MINUTES OF THE
SENATE Committee on Government Affairs
Seventy-First Session
March 21, 2001
The Senate Committee on Government Affairswas called to order by Chairman Ann O'Connell, at 2:00 p.m., on Wednesday, March 21, 2001, in Room 2149 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Ann O'Connell, Chairman
Senator William J. Raggio, Vice Chairman
Senator William R. O’Donnell
Senator Jon C. Porter
Senator Joseph M. Neal, Jr.
Senator Dina Titus
Senator Terry Care
GUEST LEGISLATORS PRESENT:
Margaret (Maggie) A. Carlton, Clark County Senatorial District No. 2
STAFF MEMBERS PRESENT:
Kimberly Marsh Guinasso, Committee Counsel
Juliann K. Jenson, Committee Policy Analyst
Julie Burdette, Committee Secretary
OTHERS PRESENT:
Stan Olsen, Lobbyist, Las Vegas Metropolitan Police Department
Thomas J. Grady, Lobbyist, Nevada League of Cities and Municipalities
Madelyn Shipman, Lobbyist, Washoe County
Michael W. Bouse, Director, Department of Building and Safety, City of Henderson
Thomas J. Gribbin, Chairman, Board of Trustees, Airport Authority of Washoe County
Richard A. Hill, Vice Chairman, Board of Trustees, Airport Authority of Washoe County
David L. Howard, Lobbyist, Nevada State Chamber Association
Judith R. Snell, Concerned Citizen
Helene G. Sasser, Concerned Citizen
Mark H. Fiorentino, Lobbyist, American Consulting Engineers Council of Nevada, and Nevada Outdoor Media Association
Cheryl Blomstrom, Lobbyist, Nevada Contractors’ Association
James A. Bell, Director, Public Works Department, City of North Las Vegas
Colleen A. Wilson-Pappa, Lobbyist, Clark County
Janelle L. Kraft, Lobbyist, City of Las Vegas
James E. Keenan, Lobbyist, Nevada Public Purchasing Study Commission
Tracy M. Duarte, Lobbyist, Nevada Association of Counties
Danny L. Thompson, Lobbyist, Nevada State AFL-CIO
Michel (Micki) Johnson, Lobbyist, National Association of Industrial and Office Properties
Donna Erwin, General Manager, Las Vegas Country Club Estates
Douglas G. Smith, Lobbyist, Chairman, Citizens for a Scenic Reno
Tom Burrous, President, Redevelopment Association of Nevada
Frank R. Carroll, Lobbyist, Executive Director, Scenic Nevada
Charles Pulsipher, Zoning Administrator, Clark County
Mimi Moss, Manager, Planning and Economic Development, Douglas County Community Development
Rob Joiner, Redevelopment Director, Community Development Department, Carson City
Bristol S. Ellington, Assistant Director, Community Development Department, City of Henderson
Chris Knight, Manager, Comprehensive Planning, Department of Planning and Development, City of Las Vegas
Michele F. Richardson, Lobbyist, Assistant City Manager, City of North Las Vegas
Warren B. Hardy II, Lobbyist, City of Mesquite
Greg Evangelatos, American Planning Association
Jim Pilzner, Concerned Citizen
Chairman O'Connell opened the work session on Senate Bill (S.B.) 22.
SENATE BILL 22: Revises provisions relating to retrofitting of governmental buildings for energy efficiency. (BDR 28-288)
Senator Raggio stressed the committee had difficulty with S.B. 22 and the potential amendments. The senator said he did not think this could be addressed during this session and was also concerned, with section 1, subsection 9, page 3, where the bill would authorize up to $50 million rather than the $5 million permitted in statute. Senator Raggio explained the bill would take away the existing authority and rise too close to the debt limit. On that basis alone, the senator stated he would move for indefinite postponement.
Chairman O'Connell asked if there were questions from the committee or if any of the members had a differing opinion on S.B. 22. There were no questions and no discussion.
SENATOR RAGGIO MOVED TO INDEFINITELY POSTPONE S.B. 22.
SENATOR CARE SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TITUS WAS ABSENT FOR THE VOTE.)
*****
The Chairman opened the hearing on Senate Bill (S.B.) 256.
SENATE BILL 256: Establishes certain requirements for issuance of work permits to certain employees who work in gaming establishments by local governments. (BDR 20-158)
Senator Margaret (Maggie) A. Carlton, Clark County Senatorial District No. 2, pointed out to the committee, since the last hearing on S.B. 256, she had spoken at length with the Legal Division, other legislators and all the affected parties on the best way to move forward to achieve meaningful work card reform. Senator Carlton acknowledged the complexity of the issue and believed it was unlikely the bill would be enacted by the end of session. In discussions with the chairman of the county commissioners, the mayor and the Las Vegas Metropolitan Police Department (METRO), the parties indicated they would work with Senator Carlton during the interim to ensure that work card reform moved forward, she said. The senator emphasized she was encouraged, however, if adequate progress did not occur, she was prepared to come to the Legislature next session with another bill. Senator Carlton reiterated, for the record, she believed it absolutely necessary that work cards be eliminated for non-gaming employees in casinos, and their counterparts in non-gaming establishments. Service employees, for example, waitresses, dishwashers and maids were not required to obtain work cards in other areas of the country. Senator Carlton maintained there was no reason they should be required to get work cards in Nevada. The senator further stated, it was her belief that an arrest with no conviction of a crime should not be used to deny an individual the right to work by denying that individual a work card. She stressed the principle of innocent until proven guilty should certainly apply to the ability of an individual to get a job. Senator Carlton said it was her belief that those who had paid their debt to society should have the ability to get a job and not lose their employment because they were unable to obtain a work card.
Senator Carlton drew attention to another issue, for the record, and that was work cards for arcade employees. The senator explained they had learned during the first hearing on S.B. 256 that those employees received regular work cards, rather than work cards designated for child-care workers. In any discussion of the elimination of work cards for non-gaming personnel, the senator said she would not, under any circumstances, advocate the elimination of work cards and extensive background checks for arcade employees or any other personnel who worked directly with children.
Chairman O'Connell inquired if Senator Carlton was asking to withdraw S.B. 256. Senator Carlton agreed that she was.
Stan Olsen, Lobbyist, Las Vegas Metropolitan Police Department (METRO) stated METRO was committed to reforming the work card program in southern Nevada. He emphasized the Las Vegas Metropolitan Police Department would continue to work with Clark County and the City of Las Vegas in order to ensure a system that would be more applicable to addressing current law enforcement and business issues.
Chairman O’Connell asked for any questions or discussion, there was none. Chairman O'Connell asked for a motion to indefinitely postpone S.B. 256.
SENATOR O’DONNELL MOVED TO INDEFINITELY POSTPONE S.B. 256.
SENATOR PORTER SECONDED THE MOTION.
Senator Titus commended Senator Carlton for bringing the bill to the committee. Obviously, the senator continued, this was a problem in southern Nevada and did not serve the purpose that had been originally intended. Senator Titus remarked she was pleased they would work on this during the interim. Senator Titus pointed to the fact that Senator Carlton had also drawn attention to the concern regarding children and arcade workers, and that would be an issue to study closely. Senator Titus stressed, although she would vote to indefinitely postpone S.B. 256, it was not because she did not support the efforts, just this particular vehicle.
The chairman asked if there was any further discussion on the motion. Senator Care said he would like to echo the sentiments of Senator Titus. Chairman O'Connell inquired if there was any other discussion on the motion, there was none.
THE MOTION CARRIED. (SENATOR NEAL ABSTAINED FROM THE VOTE.)
*****
The chairman opened the hearing on Senate Bill (S.B.) 63.
SENATE BILL 63: Makes various changes to provisions relating to bidding on and awarding contracts for public works projects. (BDR 28-754)
SENATOR PORTER MOVED TO AMEND AND DO PASS S.B. 63.
SENATOR RAGGIO SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman O'Connell requested Kimberly Marsh Guinasso, Committee Counsel, prepare the amendment for S.B. 63.
The chairman drew attention to Senate Bill (S.B.) 96 on the work session agenda.
SENATE BILL 96: Makes various changes to provisions relating to disclosure of improper governmental action. (BDR 23-450)
Senator Raggio explained he shared Senator Care’s concerns the bill could not be rewritten and it would be difficult to understand and enforce. The senator remarked that S.B. 96 had grown out of ongoing controversy. Senator Raggio also stated he was aware of litigation and did not think this would be the proper way to intervene in that situation. He said he would be prepared to indefinitely postpone S.B. 96.
SENATOR RAGGIO MOVED TO INDEFINITELY POSTPONE S.B. 96.
SENATOR CARE SECONDED THE MOTION.
Senator O’Donnell echoed Senator Raggio’s comments, and also said sometimes arguments and disagreements resulted in legislation before the committee in order to address the issue. The senator pointed out, in the time he had served in the Legislature, he had seen legislation that benefited one side or the other every session. He also stressed he did not believe this was the proper vehicle to solve a dispute.
The chairman asked if there was further discussion on the motion, there was none.
THE MOTION CARRIED. (SENATOR TITUS VOTED NO.)
*****
Chairman O'Connell opened the hearing on Senate Bill (S.B.) 98.
SENATE BILL 98: Requires candidate to disclose record of arrests for felonies and gross misdemeanors when filing for office and prohibits certain deceptive campaign materials. (BDR 24-237)
The chairman explained S.B. 98 required a candidate to disclose a record of arrests or felonies.
Senator Raggio interjected, saying he thought the intent of this bill was to bring the situation to light. The senator believed it had served the purpose. He noted section 1 would require an affidavit or declaration to be filed. Senator Raggio called attention to a situation where there could be an arrest without a conviction and it would not be relevant. The senator noted this sort of information could be obtained during a campaign and brought to light in ways other than creating additional limitation on a person’s ability to become a candidate. Senator Raggio drew attention to section 3 and declared that it would be extremely difficult to monitor. Senator Raggio stressed he did not think it was appropriate to put this into statute.
Chairman O'Connell asked if there was any further discussion on S.B. 98. The chairman stated her concerns in that the bill talked about records of arrest rather than convictions.
SENATOR RAGGIO MOVED TO INDEFINITELY POSTPONE S.B. 98.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Chairman O'Connell opened the work session on Senate Bill (S.B.) 121, and explained to the committee this was the bill concerning the recording of public meetings and workshops where agendas need to be posted to the Internet. The chairman went on to say there was a proposed amendment.
SENATE BILL 121: Makes various changes concerning recording of public meetings and attendance of workshops. (BDR 19-32)
Senator Raggio stated, in his understanding of the amendment, the bill would exclude the State Board of Parole Commissioners who maintained they could not exist under these circumstances. Senator Raggio was also concerned there were other boards or commissions with the same issues. Further, he stated, this would not apply to a local government in counties other than Clark and Washoe until January 1, 2003. Senator Raggio noted this would require an audio recording of any public body, and that was a very broad term. The senator said he understood the need regarding county commissions, city councils, library boards, and general improvement districts (GIDs), etcetera. Senator Raggio said he believed the term was broad enough that some of the advisory commissions and others would not have the technological capability. The current law did not require an audio recording although it did require minutes. Senator Raggio reiterated he did not want to enact into statute something that could not be done reasonably.
Thomas J. Grady, Lobbyist, Nevada League of Cities and Municipalities, stated he had not had the opportunity to look at the amendment. The chairman asked Mr. Grady to speak about the Assembly bill that had similar language. Mr. Grady explained, at the last subcommittee meeting, the language discussed would require elected officials in Clark and Washoe Counties to conform to the original bill. A resolution was then proposed that would require the entities to conform by 2003, and the league, the State of Nevada and the Nevada Association of Counties (NACO) would report if any did not qualify. There had been considerable discussion in the full committee, but the bill had not been voted upon. Mr. Grady believed the Assembly Committee on Government Affairs was evenly divided. Mr. Grady stated the entities of Clark and Washoe Counties were conforming, but there were approximately 69 small boards in Clark County that would be affected as the bill was originally drafted, and that was why the Nevada League of Cities and Municipalities agreed the elected boards would be the ones to post on the Internet.
