MINUTES OF THE meeting
of the
ASSEMBLY Committee on Transportation
Seventy-First Session
February 27, 2001
The Committee on Transportationwas called to order at 1:35 p.m., on Tuesday, February 27, 2001. Chairwoman Vonne Chowning 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:
Mrs. Vonne Chowning, Chairwoman
Ms. Barbara Cegavske
Mr. Jerry Claborn
Mr. Tom Collins
Mr. Don Gustavson
Ms. Kathy McClain
Mr. Dennis Nolan
Mr. John Oceguera
Mrs. Debbie Smith
COMMITTEE MEMBERS EXCUSED:
Ms. Genie Ohrenschall, Vice Chairman
Mr. John J. Lee
COMMITTEE MEMBERS ABSENT:
Mr. John Carpenter
GUEST LEGISLATORS PRESENT:
Senator Lawrence E. Jacobsen, Western Nevada Senatorial District
Assemblyman Lynn Hettrick, Assembly District 39
Assemblywoman Bonnie Parnell, Assembly District 40
STAFF MEMBERS PRESENT:
Paul Mouritsen, Committee Policy Analyst
Sue Modarelli, Committee Secretary
Geri Mosey, Committee Secretary
OTHERS PRESENT:
Daniel C. Holler, Douglas County Manager
Jim Braswell, Operational Services Director, Airport Manager, Minden-Tahoe Airport, Douglas County, Nevada
Bernard W. Curtis, Chairman, Board of County Commissioners, Douglas County, Nevada
F. Alex Ortiz, Legislative Team, Clark County, Nevada
Steven E. Tackes, Esq., Carson City Airport Authority, Carson City, Nevada
Cheryl A. Noriega, Commissioner, White Pine County Commission, Ely, Nevada
John P. Sande, III, Esq., Jones Vargas, Reno, Nevada
Robert E. Campbell, Public Affairs Consultant, The Campbell Company, Las Vegas, Nevada
Kathy Halbardier, Business and Economic Development Specialist, Nevada Small Business Development Center (NSBDC), Carson City, Nevada
Hale B. Bennett, Owner/Manager, Silver Springs Airport, LLC
Mary C. Walker, CPA, Principal and Owner, Walker & Associates, Minden, Nevada
Chairwoman Chowning brought the meeting to order, opened the hearing on A.B. 210 and reported Assemblywoman Ohrenschall may be joining the committee on a permanent basis beginning Thursday, March 1, 2001.
Assembly Bill 210: Increases authorized term for lease of county property for use as airport, airport facility or airport service. (BDR 44-507)
Chairwoman Chowning noted each committee member was provided with copies of a letter from Nevada Airport Managers Association, Inc. (Exhibit C) and Elko County Department of Community Development (Exhibit D).
Senator Jacobsen represented the Western Nevada Senatorial District that included portions of Carson City, Washoe, Douglas and Lyon Counties. Senator Jacobsen informed the committee he fully supported A.B. 210 and offered background information regarding usage of the Douglas County Airport. He documented historically demonstrating the airport had been a good neighbor to Douglas County as well as the entire state of Nevada. Senator Jacobsen summarized the attributes of the Douglas County Airport and pointed out the many functions held there by state agencies, nonprofit organizations as well as a centralized operation headquarters for various emergency relief efforts that have occurred.
Chairwoman Chowning encouraged committee members to attend the rural Nevada tour sponsored by Senator Jacobsen each session.
Assemblyman Hettrick, representing Assembly District 39, offered his support of A.B. 210 and stressed the positive economic impact of extending the term for leasing county property relative to smaller rural airports. He noted counties would not be required to write 99-year leases yet would not be limited to 50‑year lease agreements. Assemblyman Hettrick suggested increasing the terms of county airport property leases from 50 years to 99 years would promote development particularly in the rural areas. He also noted the development of smaller rural airports would not directly compete with businesses located in larger airports such as Washoe County or Clark County due to their geographic location and nature of their businesses.
Daniel C. Holler, Douglas County Manager, agreed with Assemblyman Hettrick’s testimony and emphasized the need to increase the lease term to 99 years. Mr. Holler relayed recent interest from the private sector in building quality structures that would have longer life spans. Douglas County officials had been looking for support from the private sector to fund the infrastructure for water, sewer, power, gas and fiber optics. However, the challenge they were faced with was recovering renovation costs within the 50-year lease term. Additionally, there was no guarantee leases would be renewed at the end of a 50-year term since the property could revert to the county. Mr. Holler mentioned under those circumstances many potential financiers were unwilling to provide the level of investment necessary. He reported many constituents had raised concerns related to transferring their businesses to family heirs. A 50-year lease would be a worthless asset upon developing a business for 20 to 30 years leaving only a 20-year business life that could then to be turned over to heirs, refinanced or sold. Short lease terms then created financing challenges for businesses (tenants) at the airports.
