MINUTES OF THE
SENATE Committee on Government Affairs
Seventy-second Session
March 12, 2003
The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:09 p.m., on Wednesday, March 12, 2003, in Room 2149 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4412, 555 East Washington Avenue, Las Vegas, 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 Sandra Tiffany, Vice Chairman
Senator William J. Raggio
Senator Randolph J. Townsend
Senator Warren B. Hardy II
Senator Dina Titus
Senator Terry Care
GUEST LEGISLATORS PRESENT:
Senator Maurice E. Washington, Washoe County Senatorial District No. 2
Assemblyman John W. Marvel, Assembly District No. 32
STAFF MEMBERS PRESENT:
Michael Stewart, Committee Policy Analyst
Olivia Lodato, Committee Secretary
OTHERS PRESENT:
Mary C. Walker, Lobbyist, Douglas County and Lyon County
Steve Bradhurst, Director, Department of Water Resources, Washoe County
Allen Biaggi, Administrator, Division of Environmental Protection, State Department of Conservation and Natural Resources
Leo Drozdoff, Chief, Bureau of Water Pollution Control, Division of Environmental Protection, State Department of Conservation and Natural Resources
Vallea Rose, Lobbyist, Self and Washoe County
Robert Curtis
Lois Avery
Janet L. Chubb, Attorney
Scott M. Craigie, Lobbyist
Rex Blackburn, Attorney
Stephanie D. Garcia-Vause, Lobbyist, City of Henderson
Kami Dempsey, Lobbyist, City of Las Vegas
Allen Newberry, Chief of Operations and Maintenance, Division of State Parks, State Department of Conservation and Natural Resources
Lon DeWeese, Chief Financial Officer, Housing Division, Department of Business and Industry
Dan Musgrove, Lobbyist, Clark County
Terry Savage, Director, Chief Information Officer, Department of Information Technology
Chairman O’Connell opened the hearing on Bill Draft Request (BDR) 22-913.
BILL DRAFT REQUEST 22-913: Imposes requirements relating to certain actions proposing to limit number of dwelling units that may be constructed within city or county during specified period. (Later introduced as Senate Bill 279.)
Chairman O’Connell asked Mary C. Walker, Lobbyist, Douglas County and Lyon County, to discuss BDR 22-913. Ms. Walker said the bill draft was a constituent request that grew out of the Douglas County slow growth initiative. The bill was drafted in collaboration with the Legislative Counsel Bureau and business interests in Douglas County. The aim of the BDR was to provide additional requirements in the initiative process, she said.
SENATOR TOWNSEND MOVED TO INTRODUCE BDR 22-913.
SENATOR HARDY SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman O’Connell opened the hearing on Senate Bill (S.B.) 200.
SENATE BILL 200: Authorizes grants to pay certain costs associated with connections to community sewage disposal system. (BDR 30-889)
Senator Maurice E. Washington, Washoe County Senatorial District No. 2, introduced S.B. 200. He stated he was presenting the bill for the residents of Spanish Springs. He said S.B. 200 addressed a problem that had occurred over the past 15 years with increased groundwater pollution. He said nitrates had been leaking from individual septic tanks into the groundwater. The problem was not just in Spanish Springs, but also in Winnemucca, Pahrump, and some areas in Elko County. The administrator of the Division of Environmental Protection (DEP) mandated Washoe County expand its community sewer system to address the increased nitrate levels. The county and residents had arrived at a plan to expand the sewer system and aid the residents in the hookups for the community sewer system, Senator Washington stated. He said a federal grant had become available through U. S. Senator Harry Reid’s office, Washoe County had put its resources to use to help and Spanish Springs residents had agreed to help pay part of the hookup fees. He said due to the edict from the State, the State would also participate in the cost of the conversion.
Assemblyman John W. Marvel, Assembly District No. 32, stated there were quite a few problems in new growth areas involving septic tanks and nitrate problems. He said the proposed bill would help alleviate the situation.
Steve Bradhurst, Director, Department of Water Resources, Washoe County, testified on behalf of the Washoe County Board of Commissioners, Exhibit C. Mr. Bradhurst stated the purpose of S.B. 200 was to provide a partial solution to protect Nevada’s groundwater from nitrate contamination. The bill would also remove a public health threat and prevent violation of the United States Environmental Protection Agency’s Safe Drinking Water Act and the Clean Water Act of 1977. He said the cost of the solution for Spanish Springs Valley was too high for the property owners to pay by themselves. The cost was estimated to be $20,000 per residence. A partnership among local, State, and federal governments, along with the property owner, was needed. Mr. Bradhurst explained it was possible a total of $15 million could be received from the federal government to assist in installing the community sewer system. The money would be allocated over a 5-year period, he said. Mr. Bradhurst added Washoe County had proposed a local match in funds, which would come through special assessment districts.
Mr. Bradhurst said S.B. 200 amended specific provisions in Nevada law providing grants for water conservation and capital improvements to certain water systems. He said the authorized grants would pay certain costs associated with abandoning a septic system and connecting the property to a community sewer system. The grants would be used if the Division of Environmental Protection ordered the conversion of septic systems to community sewer systems. The bill would also increase the amount of general obligation bonds the State Board of Finance could issue, he said.
Senator Titus stated the situation reminded her of an earlier problem in Clark County when the water table dropped and people were asked to abandon their wells and hook up to water systems. Clark County provided some financial assistance to help cover the costs because it was not the homeowners’ choice, but was requested by Clark County for the good of the community.
Mr. Bradhurst stated the situation was parallel, but in this instance was more severe in terms of the pollution of the actual groundwater and public health concerns. He said when nitrate levels reach 10 parts per million in drinking water, it violated provisions of the Safe Drinking Water Act.
Senator Hardy asked Mr. Bradhurst how the problem had occurred originally. Mr. Bradhurst responded if the Nevada Division of Environmental Protection and counties and local governments had known septic tanks at a certain density would cause such problems, they would not have allowed the septic systems years ago.
Allen Biaggi, Administrator, Division of Environmental Protection, State Department of Conservation and Natural Resources, told Senator Hardy the Division of Environmental Protection established a septic density policy in the early 1990s, Exhibit D. He said subdivision reviews and policies were passed based on the density policy. Mr. Biaggi also stated septic tanks were a viable means of wastewater disposal, however, when there were too many in one place, groundwater problems could occur. He also explained to Senator Titus the well issue in Clark County was a modification of the current statute.
Senator Tiffany asked if Pahrump was under the same circumstance with septic tanks and only a limited area with sewer systems. Mr. Biaggi stated Senator Tiffany was correct concerning Pahrump and added there were areas in Elko County, Douglas County, Carson City, and over the border in Grass Valley, California, with problems. Senator Tiffany inquired about possible ramifications to the State bond bank if all affected areas applied for assistance at the same time. Mr. Biaggi stated he would have Leo Drozdoff address her questions.
Leo Drozdoff, Chief, Bureau of Water Pollution Control, Division of Environmental Protection, State Department of Conservation and Natural Resources, said with regard to increasing the general obligation capacity, the funds did not compete with the General Fund. He said neither S.B. 200, nor S.B. 233 was included in the Capital Improvement Plan (CIP). Mr. Drozdoff said the DEP would be able to work with the treasurer’s office so as not to impact the CIP or any of the projects contained therein. He said because S.B. 200 was a plan to be phased in over several years, the additional impact would be a fraction of the total cost. He said the department would continue to work with the treasurer’s office to make their needs known early in the process in order to be included in updates into the CIP.
Senator Raggio inquired about the fiscal note prepared by the treasurer’s office. He said it could only be accommodated if the 15 cents earmarked for State debt service was raised to 16 cents. Mr. Drozdoff said he agreed, if the entire $4 million were spent in 1 year. The proposed expenditures were anticipated to be $400,000 a year as a worst-case scenario. Senator Raggio also asked about the projected cost per lot for the homeowners in Spanish Springs Valley. He said he had information stating the estimated cost would be between $14,900 and $24,000 per lot. Senator Raggio asked if the bill was enacted, and the bonding made available, how would the federal funding and county funds be utilized.
Mr. Bradhurst responded the county had been mandated to prepare a facility plan to address the DEP plan. He said Washoe County had arrived at an average cost per lot of $18,800. Senator Raggio asked how much a homeowner in Spanish Springs would be required to personally pay for the sewer conversion. Mr. Bradhurst said the estimated cost would be approximately $4000 per lot. The monthly sewer fee and debt retirement fees would be about $50 per month. Senator Raggio asked Mr. Bradhurst if there were any assurances the board of county commissioners would heed future warnings from the county health division. Mr. Bradhurst stated the last subdivision approved with septic systems in Spanish Springs Valley was in 1991. The county health department had changed its requirements to a minimum of 5 acres for a septic system. Mr. Bradhurst said the minimum 5-acre requirement would affect all subdivision development.
Chairman O’Connell asked how the $69 million requested earlier had been utilized. Mr. Drozdoff replied the $69 million represented increases through the years. He said $67 million had been allocated. The board sold less than $50 million in bonds due to the lag time associated with these types of projects. Senator O’Connell inquired why the Division of Environmental Protection was involved in the problem rather than the health department. Mr. Biaggi said when the Legislature created the Division of Environmental Protection, it gave the groundwater mandate to the new division for the protection of groundwater resources.
Chairman O’Connell asked how the bond sale would occur. Mr. Drozdoff replied twice a year, the Office of the State Treasurer sold bonds. Mr. Drozdoff’s office provided the treasurer’s office with a cash flow estimate of the expected grants needed over a 6-month period. Senator O’Connell asked if the grants were given through a general improvement district (GID). He said as a condition of the grant for a project, the GID would provide a cash flow analysis of the project. The project would have a date and the amount of money required to do the project. The project would be attached to all the other projects for that period and presented to the State treasurer’s office.
Chairman O’Connell asked for further testimony in favor of S.B. 200. Vallea Rose, Lobbyist, Self and Washoe County, responded she supported the bill. She had previously provided a packet to the committee concerning the problems in Spanish Springs Valley. She said the home owners wanted to protect the groundwater and did not want to pollute the area, but they were frustrated with the costs involved. She said Washoe County water resources had been diligent in finding federal funding, and the county had paid $500,000 for meetings to determine the nitrate levels. She hoped the bill would pass in both Houses. She said homeowners were being forced to pay for the hookups and she hoped Washoe County would be able to assist in the hookup fees and monthly expenditures.
Robert Curtis said he was a member of the Spanish Springs Action Committee and submitted written testimony, Exhibit E. He stated he represented 1723 home owners who had signed a petition submitted to the State last year in opposition to the cost of the proposed septic-to-sewer conversion project. Mr. Curtis stated the partnership between local, State, and federal governments, along with home owner contributions, was a realistic approach to meeting the directive issued by the Nevada Division of Environmental Protection and complying with the standards in the Clean Water Act and the Safe Drinking Water Act.
Lois Avery also submitted written testimony in favor of S.B. 200, Exhibit F. She said she was chairman of the Spanish Springs Citizen Advisory Board. She stated everyone was in agreement it was crucial to protect the quality of the water in the aquifers. S.B. 200 would assist homeowners in the cost of the changeover from septic to sewer systems. Ms. Avery also said it was imperative future developments be stopped from building septic systems on lots that were too small for the systems.
Chairman O’Connell closed the hearing on S.B. 200 and opened the hearing on S.B. 225.
SENATE BILL 225: Authorizes general improvement district to file petition in bankruptcy pursuant to the Federal Bankruptcy Act and clarifies status of general improvement district as municipality. (BDR 25-1091)
Janet L. Chubb, Attorney, testified in favor of S.B. 225. She stated her firm, Jones Vargas, had several clients who were general improvement districts. She said a GID she represented, Overton Power District No. 5, was in litigation with an Idaho company over a contract to purchase power. She stated an Idaho judge had determined the GID was not a municipality, and thus could not file for bankruptcy. She said the purpose of this bill was twofold. The first purpose was to clarify Nevada law that a GID was a municipality. The second was to authorize a GID to file a case under Chapter 9 of the U.S. Bankruptcy Code. She said Chapter 9 provided for reorganization of municipalities. Ms. Chubb said she knew there were concerns regarding the bonding issues. She said Richard F. Jost, Attorney, a partner at Jones Vargas, agreed with her testimony.
Chairman O’Connell asked Ms. Chubb if Mr. Jost was in the audience. Ms. Chubb replied he was not at the meeting. Chairman O’Connell requested Mr. Jost’s direct testimony, or at least a letter from him detailing the security of the bonding, Exhibit G. Ms. Chubb said she was a bankruptcy lawyer and would go over provisions in the bankruptcy code that might answer Chairman O’Connell’s questions. She said in Chapter 9, the code provided special revenues acquired by the debtor after the commencement of the case would remain subject to any lien resulting from any security agreement entered into by the debtor before the commencement of the case. She said the revenues would be subject to operating expenses, and the security interest would ride through the Chapter 9 filing. The bondholders she represented were not concerned Chapter 9 would have an adverse effect.
Chairman O’Connell asked if a GID was a quasi-municipality. Ms. Chubb responded by quoting an Idaho judge who said the Nevada Supreme Court had said a municipal power district was not a municipality. She stated it was from White Pine Power District No. 9 v. Public Service Commission, a 1969 case based on a statute that had been repealed. The judge stated each word in the case had to be studied and “quasi” meant it was something other than a municipality. Ms. Chubb stated there was some confusion as to whether a GID was a municipality and that was one of the purposes of the legislation. Ms. Chubb added she believed the bill would clarify what was meant in the Nevada Revised Statutes (NRS). Senator O’Connell asked what protections were available for the various parties. Ms. Chubb said the GID received the protection of the automatic stay, an opportunity to propose a plan of reorganization, and to pay its creditors. She said the creditors had many built-in protections. She said Chapter 9 envisioned an increase in special revenues or taxes. She said the plan could not be confirmed without the requisite statutory approval. Ms. Chubb said an alternative, if the entity could not file bankruptcy, was the Department of Taxation could take over an insolvent GID. The language being asked to be inserted in the bill stating the GID could file specifically under Chapter 9 was necessary because under section 109 of the bankruptcy code, Ms. Chubb said, a municipality must be specifically authorized in its capacity as a municipality, or by name, to be a debtor under Chapter 9 by State law or by a governmental officer or organization empowered by State law to authorize such entity to be a debtor.
Senator Care asked Ms. Chubb how a Nevada GID became a defendant in an action in Idaho. Ms. Chubb replied when there had been a power shortage, the contract was entered into by the GID to purchase power from an Idaho corporation. She said when power prices went down, the contract became too expensive and the litigation concerned whether there was a contract breach and whose breach it was. Senator Care asked who the other parties were in the action. She said IDACORP, Inc. was the other party involved.
Senator Hardy inquired what the consequences would be for a district that was unable to file bankruptcy. Ms. Chubb said the Department of Taxation could come in, but she was unfamiliar with other options for the GID. Senator Hardy said Chapter 9 of the bankruptcy code was designed specifically for these types of situations.
Senator Care asked if Ms. Chubb believed a GID could file for bankruptcy. She said no, she could find no authority for a GID to file bankruptcy.
Senator Raggio stated he was a shareholder in the firm Jones Vargas and would probably abstain in this matter.
Chairman O’Connell asked Ms. Chubb about section 4 in S.B. 225, particularly if the bill was retroactive as a means to clarify to the Idaho court that Nevada, as a State, considered a GID a municipality rather than a quasi‑municipality.
Scott M. Craigie, Lobbyist, spoke in opposition to S.B. 225. He introduced Rex Blackburn, Attorney, who had been employed by IDACORP, Inc. Mr. Craigie said the change in the status of the GID was an issue for his client.
Mr. Blackburn said his client thought the fact that Overton was not permitted to seek bankruptcy protection was an important factor in his client choosing to do business with Overton. He said Overton represented in the contract with his client it would raise rates to its consumers to the extent necessary to satisfy its contractual obligations to IDACORP, Inc. He explained in 2001, Overton lost its low-cost power supply from Nevada Power Company. Overton had to look for a long-term fixed price contract for its energy supply. IDACORP, Inc. offered the most favorable business terms. The contract offered $122.50 per megawatt hour for 5 years as opposed to up to $700 per megawatt hour on the spot market. IDACORP, Inc. was not a generator of energy, but had made a commitment to sell energy purchased from other suppliers. Mr. Blackburn stated his client purchased energy on the spot market and sold it to Overton. Overton, in turn, sold the energy it did not use to other sources. Overton later asked IDACORP, Inc. to renegotiate the contract as energy prices had dropped. The cost was dropped to $88.50 per megawatt hour and the contract was extended from 5 years to 10 years. Overton promised it would raise its rates to its customers sufficient to cover the cost of energy being purchased from IDACORP, Inc. Mr. Blackburn said Overton failed to raise its rates enough, and in November 2001, Overton ran out of money. Overton did not pay for energy used in October, November, or December, he said. Overton had posted a security deposit, which was used, but there was a $2.5 million debt not covered by the deposit. Mr. Blackburn stated his client still had contracts for the balance of the 10-year contract. He said his client had to sell the surplus for less than it had paid for it. Mr. Blackburn said S.B. 225 would have considerable effects on contracts made by companies who made decisions to do business with GIDs or municipalities because they were unable to seek protection under the bankruptcy laws.
Senator Care asked how close the litigation was to settlement or renegotiation of the contract. Mr. Blackburn said the parties were ordered by the court to go to mediation. He said his client was prepared to meet with Overton at any time. Senator Care stated he would like staff to research other potential situations in Nevada that might have similar problems. He stated he knew one GID was seeking legislation that would allow it to pursue the protection of bankruptcy, and he wondered if there were other entities who would take advantage of the bill.
Senator Hardy asked if municipalities in other states had the ability to access Chapter 9 as a remedy. Mr. Blackburn replied it was a state-by-state decision whether to permit municipalities within a state to seek protection under Chapter 9. He said Nevada had no prior legislation to permit that kind of protection. Senator Hardy asked Mr. Blackburn if the contract stated Overton could not file bankruptcy. Mr. Blackburn replied there was no representation in the contract that Overton would not file bankruptcy, but there was a general provision stating Overton would not use its sovereign entity status to avoid execution of a judgment against it. Senator Hardy stated it was a policy question and he understood there was litigation going on currently. He said he needed to know if there was a compelling reason a municipality such as Overton should not have the remedy of bankruptcy and commented the federal government had provided the remedy for just such cases in the past.
Mr. Craigie said he thought it was a State policy carrying its own questions that had to be answered. He said the bill would create a substantial change in the operation of GIDs by making an adjustment allowing them to declare bankruptcy. He said there were impacts beyond the increase in costs for services. There were also potential impacts on bond ratings and the ability of the State to enter into debt instruments. Senator Hardy asked Mr. Craigie what the consequences would be in Nevada if the State did not employ Chapter 9. He asked what the consequences to the rate payers would be if a GID had to declare bankruptcy. Mr. Craigie said he would let other witnesses discuss Senator Hardy’s questions. Senator Hardy requested Scott Wasserman, Legal Counsel, look for remedies available if a GID was not allowed to declare Chapter 9.
Chairman O’Connell stated Mr. Wasserman was unavailable, but she wanted to have Senator Hardy’s question on the record. Chairman O’Connell also asked, for the record, if S.B. 225 was passed, would all GIDs have the same responsibilities, as well as the privileges, as other municipalities. She stated there were so many GIDs in Nevada and the interpretation would be very broad if the bill passed. She also requested Mr. Wasserman investigate the term “quasi.” She said Overton was not subject to the Public Utilities Commission of Nevada (PUCN) because it was a municipality.
Senator Care asked when the judge had made his ruling and if a trial date was set yet. Mr. Blackburn said the trial date was May 5, 2003. He said the judge made his ruling in October 2002. The Idaho court looked to a 1960s ruling by the Nevada Supreme Court. Mr. Blackburn said in an attempt to understand the distinction between municipality and quasi-municipality, the judge said the State of Nevada had not used municipality in the context of a GID, even though the State used the word municipality in many other contexts. The judge found this 1960s case was interpreting a predecessor’s statute to the current general improvement district’s statute. The statute used the distinction of municipality versus quasi-municipality. Mr. Blackburn said the Idaho Supreme Court stated there was clearly a distinction between municipality and quasi-municipality. He said it made a difference to businesses whether they were dealing with a quasi‑municipality rather than a municipality. He said there were differences in contract formation and regulatory oversights.
Chairman O’Connell asked Mr. Blackburn how payments were made under Chapter 9. She asked if there was a priority for repayments to lenders, and if it was a part of a Chapter 9 bankruptcy. Mr. Blackburn did not know the answer. Chairman O’Connell asked Ms. Chubb if she knew the answer.
Ms. Chubb said the special revenues were protected to the extent there was a security interest in them and the bondholders would be paid. Thereafter, unsecured creditors would be paid. She said part of the process was the determination of the feasibility and necessity of increasing rates. She said a levying creditor could never cause the rates to be increased. She said if an entity became insolvent, the Department of Taxation could take it over, but it would not pay over and above the existing revenues. Chairman O’Connell asked if the revenues would go into the $50,000 protection area whenever there is a lawsuit against a government entity. She inquired if a GID was declared a municipality, would it then have the protection of the State limits. Senator Hardy said he thought the $50,000 was for tort actions.
Chairman O'Connell asked Ms. Chubb if a bankrupt GID had the opportunity of reorganization. Ms. Chubb said a GID had the opportunity to come into the bankruptcy court and explain what was necessary, what was feasible, what charges could be levied, what fees would be excessive, and then the GID would move forward. The other option would be an insolvent entity the Department of Taxation would have to take over. She said the bankruptcy process was an orderly process and an option that should be made available to GIDs.
Senator Hardy again requested Mr. Wasserman look into other options for a remedy if bankruptcy was not allowed. He said part of his concern was GIDs would come to the Legislature in future years looking for a remedy.
Ms. Walker said Douglas and Lyon counties had concerns and questions in regard to S.B. 225. She said Douglas County had 27 local governments, and the majority were GIDs. She inquired about the effects on bonding. She said insurers and potential bondholders asked bond counsel if local governments had the ability to file for bankruptcy. Ms. Walker said the interest rate would be lower and insurance rates would be less if the bondholders were assured bankruptcy was not an option. The second concern was the county generally became involved in taking over an insolvent GID because it was a public safety issue, she said. She inquired how a county would be affected if the bill were passed and requested Mr. Wasserman investigate her question.
Ms. Chubb said it was necessary for GIDs to have an avenue of recourse if bankruptcy was not allowed. She said Ms. Walker’s concerns were legitimate, but with the option of bankruptcy, the county would not be the payer of last resort.
Chairman O’Connell closed the hearing on S.B. 225 and opened the hearing on S.B. 236.
SENATE BILL 236: Revises provisions relating to location of halfway houses for recovering alcohol and drug abusers. (BDR 22-90)
Senator Titus opened the discussion on S.B. 236. She said the purpose of the bill was to clean up a problem which had been occurring in older neighborhoods. She said in areas where houses were less expensive, and had no restrictive codes, covenants and restrictions, an increase in group homes had occurred. She said a new problem had arisen in Sparks when a house with a number of recovering alcoholics and drug abusers who were also former inmates lived in one place. They harassed the neighborhood and she said there were videos made of the problems that had occurred. Senator Titus stated the bill was being offered to protect neighborhoods and children in the neighborhoods. She said there would be an additional requirement stating halfway houses could not be located within 1500 feet of a place where children tend to congregate. She mentioned schools and parks specifically. She said there was a friendly amendment from the City of Henderson, which would help narrow the definition of where children congregate.
Chairman O’Connell asked Senator Titus if there were any prohibitions as far as federal laws were concerned when she investigated the problems. Senator Titus said Reno had inquired if the bill was in violation of the Fair Housing Act. Senator Titus said she had not detected any violations. Senator O’Connell asked Mr. Wasserman to investigate the question for the committee.
Stephanie D. Garcia-Vause, Lobbyist, City of Henderson, said the city was in support of the legislation and was proposing three amendments to the bill, Exhibit H. The first two amendments dealt with consistency in the language of the bill. The third amendment to the bill would help define section 1, page 3, line 10 by deleting the language that stated any public places where children normally congregate and inserting the proposed language.
Chairman O’Connell closed the hearing on S.B. 236 and opened the work session on S.B. 19.
She said no amendments would be available until after March 24, 2003.
SENATE BILL 19: Makes various changes relating to advertising and awarding contracts for certain smaller public works projects. (BDR 28-409)
Michael Stewart, Committee Policy Analyst, said Ms. Walker would go through the bill section by section and discuss the new language proposed for sections 3, 4, and 6, and amendments to existing sections of Nevada Revised Statutes in sections 8 and 16.
Ms. Walker said the committee had two outlines of the proposed changes. The first one was a section-by-section description of the amendment to S.B. 19, Exhibit I. The second was a letter written to Senator Schneider on June 11, 2002. The letter went back to the original draft language local governments and the Associated General Contractors (AGC) had worked out, and had been submitted to the committee and approved, Exhibit J. She said the proposals were the basis for S.B. 19 and the amendments. Ms. Walker stated the bill draft language allowed local governments to bid smaller public works projects in a more timely and efficient manner. She said the majority of the changes in the bill were to bring it into conformance with current law and NRS, and to eliminate duplicate language.
Senator Hardy said he had further questions concerning the bill he would like to discuss with Mr. Wasserman. He said he needed to review the handouts offered by Ms. Walker.
Senator Care inquired about amendments 1 and 6. He said he was concerned about the deletion in the amendments of the detailed written explanation setting forth the reasons for the determination. He asked why the explanation could not be included. Ms. Walker stated it was not in current statute. She said the agreements with all the parties did not deal with the issue at all. Ms. Walker said she had tried very hard to get 50 people to agree to the original agreement. The hearing was continued to the next week in order for Senator Hardy to further review the material.
Chairman O’Connell closed the work session on S.B. 19 and opened the work session on S.B. 144.
SENATE BILL 144: Authorizes Administrator of Division of State Parks of State Department of Conservation and Natural Resources to charge and collect certain fees under certain circumstances and authorizes Division to enter into certain cooperative agreements. (BDR 35-493)
Kami Dempsey, Lobbyist, City of Las Vegas, said the committee had heard S.B. 144 last week and said she had been trying to gather additional information concerning what this legislation would do in regard to the Floyd Lamb State Park. She said she had been informed this bill would not affect the transfer of Floyd Lamb State Park.
Chairman O’Connell said the committee had already acted on the bill and it was being amended, but the amendment would not be available immediately. She asked if the committee wished to hold the bill any longer, or if it would prefer to let it proceed. Senator Townsend said there were two people in the audience who wished to testify on the bill. Chairman O’Connell stated the cities’ and counties’ concerns were about the amount of responsibility the local governments would have to shoulder.
Allen Newberry, Chief of Operations and Maintenance, Division of State Parks, State Department of Conservation and Natural Resources, said the bill was designed to be a reciprocal agreement bill for State parks to operate with counties. The bill would allow a city or county to negotiate to operate a section of a State park, or a full State park, if they wished to do so. At this time, he said, the Division of State Parks could not enter into an agreement with cities or counties to operate a State park if they wanted to operate the park. He said there were no named State parks, although Floyd Lamb State Park and others had been discussed. He said no directions had been given to negotiate with the City of Las Vegas to turn the property over to it. Senator O’Connell asked Mr. Newberry if he was familiar with the BDRs Ms. Dempsey had mentioned. Mr. Newberry said he had not seen them, but the Division of State Parks had not initiated them. He said S.B. 144 allowed a city or county to enter into an agreement to assist or to operate State-owned lands. He said the contract would have to be mutually agreeable to all parties involved.