SENATOR NEAL MOVED TO INDEFINITELY POSTPONE S.B. 121.
SENATOR RAGGIO SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS O’CONNELL, TITUS AND CARE VOTED NO.)
*****
The chairman opened the hearing on Senate Bill (S.B.) 151, and said it was her understanding that Madelyn Shipman, Lobbyist, Washoe County, had requested to withdraw S.B. 151.
SENATE BILL 151: Makes changes to provisions relating to terms of employment for county employees. (BDR 20-319)
Madelyn Shipman, Lobbyist, Washoe County, stated for the record that was correct.
SENATOR RAGGIO MOVED TO INDEFINITELY POSTPONE S.B. 151.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman O’Connell opened the hearing on Senate Bill (S.B.) 163.
SENATE BILL 163: Makes various changes to provisions relating to enforcement of building codes and zoning regulations by cities and counties. (BDR 22-240)
Michael W. Bouse, Director, Department of Building and Safety, City of Henderson, came forward to represent the Nevada Organization of Building Officials speaking in support of S.B. 163. He said it was his understanding there were two primary concerns the committee had regarding the bill during the previous hearing. The first was the cost of the bill to smaller jurisdictions and the second was the impact of the bill on part-time employees in smaller jurisdictions. Mr. Bouse explained he thought both issues had been addressed in the amendments to the bill. The committee had added an amendment that gave credit for in-house training programs conducted by cities and counties. He said he had prepared a summary of costs (Exhibit C) for the committee so the members could see what the impact would be to local jurisdictions. Mr. Bouse said S.B. 163 was comprised of two components. One was the certification requirement for building inspectors, building officials and plans examiners. The other component was continuing education and training. The costs could vary for certification, but the most common test was the building inspector test, and that cost was $140. Mr. Bouse called attention to alternative number 2 on the first page and that smaller jurisdictions would be able to achieve the continuing education requirements of the bill and the cost would be zero. Mr. Bouse drew the committee’s attention to the second page and the summary, which would exclude salary and travel benefits, etcetera. The first-year costs for a building inspector or plans examiner in a small jurisdiction, with the certification requirement of building inspector was $140. In the second year, those individuals would have to meet the continuing education requirements, but with an in-house program, the cost would be zero. In the third year, these employees would be required to renew the certifications, and the renewal fee was $50.
Mr. Bouse reiterated, with an in-house training program, the cost in the third year would be zero. He continued, stating in terms of the impact on part-time employees, an amendment had been added and the language stated that in counties with a population under 100,000, the city or county shall establish, by resolution, continuing education and certification requirements of full-time building officials, plans examiners and building inspectors. Mr. Bouse maintained their intent was that these requirements would only apply to full-time employees in those jurisdictions. The part-time employees would be exempt from the requirements of the bill.
Senator Porter inquired why legislation was needed for certification and continuing education. Mr. Bouse explained the department hoped to increase the level of professionalism and believed it was important that individuals involved in the inspection of buildings for compliance with the public health and safety requirements should have a demonstrated level of competence. Mr. Bouse pointed out other states had passed legislation to establish minimum standards for those positions. He also commented on the recognition that construction defect was a large issue in Nevada and, unfortunately, inadequate inspection had contributed to some of the construction defect problems. Mr. Bouse stressed the Nevada Organization of Building Officials would like to be perceived as part of the solution rather than part of the problem.
Senator Porter reiterated why this could not be done within organizations rather than by legislation. Mr. Bouse replied cities established minimum qualifications for these positions but they were not consistent across all jurisdictions in the state. Senate Bill 163 would establish minimum standards across all jurisdictions. Senator Porter again asked why this could not be established internally rather than in legislation. Mr. Bouse replied he was not aware of an attempt to develop a voluntary standards approach.
Senator Neal asked for clarification on CEUs. Mr. Bouse replied it stood for continuing educations units.
Senator Raggio noted the committee would agree to the stated purpose, but most professionals fell under some kind of a commission or board. Senator Raggio wondered whether legislation was the way to reach their goal. The senator explained that putting into statute all the educational requirements was of concern to him. He continued, saying each time there was a change made to the requirements, the Legislature would have to amend the statute. Most boards accomplish this by promulgating regulations. Senator Raggio also stressed he was reluctant to put the names of organizations into statute. If an organization changed its name, for example, the statute would have to be amended. Senator Raggio said he did not believe the Legislature had ever done this for any group of professionals in this manner.
Mr. Bouse said he understood Senator Raggio’s reservations and agreed to strike the language naming specific organizations. He reiterated they did want to ensure individuals were certified. Mr. Bouse explained the language regarding the continuing education credits had been taken from the national organization that awarded the CEUs. Senator Raggio maintained, for example, if that national organization, at its next annual meeting, decided to change that qualification, it would still be in Nevada law. Mr. Bouse agreed to strike the language referring to the CEUs, except the last one regarding the jurisdictions with in-house training programs, that they would want to retain the capability of using the in-house programs to count toward continuing education units.
Senator Raggio requested the language be cleaned up and the committee could address S.B. 163 during the next work session. Mr. Bouse agreed.
Senator Care emphasized his reservation was somewhat different in that Mr. Bouse had mentioned construction defects and the senator knew there was other legislation that would create a rebuttable presumption if a building permit were issued on a house. The senator said S.B. 163 might not have an effect on that bill were it to become law, but he would be interested in some discussion on such an issue.
Mr. Bouse responded he was familiar with that legislation, but did not believe S.B. 163 would have any impact on the other bill.
Chairman O'Connell remarked that S.B. 163 would be on the next work session and perhaps Mr. Bouse would want someone from the county represented or the City of Henderson. The chairman closed the work session on S.B. 163 and opened discussion on Senate Bill (S.B.) 164.
SENATE BILL 164: Contingently authorizes purchase of municipal and revenue securities by state for improvement, acquisition and construction of facilities for certain public schools. (BDR 30-52)
Chairman O'Connell pointed out this was the bill that would allow rural counties to use the state’s debt limit for school construction.
Senator Raggio interjected the bill was contingent upon Assembly Joint Resolution (A.J.R.) 26 of the Seventieth Session.
ASSEMBLY JOINT RESOLUTION 26 OF THE SEVENTIETH SESSION: Proposes to amend Nevada Constitution to exempt state contracts for improvement, acquisitions and construction of facilities for schools from state debt limit. (BDR C-1753)
Senator Neal inquired if the previous question were not passed then this would not be enacted into law. Chairman O'Connell said that was true.
SENATOR RAGGIO MOVED TO DO PASS S.B. 164.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED.
*****
Chairman O'Connell introduced discussion on S.B. 198.
SENATE BILL 198: Establishes bill of rights for persons whose financial or other business records are subject to examination by regulatory governmental agencies. (BDR 19-53)
Chairman O'Connell stated, for the record, she would be unable to vote on this issue because of her husband’s involvement in banking and her son’s involvement in mortgage lending. Senator Raggio stated he would act as chairman during discussion of this bill. Kimberly Marsh Guinasso, Committee Counsel, Legal Division, Legislative Counsel Bureau, spoke to the amendment, and affirmed the amendment changed the term regulatory agency,
because the proposed amendment sought to have the provisions of the bill apply only to the commissioner of financial institutions. Therefore, where there were broader provisions, in terms of how the bill would apply, have been deleted. For example, Ms. Guinasso said, section 4, governmental agency was no longer required and had been deleted; in section 6, regulatory agency had been deleted as well, and Ms. Guinasso noted the language would no longer be appropriate in chapter 239A of Nevada Revised Statutes (NRS), it would go into chapter 232 of NRS and be placed in the subheading dealing with the Department of Business and Industry. Ms. Guinasso pointed out there would be a new section defining the term commissioner to mean the commissioner of financial institutions. The substantive portions of the bill, sections 8 through 11 would remain, but be renumbered because of deletions. Ms. Guinasso stated where the words “regulatory agency” would be replaced with “commissioner,” meaning the commissioner of financial institutions. Sections 12 through 22 would be deleted because of the narrowing of the scope of the legislation. A new section 11, which would be directory language to show where the new sections would be going into the new subheading in chapter 232 of NRS, dealing with the Department of Business and Industry and finally, changes were being made to the title and the summary.
SENATOR NEAL MOVED TO AMEND AND DO PASS S.B. 198.
Senator O’Donnell clarified there were other regulatory bodies not under the purview of the financial institutions division that did audits, perhaps not fiscal audits, but they did performance audits and as he understood the amendment, that would preclude those types of agencies from this bill. There would be no bill of rights for those individuals under that regulatory umbrella for any kind of protection under this bill.
Senator Raggio, for the record, referred to previous testimony, and that S.B. 198 was intended to address problems that could better be resolved by direct discussion between members of the affected industries and management of the agencies required to regulate those industries rather than legislation.
Senator Titus drew attention to testimony from the regulators regarding the difficulty in giving advance notice before a visit was made. She asked if that would not defeat the purpose of the bill, because they were there to check what was being done. She asked if that had been corrected in this amendment. Senator Raggio asked if someone could respond to Senator Titus’ query. Ms. Guinasso stated she believed the issue had been brought up by the Office of the Secretary of State and that office would not be included in this bill. Senator Raggio noted it was the securities division. Ms. Guinasso said that was correct, however, it would apply to the commissioner of financial institutions. The amendment would only change the scope of the bill to apply to the commissioner of financial institutions, but Ms. Guinasso thought that had been raised by the securities division of the Office of the Secretary of State and that entity would not be included under this amendment.
Senator Care drew attention to one other objection raised during the hearing, that it had been commented, and it had not been meant in the pejorative, and was the statutory definition of a regulated person. Senator Care did not think the language was necessary and could be struck. Senator Care stated he would strike the language on line 17, page 1, “regulated person means a person whose financial or other business records,” and follow that with “governmental entity” in section 5, line 13, and then continue with the definition of person. Senator Raggio asked Senator Neal if he would accept that change. Senator Neal responded he could accept the change. Senator Raggio stated if the amendment could be written, the committee would take it up at the next work session. The committee indicated agreement.
THE MOTION FAILED FOR LACK OF A SECOND.
*****
Chairman O'Connell opened the hearing on Senate Bill (S.B.) 225.
SENATE BILL 225: Repeals prospective expiration of certain provisions concerning surcharges on telephone services in certain counties for enhancement of telephone systems for reporting emergencies in those counties. (BDR 20-499)
SENATOR PORTER MOVED TO DO PASS S.B. 225.
SENATOR RAGGIO SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
The Chairman opened the work session on Senate Bill (S.B.) 272.
SENATE BILL 272: Makes various changes to charter of City of Wells. (BDR S-1225)
SENATOR RAGGIO MOVED TO DO PASS S.B. 272.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman O'Connell opened the hearing on Senate Bill (S.B.) 304.
SENATE BILL 304: Amends charter of City of Reno by increasing term of office of municipal judges. (BDR S-870)
Senator Raggio explained this bill only involved the City of Reno charter and would bring the city into line with the trend to increase judicial positions to 6 years. Senator Raggio said he did not believe there had been expressed opposition.
SENATOR RAGGIO MOVED TO DO PASS S.B. 304.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman O'Connell asked the committee members if they would accept the introduction of bill draft requests from agencies as time was of the essence and perhaps an agency representative might not be available to explain the bill draft request. The members concurred. The chairman introduced Bill Draft Request (BDR) 23-716.
BILL DRAFT REQUEST 23-716: Makes various changes regarding ethics in government. (Later introduced as Senate Bill 466.)
SENATOR TITUS MOVED TO INTRODUCE BDR 23-716.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
******
Chairman O'Connell opened the hearing on Senate Bill (S.B.) 299.
SENATE BILL 299: Makes various changes relating to Airport Authority of Washoe County. (BDR S-759)
Senator Raggio explained to the committee this bill had been a joint effort between himself and Senator Townsend. Senator Raggio continued, stating he would give background information. The senator pointed out, in 1977, the Airport Authority of Washoe County had been created. The airport authority had come about as a result of a long period of dissatisfaction with mismanagement, during which time the City of Reno had operated the airport. Senator Raggio stated there had been sweetheart contracts that had been given to people for lucrative concessions. Some had provisions, such as, at the end of the contract, it would go out to bid but the person who operated the concession, after the bids had been opened, would then have the opportunity to outbid the highest bidder. That was just one example of mismanagement of the airport, he said.
Senator Raggio said the Legislature had authorized a study over a 2-year period of time. The operation of airports throughout the United States was studied. As a result of the study, it had been determined what was the best governance of an airport. There were basic concerns. One, that people who served on the board of an airport authority or the management of an airport, would have that as their main concern or mission. He said the airport should be run as a business. It should serve the purposes of the community, particularly a city like Reno, Washoe County, the metropolitan area that was concerned with tourism, a major industry. He pointed out all types of airports and their operations were reviewed. The consensus of the study was that rather than have an elected body to govern an airport, such as a city council or a county commission or even an elected board, the most successful method of operation was an appointed authority, appointed by, in this case, elected members of the various governing bodies within the area of concern. That was the primary reason for the enactment of the legislation in 1977 to create the Airport Authority of Washoe County.
Senator Raggio stated initially there were an odd number of members. The City of Reno would appoint four members, the City of Sparks would appoint one member and the county commissioners would appoint two members. At a later time, the City of Sparks was authorized to appoint two members. Then, instead of an uneven number of members on the board of trustees, there was an even number. In recent times, there had been stalemates in the board of trustees’ decisions. The most recent was the inability to elect a chairman. The decision was a four to four tie and was resolved temporarily so that instead of having a chairman for 2 years, they agreed that one would hold the position for 1 year and the other individual would hold the position for 1 year. There had also been other situations where a tie occurred resulting in embarrassment in the operation of the airport authority. For that reason this bill would add an additional member, he stated.
Senator Raggio said, up until this time the Airport Authority of Washoe County has been appointed only by entities within Washoe County that did not fully recognize this was more than a county airport; it is a regional airport. It serves not only the citizens of Washoe County, but also a region including Carson City, Douglas County and even California. It had also been suggested in the past, that the board be augmented with a member representing consumers, that is, those who utilize the airport. Senator Raggio said it seemed appropriate the County Fair and Recreation Board of Washoe County should make the appointment. That would result in an uneven number on the board and relieve the potential for a tie and the inability to make decisions.
Senator Raggio continued, stating the bill was limited in scope to that issue so there would be nine persons on the board. In addition, it was the full intention of the legislature that this board be an independent board, and that it be composed of people who had experience in the aviation business, or tourism industry, possessing qualifications allowing them to make business decisions in the best interest of the community being served. Senator Raggio asserted the airport would continue the effort to increase tourism, the lifeblood of the area. It had been the specific intent of the Legislature that persons serving on the board, for the terms they served, would be independent thinkers, not micromanaged by the appointing authorities. The senator stated there had been too many instances in recent times where these individuals have been unable to do that. The bill, in addition, indicated a person would have certain experience in aviation, business, tourism, finance or accounting. The language was broad stating the individual would possess such other qualifications that the appointing authority determined as necessary and appropriate. The bill clearly emphasized the intent of the Legislature that these kinds of experiences and qualifications were desirable and deemed appropriate. It also provided and made clear the initial intent of the Legislature that the appointed members of the board could not be removed unless they willfully neglected or refused to perform an official duty of the board. They could not be removed as a member for exercising independent judgment. Senator Raggio believed it was essential to make that clear and the bill would authorize the individual to serve for two terms. That would carry forth the present policy of the board but would clarify the language in the enabling legislation.
Senator Porter directed attention to page 2, and asked if the appointing board should make the decision regarding the removal of a member. Senator Raggio replied that was the precise problem that had occurred. Instead of being independent in their judgment, they, the appointing authority, made the determination whether or not the individual was qualified to serve, which was the extent of their appointing authority. The senator continued, saying the intent was that the appointing authority not micromanage, not to tell each member of the board of trustees how to vote on every issue that came before them. That had happened in too many cases, the board of trustees had not been able to exercise their independent authority. There had been threats if they did not vote a certain way they would be removed.
Senator Porter clarified, stating an individual appointed by the local governments would not represent the local governments, but rather, represent the board of trustees. Senator Raggio replied that was correct, and was the reason the airport authority was created, which was the intent of the Legislature. The individuals would be appointed by the local entities based upon experience, ability to govern and manage an airport, and they would exercise discretion and independent judgment in furtherance of their duties.
Senator Neal stated the only comparison he could make was to McCarran International Airport in Las Vegas, which was run by the county commissioners and they seemed to be doing a good job. Senator Neal noted the elected individuals were still involved in terms of selection and appointment. It appeared to Senator Neal, in fact, the problem was in the evenly numbered board and adding a person would solve the problem. Senator Neal did point out, even the new member would have great authority in terms of selecting the chairman. Senator Neal stressed the airport revenues were good and expansion had been discussed along with utilizing funds to bring additional facilities for aircraft.
Senator Raggio reiterated that S.B. 299 would place language into statute, the enabling authority, the specific intent of the Legislature, at the time the authority was created. The situation would continue where the appointing authority had the ability to make reasoned decisions about those who were appointed.
Senator Neal asked whether it had been anticipated, with the passage of S.B. 299, that the bill would enable the authority to levy any taxes. Senator Raggio emphasized nothing in the law would be changed; but it would prevent some appointing authority from making threats as to removal from the board based upon the voting record. Senator Neal queried if, under the present law, the board could levy taxes. Senator Raggio replied, under the present law, the county commissioner would have to levy any tax. The board in question did not have that authority, nor did the airport authority operate on tax revenue.
Senator O’Donnell asked what revenue allowed the operation of the airport; the senator thought it was the jet fuel taxes that allowed the operation.
Senator Raggio responded the airport did not run on county levied taxes but rather, the airport operated on the revenues from the airport authority
Thomas J. Gribbin, Chairman, Board of Trustees, Airport Authority of Washoe County, came forward to testify as a private citizen to state he did not believe it was appropriate for the board to take a position on this issue. Mr. Gribbin acknowledged the airport operated primarily on the funds from the concessions and parking. Although, he said they did receive passenger-facilities charges. The airport authority also received very limited funds from the Federal Aviation Administration (FAA). Mr. Gribbin reiterated the majority of funds came from the airport’s revenues, and the airport was operated like a business.
Senator O’Donnell questioned whether some of the revenue was from slot machines. Mr. Gribbin, replied, yes, some of the funds were from slot machine revenues.
Senator O’Donnell asked the amount of the federal match ratio. Mr. Gribbin said it was approximately 8¼ to 8½ percent on the federal funds. For example, Senator O’Donnell clarified, if the airport authority raised $875,000, the federal government would give $10 million. Mr. Gribbin stated, specifically, the airport authority had to seek the funds first. They had to get the funds and then match the funds, this was user-money from the trust fund.
Senator O’Donnell asked if any of the board of trustees was elected to administer the $10 million. Mr. Gribbin replied he believed the FAA administered the funds, as there were specific projects on which the airport authority must spend those funds. Senator O’Donnell maintained he, along with the constituents he represented, paid into those tax dollars. Again, the senator asked if any of the members of the board were elected. Mr. Gribbin responded, no, the members were not elected, but rather appointed.
Richard A. Hill, Vice Chairman, Board of Trustees, Airport Authority of Washoe County, answered the question that it was a fact the airport authority had to follow several federal sponsors’ assurances in order to make the expenditure of those funds, there was a very narrow guideline in which the airport authority could operate in terms of decision making.
David L. Howard, Lobbyist, Nevada State Chamber Association, stated he was in support of S.B. 299 as his organization spent time in educating individuals for appointment to the various boards. Mr. Howard emphasized no board was more important than the airport board to commerce in northern Nevada and northern California. Mr. Howard stressed the need for business people on the board and that there had been problems. Senate Bill 299, as written, would go a long way to resolving the problems in the operation of the board.
Chairman O'Connell asked for further questions from the committee. Senator Neal asked if there was anyone from the Lake Tahoe area represented in the hearing room. Mr. Gribbin responded that a past chairman, Geno D. Menchetti, had been from Lake Tahoe but that was the northern portion of Washoe County. Mr. Gribbin said Mr. Menchetti had resigned and been replaced on the board. Senator Neal reiterated, saying, there was no one from Lake Tahoe on the board of trustees.
Chairman O'Connell asked if there was anyone else who wished to speak in favor of S.B. 299, there was none. The chairman then asked if anyone wished to speak in opposition to S.B. 299.
Judith R. Snell, Concerned Citizen, and resident of Washoe County, came forward to testify. Ms. Snell stressed many citizens in Reno were interested in S.B. 299 and were opposed to the legislation. Ms. Snell called attention to the study on national airports to which Senator Raggio had referred that led to the appointment of a board. Ms. Snell asked what had changed in the composition of the board, and pointedly remarked, Web sites and e-mails nationwide noted local entities and local governments that tried to regain control of their respective airports due to public outcry. Ms. Snell stated she would not belabor the issues of airports and airplanes and the outcry over noise. Ms. Snell stressed no one she knew wished to curtail passenger travel. Ms. Snell emphasized she did not believe the board was broken and if it were broken it was because of the internal conflict, not by any law that could be changed. Senator Raggio’s reference to the tie vote pointed to the fact that the board did not follow their own bylaws. Ms. Snell said it was her understanding that the bylaws clearly spelled out the manner in which to break a tie vote.
Ms. Snell, stated, in her opinion, the governmental entities did not heed the public. Secondly, Ms. Snell commented, saying the board was influenced when the various local governmental entities did not all support the air cargo hub. She remarked to the committee that Krys Bart, Executive Director, Airport Authority of Washoe County, had met with the FAA in Burlingame, California, and although she could not confirm the statement, the discussion involved the environmental assessment, which would come back in the affirmative, therefore, there would be no necessity for an environmental impact study (EIS). Ms. Snell said her main objection to the board was the board could condemn public property through the use of eminent domain. She pointed out the Home Gardens area was idle and not providing tax revenue to the city. Moana Farms had been condemned to expand the air cargo facility which provided no tax revenue to the city. Ms. Snell continued, reiterating the board was not broken and the board should address their problems, in her opinion. Ms. Snell suggested the Airport Authority of Washoe County issue bonds so that the public would then be responsible. She summarized saying she was in opposition to S.B. 299.
Senator Raggio responded, saying, to his knowledge, the Airport Authority of Washoe County could not levy a tax under the law. The senator reiterated the language of S.B. 299 would create an uneven number of board members so that ties would not occur and the Legislature would not have to deal with the board, and, in fact, that was the intent of the initial legislation. Senator Raggio restated the term of the two present chairmen as 6 months and 6 months, which he declared as a radical situation.
Ms. Snell asked Senator Raggio if the board had the power of eminent domain, the power to condemn and take property. Senator Raggio said existing law allowed for that and the board had done so for the enlargement of the airport, but it had been done very appropriately with all the necessary hearings and without that ability the airport authority could not function.
Ms. Snell stressed decisions made by any form of government should be prudent. She stated this was an acknowledged emotional issue when people lost their homes due to a local entity enforcing eminent domain. It was Ms. Snell’s opinion, though, an entity with this power should also be obliged to answer to someone. She further said, in her opinion, if S.B. 299 passed there would be no leverage, and decisions would be after the fact for the public.
Senator Raggio assured Ms. Snell the language of S.B. 299 would not change the method of appointment, but the bill clarified, to some extent, the qualifications necessary to serve on the board. The Senator reiterated this was a board that operated a large business. The bill would give the appointing entities, the elected bodies, some discretion in appointing anyone. Ms. Snell voiced her concern the bill appeared to take away the governmental leverage in allowing the nine members to be totally independent of the rest of the government in the City of Reno. It appeared to Ms. Snell the only reasons an individual could be removed would be for absence from meetings or malfeasance and misconduct. Ms. Snell asked Senator Raggio how many members had been removed since the initial legislation, and if the senator knew of any incidents where the appointing government entity had removed a member of the board. Senator Raggio stated there were reasons to clarify the original intent of the legislation in that the board members should be able to exercise their independent judgment, the same as any board that managing an enterprise of this kind.
Ms. Snell emphasized the Board of Trustees, Airport Authority of Washoe County, was not an elected board, although the board was in the position to affect many lives of the citizens of the valley. Ms. Snell summarized, stating, in her opinion, the board should be subject to oversight by elected officials, not independent of them.
Helene G. Sasser, Concerned Citizen, came forward to state she did not object to most of the language of S.B. 299, but Ms. Sasser emphasized she did think it was inherently dangerous to give a few individuals so much power without accountability to an elected governing body.
As there was no further testimony on S.B. 299, Chairman O'Connell closed the hearing on S.B. 299 and opened the hearing on S.B. 255.
SENATE BILL 255: Makes various changes concerning contract between design professional and public body for provision of services in connection with public work. (BDR 28-236)
Mark H. Fiorentino, Lobbyist, American Consulting Engineers Council of Nevada (ACEC), and Nevada Outdoor Media Association, pointed out local governments occasionally required professional engineers to indemnify themselves, their employees and their agents for the conduct of the public body and their employees and agents. Local government bodies had, in the past, refused to enter into a contract with engineers unless those terms were agreed upon. Mr. Fiorentino continued, stating this practice placed the engineer in the difficult position of taking responsibility for the actions of others, over which they had no control.
The purpose of this bill, Mr. Fiorentino noted, was to prohibit those types of provisions in a contract for a public work. The bill would, in fact, allow the local government to require engineers to indemnify for anything the engineers or their agents did that caused damage or caused a claim to be brought against them.
Chairman O'Connell asked Mr. Fiorentino to go through the proposed amendment (Exhibit D) as presented to the committee. Mr. Fiorentino noted on page 2, lines 11 and 12 of the document submitted would include landscape architecture in the group of design professions. The definition of business entity would include not just entities that employed an engineer or architect but rather an entity engaged in the practice of those disciplines. The language had been specifically recommended by architects. Mr. Fiorentino then pointed out changes on page 4, line 14, where the new paragraph (c) had been added at the request of some of the northern local governments. The local governments often negotiated a provision in contracts requiring the design professional to name the local government as the additional insured on some of the insurance policies the design professionals carry. The local governments wanted to have the continued right to do so if the parties agreed. The provision would allow the local governments to negotiate while neither requiring nor prohibiting. Mr. Fiorentino stated the intent of the changes was to ensure the provisions that governed what could be done and what could not be done would use similar or identical language. Subparagraph (d) would prohibit certain types of indemnification provisions and subparagraph (e) allowed others. He reiterated they wanted to use the same language and the amendments accomplished that.
Senator Care asked Mr. Fiorentino if he was aware of any current litigation which could have been prevented had this proposed bill already been law. Senator Care stressed his concern that perhaps there was some litigation and the bill would have the unintended consequence of affecting the outcome of that litigation. Mr. Fiorentino stated he was not aware of any litigation, but he had not asked his client if there was any pending litigation.
Chairman O'Connell requested Mr. Fiorentino research the information and report to Senator Care. Mr. Fiorentino agreed, saying he could certainly get an answer specifically regarding his client and whether they had pending litigation.
Cheryl Blomstrom, Lobbyist, Nevada Contractors’ Association, said the sponsors of S.B. 255 had made the effort of addressing the concern of the Nevada Contractors Association as it related to the design-build bill. Ms. Blomstrom stated the Nevada Contractors’ Association was in support of S.B. 255 in its amended form.
The chairman asked for further testimony on S.B. 255.
James A. Bell, Director, Public Works Department, City of North Las Vegas, stated he also was a professional engineer. Mr. Bell pointed out the proposed amendments to S.B. 255 were agreeable to the City of North Las Vegas. Mr. Bell maintained the amendments clarified and would protect the city as well as the professional.
Colleen A. Wilson-Pappa, Lobbyist, Clark County, stated her support of the amendment. However, Ms. Wilson-Pappa related the Clark County district attorney was somewhat uncomfortable with just the language of negligence, recklessness or intentional misconduct. Ms. Wilson-Pappa noted the district attorney would like to add “errors and omissions” to the language and that would apply to the county as well as the design professional.
Chairman O'Connell asked Ms. Wilson-Pappa if she had the opportunity to speak with Mr. Fiorentino regarding this change. Ms. Wilson-Pappa replied she had, although very briefly. She apologized and stated they had only received the amendment that morning. Other than the addition of the words “errors and omissions,” Clark County was in support of S.B. 255.
Chairman O'Connell asked Mr. Fiorentino if the language change would be acceptable to him and his client. Mr. Fiorentino stated it was their belief the term negligence actually included errors and omissions. Therefore, he was not certain the exact words were necessary. Mr. Fiorentino said he had not spoken with his client regarding the language, but did not think it would be an issue.
Janelle L. Kraft, Lobbyist, City of Las Vegas, expressed support for S.B. 255 as amended, also with the clarifications that Colleen Wilson-Pappa mentioned. Ms. Kraft thanked both Mr. Fiorentino and Maddie Fischer for their willingness to work through the City of Las Vegas’ concerns.
James E. Keenan, Lobbyist, Nevada Public Purchasing Study Commission, stated full support of the intent of S.B. 255 and the proposed amendment with Clark County’s additional language of “errors and omissions.”
Senator Care asked if there were any public bodies with current contracts in effect that had these requirements for the design professionals. If those contracts existed, and S.B. 255 became law, was it the intent to modify those contracts to conform to this legislation, he queried.
Mr. Keenan replied to Senator Care, and said he had asked that specific question at a meeting of the Nevada Public Purchasing Study Commission, 2 weeks previously. Mr. Keenan stated the members said they were not aware any of their contracts with professional services or organizations of architects or engineers had such a provision.
Ms. Kraft also replied to Senator Care’s question and said there had been no concern in remarks received from the City of Las Vegas purchasing staff and the city attorney regarding current contracts.
Thomas J. Grady, Lobbyist, Nevada League of Cities and Municipalities stated support of S.B. 255.
Tracy M. Duarte, Lobbyist, Nevada Association of Counties (NACO), maintained she was there in support of S.B. 255 and the amendments mentioned during the hearing.
Madelyn Shipman, Lobbyist, Washoe County, stated she had helped draft the language and thought the addition of “errors and omissions” would be helpful.
Chairman O'Connell asked if there was any opposition to S.B. 255 and there was none. The chairman closed the hearing on S.B. 255 and opened the hearing on S.B. 265.
SENATE BILL 265: Requires city or county to pay just compensation or authorize alternative location for certain structures or uses of property under certain circumstances. (BDR 22-156)
Mark H. Fiorentino, Lobbyist, Nevada Outdoor Media Association (NOMA), proceeded to explain S.B. 265 to the committee members and began by stating the purpose of the bill. First, the bill would provide some protection for private property rights by requiring, with certain exceptions, a local government to pay just compensation when it required the removal of a legal use or legal structure. Mr. Fiorentino continued, saying all of the local governments have a series of codes, ordinances and regulations governing the adoption of certain uses and structures which take the form of building codes and zoning codes. Individuals use those codes in order to make decisions regarding investments in properties and buildings. Mr. Fiorentino maintained local governments sometimes order the removal of a structure that had been built under code and legal at the time of building. The reasons vary; there could have been a change in public opinion regarding a use or structure. There could be changes in the local governments planning goals or strategies, or there might have been a natural progression in codes that govern. The methodology the local governments employ to require the removal of a structure also varies. Some require the removal of a use or structure by a specific date. For example, Mr. Fiorentino described the date for removal of the use or structure as 3 years, 5 years, etcetera. Other local governments operated, in his opinion, in a somewhat harsh manner. Mr. Fiorentino directed attention to a provision of the City of Las Vegas code governing non-conforming uses (Exhibit E). Mr. Fiorentino noted he would read the provision into the record:
A non-conforming use of land that does not take place within a principal building, legally existing on the effective date of this title or an amendment thereto shall be discontinued upon written notice from the city to the owner to discontinue the use.
Mr. Fiorentino explained if an individual had a use built, or a building built, in conformance with all laws and regulations that governed at that time. At a later date, the local government changed the code, in this instance, the City of Las Vegas. The city could then send a letter stating the use or structure shall discontinue.
Mr. Fiorentino noted individuals sometimes had to hold a property for a lengthy period before they were financially able to develop the property. The use could be a bookstore, hotel or an off-premise sign. He continued, remarking that perhaps the owner attracted a long-term tenant, 25 years, for example. Then the city, for whatever reason, and it could be a legitimate reason, decided the use was no longer appropriate in that zone or adopted a restriction that would prohibit such use. The city could write a letter 2 years into the lease saying the city was directing the use to discontinue pursuant to a section of the code. Mr. Fiorentino summarized, there was nothing in current law that either prohibited a local government from doing that or requiring the local government to pay just compensation if they did.
Mr. Fiorentino said the purpose of S.B. 265 was to protect property and property rights and that already existed in the Nevada Revised Statutes (NRS). Mr. Fiorentino stated he would give two examples, first, an area of state law wherein governments were decidedly protecting existing uses in chapter 463 of NRS governing gaming establishments. He went on, saying the laws had changed over time. He noted the Legislature had decided that nonrestricted gaming, gaming with more than 15 slot machines or any type of live game, had to be conducted in a resort hotel. The Legislature did not say then that all existing establishments that were not resort hotels would lose their investment, build a resort hotel or give up their property rights. The Legislature protected those people, they could not expand, could not go beyond the rights they had when the law was established but they could continue as long as they maintained themselves in a reasonable manner.
In chapter 37 of NRS, which governs eminent domain proceedings, Mr. Fiorentino continued, saying if he owned a building in downtown Las Vegas, the use did not matter, the building conformed to all codes at the time. However, if the public decided a road was needed and it would go through the building, there would be no other choice. No one would argue, under the constitution and chapter 37 of NRS, that the public should not have to pay for the building. Because the public need for a road outweighed the private need, but the owner should be compensated for their private rights. Mr. Fiorentino submitted to the committee members that it should be no different if the public needed his building for some other reason, either because the public no longer cared for the use of the building or because an historic district was being created or the use was incompatible. As the property owner, he maintained, he would deserve to be compensated in the same manner as if a road were to be built through the building.
Mr. Fiorentino said emphatically that S.B. 265 did not prohibit or limit the local governments’ ability to regulate uses and structures. For example, the City of Reno City Council and their constituents had been involved in lengthy discussions whether the City of Reno should ban new outdoor structures. This bill would not affect the city’s right to ban outdoor structures, or whatever the local government deemed to be appropriate. Mr. Fiorentino stressed if the city wished to discontinue the use of the outdoor structures placed in the ground and permitted on a permanent basis, the language of S.B. 265 would codify that the city would have to compensate the owner. Senate Bill 265 also would not limit a local government’s ability to abate nuisances or a threat to public safety. Mr. Fiorentino pointed out chapter 244 of NRS clarified governments’ right to abate buildings in decline or to abate public nuisances. The bill would not prohibit a local government from requiring the removal of these legal uses and structures. It merely said compensation must be made, or allow relocation to a comparable site. Finally, S.B. 265 would not require local government to spend a dollar of public money. The bill would not force the expenditure of any money. The language of the bill stated if the local government wanted to discontinue the use or the structure that was legal, compensation would be made or relocation of the use or structure would be allowed. Mr. Fiorentino expressed to the committee the efforts made in meetings with representatives of local governments dating back over a year or more regarding the concept of S.B. 265. He further stated, suggested language had been submitted to the Legislative Counsel Bureau and to representatives of local governments and, when possible, compromises had been reached. In those meetings, it had been expressed to Mr. Fiorentino that the local governments viewed the ability to discontinue uses as a valuable tool. Mr. Fiorentino recognized the challenges before local governments and respected the need to respond to constituents, but in this instance there was a conflict with the rights of the owner. Mr. Fiorentino said local governments had pointed out specific concerns to him recently. First, S.B. 265 would somehow either eliminate or thwart a local government’s ability to rid a city of public nuisances, he reiterated that was not the intent of the bill and had invited suggestions to amendments clarifying if it was thought to be necessary. In his opinion, Mr. Fiorentino did not believe clarification was necessary. Secondly, a specific issue had arisen in Clark County that involved a particular type of use of property. He elaborated, saying individuals and companies in Clark County had been buying residential properties for use as transient-lodging purposes. These were short-term rentals to vacationers or conventioneers. It was his understanding, although he did not have detailed knowledge of the ordinance, that Clark County had adopted an ordinance, which clarified the short-term rentals, as described, would cease. Mr. Fiorentino continued, saying the local governments would need a better tool than S.B. 265 to regulate the use of residential properties for commercial purposes. Mr. Fiorentino noted he had spoken with the county attorney and asked for suggested language to ensure S.B. 265 would not affect that issue. He pointed out he had not received language from the county, to date.
Mr. Fiorentino, in summary, stated he believed S.B. 265 promoted stability and confidence in local governments and the economy. He further said, S.B. 265 would encourage growth and diversification in the economy. Mr. Fiorentino clarified that people investing in a community would want to be assured that they would be compensated for their investment if the law changed.
Mr. Fiorentino declared if the committee and the chairman wished, he would go through the bill line by line to explain and he hoped the committee would support the adoption of the bill.
Chairman O'Connell asked the committee for questions and if the members would care for a line-by-line explanation of S.B. 265. Committee members requested Mr. Fiorentino explain the bill.
Mr. Fiorentino directed attention to page 1, subsection 1 of section 1, lines 1 through 17, and emphasized this was central to the bill. If a local government, through the adoption or enforcement of an ordinance, required the removal of a nonconforming structure or prohibited the continuation of a nonconforming use, he said, there would be two options. The local government could pay just compensation to the owner of the use and or the owner of the property if that were different, he said, or the local government could allow the relocation to a site that had been deemed comparable by both parties, the local government and the owner of the use.
Senator Porter, confirming section 1 of S.B. 265 was the crux of the bill as Mr. Fiorentino had mentioned. The senator went on to say he had received many telephone calls from concerned citizens and local governments as well. Senator Porter pointed out it was his understanding the intent of S.B. 265 was to address the billboard issue. The senator questioned the language in lines 3 through 18 and how it related to billboards. The language seemed very broad to Senator Porter and to members of the community as well as the committee members. The senator asked Mr. Fiorentino how defining the removal of non-conforming structures would relate to billboards. Mr. Fiorentino replied the bill before the committee was much broader than billboards and applied to all uses or all structures that were legal at the time they were built. However, Mr. Fiorentino’s client was NOMA and if it were the wisdom of the Legislature and the committee to limit the protection to the outdoor (media) industry then that could be accomplished. He reiterated, the bill in its current form was not limited to the outdoor (media) industry.
Senator Care pointed out the discussion involved cities and counties and their ordinances. The Highway Beautification Act of 1965, a federal bill, as originally enacted, required just compensation for owners of real property and would probably cover the billboard owner as well. Senator Care asked Mr. Fiorentino if it made a difference why a city or a county asked that a billboard be taken down. To clarify, he asked if it was even a concern to Mr. Fiorentino that it might be by federal dictate.
Mr. Fiorentino said the senator was correct. There was federal law that governed outdoor structures along federally funded highways, he said, which provided if a structure was required to be removed, either by the federal government or the local government, whoever required the removal had to compensate the owner of the structure. That only applied to jurisdictions within the federally funded highways, and S.B. 265 would extend the same protection to structures that were not along federally funded highways, he said.
Senator Care queried if the federal act, when discussing just compensation, offered a method of calculation of just compensation. For example, the City of Henderson had an amortization schedule, he said, and asked if Mr. Fiorentino knew whether the federal act had some method of calculating just compensation.
Mr. Fiorentino said he did not know definitively, but maintained the act did not set a formula for how to establish compensation. In Nevada, he said, there is fairly strong guidance with respect to outdoor structures in calculating the value of those structures. Mr. Fiorentino noted there was a Nevada Supreme Court case, National Advertising Company, a Delaware Corporation; and Donrey of Nevada, Inc., a Nevada Corporation v. the State of Nevada, Department of Transportation. Mr. Fiorentino elaborated, saying the Nevada Department of Transportation (NDOT) needed to widen a highway, a portion of the highway contained an off-premise sign. The NDOT needed to take the property and the sign. The question in the case was not whether compensation was made, but rather, how to determine the value of the structure. The NDOT argued it was the value of the steel in the structure and the value associated with moving the structure elsewhere. The outdoor (media) industry argued the value of the structure was based upon the income stream. The Nevada Supreme Court ruled for the outdoor (media) industry in that the formula had to be based on an income stream. The case referred to an analysis of whether there was a comparable site for relocation and that NDOT would only pay if there were no comparable site allowable. There are existing regulations in northern Nevada prohibiting structures, therefore, there was no site to relocate and replace their income stream. The NDOT had to pay a value based upon the income stream.
Senator Care noted he had received correspondence referring to the ballot question in Washoe County and pointed out an owner could not relocate a structure because that constituted a new structure. As a practical matter, would any city or county agree to relocate, because the discussion would now involve a number of factors, vehicle volume, the affluence of the neighborhood where the structure was located, etcetera. Senator Care questioned what a comparable site would be as stated in the language of the bill.
Mr. Fiorentino replied that had not occurred with any local governments in Nevada but it had in other jurisdictions. He acknowledged it would be painstaking work, the location of structures local government deemed no longer appropriate would need to be noted and growth areas would need to be identified where there would be no objections. Mr. Fiorentino elaborated, stating it was not always a one-to-one trade. For example, the City of Henderson and Clark County have overlay districts where signs are allowed, primarily along freeways. Large portions of the beltway did not exist when the overlay districts were adopted.
Mr. Fiorentino said:
In the City of Henderson, the example would be, we understand that if we have to remove structures in the interior streets of the city because those are deemed no longer to be appropriate. The ad revenue that we might receive on a structure on the beltway is higher than one we might receive in the center of the city somewhere. So we have to figure out a formula. It may be a 2 for 1 replacement, or a 3 for 1 depending on the actual circumstances. It can be done, it has been done in other jurisdictions, it takes time, and it is not easy.
Senator Neal, referring to the court case, clarified Mr. Fiorentino’s testimony that the court settled the case based on the income stream. The senator asked for what period of time. Mr. Fiorentino responded it would vary on a case-by-case basis. Senator Neal asked what period of time for this particular case. Mr. Fiorentino answered it had been based on the length of the term of the lease the outdoor sign company had with the property owner. Most outdoor sign companies’ circumstances were based on a lease. Senator Neal asked, what was the average lease? Mr. Fiorentino said it varied dramatically. Although, most leases with which he had experience were for a 10-year initial lease or longer with subsequent rollover terms. Senator Neal asked if a lease term could go as high as 50 years. Mr. Fiorentino said it could but he had never seen a lease written for that length of time. Senator Neal questioned the need for S.B. 265 since the court had ruled. Mr. Fiorentino responded the court case had dealt with only one of two critical issues. The court case dealt with the issue whereby there was recognition by both parties that the owner was entitled to compensation because NDOT widened the highway. There were other cases where the structure was deemed inappropriate for other reasons. Senate Bill 265 addressed the first threshold issue of when compensation had to be made. Senator Neal gave an example of rerouting a street or closing a street and rerouting traffic away from a sign, and asked if the city would then be obligated to pay costs. Mr. Fiorentino replied no, not under S.B. 265. Senator Neal asked if the court case addressed that issue. Mr. Fiorentino said he did not think the court case had, because that was an issue of a taking. He clarified, citing as an example, a billboard company sued, claiming there had been a taking because the road was rerouted and therefore the people who viewed the advertising no longer saw the sign. In Mr. Fiorentino’s opinion, that would be a difficult case to win under the existing takings law and this bill would not change that law. Senator Neal outlined Mr. Fiorentino’s position using as an example 25,000 to 50,000 vehicles traveling past a billboard each day, and if the city decided, under the power of eminent domain, to remove the sign, or remove the sign for some other purpose, he asked if that would be considered a taking. Mr. Fiorentino replied yes, their position was if the structure was removed either because a road went through it or the local government required it to be moved for some other reason, then those two circumstances should be treated the same.
Senator Neal asked if it would be a taking if the governmental body utilized the power of eminent domain. Mr. Fiorentino replied yes, it would be a taking.
Senator O’Donnell addressed the issue of vacation homes. The senator suggested if Mr. Fiorentino were amenable to removing that language from the bill, there would be a better opportunity for passage of the bill. Senator O’Donnell continued, saying the billboard had two determinate values. An appraisal on a building could be done in three ways, on a cost basis, on a revenue basis and a replacement cost basis. In the case of a billboard, there would be the cost, minus depreciation on the billboard or the revenue stream generated by the billboard could determine the cost. As he understood the bill, Senator O’Donnell said the compensation would be determined by the revenue stream or approach to appraisal versus the cost approach to the appraisal. The appraisal of the taking should be determined by the value of the revenue stream over a 10-year period, or a period of time along with a renewal period of time, whatever that calculation would be. Senator O’Donnell pointed out the taking took into account the cost of the sign, minus depreciation and the ongoing revenue that would be lost. Senator O’Donnell noted S.B. 265 had no determination as to how many vehicles went by a sign or the value of the sign if it had remained in place. He did not think the bill did that.
Mr. Fiorentino replied the supreme court case was the mechanism that would set the methodology for using income stream or depreciated value. S.B. 265 addressed the first step of when compensation had to be paid at all when the use or structure was caused to be removed for other reasons than eminent domain, and the court case was the second step.
Mr. Fiorentino then acknowledged Senator O’Donnell’s statement regarding the vacation homes. Mr. Fiorentino stated his firm did represent a client who had been involved in the vacation home practice which caused concern. There had been, he stated, some concern the bill had been written to protect the client, and that was absolutely not the case. Mr. Fiorentino emphasized he had asked the county to draft the bill.
Senator Care referred to his previous question, if it would make a difference why the local government caused the removal. Senator Care, clarified, saying a taking by eminent domain would figure in the income stream, comparable sales or income capitalization as the court had done. The senator then pointed out there was a formula in the bill for just compensation. Senator Care said it seemed to him a city with an ordinance which mandated amortization would maintain to Mr. Fiorentino that amortization was just compensation. Senator Care stated it was obvious the outdoor (media) industry did not believe that was enough. The senator asked if the amortization period varied from jurisdiction to jurisdiction, and how much money was being discussed using the City of Henderson over a 10-year period as opposed to just compensation in S.B. 265.
Mr. Fiorentino responded amortization periods can vary. The City of Las Vegas code says there might not be any amortization period at all. The city might just send a letter causing the removal of a use or structure. The adopted ordinances Mr. Fiorentino was familiar with in Nevada had 10-year amortization periods. The period can vary depending upon use and jurisdiction. He went on to voice that part of the fundamental disagreement with the local governments was that amortization was not a substitution for just compensation. Amortization would not adequately compensate people for the value of their property. In the outdoor (media) industry, in particular, the value of the structure could far exceed its 10-year life. Mr. Fiorentino continued, saying when the structure was built there were low costs, and the investment was made on the expectation of permanent life. It was not expected the local government would require the structure be removed and that was an issue the bill also addressed. Mr. Fiorentino reiterated that amortization was not in and of itself compensation. He further said, based upon income stream, the structures would be expensive and that would be an inefficient use of taxpayer money. He emphasized the industry was interested in maintaining livelihoods and income streams. Mr. Fiorentino noted the outdoor media industry would prefer the local government discuss where a structure could be relocated.
Senator Porter recommended an amendment be drafted because the language was so broad. The senator expressed the concern of many with regard to the vacation home language. Mr. Fiorentino declared his client was the outdoor (media) industry and the bill could be written to protect only the outdoor (media) industry, or perhaps draft the language to protect people in a more general way but exempt out certain concerns and issues.
Senator O’Donnell asked Chairman O'Connell if he might make the recommendation that the Legislative Counsel Bureau staff work with Alan W. Feld, Chairman of the Winchester Town Board to draft the language. The chairman replied that would not be a problem as that was not the intent of the original bill. Chairman O'Connell restated the sponsor of the bill should not have difficulty with that either if that was what was necessary to get his issue heard. The chairman asked Senator O’Donnell if he would pass that information on to Mr. Feld.
Chairman O'Connell asked the committee if they wished to continue the progress through the bill or had the concerns been identified.
Senator Porter pointed out Mr. Fiorentino had mentioned having numerous meetings or communications with local governments. Senator Porter asked if the local governments had offered any language to compensate people for the removal of their use or structure. Mr. Fiorentino replied no, and said he had not seen any suggested amendments to the bill. Mr. Fiorentino stressed he had asked the committee if it would remove their opposition to S.B. 265 if it applied only to the outdoor (media) industry’s specific needs.
Senator Neal stated, as he understood the situation, if a structure was caused to be removed the only recourse the outdoor (media) industry had would be to go to court. This would be a taking that required just compensation, he said.
Senator Titus noted the local governments were not providing assistance, first, because the language was overly broad, and secondly, they did not want to pay just compensation for signs. If the local governing body offered an amendment, that would help Mr. Fiorentino, but he should not count on that as the local governments would rather see S.B. 265 die. Senator Titus emphasized if the committee were going pursue an amendment, she would like the language narrowed down to specifically affect outdoor signs as opposed to covering other issues.
Chairman O'Connell invited further testimony in favor of the bill.
Danny L. Thompson, Lobbyist, Nevada State AFL-CIO, came forward in favor of S.B. 265. Mr. Thompson stated he represented outdoor sign workers and called attention to the concern over the takings. Mr. Thompson said he understood the broad language of the bill and would support an amendment from the committee. He emphasized the Nevada State AFL-CIO supported the concept of the bill.
Michel (Micki) Johnson, Lobbyist, National Association of Industrial and Office Properties, a commercial developers trade organization, noted she was speaking in favor of S.B. 265. Ms. Johnson stressed anytime an issue of takings arose, the membership of her organization was very interested. She continued, stating they believed strongly in private property rights and the role of government. Ms. Johnson mentioned the United States Supreme Court had found in favor of property owners whose property had been taken without just compensation by local government.
Senator Porter posed a question to Mr. Fiorentino, asking if there had been a reason not to look at the eminent domain statutes instead of this particular language. Mr. Fiorentino responded, saying they had done a study and the issue was not new in other state jurisdictions. This was the typical way the issue had been addressed in language that talked about protecting legal non-conforming uses.
Chairman O'Connell asked for further testimony in support of S.B 265, there was none. The chairman then asked for opposing testimony.
Donna Erwin, General Manager, Las Vegas Country Club Estates, said her community had great concerns regarding S.B. 265. Chairman O'Connell asked Ms. Erwin, for the record, after hearing the previous testimony and that the language would be changed, if she would continue to be in opposition. Ms. Erwin replied, with Alan W. Feld and members of the community working on the language of an amendment, there would not then be opposition to the bill.
Thomas J. Grady, Lobbyist, Nevada League of Cities and Municipalities, drew attention to Mr. Fiorentino’s statement that there were fundamental differences. Mr. Grady noted the committee had addressed one of the differences, and that was the broad language of the bill. Mr. Grady stated, for the record, Mr. Fiorentino might have spoken with people in southern Nevada, but Mr. Grady did not believe there had been formal meetings with anyone in the rest of the state. As he read S.B. 265, it would affect all local governments in the state, he said.
Tracy M. Duarte, Lobbyist, Nevada Association of Counties (NACO), came forward to echo Mr. Grady’s comments. Chairman O'Connell noted NACO’s concerns regarding S.B. 265.
Douglas G. Smith, Lobbyist, Chairman, Citizens for a Scenic Reno, pointed out his organization was dedicated to preserving, protecting and enhancing the aesthetic character of Reno. He urged the committee not to pass S.B. 265. Mr. Smith drew attention to the fact that the Nevada Legislature had defeated similar anti-amortization bills that would limit local control of billboards. Mr. Smith contended that S.B. 265 was not about non‑conforming uses, but rather a bill to thwart the will of the people. Mr. Smith declared the voters of Reno had clearly said no new billboards. He testified that on November 7, 2000, Reno voters had approved Billboard Ballot Question R-1 which stated: “The construction of new off-premise advertising displays/billboards is prohibited, and the City of Reno may not issue permits for their construction.” Mr. Smith stressed relocation of a billboard in lieu of just compensation would defeat the intent of no new billboards. Mr. Smith summarized, saying the Citizens for a Scenic Reno were confident the elected officials would continue to make land use decisions at the local level. He urged the committee not to pass S.B. 265.
Senator Neal asked Mr. Smith if the petition had taken the existing billboards into account and whether those billboards could be moved. Mr. Smith replied, saying for example, a billboard that had been damaged over 50 percent would be removed, which was standard in billboard ordinances. Billboards could be relocated to industrial areas. Senator Neal asked for clarification, if Mr. Smith was stating the billboards could not be relocated and the owner would not be compensated. Mr. Smith testified if a billboard had to be removed, that would be one less from the total number of billboards in Reno and just compensation was another issue. Senator Neal asked Mr. Smith if he recalled the supreme court had based the amount of compensation on the length of the lease and if Mr. Smith was suggesting something otherwise. Mr. Smith replied no, and clarified there were 300 structures or billboards in place currently and the initiative stated there would be no new billboards or new locations. Senator Neal pointed out, in this situation, a number of billboards had been grandfathered. He continued, saying what if a governmental entity said they needed the land, was Mr. Smith saying the initiative would bar any just compensation for that particular billboard because it could not be moved. Mr. Smith replied yes, that was what their legal advisors had told them.
Senator O’Donnell asked Mr. Smith if it was not true the county commission or the city council or whoever had jurisdiction at the time would have had to approve the billboard. Mr. Smith said, originally the uses were legal but because of zoning changes or residential expansion the uses became nonconforming. Senator O’Donnell said an elected body had approved the billboard placement and the city council or the county commission gave the owner of the property an added value with the approval of the billboard. Mr. Smith concurred. The senator further clarified, stating the people of Reno then voted overwhelmingly there should be no more billboards and it was their decision to remove the nonconforming signs. Mr. Smith responded no, the decision to remove the signs had not been made, rather, the ballot language said no more signs. Senator O’Donnell asked Mr. Smith if it was his intent to have the signs removed. Mr. Smith said no that was not correct.
Senator O’Donnell continued, stating when the city or county gave the approval for the sign, something of value was given to the owner of the property. The dispute if the sign is caused to be removed is not whether or not to compensate the owner, but rather, how to compensate the owner. Senator O’Donnell maintained the city or county had created the added value and now wanted to pay the owner less than the created value. Mr. Smith said his organization had no interest in that aspect. Mr. Smith clarified the ballot language wherein the petition emphasized there would be no more billboards, but the existing billboards would stay in place. Senator O’Donnell asked what amortization really bought versus paying the owner just compensation for an income stream. Mr. Smith referred to the supreme court decision, and noted he was not an attorney, and pointed out, paying the owner based on the income stream tremendously increased the amount of money the billboard companies would receive through just compensation.
Mr. Smith pointed out the City of Reno and Washoe County did not have enough money to pay owners for the removal of billboards, therefore, amortization would give an option to the elected officials. Mr. Smith commented, in some cases just compensation could be made, but in others, the process of amortization would be employed. Mr. Smith questioned where the smaller counties would obtain the funds. Senator O’Donnell remarked he did not think that was the problem. The people had voted and the problem was the city or county had approved the billboard and created the value. He stated the community had the problem. Senator O’Donnell used a residential property as an example. If a county commission or city council had originally approved a residential development, then arbitrarily decided the development was a nuisance and offered to compensate homeowners through amortization, the homes would be worth approximately $1000 to owners who had lived in them for 29 out of 30 years. Senator O’Donnell emphasized this was the issue, and asked Mr. Smith if he would not say to the city or county that they owed him just compensation for the taking. Mr. Smith commented one item that created value for him was no billboards in his community. Senator O’Donnell reiterated the city or county created the value and now they had to reimburse the value if they wished to take it back, and in the senator’s opinion, the city or county needed to take it back justly. The point, Senator O’Donnell stated, was not the desirability on the part of the county commission or the city council to remove a non-conforming sign, but rather, the financial aspect, and that the county or city removing the billboard should not pay just compensation but would pay through the amortization method. Mr. Smith replied if that was what Senator O’Donnell understood from Mr. Smith’s testimony, it was not accurate. Mr. Smith asserted he was in favor of private property rights. Mr. Smith acknowledged his belief in just compensation, but just compensation could also be amortization.
Chairman O'Connell interjected, saying both Mr. Smith and Senator O’Donnell had stated their points of view, and they were not in agreement.
Senator Titus asked Mr. Smith for a copy of the ballot question, as it appeared, so the committee could study exactly what the people had voted on as opposed to the interpretation of the Citizens for a Scenic Reno. Mr. Smith stated he would ensure the committee had a copy of the ballot question.
Senator Care summarized Mr. Smith’s testimony, saying the Citizens for a Scenic Reno did not want the state to take any action that would thwart the intent of the overwhelming majority who approved the ballot question. Senator Care voiced his interpretation of the bill, saying that to relocate a billboard in Reno would constitute a new billboard and would require just compensation. He asked if Mr. Smith knew what the amortization ordinance was in Reno. Mr. Smith replied a representative of the city or county could better answer the question.
Tom Burrous, President, Redevelopment Association of Nevada, representing the cities of Sparks, Reno, Carson City, Boulder City, North Las Vegas, Las Vegas, Mesquite, Henderson and Douglas County came forward. Mr. Burrous maintained S.B. 265 would be harmful to redevelopment efforts because it would limit the cities’ ability to phase out nonconforming uses in the redevelopment project areas. Mr. Burrous referred to a point brought up by Senator Titus and that was property rights. He asked what the rights were of the surrounding properties. Mr. Burrous stated just compensation could stop a redevelopment project, therefore the surrounding property values would continue to decline. The purpose of the Redevelopment Association of Nevada was to eliminate blight. Passage of S.B. 265 would make their limited budget projects that much more difficult.