Mr. Holler suggested the 99-year leases would make great business sense given the potential investments initially required approximately 4 to 6 million dollars simply for development of infrastructure, before any buildings could be constructed for business locations. Mr. Holler asserted another favorable component of a 99‑year lease was its permissiveness. The longer term allowed for potential rollover leases on 25-year increments thus providing an opportunity to review on a regular periodic basis. Mr. Holler affirmed provisions within the legislation of A.B. 210 upheld the public hearing process, which established the opportunity for the public to comment and be involved with the decisions made regarding the types of potential businesses that might be located at the Douglas County Airport facility.
Assemblyman Nolan asked whether there had been any interest in negotiating services with other commercial carriers such as SkyWest, Inc. Mr. Holler described the structure of the governing board and airport advisory committee and explained the objectives that were aimed more towards the establishment of corporate business headquarters. Additionally, voter-imposed weight restrictions would not accommodate larger aircraft landing there. Businessmen who often landed their planes in Reno drove to Douglas County where their businesses were located. Mr. Holler felt Douglas County Airport would attract more businesses if they were equipped with facilities to accommodate corporate related activities.
Jim Braswell, Operational Services Director and Airport Manager of Minden-Tahoe Airport, Douglas County, spoke in favor of A.B. 210, on behalf of both Minden-Tahoe Airport of Douglas County and as current president of the Nevada Airport Managers Association. Mr. Braswell felt the legislation would enable county governments to negotiate lease agreements with terms that would attract businesses and boost economic development. Mr. Braswell reported over the past 30 years a number of rural airports were experiencing a decline in infrastructure. He emphasized the difficulty rural airports faced procuring investments from tenants when only five to ten years remained on a lease agreement. Mr. Braswell noted the Federal Aviation Association (FAA) provided funding and expected grant assurances in return. Typically the FAA required airports to become as self-sustaining as possible and to lease land at a fair market value that was also reasonable for tenants. Mr. Braswell suggested local governments that were responsible for airports would sustain fair market values on property through viable long-term lease agreements that carried a Consumer Price Index. He emphasized the importance of essential emergency lifeline air services provided to the communities by Nevada’s rural airports as well as an increased job market and intermodal sites which connected citizens to other parts of the country. Mr. Braswell concluded 49 of the 54 airports in the state of Nevada were general aviation airports.
Bernard W. Curtis, Chairman of Douglas County Board of County Commissioners, spoke in support of A.B. 210. He reiterated the benefits of extending lease terms beyond 50 years and stated approval of A.B. 210 would allow the counties to solicit new businesses in their surrounding areas. Chairwoman Chowning noted A.B. 210 had no effect on local government. However, she questioned the effects that management of long-term leases would have with regard to fiscal burdens or added work for county commissioners pertaining to their responsibilities of negotiating leases. Mr. Curtis suggested the workload would be about the same considering not all leases were required to be issued for longer terms by the legislation and leases were not always renegotiated upon renewal. Mr. Curtis considered increasing the lease period would be an opportunity for flexibility when dealing with potential investors, enabling counties to offer varied lease term agreements.
Chairwoman Chowning queried further regarding usage of leased airport properties. She asked what protection the public would have when manufacturing businesses under lease agreements chose to deal with hazardous substances. Chairwoman Chowning expressed concerns about the longer length lease agreements and how the public would deal with businesses that had a negative influence on their community. Chairwoman Chowning called attention to a possible scenario where businesses operating under a 99‑year lease could have leeway to deal in hazardous substances or something that would not be a benefit to the public and asked if there would be an escape clause or some way to terminate such leases.
Mr. Holler defined aspects of the county airport property lease development process. In general, a master plan of an airport structural layout exists or was created with public involvement and approval. Mr. Holler indicated prospective businesses were required to be approximately 25 percent aviation related which limited some activity but addressed issues of direct competition with other private business parks in the community. The FAA mandated standard restrictions through grant assurance conditions relative to the handling of hazardous materials. Mr. Holler explained restrictions and requirements of hazardous materials were also governed by the fire department in addition to zoning requirements and the master plan. Fixed‑based operators were targeted that provided services to aircraft, the primary user of an airport. Mr. Holler explained the airport layout dictated the nature of a business; for instance, a significant amount of business activity earmarked as non‑aviation services would be distanced from the major runways in anticipation of an accident. Mr. Holler concluded, expressing his primary concern was for standard regulations pertaining to hazardous materials during planning and development of facilities at the Douglas County Airport. Mr. Curtis expanded on the extent of public input. He noted decisions verifying airport facility leases were approved at county commission meetings where public input was solicited and desired.
Chairwoman Chowning emphasized the importance of keeping a watchful eye on businesses operating with longer 99-year lease agreements and the need to proceed with caution. She observed the way one county in Nevada chose to open the door for nuclear waste to improve their economy without regard for the rest of the state. She advised everyone to be very cautious, aware and reasoned with the concept of a commitment to ongoing regulation.
Mr. Braswell apprised the committee of his role as President of the Nevada Airport Association and as an affiliate member of Nevada Association of Counties (NACO). He provided conferences to enlighten and instruct local government officials, airport managers and operators. Mr. Braswell identified the types of training offered were congruent with keeping goals and objectives of communities harmonious with their mission statements and instructions on FAA, as well as local, requirements. Mr. Braswell announced a training conference for airport managers would be held in Minden during the legislative session facilitating a visit to the legislature.
Chairwoman Chowning noted representation was on behalf of Douglas County and asked if A.B. 210 would apply to all counties in the state including Washoe and Clark County. Mr. Holler replied A.B. 210 applied to all counties in Nevada with leased airport property. Mr. Holler reported A.B. 210 was submitted to NACO for review with no negative feedback. The choice was made for carrying A.B. 210 on behalf of Douglas County, optimizing bill draft request procedures. Chairwoman Chowning noted A.B. 210 appeared to be written for rural areas; however, it really applied to all Nevada counties.
Assemblyman Claborn expressed his desire to hear testimony from Clark County with regard to McCarran International, North Las Vegas and Henderson Airports.
Mr. Braswell reiterated he represented Nevada Airport Managers’ Association. He stated both Clark and Washoe Counties were familiar with A.B. 210. Mr. Braswell reported although he did not speak individually for those counties, he had approval of A.B. 210 from the board of directors of both Clark and Washoe Counties.
Chairwoman Chowning invited F. Alex Ortiz of the Clark County Legislative Team, to testify on behalf of Clark County. Mr. Ortiz stated Clark County was neutral regarding A.B. 210. Chairwoman Chowning wondered if any businesses had specifically requested an extension of their lease term or if Mr. Ortiz knew whether this problem existed in Clark County. Mr. Ortiz responded, the Director of Aviation for Clark County had not expressed concerns and was not aware of any such problems. Mr. Ortiz offered to research the issue and follow-up with the committee if it became necessary.
Assemblywoman Parnell, representing Assembly District 40, wanted to join with fellow legislators in support of A.B. 210. She felt it was a great vehicle to encourage rural economic development, which would allow rural areas to take a serious long-term look at what could be done with airport lease land. Assemblywoman Parnell identified Nevada Revised Statutes (NRS) 495.040, an existing statute referenced on page one of A.B. 210, which clearly addressed public input pertaining to airport land use.
Chairwoman Chowning submitted NRS 495.040 required the board of county commissioners to publish notice of its intention in a newspaper of general circulation, published within the county, at least once a week for 21 days or 3 times during a period of 10 days. If there was not a newspaper of general circulation within the county, the board was required to post a notice of its intention in a public place at least once a week for 30 days. The notice was required to specify that a regular meeting would be held, at which time any interested person could appear. The board could not enter into a lease or agreement until after the notice had been given and a meeting held.
Steven E. Tackes, Esq., stated his support of A.B. 210 on behalf of the Carson City Airport Authority. He was a past chairman of the Carson City Airport Authority and currently provided pro bono legal work for them. He mentioned occasionally an opportunity presented itself where a 99-year lease term would have been advantageous. Mr. Tackes described high-tech industry companies might need longer than 50 years to amortize their investments. He documented an example of a golf course venture presented to the Carson City Airport Authority a couple years ago. This particular golf course could have been located out of the flight path, away from airport operations and compatible with airport land use. Mr. Tackes described characteristics of golf courses and referred to them as low density, relatively flat, smooth and wide open. He reasoned, in the likelihood of an accident such an environment would be beneficial. Mr. Tackes predicted Carson City Airport Authority’s would most likely continue issuing 50‑year leases even if A.B. 210 passed, unless longer lease term offers were presented and appeared to be worthwhile.
Mr. Tackes reiterated Assemblyman Hettrick’s comment regarding A.B. 210 as enabling and pointed out there was no directive to extend lease terms. He added, all counties were required to get competitive bids on each airport lease, which made the public input and review process fairly lengthy. At the Carson City Airport the bidding procedure involved a three-month process of obtaining bids, then forwarding the most desirable bids to the Carson City Board of Supervisors for final approval. In some cases proposals had reached the Board of Supervisors level before problems were perceived, such as type of land use or inadequate lease features. Mr. Tackes assured the committee of diligent procedures engaged in this process and when the Board of Supervisors detected any discomfort about any feature of a lease under review, that lease would be denied and the process would be begin again, making certain a plentitude of public input.
Cheryl A. Noriega, Commissioner, White Pine County Commissioner of Ely, represented White Pine County in favor of A.B. 210. She felt longer lease terms would benefit the growth process of Ely’s airport facility. Ms. Noriega described the airport to be approximately seven miles outside of Ely and across the highway from an industrial park. She projected surrounding land currently owned by Bureau of Land Management (BLM) might be obtained for expansion of airport facilities. Ms. Noriega concluded, 99-year limits on lease options provided the flexibility needed for future development of Ely’s airport.
John P. Sande, III, Esq., Jones Vargas, Reno, stated Washoe County Airport Authority took a neutral stand regarding A.B. 210. He explained the proposed amendments of A.B. 210 would not apply to Washoe County and read from NRS 495.040, Section 1, emphasizing the Airport Authority of Washoe County was created by Chapter 474, Statutes of Nevada, 1977, a special act that created the Washoe County Airport Authority. Mr. Sande verified three airport authorities that were created by special acts in Nevada were in Battle Mountain, Carson City, and as stated earlier, Washoe County. Mr. Sande requested assurance A.B. 210 would not affect Washoe County.
Robert E. Campbell, Public Affairs Consultant for The Campbell Company in Las Vegas, commented about the development of the proposed Ivanpah Valley Airport located in southern Nevada. Mr. Campbell indicated the first step of the land transfer process had been accomplished last fall and Clark County would eventually take title of the land. He disclosed the intent to develop Ivanpah Valley Airport largely with private sector funds under the auspices of Clark County Aviation. Mr. Campbell evaluated the fact that long‑term leases would make airport property investments more financially viable when the magnitude of required support to develop airport property would be quite significant. Chairwoman Chowning pointed out the prospective location of Ivanpah Valley Airport was between Jean and Primm, Nevada.
Kathy Halbardier, Business and Economic Development Specialist for Nevada Small Business Development Center (NSBDC) in Carson City, reported on businesses in Carson City, Carson Valley, Yerington, South Lake Tahoe and Douglas County. She expressed her support for extending lease terms to 99 years. She addressed limitations a business owner with 50‑year lease terms might encounter while venturing to sell their company after spending 30 to 35 years building on their investment. Ms. Halbardier projected the value of a business would not be equitable if lenders were reluctant to risk sizable loans to tenants with short lease periods remaining at the time of sale. She shared an example of a manufacturing company in Yerington whose corporate office was in Irvine, California, and described the difficulties encountered shuttling to and from these locations. Ms. Halbardier agreed with prior testimony in favor of increasing airport facility lease terms to 99 years.
Hale B. Bennett, Owner and Manager of Silver Springs Airport, presented his historical recollection of the progress of Silver Springs Airport. Originally, land was leased under federal statutes for a maximum of 20 years and was eventually transferred to Lyon County when a 50-year term lease was simultaneously granted under Nevada law. Mr. Bennett claimed several companies interested in locating their businesses at Silver Springs Airport approached him with hopes of securing 100-year lease terms. Mr. Bennett addressed concerns of hazardous material storage stating those issues were functions of a lease and could be easily precluded within a lease agreement. Mr. Bennett strongly supported A.B. 210.
Mary C. Walker, CPA, Principal and Owner of Walker & Associates in Minden, stressed the need to boost economy in the rural Nevada areas. She had observed declines in economic progress related to a lack of infrastructure. Some of Nevada’s smaller towns do not have paved streets, water or sewer systems crucial to supporting new businesses. Ms. Walker pointed out how Carson City evolved to possess its diversified economic base largely due to federal grant monies that were available in the ‘80s, from the Economic Development Administration (EDA) of the U.S. Department of Commerce. Ms. Walker estimated the current economic structure consisted of approximately 16 percent manufacturing, 20 percent gaming, 20 percent retail and 20 percent state government. Ms. Walker stated those federal grants were no longer available and projected rural communities would rely more and more on private sector investments to upgrade infrastructures, thus emphasizing a need to increase authorized lease terms to attract potential investors.
Assemblywoman Cegavske requested clarification of the difference between airport authorities and county commissions relative to airports in Clark County. Mr. Ortiz explained there was not an airport authority for Clark County and clarified the Clark County Director of Aviation was operating those airports. Assemblyman Collins noted both McCarran International and Reno/Tahoe International Airports were created by the legislature at different times with different regulations and for different purposes. Chairwoman Chowning added North Las Vegas Airport was owned and controlled by Clark County.
Assemblywoman McClain MOVED FOR DO PASS ON A.B. 210.
Assemblywoman Cegavske SECONDED THE MOTION.
MOTION CARRIED UNANIMOUSLY.
The meeting was adjourned at 2:35 p.m.
RESPECTFULLY SUBMITTED:
Geri Mosey
Committee Secretary
APPROVED BY:
Assemblywoman Vonne Chowning, Chairwoman
DATE: