MINUTES OF THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session April 19, 1995 The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:35 p.m., on Wednesday, April 19, 1995, in Room 227 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Ann O'Connell, Chairman Senator Jon C. Porter Senator William J. Raggio Senator William R. O'Donnell Senator Dina Titus Senator Raymond C. Shaffer COMMITTEE MEMBERS ABSENT: Senator Randolph J. Townsend, Vice Chairman (Excused) STAFF MEMBERS PRESENT: Dana Bennett, Senior Research Analyst Teri J. Spraggins, Committee Secretary OTHERS PRESENT: Kurt Weinrich, P.E., Director, Regional Transportation Commission of Clark County Irene Porter, Lobbyist, Southern Nevada Homebuilders Association Stephanie Tyler, Lobbyist, Regional Transportation Commission of Washoe County Tom Tatro, Administrator, Department of Administration, Purchasing Division Terry Murphy, Assistant Director, Administrative Services, Clark County Keith Ashworth, Lobbyist, Nevada Power Company, Clark County Senator O'Connell opened the hearing on Senate Bill (S.B.) 303. SENATE BILL 303: Makes various changes concerning purchasing by local governments. (BDR-27-1969) Kurt Weinrich, P.E., Director, Regional Transportation Commission of Clark County, read from a prepared statement (Exhibit C) in favor of S.B. 303. Senator O'Connell asked Mr. Weinrich if there have been specific problems regarding contracts or is this just good business practice? Mr. Weinrich responded he does not have specific examples for the committee. However, over the last 4 or 5 years there have been several instances in which contacts were made with decision makers during procurement. He stated this has happened several times. He told the committee when these incidences occurred, the Regional Transportation Commission of Clark County cited federal regulations to discourage contact. He explained to the committee that the federal regulations do not apply to local procurement, only to procurement funded by federal revenue. He asserted this legislation will help protect everyone in the future. Senator O'Connell asked Mr. Weinrich why the bill is not effective upon passage and approval? Mr. Weinrich responded the Regional Transportation Commission of Clark County would not object to this language being included in the bill. Senator O'Connell asked Irene Porter, Lobbyist, Southern Nevada Homebuilders Association, if she was aware of any contract law problems. Ms. Porter responded, "No." Senator Raggio asked Mr. Weinrich the origin of the language base for the bill. Mr. Weinrich responded they took the language directly from the Federal Procurement Integrity Act. Senator Raggio asked if they intend this to mean that there can be no contact between the person submitting the bid and a decision maker in the bid process? Mr. Weinrich stated "That is correct." Stephanie Tyler, Lobbyist, Regional Transportation Commission of Washoe County, spoke in support of S.B. 303. She told the committee Regional Transportation Commission of Washoe County wants to go on the record as supporting S.B. 303. She explained while they do not view the bill as affecting them as much as the Regional Transportation Commission of Clark County, they do support the concept. Senator O'Connell asked if the Regional Transportation Commission of Washoe County has had any problems of this kind. Ms. Tyler responded, "Not directly with this, no." Senator O'Connell asked if her reason for supporting the bill is that conceptually it is a good business practice. Ms. Tyler responded, "Yes, ma'am." Tom Tatro, Administrator, Department of Administration, Purchasing Division, requested that the committee consider an amendment to the bill (Exhibit D). Senator O'Connell asked Mr. Tatro if he has shared the amendment with Mr. Weinrich. Mr. Tatro responded he had not shared it and gave a copy to Mr. Weinrich. Mr. Tatro assured the committee he has no changes to the language that Mr. Weinrich submitted; he is asking that additional language be added to the bill that would extend the same provision to the State Purchasing Act. He told the committee he is interested in sections 2 and 4 of the bill. He explained some proposals received by the Purchasing Division are lacking information because the company feels that its information should be kept private. He asserted the Purchasing Division has a responsibility to know that the companies they deal with are financially sound. He explained this bill will provide the opportunity to reduce some vendors' hesitance to respond to request for proposals from state agencies. He stated this is the reasoning behind the Purchasing Division's request for the amendment. Mr. Weinrich stated for the record, "The Regional Transportation Commission [of Clark County] has no objection whatsoever to including state purchasing in this bill." Senator Raggio stated the regulations for state purchasing would be in a different section from the Regional Transportation Commission of Clark County. Senator Raggio stated they could amend it in this bill. Senator O'Connell closed the hearing on S.B. 303 and opened the hearing on Assembly Bill (A.B.) 139. ASSEMBLY BILL 139: Revises provisions governing expenditure of money by certain counties to encourage preservation of certain species of wildlife. (BDR 2-202) Terry Murphy, Assistant Director, Administrative Services, Clark County, testified in favor of A.B. 139. She told the committee what this bill means to Clark County: Going back to 1989, when the Desert Tortoise was first listed under the Emergency Provisions of the Endangered Species Act, we had a little bit of economic chaos in Clark County. What that meant to us was that no development could occur on land that was inhabited by that species, because it was declared to be threatened . . . initially endangered and then downgraded to threatened. What that caused us to do was to bring together . . . Senator O'Connell interrupted Ms. Murphy to ask for clarification, "Let me back you up and explain to the committee what that means. My understanding is it means there are a bunch of them. We've got them in Utah, and we've got them in Southern California, and we've got them in Arizona, and we've got them in New Mexico, and we've got them in Nevada." Ms. Murphy explained: The population that the federal government deemed to be threatened . . . well to address more pointedly your question. The difference between endangered and threatened . . . the law states a species declared to be endangered is one that is likely to become extinct within the foreseeable future. The legal definition of threatened is a species that is likely to become endangered in the foreseeable future. And so, for all practical purposes, in terms of enforcement of the law and its provisions and the restrictions it places upon us, there is no difference between . . . the protection afforded a threatened or endangered species is identical. There is no provision within the Federal Endangered Species Act to identify a number of a population that would cause it to be listed as threatened. The criteria are based upon the best scientific data available. And they do not define what that criteria are. So the law, and anyone can petition the Fish and Wildlife Service to list a species as threatened or endangered. So what does . . . what that did to us is, anyone from that region recalls, it placed us in major economic jeopardy at the time. We brought together all of the interested parties, all of the cities within Clark County, as well as the development industry, homebuilders, commercial real estate industry, off road vehicle users, multiple users of public land, the mining industry, recreationists and conservationists . . . all together had to basically come up with a solution that was agreeable to all of those parties. But the federal law provides for . . . they will issue what's called an 'incidental take permit' which will allow development to continue on land inhabited by the species. We were able to craft . . . have a 'take conservation plan,' which is required prior to the issuance of an incidental take permit. We are operating currently under a short-term plan. We had a plan that lasted for 3 years. It allowed for the development of up to 22,000 inside the urban Las Vegas valley in exchange for some conservation measures that were taken. During the term of the short-term plan, we had those same individuals together who met for over 800 hours of public meetings. Whenever a new player came into the room and became interested in the issue, we went back to square one and educated that person and answered all of their questions. It was an extremely intensive and difficult process. However we are . . . our short-term permit is one of the quickest and least expensive habitat conservation plans that has ever been done in the nation. Our long-term plan is right now in the final stages of the federal approval process. We are asking for a plan that will allow development on private land in Clark County to continue for a period of 30 years despite the presence of a threatened or endangered Desert Tortoise. One of the provisions of that plan, that this group of people agreed to, was that the development fee that we currently collect, $550 per acre, should also be used, not specifically for conservation measures for the Desert Tortoise alone, but that we should be able to expend those funds, and we do not contemplate raising the fee, but using those existing funds that we will be collecting to make certain that candidate species . . . the Fish and Wildlife Service categorizes those 'candidate species' are species which people have petitioned for a listing . . . they are asking to take a look at listing them, but they [the Fish and Wildlife Service] have not gotten around to it yet or they have not found it is warranted yet. The group decided that it would be prudent of us to spend funds on candidate species to ensure that they do not become threatened or endangered, that they do not make it to that list and therefore cause us to go back to square one and do another habitat conservation plan. So what this does, it enables us to be proactive and to hopefully avoid any future listings of species in Clark County. That is what we are asking to do. Senator O'Connell asked, "But what you are telling us is that we do not really know what . . . it's not necessarily numbers that make them threatened or endangered?" Ms. Murphy responded that the federal law does not look at numbers when they list a species as endangered or threatened. She explained the law states "based on the best commercial or scientific data available." She said there is no definition for that phrase. She told the committee the federal law looks at ecosystems, and with the Desert Tortoise, it is the area north and west of the Colorado River. She asserted Nevada is the only state in the ecosystem area that has a plan which accommodates development as well as the threatened species. She said, "We are extremely fortunate we have a community that has been able to come together to achieve a solution." Senator O'Connell asked, "What has happened to the other districts that have not yet addressed this? What action has the federal government taken?" Ms. Murphy replied: In some instances they have stopped development projects from occurring. They have . . . there's another section of the act which pertains to federal projects. They are basically attempting to craft habitat conservation plans that allow the same thing as Clark County. In fact, the Department of Interior is looking to Clark County as a model for other communities to follow. We are breaking new ground. There has never, to my knowledge, been a species with such wide a range and so . . . occurring so frequently, been placed on a list. Other communities are at a loss. Saint George, Washington County, Utah has been attempting to craft a habitat conservation plan since 1990 and they have yet to . . . Senator O'Connell interjected, "How much did we spend on the t- condos?" Ms. Murphy replied: That is the conservation center built pursuant to . . . the settlement of the lawsuit that was filed by the State of Nevada and the City of Las Vegas and the homebuilders provided for what's called a 'scientific take permit' and the construction of a conservation center. Homebuilders and other plaintiffs in the lawsuit contributed $2.5 million, the bulk of which was used for research, but I would say that about $550,000 was used to construct a conservation center to house those [Desert Tortoise] that were displaced. We do not want to contemplate continuing expansion of that. Senator O'Connell asked Ms. Murphy how much revenue they currently have in their reserve fund. Ms. Murphy responded, "We currently have approximately $15 million." Senator O'Connell emphasized, "You have $15 million right now? How much do we spend on the homeless? Does anybody know that? ...Seriously, how much of our county budget do we spend on the homeless?" Ms. Murphy answered: In the Clark County budget? I really could not give you an exact figure. I will get that for you and I can assure you that in discussing this matter with the county commissioners, their feelings are the same. It is an issue I do not like dealing with, the county does not like dealing with any more than anybody else. Unfortunately, until, and unless there are amendments to the Endangered Species Act, we have no alternative . . . We are following, closely, the activity in Washington [D.C.] regarding the Endangered Species Act and the amendments to it. I know that right now they have agreed not to put anymore species on the list, but that's certainly not a guarantee that will not happen. Senator O'Connell asked Ms. Murphy how many Nevada species are on the Endangered Species Act list. Ms. Murphy responded that the State of Nevada is number five in the nation for the number of candidate species, but only has 35 species statewide on the threatened and endangered species list. She explained again about candidate species. Senator O'Donnell stated $15 million sounds excessive. Ms. Murphy responded, "The long-term plan contemplates establishing a fund, from which up to $1.6 million will be generated for the expenditure on threatened and endangered species, in order to accommodate continued development. That does not come from the General Fund in Clark County, it comes from the development industry." Senator O'Donnell remarked that just drives up rental and other housing rates. Ms. Murphy agreed with him, but told the committee other states have spent upwards of $125 million for a plan such as Clark County's plan. "We are between a rock and a tortoise, so to speak, " she remarked. Senator O'Donnell asked if any of this revenue from the $15 million was for litigation. Ms. Murphy responded, "No." Senator O'Donnell asked, "So what does it go for?" Ms. Murphy stated: A few things . . . one of the things that makes us unique in Clark County is that we have so much public land available that we do not have to purchase habitat. In other areas, such as Washington County [Utah], the Fish and Wildlife Service is saying 'We want acre for acre. You take an acre, you buy an acre of habitat.' Actually they are saying, 'You take an acre, you buy five.' It has been much, much more expensive there and that's why they have not been able to move forward. In Clark County we have a lot of public land that's available and they've been establishing preserves on public land and utilizing funds for increased law enforcement. They've been utilizing funds for public education for people to not pick them [the Desert Tortoise] and move them. We've utilized some funds for research. They contemplate utilizing funds for road barriers. Senator O'Donnell remarked, "Sometimes we pass laws that are unenforceable. What happens if we just refuse to go along with this unenforceable law?" Ms. Murphy responded they have enforced it in Clark County. Senator O'Donnell asked if anyone had gone to prison yet. Ms. Murphy replied that there have been settlements of up to $100,000 for individuals whom they have accused of "unlawful take" of Desert Tortoises. She explained they are also working with Boulder City to purchase an easement in the Eldorado Valley that consists of private land. She stated, "The punishment is up to $100,000 per take and up to 1 year in prison, depending upon the severity. They have a law enforcement presence." Senator O'Connell stated, "Knowing you have $15 million in your reserve fund right now, I have a real problem with broadening the language at that same amount of money, at the $1000 per acre. I know you said you are only using the $550 right now, but my gosh, this could end up [being] a Swiss bank account." Ms. Murphy explained, "Our intention is to make the fee go away once we have enough to generate what we are required to generate pursuant to the permit. That's our intention." She explained why the Desert Tortoise is considered endangered from habitat loss, raven predation, other predation, and other human conditions that have been deteriorating the desert ecosystems. Ms. Porter testified in favor of A.B. 139. She explained the history of the Desert Tortoise legislation in the State of Nevada. She stated several people went to Washington, D.C. to block the entry of the Desert Tortoise onto the endangered species list. She said there was no way to stop the listing because the Desert Tortoises in California were experiencing upper respiratory infections and influenza. She explained the homebuilders association contacted biological people and attorneys. She asserted the homebuilders sued and went to the Federal Appeals Court in Washington, D.C. She said they lost the lawsuit, but the judge noted in his remarks that the Endangered Species Act did not consider the economic impact on human beings when listing a species as threatened or endangered. She told the committee they have worked in cooperative effort to keep the building going. Ms. Porter stated: If we had not done what we had done, you could not have built schools, or highways, or bridges, or parks, or anything else. There are some consequences other than the fines and it happens to be one of my builders whose subcontractor ran over a tortoise one day. He was fined $100,000, Senator O'Donnell, and that was recently. That was one of our major master plan people. It was one tortoise. It was a $100,000 fine. In addition to that, there are consequences for the local governments, for the school district. They can cut off the federal funds and these are the kinds of things that have gone on with the Endangered Species [Act]. That's why what has been accomplished with this short-term habitat conservation plan . . . what we are doing now continues to be so important to all of us. This long-term plan will finally get us into a position where we are not worried every 6 months that we are all going to be shut down again. This is a 30-year plan and this legislation is needed because trying to use some of the money on candidate species and prevent what happened to us from happening again, is actually part of that long-term plan. We lose that provision now, we are going to have to go back to square one on development of long-term plans and pray we can get another extension of time. Senator O'Donnell asked if the $100,000 fine was being appealed? Ms. Porter responded, "No, he paid it." Senator O'Connell asked, "He paid the full amount?" Ms. Porter responded, "He paid it." She continued: Even though we have so much legislation pending Congress now, the National Association of Homebuilders has been involved for a long time on changing the Endangered Species Act as well as the National Association of Counties and other groups. Our problem now is that it still hasn't passed. We are sitting with this July 30 deadline. We have to keep on doing what we are going and if they do pass it, changes to the act, we do not know if, at this point, they will be retroactive to those that have already been listed and the plans that have already been done . . . With Congress that could take us another 2 or 3 years. We absolutely have no choice at this juncture but to keep on doing what we are doing, until there can be the kind of relief that is really needed to balance the wildlife and the human beings and take into consideration the needs of the human population and not just the fish and wildlife population. Keith Ashworth, Lobbyist, Nevada Power Company, Clark County, told the committee about the working conditions when building the Harry Allen turbo station. He told the committee they had to walk the 30 acres to ensure there were no Desert Tortoise in the virgin land. The construction crew had to have two people walk in front of any piece of moving heavy equipment to ensure that no Desert Tortoise wandered into the path of the heavy equipment. The cost of the permits to build in the habitat of an endangered species was exorbitant. He told the committee about the required fencing and watering of the area. He added the rental costs for extra days for the heavy equipment drove up the costs for the construction. "It costs hundreds of thousands of dollars more for a project such as that combustion turbine up there to get electricity on-line." Ms. Murphy responded to Mr. Ashworth's statement. She explained the long-term plan would remove all of those construction restrictions. She stated the current plan only operates in the Las Vegas valley. She told the committee the long-term plan covers all private land in Clark County. She said if the long- term plan gets approved, the fencing, monitoring and all of those restrictions will go away because the long-term survival of the species has been assured. Senator O'Connell asked Mr. Ashworth how much these restrictions added to the cost of the project? Mr. Ashworth responded, "Several thousands of dollars. I can find out for you. Not only did it add to the cost, but it caused delay in getting the job done. When you get three or four heavy pieces of equipment that cost $3 [$300] or $400 per hour to run, and you cannot run them at full speed and it takes them 10 days to do what they should do in 1 day, that's where the added cost comes in." Ms. Porter told the committee A.B. 139 accomplishes three things. She reminded the committee of the July 30 deadline for expiration of the short-term habitat conservation plan. She stated if the long-term plan is not approved and in place, "We are right back in the turtle soup we were in 1989." She added this legislation is an integral part of the long-term plan. It will enable them to use revenue for candidate species and prevent this scenario from happening again. She reminded the committee the long-term plan will remove some regulations. She said this bill will help relieve some other problems. Senator O'Connell closed the hearing on A.B. 139. The committee turned their attention to the financial situation in White Pine County. Senator O'Connell informed the committee that the school board for White Pine County School District failed to properly post the announcement for the hearing for the voting on the acquisition of the loan. Senator O'Donnell asked if they would make the payroll? Senator O'Connell told the committee that they would not meet the payroll. She stated, "They were going to have a hearing in order to get the school board to vote on the fact that they needed to borrow the money, to go ahead with the loan process. They neglected to post it. Can you believe it?" The meeting adjourned at 3:30 p.m. RESPECTFULLY SUBMITTED: Teri J. Spraggins, Committee Secretary APPROVED BY: Senator Ann O'Connell, Chairman DATE: Senate Committee on Government Affairs April 19, 1995 Page