Senator O’Donnell asked if it was not the city council or county commission that caused the very blight that Mr. Burrous was trying to eliminate. The use was approved in the same manner as a housing development or a commercial establishment was approved. Mr. Burrous agreed with what Senator O’Donnell had said. However, Mr. Burrous drew attention to billboards placed on Victorian Avenue, formerly B Street, in Sparks, 20, 30 or 40 years ago. At that time it was a highway through the City of Reno. Changes had occurred over time, but in a sense, the billboards had been grandfathered. Mr. Burrous emphasized there was a great need to revitalize certain areas of Sparks. He stressed what Senator O’Donnell supported would affect the Redevelopment Association of Nevada to such an extent they would not be able to revitalize that area. Senator O’Donnell asked if Mr. Burrous was referring to the cost of removing the billboards. Mr. Burrous gave an example of a signed 10‑year lease where the lessee was only 2 years into the lease, and just compensation for that lease, dependent upon the income stream, could be $1000 to $3000 per month. He understood the business operation would lose income because of the removal of the billboard, but surely the senator could see from the redevelopment standpoint, the situation would end in a stalemate. Senator O’Donnell pointed out if they really did want the signs removed, they would be and the voters would authorize payment. Mr. Burrous responded, saying the senator was correct and the signs would stay in place and there would not be a redevelopment area able to pay that kind of compensation in order to begin a project.
Chairman O'Connell commented that Mr. Burrous could understand the exact concerns of the other side. A great deal of income would be taken from a business with a legal lease.
Frank R. Carroll, Lobbyist, Executive Director, Scenic Nevada, testified the state of Nevada was unique in many ways and Scenic Nevada worked to preserve and enhance the state. Mr. Carroll stated S.B. 265 had been proposed by the billboard industry but the language was not limited to billboards. Mr. Carroll stated, because structures were not defined in the bill, it could apply to any and all structures as had been discussed previously. He stated a recent survey by the Las Vegas Business Press had reported 65 percent of the readership did not want a change in the overlay of billboards in the Las Vegas area. Presently, nonconforming billboards may be used by owners through a long-term amortization process for a reasonable period of time in order to recover their investment.
Mr. Carroll went on to say, under S.B. 265 the process would be prohibited and just compensation must be paid by the city or county. It would not allow the option of choosing or negotiating between just compensation and amortization or a reasonable combination of the two methods. Disagreements regarding just compensation would have to be resolved before a court, not through an arbitration process. Mr. Carroll emphasized because S.B. 265 prohibited amortization, if the city or county wished to restrict property for future use, such as an airport, the entity would not be allowed to permit nonconforming uses such as farms, homes and businesses to remain on the property until the actual conversion of the use was needed. He stressed, since the bill would be effective immediately upon passage, it was unclear whether the bill would affect billboards already scheduled for removal under an amortization schedule. The City of Henderson had 80 billboards scheduled to be removed by the end of 2001, Mr. Carroll said, and he strongly urged the committee to defeat S.B. 265.
Madelyn Shipman, Lobbyist, Washoe County, stated she had been a deputy attorney general with the Nevada Department of Transportation and had worked on the removal of billboards because of the federal Highway Beautification Act of 1965. Ms. Shipman testified she would assume the discussion was now limited to billboards and not other nonconforming uses. She called attention to the supreme court case and her discussions with the local governments regarding the case. It was her understanding that the basic way just compensation was determined, if condemning, and aside from the question of constitutionality, to her knowledge amortization had been upheld as a substitute for just compensation, and assumed the entity was paying money outright, in that case, the valuation was approximately four-times (10, 12 and 15 years left on the leases in place). If the valuation were four-times the annual revenue from the billboards, Ms. Shipman clarified Washoe County had an ordinance that did not allow relocation or new billboards to be placed, and the revenue was $28,000 for one and $56,000 for another. Therefore, the committee could understand just compensation or value for the billboards could range from $100,000 to $300,000 apiece.
Ms. Shipman noted the supreme court case had been remanded for review. She stated Washoe County regulated the size, height, and number of faces, spacing, aesthetics and location of billboards. Billboards were located according to specific highways and regulatory zones and there was an absolute number of 125 billboards, to those existing within the unincorporated area. Washoe County had already accomplished what the City of Reno tried to do through the initiative, Ms. Shipman said, and there were also provisions in the county code to reduce the number of billboards as land was annexed into the city. She called attention to Washoe County’s concern about a code provision which required, with development of a property, a residential development or a zoning change, the development would then be a project of regional significance and the outdoor advertising would be removed. Washoe County would request the lease be terminated, she said, because the leases contained clauses for termination at the request of the property owner. Ms. Shipman stated to the committee, in discussion of S.B. 265 with Mark Fiorentino, Washoe County would have to pay just compensation or find an alternative location because the county had required the removal, even though it had been the owner of the property who requested termination of the lease. Washoe County did not believe that was appropriate. Ms. Shipman stressed S.B. 265, as written, would subject Washoe County to payment of just compensation.
Senator Care drew attention to Ms. Shipman’s testimony in that compensation had to be paid to the billboard owner as well as the real property owner. Ms. Shipman added to the senator’s remarks stating, in chapter 37 of NRS, which applied to condemnation or eminent domain law, normally there would be no separate compensation to the real property owner and the lessee. A single price for the totality of the property and the structure in place is made to the real property owner.
Senator Porter clarified the interpretation of Scenic Nevada regarding the initiative petition that passed, and there would be 300 billboards or less. The senator stated, if he understood correctly, the petition would eliminate the ability to replace or move a billboard. Senator Porter asked Ms. Shipman if Washoe County allowed sign replacement or relocation. Ms. Shipman replied there were designated roadways and zones where signs would be allowed and the sign could be relocated. She clarified relocate, one sign would be removed and the person could construct anew. It would be a new sign, Washoe County did not treat that as a relocation of an existing sign. Ms. Shipman continued, saying when Washoe County allowed a reconstruction, and the code specifically prohibited reconstruction of a sign when damaged by vandalism, etcetera, it would require an affidavit for a nonconforming sign and the owner of the use could not utilize the new value for purposes of determining value for the sign. Senator Porter reiterated the number of signs in Washoe County was 125. Ms. Shipman replied, that was correct, and there were few places that someone could relocate in conformance with the Washoe County code. Senator Porter queried whether that was contrary to the petition. Ms. Shipman stressed they were discussing Washoe County unincorporated. Her understanding of the petition, although she said she had not been a party, would accomplish what Washoe County had done in code.
Senator O’Donnell asked, if the referendum was to not have any additional signs and Washoe County decided to take a sign, would the county have to compensate the owner for that sign? Ms. Shipman replied, unless it was otherwise covered by code. She stressed the county required the removal of signs with development of the land. The county did not pay just compensation for that because they believed that would be the owner’s choice. If the owner wanted to convert the property to a different use, from an outdoor structure advertising use, they had the right to do that, but in that case, the county would not pay just compensation. Presumably, the owner of the sign had knowledge or an understanding that the property owner they leased from might some day choose to change the use of the property. Therefore, Ms. Shipman stated, there could be no expectation of just compensation from either the owner of the real property or the government. She emphasized there was risk involved in entering into those leases and that narrow area was of concern to Washoe County regarding S.B. 265.
Senator O’Donnell asked Ms. Shipman if she were familiar with the term cap rate. She replied, saying in general, yes. Senator O’Donnell continued, stating cap rate was the amount of money returned on an investment. In selling parcels of land, apartment houses, etcetera, Senator O’Donnell stated, the normal cap rate used was 10 percent or ten-times earnings. Therefore, he said, if you wished to buy a business with an established income stream, and multiplied the annual income by ten, that figure would generally be what the building or business was worth. The senator stressed Ms. Shipman was speaking about a four-times earnings for a sign. Ms. Shipman said the senator’s statement referred to that particular court case. She commented further, saying that could just be a Washoe County situation, dependant upon traffic, location, etcetera. Ms. Shipman also stressed the case had gone to review, and it had been the appraiser for the outdoor advertiser who had maintained the amount should be four-times the yearly income stream. Senator O’Donnell asked if Ms. Shipman was saying that was way too high. Ms. Shipman replied, saying if a local government had to pay $100,000 to $300,000 to remove a sign, she could assure the senator that would probably not happen.
Senator O’Donnell explained his perspective by giving a scenario of an individual who bought a parcel, located on Las Vegas Boulevard, South near the airport. No one could build on that parcel because of the size, approximately 10 feet wide by 100 feet long in the airport zone, but, he said, a sign could be located on the parcel. That parcel had sold for $75,000, therefore the parcel had value, predicated upon the fact that a sign could be located on it. A sign was located on the parcel and now generated an income stream. Senator O’Donnell remarked, if suddenly the sign was made non-conforming or a local government decided to cause the sign to be removed, the person who had bought the parcel did so because they knew they would get a return on the investment of $75,000. Therefore, he said, when the county took a property like that, after approving the sign and thereby giving the land a value and now wanted the sign removed, the county would have to compensate the owner. Ms. Shipman stated agreement. In that situation, if there were no viable use for the property other than the sign and the sign was required to be removed, the local government would have just taken the property for public use. She continued, saying that was not the case of personal property, which was what a sign was, or a lease on a leasehold and the property still had other uses. Ms. Shipman maintained the situations were very different.
Charles Pulsipher, Zoning Administrator, Clark County, stated his written testimony (Exhibit F), would explain the county’s very serious concerns regarding the passage of S.B. 265 in its present form. Mr. Pulsipher pointed out Clark County, even if the bill were rewritten to narrowly focus only on billboards, would still oppose the bill. The amortization of that which could become a public nuisance, Clark County believed was a fair and equitable way of dealing with a problem that had created an adverse effect on adjacent properties. Mr. Pulsipher maintained amortization was a middle-way of solving a problem because it did not impose ruinous financial hardship to the owner of the sign and/or the owner of the property. At the same time, amortization provided an eventual resolution of a significant problem. The county, he testified, believed in all cases there must be a beneficial use provided for property. Mr. Pulsipher referred to Senator O’Donnell’s scenario, and said he doubted Clark County would require the removal of a sign on property where there was no other beneficial use of property. If the county allowed no use of the property, that would be a taking, and the county would have to pay just compensation. Mr. Pulsipher stressed Clark County was very sensitive to nonconforming uses, including nonconforming signs and had a 5-year amortization period for signs covered in a provision of current code. He did state, saying that section of the code was not utilized, to his knowledge, because the county used other methods.
Senator Care pointed out he found the fact troubling that Clark County had a 5-year amortization period while the City of Henderson had a 10-year amortization period. For example, the senator said, he could be driving on Boulder Highway in Clark County and then enter into the City of Henderson. There could be two billboards with identical advertising, 100 yards apart, and one billboard would have 10-years’ amortization and the other would have 5-years’. Senator Care maintained the differing periods defied logic.
Senator O’Donnell asked Mr. Pulsipher if, when the signs were approved, the owners were told there was a 10-year amortization period. Mr. Pulsipher responded by saying most of the currently nonconforming signs would not be affected by the bill because they had been approved by special-use permit with a public hearing. He noted a section of S.B. 265 that specifically exempted those types of approvals.
Senator O’Donnell declared a special-use permit effectively diminished the value of the lease. The owner and/or the lessee of the use would be aware of the risk. Mr. Pulsipher agreed.
Senator Porter emphasized the issue was the billboards that had been in place for a long time, legal within the provisions of the codes at the time of placement. His question was, what were the other means that Clark County employed to resolve disputes. Mr. Pulsipher answered, stating he was aware of some complaints through the Public Response Office. Perhaps they had gotten a variance for the use in order to maintain the sign. Mr. Pulsipher said he knew, in some cases, the disputes were between different sign companies as to which sign was properly there and which was not. Those cases went to court and the sign companies resolved the differences through court action. Senator Porter asked if the zoning administrator currently had any disputes with sign companies. Mr. Pulsipher responded none, of which he was aware. Senator Porter reiterated the question, saying there was no problem in Clark County. Mr. Pulsipher said that was correct.
Senator Titus referred to legislation introduced in a previous session. The senator stated local government, especially the planning departments had come forward and testified that if no development could take place outside the valley ring and people were unable to get zoning changes, then that would be a taking. Senator Titus clarified, saying people giving testimony before the committee today had said if code changed from conforming to nonconforming or discontinued a nonconforming use, that was not a taking. The senator stated she did not understand the difference.
Mr. Pulsipher answered by reiterating the beneficial use of property must always be allowed. If the county did not allow a use, he believed that was a taking, and would not necessarily mean the use the county permitted was what the owner perceived as the highest and best use.
Senator Porter pointed out Clark County did not have problems, but other entities did and the senator wondered what the differing procedures were. Senator Porter requested comparisons at the next hearing. Mr. Pulsipher drew attention to the fact that Clark County had been asked to introduce a bill that would revise restrictions with regard to billboards. If that bill were adopted, the entire situation would change. Senator Porter asked if the county ordinance was different than the other local governments. Mr. Pulsipher replied yes, the county did have a billboard overlay district within which signs were permitted by right if they conformed to a set of regulations. That did not just include major highways but included the major resort corridor itself, a substantial area.
Mimi Moss, Manager, Planning and Economic Development, Douglas County Community Development, pointed out, to her knowledge, Douglas County had not been contacted regarding the contents of S.B. 265. Ms. Moss also emphasized that Douglas County prohibited billboards and there were no billboards existing in Douglas County except on tribal property, under a separate jurisdiction. The issue of billboards and nonconforming structures would not apply to Douglas County. Ms. Moss stressed the broad language in the bill did relate to Douglas County in that the county had an ordinance section on nonconforming structures and uses. She stated the section did allow the continued use of nonconforming structures and uses over time. The section did not require the removal of the uses, but it did require if the use was discontinued for a certain period of time, then the use would have to be in conformance. Ms. Moss gave as an example, an auto-body shop in a neighborhood commercial zone, current code would not allow that, if the auto-body shop moved out, the new use would have to conform to the current zoning district. She explained normal maintenance and repair were also allowed for public health and safety reasons.
Chairman O'Connell pointed out Ms. Moss’ testimony was not applicable to the bill now.
Ms. Moss replied she wanted the record to reflect that Douglas County had taken measures regarding nonconforming structures. She went on, saying the county understood property owners had rights and the county tried to work with owners if changes occurred on the property. Douglas County does not allow off-premises signs and that included billboards. She noted it was her belief this issue belonged under a local jurisdiction. And, instead of dealing with it at the local level, the Legislature was being asked to provide for something that would apply statewide.
Chairman O'Connell pointed out part of the reason the bill was before the committee was because those jurisdictions had said to the outdoor (media) industry that they did not have to work with them.
Madelyn Shipman, Lobbyist, Washoe County, stated, for the record, the committee needed to know Douglas County had no signs because the county effectively used amortization in the 1970s.
Rob Joiner, Redevelopment Director, Community Development Department, Carson City, emphasized Carson City had not been contacted on this issue. Mr. Joiner pointed out to the committee all the examples given by the proponents had been from southern Nevada. He stated Carson City had required special-use permits for all billboards in 1975, not to be abated, just to obtain a special-use permit. Mr. Joiner said, later the city realized there were no good standards in place, so the city worked with the outdoor advertising industry for a year developing standards. Mr. Joiner reiterated although Carson City had not been contacted regarding S.B. 265, Mr. Fiorentino had done a good job in exempting most of the Carson City issues because of the special-use permit exemption. However, he said there was concern about the broad language and the city had in the past eliminated some billboards through attrition of development. Mr. Joiner stressed S.B. 265 would require the city, not the developer, to compensate. Mr. Joiner said he did not think that was the intent and could be easily remedied. He maintained that Carson City had land zoned for new billboards, in fact, a billboard had been approved in 1999.
Carson City is not anti-billboard, Mr. Joiner said, but there are conforming and nonconforming zoning districts. The billboards in the nonconforming districts, such as retail or commercial, continue by special-use permit and new billboards would be allowed in general commercial and general industrial areas with spacing requirements. Mr. Joiner expressed concern in the case of an unwilling recipient of a new location by a developer. He stated the city would not oppose S.B. 265 as long as the language regarding nonconforming uses and structures was deleted. He noted Carson City’s ordinance was almost identical to the description given by Ms. Moss.
Bristol S. Ellington, Assistant Director, Department of Community Development, City of Henderson, testified that 10 years ago the City of Henderson had worked with the outdoor advertising companies in order to amend Henderson’s sign code. The citizen advisory subcommittee conducted several meetings with the outdoor (media) industry and adopted a billboard ordinance, a collective effort by the outdoor (media) industry and the city. The ordinance was adopted November 19, 1991. The ordinance provided a 10-year amortization period in which nonconforming signs would be removed. A review of case law had found that 10 years was an adequate period of time in which to recoup investments, fulfill lease requirements and relocate and not infringe on property owners’ constitutional rights. The City of Henderson believed amortization was a tool typically used for providing just compensation.
Mr. Ellington stressed the outdoor (media) industry had not approached the city council to seek relief from the ordinance. He remarked there were two areas within the city limits, one along Lake Mead Boulevard and the other along Interstates 93 and 95, where billboards were allowed as conforming uses. On the eve of amortization, the industry was seeking relief from a local ordinance through the Legislature. Mr. Ellington emphasized their belief that S.B. 265 was completely contrary to the public welfare and benefit, but would benefit one group and sought to ensure their continued operation.
Senator Porter asked if the outdoor (media) industry client represented by Mr. Fiorentino had been involved in the discussions 10 years ago. Mr. Ellington responded he did not know. Senator Porter asked if there were minutes available from those meetings. Mr. Ellington replied yes, and the information would be provided to show who had been involved.
Senator Care asked if the City of Henderson had calculated the costs, using the definition of just compensation as written in this bill, and what it would cost the City of Henderson. Mr. Ellington replied he did not know if anyone actually had looked at the cost. He stated, in looking at the amortization time frame, it was thought that 10 years was an appropriate length of time to give notice and to provide for just compensation to businesses and sign industries.
Chris Knight, Manager, Comprehensive Planning, Department of Planning and Development, City of Las Vegas, referred to Mr. Fiorentino’s reading the section of the city’s ordinance on nonconforming use of land that does not take place within a principal building. Mr. Knight encouraged particular attention to that language and that it could be construed to apply to billboards. Mr. Knight stressed, to his knowledge, that had never been used by the City of Las Vegas to apply to a billboard. The city would view that language for ancillary uses, such as seasonal sales on property where the zoning would no longer allow such use. In that case, Mr. Knight said, the City of Las Vegas would issue a letter stipulating that use was not permitted. He continued, saying these were transient uses which could locate on any vacant piece of property. He believed that was the intent of this language.
Mr. Knight referenced the maps (Exhibit G) handed to the committee, showing locations of billboards in the City of Las Vegas. The zoning code had a provision allowing for billboards and the city had many billboards. He pointed out an exclusionary sign zone in which billboards were not permitted. Mr. Knight commented on the exempt zone along highway US 95, and stressed the city made ample provision for billboards and the City of Las Vegas was not anti-billboards. Mr. Knight called attention to another map (Exhibit H) titled “Non-Conforming Billboards Subject to S.B. 265. Mr. Knight said there were approximately 365 billboards in the city and of those, 267 would be considered nonconforming. However, based on the language of the bill, there would be 147 nonconforming billboards that would be subject to the just compensation issue in this bill. Mr. Knight pointed out to the committee most of those billboards were in the older parts of the City of Las Vegas. He believed S.B. 265 would establish a certain bias against the newer developing areas of the City of Las Vegas versus the older parts of the city. The ordinance, changed in 1989, began to require a review period for billboard approvals. Mr. Knight maintained since the focus of discussion had become billboards, he had also given the members maps (Exhibit I) of sexually oriented businesses and the number of those that were nonconforming. There were 22 in the City of Las Vegas, 19 of which would be subject to this legislation, which they believed would be difficult for the city to amortize.
Mr. Knight remarked, the city had been given an opportunity to review the bill draft request for this legislation. The planning department had provided written comment stating concerns regarding amortization, the expansion of billboards and the compensation issue.
Mr. Knight declared the City of Las Vegas, Department of Planning and Development, would work with those involved to discuss language and the character of S.B. 265 and the direction it might take.
Chairman O'Connell asked Mr. Knight to answer Senator Care’s question regarding the different amortization periods, for example, the county had a 5-year period, and the City of Henderson had a 10-year period. The chairman asked what the time period was for Las Vegas. Mr. Knight replied, basically the City of Las Vegas did not have an amortization schedule. He said, under the section Mr. Fiorentino had referred, “outside a principal building . . . ” the city could send a letter saying remove it, but it could not be done in a period longer than 5 years, but it could be done within 2 weeks. Mr. Knight stated typically a negotiation with the property owner would determine how quickly the use would be removed.
Michele F. Richardson, Lobbyist, Assistant City Manager, City of North Las Vegas stated, along with Sean T. McGowan, City Attorney, City of North Las Vegas, they could not support S.B. 265 in its current form. Ms. Richardson told the committee the city had attempted to balance the business interests expressed in the proposed legislation with responsible government and therefore the quality of life for their citizens. The City of North Las Vegas had enacted a billboard ordinance after meetings with the billboard industry. She stated city representatives had spoken with Mr. Fiorentino and consideration had been given to a reasonable agreement on how this process could be handled.
Ms. Richardson explained, in 1999, the city council directed staff to schedule the North Las Vegas planning commission to review amended requirements for billboards. The City of North Las Vegas had used the model of the City of Henderson. There was a 10-year amortization period in the City of North Las Vegas as well. The planning commission voted to continue the consideration of the ordinance.
Senator Porter welcomed Ms. Richardson and said the work between the local government and the outdoor (media) industry had been of value. The real issue continued to be one of just compensation for the individuals with property rights.
Senator Care voiced concern the jurisdictions, as he understood, were divided as to whether amortization was sufficient. The senator suggested the parties should compromise. Ms. Richardson urged the committee to consider the unique needs of communities and that one piece of legislation could not address all the issues.
Warren B. Hardy II, Lobbyist, City of Mesquite, stated the city’s concerns had been articulated. Mr. Hardy did not add any further testimony.
Greg Evangelatos Lobbyist, American Planning Association, testified the City of Sparks had chosen a 7-year period of amortization and that had been difficult to enforce because the city council lacked the political will to follow through. Mr. Evangelatos continued, saying the issue of nonconformity, as it related to primary structures, was critically important to being separated from signage. Many nonconforming uses predated the current ordinances and were built without permits; some were commercial or home occupations that had grown and had become public nuisances; some were agricultural uses that were now surrounded by development and then issues regarding the deleterious effect of junk or wrecking yards. Therefore, the issue of nonconformity should be carefully considered. Mr. Evangelatos also brought up physically substandard land uses, properties that had been totally built-out, no parking, no landscaping and if there were a fire, the government in his understanding would be obligated for replacement but not for the intensity of replacement that currently existed pre-ordinance. Mr. Evangelatos pointed out Senator Porter had spoken to the separation of these issues. He also pointed out to the chairman the Nevada Supreme Court had approved the principle of amortizing nonconforming signs in Beals v. County of Douglas.
Jim Pilzner, Concerned Citizen, explained he was a former chairman of the City of Reno Planning Commission and had spent 4 years on the Reno City Council and was a Reno business owner. Mr. Pilzner brought up the subject of maintenance or maintaining signs and said the language had not been defined. Mr. Pilzner stressed, if the Legislature became involved at the local government level, perhaps they might wish to standardize the amortization period.
Chairman O'Connell asked for any further testimony or discussion on S.B. 265, there was none. The chairman closed the hearing on S.B. 265. Chairman O'Connell asked for a motion to introduce Bill Draft Request (BDR) 21-1155.
BILL DRAFT REQUEST 21-1155: Makes various changes relating to bonds issued by local government for local improvements. (Later introduced as Senate Bill 470.)
SENATOR NEAL MOVED TO INTRODUCE BDR 21-1155.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RAGGIO WAS ABSENT FOR THE VOTE.)
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There being no further business the meeting was adjourned at 6:23 p.m.
Julie Burdette,
Committee Secretary
APPROVED BY:
Senator Ann O'Connell, Chairman
DATE: