowley, PhD., former president, University of Nevada, Reno

Jim Richardson, PhD., Lobbyist, Nevada Faculty Alliance

Stewart White, Attorney, Sun Valley General Improvement District

Fred Hillerby, Lobbyist, Sun Valley General Improvement District

Madelyn Shipman, Assistant District Attorney, Washoe County District Attorney’s Office

Chris Ferrari, Lobbyist, Regional Emergency Medical Service Authority

Jim Gubbels, Vice President, Regional Emergency Medical Service Authority

Mary Henderson, Lobbyist, Reno

Neena Laxalt, Lobbyist, Sparks

Assembly Bill 50: Revises provisions governing certain funds into which school districts may transfer money. (BDR 31-30)

Assemblyman John Marvel, Assembly District No. 34, introduced A.B. 50 and stated it was a revision of S.B. 48 of the Seventieth Legislative Session. It allowed rural counties to put aside additional money for school construction to stabilize their fund. Counties under 100,000 could have a fund that would not exceed 30 percent of the school expenditures from the previous fiscal year.

Al Bellister, Lobbyist, Nevada State Education Association (NSEA), opposed A.B. 50. Mining revenues were a necessary source of revenue for school districts’ ongoing operations. The need to stabilize the fund had been eliminated when net proceeds of mine revenues were changed from “estimated” to “actual.” Schools needed every penny for operating costs and did not have the financial ability to set aside money. The current “10 percent cap” had not been met. Nevada had its own “rainy day” fund that would cover the counties in case of an emergency.

Mr. Mortenson questioned what difference it made where the cap was if the schools could not meet it.

Mr. Bellister replied the schools could not reach the current 10 percent cap. Mr. Mortenson said if schools could not reach the cap then it should not bother him.

Mr. Bellister explained schools could not set aside money because they did not have enough money to operate. The move from an estimated base of budgeting to an actual base had stabilized revenues and solved the “net proceeds” problem related to the fluctuating price of gold.

Chairman Bache closed the hearing on A.B. 50 and opened the hearing on A.B. 407.

Assembly Bill 407: Revises provisions governing development projects on which prevailing wage must be paid. (BDR 22-1196)

Assemblyman Jerry Claborn, Assembly District No. 19, stated A.B. 407 was requested by Laborers Union Local No. 169 from Reno, Nevada.

Richard Daly, Lobbyist, Laborers Union Local No. 169, stated A.B. 407 explained the parameters of “prevailing wage” as it related to redevelopment projects and was an update of A.B. 580 of the Sixty-Sixth Session. He introduced a proposed amendment (Exhibit C) and explained the changes to NRS. Section 3 clarified the appraisal process and increased or “fair market” value of a development. Section 4 stated financial incentives given must be calculated into the value of financial incentives given. Section 5 and 6 defined “financial incentives” and what redevelopment agencies could do.

Ms. Berman questioned how you could prove someone “encouraged or influenced” the redevelopment agency. Mr. Daly responded if a developer was trying to influence the agency it was evident through minutes of meetings. Section 4(b) would not apply if you could not prove allegations.

Ms. Berman asked if allegations were not proven then why was it needed in statute. Mr. Daly responded it would prevent a developer from coming back under another developer to receive the benefit of redevelopment incentives.

Mr. Brown asked if most redevelopment projects were initiated by private developers. Mr. Daly replied most projects were funded and operated by private developers. The redevelopment agency developed, enticed and gave incentives to developers to bring private money into the community. The bill clarified if public money was used the developers should not “under-cut” prevailing wages.

Mr. Brown questioned whether the infrastructure or the entire Target development was subject to prevailing wage. Mr. Daly replied it should have been the buildings. Currently, Target and Home Depot were in litigation with the Labor Commissioner’s Office for failure to comply with NRS 338.

Mr. Brown asked what the development cost. Mr. Daly answered around $9 to $10 million.

Tom Burrous, President, Redevelopment Association of Nevada, stated the bill severely limited the powers of redevelopment agencies to create new jobs and respond to market conditions. Existing legislation adequately handled larger projects. The prevailing wage statutes in NRS 338.010 to NRS 338.090 were included in the redevelopment agreement. “Gifting” or reducing property to the developer made the project viable. Smaller projects might not be able to afford off-site infrastructure improvements. The addition of prevailing wage to those costs could render the project nonfeasible or nonexistent. If a project did not recover incentive costs within 60 months it would trigger prevailing wages. Some projects required additional time to see a return of investment. The proposed legislation added administrative costs, limited negotiating ability, and hindered the ability to leverage tax increment financing. Because the bill was retroactive to October 1, 1991, there would be financial repercussions. The bill impeded the ability of redevelopment agencies to meet the intent of NRS 279.408 and NRS 279.418.

Mrs. Smith questioned if the lack of a new effective date caused the bill to become retroactive. Mr. Daly answered a new effective date would clarify that.

Eileen O’Grady, Committee Counsel, clarified the effective date of the bill was October 1, 2001 and was not retroactive but prospective.

Mr. Price questioned the theory behind prevailing wage. Mr. Daly responded possibly early redevelopment projects needed an incentive to pay minimum wage. Small redevelopment projects under $100,000 could be cancelled because of additional costs.

Mr. Price asked if Mr. Burrous’ interest was in projects under $100,000. Mr. Burrous replied the Redevelopment Agency of Nevada had followed existing guidelines and felt Section 6 should not be counted as an incentive because it spoke to the principal purpose of redevelopment and was a primary obstacle to economic reuse.

Mr. Price commented he had seen large redevelopment projects and questioned what small low-income housing projects would be. Mr. Daly said maybe a duplex rehab or a small piece of property would not exceed $100,000. Those small projects revitalized the neighborhood and brought them back into compliance.

Ms. Berman questioned what additional redevelopment costs would be incurred with the new language. Mr. Daly replied he could not answer because every community was unique and costs were on a case-by-case basis.

Mr. Brown questioned what projects would be under $100,000. Mr. Daly responded redevelopment in older, blighted neighborhoods could be a “poster-child” and spark additional development. Addition of prevailing wage could cause the project to fail.

Mr. Brown asked if the ceiling was raised to $200,000 would smaller projects be helped. Mr. Daly answered he would need to confer with his associates.

Mr. Price questioned what redevelopment agencies Mr. Daly represented. Mr. Daly answered he represented the cities of Reno, Sparks, Las Vegas, North Las Vegas, Mesquite, Henderson, Carson City, and Douglas County.

Ms. Smith asked why he opposed Section 3 and the wording “current fair market value.” Mr. Daly replied his concern was with a dated appraisal that became obsolete.

Carole Vilardo, Lobbyist, Nevada Taxpayers Association, expressed concerns about incentives becoming part of the market value of the project. A small building in Carson City had asbestos in it and no business wanted to absorb those costs. The city had to remove the asbestos to make the project viable. The costs might not be mitigated because a small business had a smaller rate of return. The bill would work against necessary refurbishing and redevelopment incentives. Careful rewording of the bill would address the issue.

Kimberly McDonald, Lobbyist, City of North Las Vegas, supported the statements of Mr. Burrous. The proposed legislation significantly increased financial burdens on governmental redevelopment projects. The legislation invoked prevailing wage requirements and limited the agency’s ability to induce new developments. Negotiations for financially feasible small- and mid-scale projects would be hampered. The agency would be hampered to recover their financial incentives beyond the 60-month period. The most detrimental aspect of the legislation was the retroactive provision to October 1, 1991.

Ms. Smith commented the effective date was October 1, 2001.

Chairman Bache closed the hearing on A.B. 407 and opened the hearing on A.B. 479.

Assembly Bill 479: Revises provisions regarding open meeting law. (BDR 19‑1026)

Assemblyman Bob Price, Assembly District No. 17, introduced A.B. 479 and stated any individual who received their basic income or operating revenue from tax dollars was doing the “people’s business” and citizens had the right to know what was going on. The question of what constituted a “public office” or “public officer” arose out of the search for a University President.

Kent Lauer, Executive Director, Nevada Press Association, strongly supported the bill because it defined what “public office” was in the open meeting law. The Nevada Supreme Court ruled interviews for president of the Community College of Southern Nevada could be held behind closed doors because the position of college president was not a “public office” (Exhibit D). High-level government positions had significant public responsibility, power, and trust and should be interviewed in public.

Mr. Mortenson questioned how many states had similar rules governing the hiring of college presidents. Mr. Lauer stated he did not know but would get the information to Mr. Mortenson.

Assemblyman Price commented he had not researched the question because he felt Nevada should be at the forefront of this type of legislation.

Mr. Mortenson stated he was a strong advocate of the open meeting law but did not want to be the only state that required a college president to be interviewed openly because it could be detrimental to those who applied.

Mr. Lauer stated all applications were public record and questioned whether any individual had been fired because their employer found out they had applied for a different job.

Ms. Smith asked if the recent interview for state superintendent of schools had been done openly. Mr. Lauer responded he could not recall.

Ms. Von Tobel stated she did not feel the open process had negative repercussions.

Mrs. Freeman agreed an open process allowed for public trust and confidence. She wondered why anybody would be afraid to bring things out in the open.

Chairman Bache questioned if public boards did the interview was it open to the public. Mr. Lauer responded open meeting law applied when public boards handled the interview.

Kathy Naumann, Business Agent, Teamsters Local No. 14, explained her attendance at public benefit board meetings had not been received well.

Ms. Freeman asked who provided the staff at public benefit board meetings. Ms. Naumann replied the public benefit board could answer tomorrow.

Jane Nichols, PhD., Chancellor, University and Community College System of Nevada, stated it was difficult to be in opposition to the newspapers of Nevada. It was the Board of Regents’ intention to comply with open meeting laws. A.B. 479 was too broad and could have unintended consequences. The difficult business of the Legislature was to balance good and open government. The Chancellor was a public officer in Nevada and the position operated with all the ramifications of that designation. The President of the University was different because they came from the academic ranks within academic institutions. The bill did not address the public part of the selection process but would limit reference discussions. Florida had a “quasi-permanent” interim president of the University because they had been unable to hire anyone because of their open meeting law requirements. Many people had not applied for the position of President of the University of Nevada, Reno, because of the open process that was conducted.

Ms. Nichols asked the process not be expanded to severely impact their ability to conduct presidential searches. The application process and decision process were currently done openly. The interviews could be done in the open. Parts of the process needed to be done in a way to protect the people that chose to seek those positions. Personnel issues should be kept private. A.B. 479 could affect principals of elementary schools, football coaches, or vice-chancellors.

Ms. Von Tobel stated all search committees should be open. A recent search committee she participated in was manipulated in “closed” meetings. Washington University posted all candidates who applied for presidential positions on the Internet.

Dr. Nichols clarified the personnel process for hiring of public employees was very important and should be kept as was. It had been her experience people in high-level positions that applied for different positions experienced turmoil when it became public knowledge.

Mr. Price stated similar arguments were raised from opponents of Nevada’s first open meeting law. Employees who were paid by tax dollars had a responsibility to the public.

Tom Ray, General Counsel, University and Community College System of Nevada, felt the bill was unnecessary and too broad. He felt the bill was an overreaction to the Nevada Supreme Court ruling. The personnel section of Nevada Revised Statues (NRS) defined the position of “public officer.” A.B. 479 would redefine “public officer.” “Public officer” would have two different definitions that would be inconsistent with each other. The bill did not clearly define what a “public officer” was, what laws applied to them, or what risk they would be at if they failed to comply with those laws. “Public officers” had to file public disclosure reports with ethics committees and received penalties if they did not.

Search processes were open, the applications received were public, and discussions on who should be recommended were done openly. A limited closed session was used to discuss the applicant’s character or competency. The existing open meeting law realized the trade-off for open government and limited privacy “confidentiality” interests. All contract employees had an evaluation process that extended or renewed their contract. Under personnel board policies those documents were confidential. The broad approach of the bill might allow personnel documents and evaluations to be public. Many states with open meeting laws had exceptions for confidentiality in search processes and evaluations.

Joe Crowley, PhD., former president, University of Nevada, Reno (UNR), felt a consideration of balance was needed. When the public interest ceased to be served because the law was so open, it could produce a “chilling effect.” It was appropriate to have interviews for President and Chancellor done openly, but it was not appropriate for questions concerning references and competency to be done openly. Although the University President and Chancellor were public officials they still had the same privacy rights as other public employees. UNR evaluations were done by the board and faculty. The faculty felt those evaluations needed the protection of confidentially and the proposed legislation would destroy that.

Ms. Freeman felt public distrust was perpetuated by not having open meetings.

Dr. Nichols responded she would appreciate a closer look at the bill to allow for flexibility in open interviews and evaluation of the best possible people in a nationally competitive market.

Mr. Price clarified subject matter was defined differently for the purpose and intent of that particular law. NRS did not define everything the same. The definition of “public officer” for the open meeting law section did not pose a problem in other NRS sections.

Mr. Ray replied there were different definitions of Nevada state employees throughout NRS. The relevant personnel NRS statute had a specific definition of what a “public officer” was and A.B. 479 conflicted with that.

Mr. Price questioned if it would be unconstitutional for both definitions to be in statute. Mr. Ray replied it could be an argument for court but he could not say definitively.

Jim Richardson, PhD., Lobbyist, Nevada Faculty Alliance, opposed A.B. 479. The phrase “high-level administrative or executive officer” was problematic and needed further definition. The qualified candidate pool had diminished because of problems already discussed. Disclosure filings by public officials were a concern to those who applied for those types of jobs. Personnel files were confidential and not open to the public. Public employees should not have to compromise their privacy rights.

Ms. Von Tobel questioned if current meeting laws had affected applicants coming to Nevada. Dr. Richardson felt the current law effected Nevada’s candidate pool and their ability to recruit the best candidates. He felt the law needed an exemption.

Ms. Von Tobel suggested A.B. 479 would not have the “chilling effect” mentioned because applications and hearings were public. The final meeting that decided which candidate would be hired would be only a portion of the hiring process affected.

Dr. Richardson responded sometimes it was advantageous to have portions of the hearing process behind closed doors. Discussions of references should not be done in open meetings.

Vice Chairman Lee closed the hearing on A.B. 479 and opened the hearing on A.B. 413.

Assembly Bill 413: Revises provisions regarding cooperative agreements between local governments. (BDR 22-1305)

Assemblyman Don Gustavson, Assembly District No. 32, said A.B. 413 was requested by Sun Valley General Improvement District.

Stewart White, Attorney, Sun Valley General Improvement District, said the bill prohibited local government cooperative agreements formed under NRS 277 to abolish continued existence of other local government entities that were not part of the agreement. NRS 277 allowed local governments to cooperate with each other in agreements for governmental purposes. The combination of those agreements could have an adverse affect on others that were not a part of the cooperative agreement. Sun Valley had a wholesale 10-year contract with Sierra Pacific Power Company for water service. Reno, Sparks, and Washoe County had formed the Truckee Meadows Water Authority under NRS 277 to buy Sierra Pacific Power Company’s water division. The new Truckee Meadows Water Authority was regulated by the Federal Public Utility Commission and did not have to provide water to Sun Valley General Improvement District. Without water, Sun Valley Water and Sanitation District would be eliminated. The proposed amendment (Exhibit E) removed the words “the operation” from subsection 2.

Vice Chairman Lee questioned what type of “entities” could be formed under the agreement. Mr. White did not know of any cooperative agreements that had been formed around the Reno area.

Fred Hillerby, Lobbyist, Sun Valley General Improvement District, supported the bill and its amendment.

Vice Chairman Lee closed the hearing on A.B. 413 and opened the hearing on A. B. 648.

Assembly Bill 648: Provides for formation of regional fire protection district in certain counties. (BDR 42-327)

Madelyn Shipman, Assistant District Attorney, Washoe County District Attorney’s Office, stated A.B. 648 talked about the consolidation of fire districts. A proposed replacement (Exhibit F) changed the bill to a resolution. Within the Washoe County metropolitan area were nine different fire agencies. Reno, Sparks, the Truckee Meadows Fire Protection District, the Sierra Forest Fire Protection District, Airport Authority Fire Department, Bureau of Land Management and Forest Service all had their own fire departments. Issues had been raised whether fire or other services should be consolidated.

Chairman Bache commented he had requested the bill as a vehicle for the entities involved to accomplish their goals.

Ms. Freeman questioned if there would be a need for a statute next session. Ms. Shipman responded if the decision was made to establish a regional fire district there would be a need for future legislation. Consolidation of services did not necessarily need a formation of a fire district.

Chris Ferrari, Lobbyist, Regional Emergency Medical Service Authority (REMSA), supported the proposed joint resolution and would work with Ms. Shipman and other interested parties in resolving issues.

Jim Gubbels, Vice President, Regional Emergency Medical Service Authority, did not support the bill as written but would support the resolution. REMSA was a regional service and wanted to see the fire district become a regional service.

Mary Henderson, Lobbyist, Reno, stated their legal counsel had opposed the bill and was neutral on the joint resolution. She felt the resolution should encourage people to get together.

Neena Laxalt, Lobbyist, Sparks, stated they were neutral on A.B. 648 but supported the resolution.

Vice Chairman Lee advised those interested to get with Ms. Shipman before Monday and closed the hearing on A.B. 648.

Chairman Bache explained the committee had 42 bills to process before Tuesday, April 17, 2001 and there could possibly be a 7 p.m. work session on Thursday to process bills.

Assembly Bill 414: Authorizes removal of manager of state public works board under certain circumstances. (BDR 28-670)

ASSEMBLYWOMAN GIBBONS MOVED TO DO PASS ON A.B. 414.

ASSEMBLYWOMAN PARNELL SECONDED THE MOTION.

Ms. Smith commented a suggestion had been made to change “or” to “and” in Section 1, subsection 1.

ASSEMBLYWOMAN GIBBONS AND ASSEMBLYWOMAN PARNELL WITHDREW THEIR MOTIONS.

ASSEMBLYWOMAN GIBBONS MOVED TO AMEND AND DO PASS AS STATED BY MS. SMITH.

ASSEMBLYWOMAN PARNELL SECONDED THE MOTION.

Ms. Von Tobel questioned whether both parts of the bill were being changed from “or” to “and.”

Chairman Bache clarified he supported the original bill and not the amendment because problems occurred when the board had not been available. The existing language gave flexibility.

ASSEMBLYWOMAN GIBBONS AND ASSEMBLYWOMAN PARNELL WITHDREW THEIR MOTIONS.

ASSEMBLYWOMAN GIBBONS MOVED TO DO PASS A.B. 414.

ASSEMBLYWOMAN PARNELL SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.

Assembly Bill 465: Authorizes use of proceeds of certain taxes for certain highway improvement projects located wholly or partially outside boundaries of this state. (BDR 20-831)

ASSEMBLYWOMAN BERMAN MOVED TO DO PASS A.B. 465.

ASSEMBLYWOMAN SMITH SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.

Assembly Bill 553: Revises provisions regarding notification of certain proposed planning and zoning changes. (BDR 22-197)

ASSEMBLYMAN WILLIAMS MOVED TO DO PASS A.B. 553.

ASSEMBLYWOMAN BERMAN SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.

Assembly Bill 557: Authorizes constables, upon request of sheriff, to execute certain process, writs and warrants. (BDR 20-246)

ASSEMBLYMAN WILLIAMS MOVED TO DO PASS A.B. 557.

ASSEMBLYMAN BROWN SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.

Chairman Bache stated they had 38 more bills to process and Friday and Monday meetings would be work sessions. Seeing no further business the meeting was adjourned at 11:05 a.m.

RESPECTFULLY SUBMITTED:

Glenda Jacques

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

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