Senator Hardy asked Ms. Dempsey if her concerns were the city could be encumbered with the care of a park against its will. She said that was not their concern, as they knew it was a cooperative agreement. She said the city had some general questions that had not been clarified in the legislation. She said the legislation talked of having the Division of State Parks apply for federal grants and be able to take up to 10 percent of the grant. She said the city needed to know if that was negotiable in terms of the administrative fee.
Senator Hardy asked if the bill could be held over for the next week.
Senator Raggio asked if there was an amendment to the bill. Chairman O’Connell responded the Nevada Association of Counties (NACO) had worked with Mr. Wayne R. Perock, Administrator, Division of State Parks, State Department of Conservation and Natural Resources, to provide language that would be suitable to all parties.
Chairman O’Connell closed the work session on S.B. 144 and opened the work session on S.B. 78.
SENATE BILL 78: Makes various changes relating to assistance to finance housing. (BDR 25-467)
Mr. Stewart said Lon DeWeese was in the audience. Mr. DeWeese had supplied the committee with several pieces of information previously, Exhibit K and Exhibit L.
Chairman O’Connell asked Lon DeWeese, Chief Financial Officer, Housing Division, Department of Business and Industry, about the special groups included in the bill. She said she was not sure if it was an expansion or if it was something the Housing Division had been doing all along. Mr. DeWeese said the nurses and teachers alluded to in testimony earlier were eligible under existing programs to borrow money under various bond-sponsored programs. The expansion now being discussed targeted higher income levels and was in response to input from stakeholders with regard to special needs groups or groups local governments had identified as being in need of affordable housing. The statute language in section 1 had been proposed because the income levels might be in excess of existing federal statutes that required the Housing Division to limit tax-exempt programs. Mr. DeWeese said the other sections of the bill were ministerial in nature.
Chairman O’Connell stated she had problems with identifying two groups of people whose incomes would not fall into the category of needy. She stated she did not wish to spend money in areas that did not necessitate a specific need. Senator Care expressed the same concerns as Senator O’Connell. Senator Tiffany inquired if it would be possible to delete the two categories, nurses and teachers, from the bill. She asked if the bill would continue to be effective with the deletions, and if it would affect the $5 billion.
Mr. DeWeese stated the income levels were a concern to the Housing Division also. He said an amendment submitted to the committee last week required demonstrations to the State Board of Finance of findings requiring proven demographic and economic necessity. The amendment would not eliminate other alternative ways for those groups to address their housing needs, he said. Mr. DeWeese then said if the entire section 1 of the bill was eliminated, it would still allow the Housing Division to work with members of the committee for future legislation.
Senator Tiffany asked if the elimination of section 1 would also impact page 5, line 7, which referred to $2 billion to $5 billion. Mr. DeWeese said the other sections of the bill did not specifically address special needs groups. All other sections of the bill dealt with requirements for rating agency levels for letters of credit. He said the remaining sections were ministerial in nature and also removed the sunset on the provisions of S.B. No. 552 of the 71st Session.
Chairman O’Connell asked Mr. DeWeese about the 150 percent adjusted median income increase, which on the chart provided was an income of $72,930. Mr. DeWeese responded that amount would be the maximum limit a borrower family could earn and still participate in some of the special needs programs. He said it did not apply to the mainline programs for low-to-moderate income groups.
Chairman O’Connell asked members of the committee if there were any other changes they wished to make to S.B. 78. She asked if they wanted to leave the 150 percent in the amendment. She asked Mr. DeWeese if the current law was 120 percent, to which he replied in the affirmative.
Senator Townsend inquired if current bond programs had a maximum amount per the Internal Revenue Service (IRS) of 120 percent. He asked Mr. DeWeese if that number was allowed to be moved to 150 percent. Mr. DeWeese said the programs would not be funded by tax-exempt mortgage revenue bonds because of the limitation mentioned by Senator Townsend. He said they would use taxable bonds, letters of credit, bank loans, or other mechanisms to be financed.
Senator Titus asked if teachers and nurses were already included in other special needs groups. Mr. DeWeese responded the current IRS rules for tax‑exempt, bond-financed mortgage revenue bonds were limited to first-time home buyers. Senator Titus asked if section 1 was deleted, would it eliminate the 150 percent and would it eliminate the ability to expand the program. Mr. DeWeese stated the amendment provided to the committee last week addressed Senator Care, Senator Tiffany and Senator O’Connell’s concerns about uncontrolled levels of lending.
Chairman O’Connell mentioned a U.S. Department of Housing and Urban Development (HUD) program that paid for one half of a teacher’s home. She said guidelines, including the section of a town where a teacher worked and certain zip codes, were required to be met in order for the HUD program to be applicable.
Senator Hardy asked if the program was designed to help low-income people obtain housing, or designed to help attract teachers and nurses. Mr. DeWeese responded the program had not been designed specifically for teachers; it was designed to provide safe, affordable, decent, and sanitary housing for all groups within certain defined income limits throughout the State. Mr. DeWeese said the Housing Division was seeking to broaden its ability to address special needs groups, as defined by a set of findings and objective criteria. Senator Hardy stated if the original intent was to provide low-income people good, clean housing, then the bill should stay within that intent. He said he was not in favor of expanding the bill to include other higher income special needs groups.
SENATOR TIFFANY MOVED TO AMEND WITH THE REMOVAL OF SECTION 1, IN ORDER TO ELIMINATE THE UP TO 150 PERCENT MEDIAN INCOME, AND ALSO AMEND THE $5 BILLION TO $3.5 BILLION FOR THE PROGRAM AND DO PASS S.B. 78.
SENATOR TOWNSEND SECONDED THE MOTION.
Mr. Stewart said if section 1 were removed, the bill would be status quo with the current statutes. The remainder of the bill would remain the same.
Senator Raggio asked Mr. DeWeese how much of the amount of the authorized $2 billion had been issued. Mr. DeWeese responded the Housing Division had issued in excess of $2 billion, but because the balance was required to be below $2 billion, old money was constantly being rolled over. Senator Raggio stated he had a concern about capping the money at $3.5 billion. He said if the bill was limited to low-income groups only, he would prefer to authorize the $5 billion amount.
Senator Tiffany stated she could leave the $5 billion figure in the bill. Senator Townsend also said he had no problem with returning to the $5 billion amount. Chairman O’Connell said she would amend the motion that had been offered to return to the original $5 billion figure in the bill.
SENATOR TIFFANY MOVED TO AMEND WITH THE $5 BILLION CAP AND DO PASS S.B. 78.
SENATOR TOWNSEND SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TITUS VOTED NO.)
*****
Chairman O’Connell opened the hearing on S.B. 109.
SENATE BILL 109: Requires only name of candidate receiving majority of votes in primary of certain nonpartisan elections to be placed on ballot for general election. (BDR 24-324)
Mr. Stewart stated S.B. 109 had to do with the 50 plus 1 provision for county nonpartisan offices. He said if there were twice the number of candidates for a nonpartisan county office to be elected in the primary, and one candidate received more the 50 percent of the vote, he or she would be the only candidate who went on to the general election ballot. Mr. Stewart said the committee had previously discussed whether the measure should encompass all nonpartisan offices, only county nonpartisan offices, or only county sheriffs.
Senator Titus said consistency should be maintained and applied to both partisan and nonpartisan offices. She stated a higher turnout occurred in nonpartisan races than partisan races in the primary.
SENATOR TITUS MOVED TO AMEND THE BILL TO SAY ALL NONPARTISAN RACES, NOT JUST NONPARTISAN COUNTY RACES.
SENATOR CARE SECONDED THE MOTION.
Senator Raggio said he would have to vote no because, he said, particularly in nonpartisan races, there was not enough interest in the primary. Chairman O’Connell, Senator Hardy, Senator Tiffany, and Senator Townsend said they would have to vote no also.
SENATOR TITUS MOVED THAT THE BILL BE AMENDED TO ELIMINATE THE EXISTING PRACTICE OF ALLOWING 50 PERCENT PLUS 1 TO PREVAIL IN THE PARTISAN PRIMARIES AND DO PASS S.B. 109.
Mr. Stewart said in the bill it would be lines 15 through 19 on page 2.
Chairman O’Connell recapped, the motion Senator Titus made was to eliminate lines 15 through 19 on page 2 of the bill.
SENATOR HARDY SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS RAGGIO AND TIFFANY VOTED NO.)
*****
Chairman O’Connell opened discussion on S.B. 142.
SENATE BILL 142: Revises provisions concerning adoption or amendment of master plan by governing body of local government. (BDR 22-424)
Mr. Stewart said S.B. 142 involved the adoption of master plans or any part thereof by resolution. He said Senator Raggio requested the bill be held from the last work session in order to clarify certain points and examine the various impacts on smaller versus larger counties.
Senator Raggio said he had received information from government entities in Washoe County who would not agree to this bill. He said he did not want to get into a situation where the Legislators were forced to arbitrate differences in individual counties. Senator Raggio said he would want the bill to apply to counties with populations of 100,000 or less.
SENATOR RAGGIO MOVED TO INDEFINITELY POSTPONE S.B. 142.
SENATOR HARDY SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TITUS VOTED NO).
*****
Chairman O’Connell opened discussion on S.B. 145.
SENATE BILL 145: Makes various changes concerning counties. (BDR 20-172)
Chairman O’Connell said S.B. 145 had an amendment from Clark County. Mr. Stewart said the bill would allow the counties, by ordinance, to set civil penalties in lieu of misdemeanor penalties.
Dan Musgrove, Lobbyist, Clark County, said the bill had been basically rewritten. He said the amendment would clarify some sections of the bill. The first section allowed Clark County to create an offense punishable as a misdemeanor, so long as it did not conflict with any provisions of NRS. He said there were some provisions in the bill which were needed.
Chairman O’Connell asked Mr. Musgrove to clarify sections 4 and 5. Mr. Musgrove said section 4 allowed the county to designate certain employees to prepare, sign, and serve written citations. Mr. Musgrove used an example of a store that sold spray paint to a minor. The amendment would allow the public response officer to serve a citation or ticket on the store. Chairman O’Connell asked if a citation would include a fine. Mr. Musgrove responded positively and said that was proposed in the first section of the bill. He said it would be a graduated fine and there would be public hearings about the amounts of the fines.
Senator Tiffany asked if the fine would go to Clark County and then into the General Fund or some specific department. Mr. Musgrove stated she was correct, excluding anything already contained in NRS. He said it would be a separate and distinct ordinance the county would pass. He said something like a dust violation would go into the general fund of the county. He said Clark County wanted to be able to impose a civil penalty.
Senator Hardy asked if the only current way to fine was under a criminal case. Mr. Musgrove replied Senator Hardy was correct.
Senator Care inquired if the Legislature enacted the bill, would they be bestowing police powers on the people who would be issuing citations. Mr. Musgrove responded the language in section 4 stated the employees were only allowed to exercise the authority within the field of enforcement in which he or she worked. A code enforcement officer would not be allowed to exercise police powers.
Senator Raggio was concerned about the language. He said he wished to make it clear, on the record, section 1 would be amended, clarifying a board of county commissioners may set by ordinance an offense punishable as a misdemeanor so long as that ordinance was not in conflict with other Nevada laws or regulations. Senator Raggio said the concern was if an ordinance was passed creating a misdemeanor that was the same as the State statute, if that misdemeanor would be in conflict. He said he assumed from Mr. Musgrove’s statements, if it were already a State law, the county would not pass a similar law. Senator Raggio said the fines go differently: under State statute they would go to one place; and under county law, the fines would go to the county. Senator Raggio asked for assurance from the legal department the term “not in conflict” is “not the same as”; he said he saw two different meanings. He said the State statute declaring a misdemeanor would preempt the county’s ability to pass a similar law.
Senator Raggio said such things had been attempted previously. He did not want to see a situation where a county could pass ordinances making State misdemeanors county misdemeanors. He reiterated he was assuming from the testimony they cannot pass a misdemeanor ordinance that is the same as the State’s ordinance.
Senator Titus stated she thought there were already civil penalties for air and water violations.
Mr. Musgrove stated cities had the ability to pass misdemeanor ordinances, but the county did not have the ability to do so. He said the county district attorney said the county inspectors did not have the ability to serve citations. Mr. Musgrove stated the only people allowed to serve citations were the metropolitan police departments.
Chairman O’Connell inquired if there were any further questions from the committee. Senator Raggio responded he would like staff to research his concerns about the language in the bill that would allow ordinances to be passed that were exactly the same as State ordinances, and clarify all the fines would go the county. He requested an amendment be prepared for the committee to review. He requested the amendment rephrase the proposal to eliminate any confusion between State and county ordinances.
Senator Hardy requested the committee look at the cities for the same answer as the counties question Senator Raggio had asked.
Chairman O’Connell requested Mr. Musgrove be more specific regarding the areas in which the county would like to have expanded power or authority. She asked him for a list of what would be the most helpful to the county to see if it should be included in the amendment.
Chairman O’Connell closed the hearing on S.B. 145 and opened the hearing on S.B. 146.
SENATE BILL 146: Revises provisions governing purchasing contracts of local governments. (BDR 27-321)
Mr. Stewart reviewed the bill stating it exempted local governments from some of the requirements of competitive bidding between the local government and a vendor of supplies, materials, or equipment within or outside of this State. He said no formal amendments had been submitted to the staff.
Chairman O’Connell asked if there were any questions or discussion on the bill. There were none.
SENATOR TIFFANY MOVED TO DO PASS S.B. 146.
SENATOR CARE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman O’Connell opened the hearing on S.B. 175.
SENATE BILL 175: Makes certain documents relating to information technology of state agencies confidential and authorizes appointment of advisory committee on security issues. (BDR 18-536)
Mr. Stewart stated S.B. 175 related to documents of informational technology in the State, and the advisory committee on security issues which was commonly being called the Governor’s Committee on Homeland Security. He said there were testifiers waiting to explain a joint amendment.
Terry Savage, Director, Chief Information Officer, Department of Information Technology, submitted written testimony and said he would go through the different sections of the bill and explain where the changes occurred, Exhibit M. He said one of the main concerns with the original bill was it gave the Governor very broad power to declare a wide range of things confidential. He stated section 2, subsection 1, deleted the process and specified the specific types of information that could be declared confidential. Mr. Savage said the American Civil Liberties Union (ACLU) requested the second provision of the bill. It answered what kinds of things were to be specifically protected.
Mr. Savage said section 2, subsections 3 and 4, addressed Senator Care’s questions about an ongoing review of information to make sure that things do not stay confidential forever. Section 4, subsection 1, included a request from the ACLU that the committee include at least one non-law enforcement member. Section 4, subsection 2, specified financial decisions would be made in a public meeting, and were consistent with the original intent.
Section 5 stated if a document was made confidential, the existence of such a document would be known. Such documents would be reported to the Legislature on an annual basis, with description of what the documents consisted of and the reasons they were made confidential. Mr. Savage complimented both the press association and the ACLU for the cooperative and helpful manner in which the bill was written.
Senator Tiffany inquired about the name of the committee to which Mr. Savage referred. She asked if it should be called the “Committee on Homeland Security,” as opposed to the Advisory Committee on Security Issues. Mr. Savage stated he did not know if the Governor had selected a name for the committee. He said the intent was to define the purpose of the committee rather than choose a specific name for the committee. Senator Tiffany said a name needed to be clarified since budget work was involved for some of the committees. Senator Tiffany also asked about the language referring to sabotage and terrorists. She asked Mr. Savage if the vulnerable departments in government had been identified. He said the areas of security concern were being identified first, rather than specific departments. Mr. Savage stated the specifics: infrastructure, security issues, networks, passwords, and other things in those classes were identified in section 2, subsection 1. Mr. Savage also stated he would have no objection in section 4 to changing the name of the committee to “Nevada Homeland Security,” as that was the way it was being referred to at this time.
SENATOR TITUS MOVED TO AMEND AND DO PASS S.B. 175.
SENATOR CARE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
There being no further business, Chairman O’Connell adjourned the meeting at 5:07 p.m.
RESPECTFULLY SUBMITTED:
Olivia Lodato,
Committee Secretary
APPROVED BY:
Senator Ann O'Connell, Chairman
DATE: