MINUTES OF THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session May 8, 1995 The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:45 p.m., on Monday, May 8, 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 Randolph J. Townsend, Vice Chairman Senator Jon C. Porter Senator William J. Raggio Senator William R. O'Donnell Senator Dina Titus Senator Raymond C. Shaffer GUEST LEGISLATORS PRESENT: Assemblyman John W. Marvel Assemblyman John C. Carpenter STAFF MEMBERS PRESENT: Dana Bennett, Principal Research Analyst Teri J. Spraggins, Committee Secretary OTHERS PRESENT: Gary Crews, Legislative Auditor, Legislative Counsel Bureau Maureen DeAmbra, Special Improvement District Coordinator, Clark County Everett Gifford, Concerned Citizen Joe Guild, Lobbyist, Nevada Mobile Home Park Owners Association Darlene Carter, Insurance Agent Robert Hadfield, Lobbyist, Nevada Public Agency Insurance Pool Joanne Rennie, Risk Manager, City of Reno Nancy Howard, Lobbyist, Nevada League of Cities Andrew Urban, Office of the City Attorney, Henderson Pat Coward, Lobbyist, City of Sparks Betsy Fretwell, Strategic Issues Manager, Administrative Services, Clark County Tom Grady, Lobbyist, Nevada League of Cities Wayne Perock, Acting Administrator, State Department of Conservation and Natural Resources Roberta Gang, Lobbyist, Elko Rural TV District Leo Puccinelli, Attorney, Elko TV District Paul Burkholder, Communications Manager, Humboldt County Mary Ball, Beatty TV and Radio Committee, Beatty Town Council Bruce Wylie, President, Ruby Mountain Translator Association Gene D'Asto, Chairman of the Board, Elko Rural TV District Paul Gardner, President and General Manager, KELK-AM and KLKO- FM, Elko Lori Gilbert, News Director, KELK-AM and KLKO-FM, Elko Ray Gardner, Concerned Citizen Adriene Abbot, News Director, KOH-AM, KBUL-FM and KNEV-FM, Reno Bart Reed, Owner and Manager, KELY-AM and KELY-FM, Ely Gerald Pugh, Construction Permit Holder, KYOU, Wendover Danna Sturm, Concerned Citizen Don Stubbs, Owner, Stubbs Broadcasting, KDSS-FM, Ely Sam McMullen, Lobbyist, Nevada Broadcasters Association Senator O'Connell opened the committee meeting with Bill Draft Request (BDR) 31-1119. BILL DRAFT REQUEST 31-1119: Requires certification of system of internal accounting and administrative control. Gary Crews, Legislative Auditor, Legislative Counsel Bureau, asked the committee to introduce BDR 31-1119. He explained in 1987, legislation was passed requiring state agencies to institute internal systems of control. He stated numerous state agencies have not accomplished the tasks set out in the legislation. He said, "In fact, this last biennium, we have pointed out some $75 million in audit exceptions as a result of not implementing systems internal accounting controls. Consequently, we believe this BDR request would help strengthen the internal control process. It would require state agencies to periodically evaluate their controls and biennially report that evaluation to the Director of the Department of Administration." He explained this report would be done on an even-numbered year, prior to session. He stated it would help the Legislature to know if those agencies have, in fact, evaluated their controls and reported them to the Department of Administration. He noted department heads would know there are firmer controls expected for the agencies. SENATOR RAGGIO MOVED TO INTRODUCE BDR 31-1119. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS SHAFFER, TITUS AND TOWNSEND WERE ABSENT FOR THE VOTE.) ***** Senator O'Connell closed the hearing on BDR 31-1119 and opened the hearing on Assembly Bill (A.B.) 370. ASSEMBLY BILL 370: Revises provisions governing alternative procedure for creation of local improvement district. Maureen DeAmbra, Special Improvement District Coordinator, Clark County, read a summary and purpose of A.B. 370 to the committee (Exhibit C). Senator O'Connell asked why they included the requirement of a two-thirds vote in the language of the bill? She asked for the reason for this language. Ms. DeAmbra responded if an emergency exists, then they require the two-thirds vote. She testified they have not held a vote because the property owners are usually unanimous in their vote. Senator O'Connell closed the hearing on A.B. 370 and opened the hearing on Senate Bill (S.B.) 281. SENATE BILL 281: Prohibits adoption of rules or regulations for mobile home parks and recordation of deed restrictions for subdivisions which prohibit a person from displaying a flag of United States on his property. Senator O'Donnell gave the committee a brief history of S.B. 281. He explained a constituent, who lived in a mobile home park, was not allowed to install a flagpole and fly his American flag or his Marine Corps flag. He explained that stanchions are permitted, but freestanding poles are prohibited. Everett Gifford, Concerned Citizen, testified in favor of S.B. 281. He stated: It is a flag that should fly freely. I am proud of my county. I am very proud of my flag. I fly it in remembrance of all of those who did not make it back, for all of those who gave the ultimate . . . I feel my constitutional rights are being infringed upon because I cannot fly my American flag and my Marine Corps flag from my flagpole. When the President of our country asks us to lower our flag at half-mast . . . how do you lower a flag to half-mast when it is on a stick? I would like this to be put into a bill, sent to the Senate and the Assembly and have it passed. If I was willing to go and fight for my country, then I feel that I should at least have the right to fly my flag in a manner that is not only proud, but is the very soul of what I believe in. Senator O'Donnell asked Mr. Gifford what was the reason the mobile home park gave him for refusing to allow him to fly his flags. Mr. Gifford responded they feel it would take away from the conformity and the general appearance of the park. Joe Guild, Lobbyist, Nevada Mobile Home Park Owners Association, testified opposing S.B. 281. He explained to the committee that they should not take his testimony as belittling Mr. Gifford's heartfelt feelings about America. He told the committee that Mr. Gifford had litigated this issue in the Clark County District Court and had lost. He stated the judge denied his lawsuit on the basis that there was no provision in the lease allowing a flagpole and for the reasons provided by the real property owner, the landlord. He told the committee Mr. Gifford's flagpole was permanently affixed to the lot, and the park owners expressed concern that if other renters in the park followed Mr. Gifford's example, 196 renters could have flagpoles flying various other flags, espousing various other beliefs and persuasions different from Mr. Gifford's admirable ones. He told the committee there is a flagpole in the park and they offered to allow Mr. Gifford to be in charge of that flagpole and to fly his flags on the park flagpole. He stated the park did allow and does allow individuals to "affix a flag of their choice to the mobile-home coach itself. There was not denial here of Mr. Gifford's right to express himself, it was just the manner in which he wanted to express himself that the park denied, and the dispute arose over." Mr. Guild stated he felt the park had been generous and had made an honest endeavor in offering Mr. Gifford the opportunity to fly his flags on the park flagpole. He told the committee the tenants' association suggested a stanchion to Mr. Gifford instead of the flagpole. He testified the park polled the residents of the park to see what their feelings were regarding the flagpole. He stated the results of the poll were 68 people for the stanchion only, and only one person voted for the flag pole. Senator O'Donnell asked Mr. Guild to verify the results of the poll, stated 69 people, in a mobile home park that has 196 spaces, is not a majority. Mr. Guild responded, "96 residents of the park responded. Of those that responded, which is a pretty good response in any survey, 68 voted for the stanchion only. That's a clear majority of those who responded to the survey." Senator O'Donnell asked, "What did the rest of them say?" Mr. Guild responded: One voted for the flagpole; 26 for the stanchion or the flagpole. So you could say two-thirds voted for the stanchion only, one-third voted for the stanchion or flagpole, and one person voted for the flagpole, and the other 100 residents of the park did not respond. I think that shows that the park made a valiant effort to try to accommodate Mr. Gifford, they did not have to conduct a survey, but they did. The park rules and regulations do not allow for this kind of fixture to be placed in the park on a mobile home lot. Judge Layman found thus, and the president of the organization representing the tenants agreed with the tenants who voted in this park and disagreed with Mr. Gifford's position. Senator O'Donnell remarked, "But they really did not disagree did they; 68 said they were in favor of the stanchion. They did not say they were against the flagpole did they?" Mr. Guild responded, "I believe they did, because they had a choice, senator, either to vote for a stanchion, express no opinion, or to vote with Mr. Gifford for the option of everyone placing a flagpole on their lot." Senator O'Donnell asked, "What about the 26? I cannot see the questions, I am not privy to those." Mr. Guild stated, "I am not privy to them either. I am giving you the tally results." Senator O'Donnell stated, "But 26 of them said they would support a flagpole or a stanchion?" Mr. Guild responded, "Yes." Senator O'Donnell stated, "I think it was reported that the majority of them were against the flagpole." Mr. Guild stressed, "That's exactly what I said, and I will say it again. The majority of the people who responded said they were against having a flagpole option allowed on each of the lots in the park and would agree to stanchions only. That's 68 people out of the 96 who responded." Senator O'Donnell stated, "I understand that, but we did not get the other 26 until I asked the question." Mr. Guild responded, "I offered to provide, and I will provide this letter (Exhibit D), which has that information, to the committee. But the point is, two-thirds of the people who responded to the poll said they do not want Mr. Gifford's idea to be part of the park rules and regulations." Senator O'Connell closed the hearing on S.B. 281 and opened the hearing on S.B. 407. SENATE BILL 407: Eliminates exception from competitive bidding process which was provided for purchase of insurance by local governments. (BDR 27-1434) Before testimony was taken on S.B. 407, Senator Porter announced to the committee that he had a conflict of interest with the bill and requested that he be excused from listening to testimony, participating in discussion, or voting on the bill. He told the committee his company is involved in this type of business and he felt he should not be involved in the hearing process. Senator O'Connell noted his request for the record. Senator Porter exited the room prior to testimony for S.B. 407. Darlene Carter, Insurance Agent, stated that insurance contracts are exempt from the bidding process and asked the committee why this information is not clearly stated on the application. She told the committee she was on a bidder's list for 4 years before she learned this. She asked the committee what standards are used when selecting an insurance company for a contract. She explained two public hearings were held by the Clark County Economic Disparity Study to determine the impact this has on minority women and disadvantaged firms' participation in local area government contracts. She stated there has been no effort since these public hearings in September, 1994, to open doors of opportunity. She said that on Friday, May 5, 1995, she faxed a letter to all senators and Assembly persons and asked that it be included in the minutes (Exhibit E). She continued with her testimony by reading an amendment, which is page 2 of Exhibit E. Robert Hadfield, Lobbyist, Nevada Public Agency Insurance Pool, testified against S.B. 407. He read a letter from Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool, on behalf of the pool (Exhibit F). He referred to a letter from the Churchill County Comptroller which explains the difficulties Churchill County faced when asking for contract bids on insurance (Exhibit G). He said: On behalf of the town of Minden...for us to go out to bid for insurance creates an almost impossible task. We are not insurance experts, that's why we belong to the pool. We acquire that expertise through collective capability of the insurance pool. We would simply be placed at the mercy of the bid process. We would have to select a professional to review the bids for us, at a considerable cost. Insurance is a very complex issue. We do not improve anything by the bid process. This bill would take away the professional capability that we have obtained at a very reasonable price in concert with 31 other local governments throughout the State of Nevada. On behalf of NACO [Nevada Association of Counties], we are opposed to eliminating this exemption. I will not elaborate on that. Wayne [Carlson] covered it in his letter (Exhibit F). My recollection is that the exemption allowed for books, library materials and subscriptions. . . you will find it does not make sense to go out to bid. . . because those are almost 'sole-source' products. It just is a paperwork process. So is the fuel purchase by a local government agency for use in undercover investigation. If these cars are supposed to be undercover, they are supposed to go purchase fuel wherever they want to remain in that status. That is the reason for that. The exemption is for motor fuel for use in vehicles operated by a local government agency or fire department where the fuel is not available when a vehicle is assigned to that area. That's again, a practical matter. You would not want to require that vehicle to go somewhere else for lengthy mileage and time out of service. These are simple areas where we are required to be administrators of funds. To create a bid process would create an administrative oversight problem that would cost more than the benefit we would gain from the bid process itself. Joanne Rennie, Risk Manager, City of Reno, testified in opposition to S.B. 407. She clarified the process of securing insurance for most city entities: In general, public agencies secure insurance through the services of a broker or agent. Brokers or agents are selected through a competitive bidding process, based upon their ability to access the broadest possible markets and their services for the client. That is done approximately every 3 years. The broker then searches the market to secure the most competitive coverage that meets the unique needs of that agency based on availability and affordability of the different coverages. The agency in collaboration with the broker then addresses the fiscal stability and service capacity of those companies offering coverage. In my perception this is an economic issue. Insurance underwriters base their premium quotes on an assessed risk with their bottom line responsibility to the shareholders. Depending upon the line of coverage, if a public agency's loss experience approaches 50 percent or greater, that insurer is not making any money. In an annual bid process, the agency does not have an opportunity to offset an unusual loss experience year with several good years, which in all likelihood would result in significant premium increases or the possibility of denied coverage. As all of our governments experienced, throughout the nation, we all felt increasing premium shocks and later, ultimately in 1986, absolutely no coverage. Most agencies went without any insurance at all in 1986. None of us would like to revisit that situation. Either situation, the denial of coverage or increased premium, impacts the taxpayer. Underinsured-, uninsured-, or inadequately-insured losses are borne by all taxpayers. Nancy Howard, Lobbyist, Nevada League of Cities, testified that the Nevada League of Cities opposes S.B. 407. Senator Townsend referred to Mr. Carlson's letter, "Instead, we look at the quality of the insurer, its reputation, claims- paying ability, financial strength." He noted that this bill does not preclude the government agencies from continuing this process. He continued by saying that the bid process prohibits insurers from knowing what they are getting into since policies are written for a 1-year term and bidding would have to occur every year. He told the committee if the insurance goes out to bid, the term would have to be for about 5 years to allow consistent coverage, yet allowing the company to adjust rates depending upon risk. "Can this be crafted to allow you the flexibility you have without requiring you to pick the cheapest insurance company?" Mr. Hadfield referred to the Churchill County letter (Exhibit G) and told the committee it exemplifies the reason government entities do not want to go back to the where they were. He stated: We now have the collective capability to work long- term solutions. There is no commitment on behalf of an industry that is profit driven. We have to be smarter about how we tailor the relationship and what value we place on the various increments of that relationship. When you go to a bid process...you do not get that relationship developed. You get is a simple economic response and you subject yourself to being the victim of someone bidding low on certain components to show a better overall cost without due consideration for the total package. What we have learned is that you have to be concerned with the total package. There has to be a compelling reason to change what we have now. Some of the concerns she [Mrs. Carter] has do not exist in the insurance pool and how we hire people and how we do business. Local governments are required to be equal opportunity employers and we employ those ideas in how we do contracts and things like that. I am not sure this bill accomplishes what I believe I heard is one of her concerns. Her concerns are valid concerns; they are her concerns, but this bill does not take care of this problem. This bill creates a whole new problem for us and sends us back, in my opinion, 15 years back into the situation we were in during the early [19]80s. I think we have created a valid process to stop us from being put in that situation again. Andrew Urban, Office of the City Attorney, Henderson, testified against S.B. 407. He explained: We, about every 4 years, put out a request for proposal to hire a broker. That broker works with our Risk Manager and puts together the information package that the different insurance company underwriters want to see. One of the complications with a competitive bid process is that, in our experience, when we initially went self-insured and obtained excess coverage using our broker services, that process took 6 months. In some instances it takes about 90 days to now go through the renewal process, provide information for the underwriters for them to make their presentation for renewal for the premium quotations. We use one agent for our liability and property coverage. We have a broker who handles the contact with our life insurance, accident and disability carriers and our excess coverage over our self-insured fund for health. That's the process that works for us. Even though Henderson is a larger city than most who participate in the pool, we internally do not have the expertise to analyze the issues and prepare a package for underwriter review, nor do we have the time over that 3- to 6-month period to stay in the meetings and correspondence that the underwriters want in order for them to give us back a package [a bid]. We do competitively bid the brokerage services and then rely on their expertise and professional services to find those companies that have the adequate financial capacities and can provide us with the claims services and loss control services that we need. We would like to stay with that process. Pat Coward, Lobbyist, City of Sparks, stated the Sparks City Council requests that the law be left as it is. He stated they feel very strongly about balancing the cost of the way they do it now, versus the bid process. Betsy Fretwell, Strategic Issues Manager, Administrative Services, Clark County, stated, "Ditto, and I will be happy to leave our testimony for the record (Exhibit H) instead of reading it into the record. Our airport has serious concerns with this bill, as does Clark County as a whole." Tom Grady, Lobbyist, Nevada League of Cities, testified he was representing Henry Etchemendy, Nevada Association of School Boards. He stated he agreed with the opposing testimony which had been presented. Senator O'Connell closed the hearing on S.B. 407 and opened the hearing on A.B. 22. Senator Porter returned to the committee hearing. ASSEMBLY BILL 22: Revises provisions regarding funding operation of state parks. Wayne Perock, Acting Administrator, State Department of Conservation and Natural Resources, read a written statement to the committee (Exhibit I). Senator O'Connell stated the bill does not specify an amount. She asked if that was intentional? Mr. Perock stated there was no amount listed in the bill in order to plan for contingencies in the future. He stated, "With time and inflation, we may want to look at upping it. All our fees are contained in the administrative code and we change them there." Senator O'Connell asked if the 50 cents was set out in the administrative code. Mr. Perock stated, "Yes." Senator O'Connell closed the hearing on A.B. 22 and opened the hearing on A.B. 358. ASSEMBLY BILL 358: Repeals provision authorizing general improvement district to furnish facilities for public schools. Senator O'Connell stated, "There is no one here to testify on the bill." A memorandum was submitted to the committee from Ted Zuend, Deputy Fiscal Analyst, Legislative Counsel Bureau (Exhibit J). She closed the hearing on A.B. 358 and opened the hearing on A.B. 8. ASSEMBLY BILL 8: Authorizes creation of general improvement district to furnish facilities for certain radio transmissions. Roberta Gang, Lobbyist, Elko Rural TV District, testified in favor of A.B. 8. She testified this bill seeks to amend chapter 318 and 269 of the Nevada Revised Statutes. She stated it will allow retransmissions of FM radio signals to remote areas. She submitted letters of support for the bill (Exhibit K). She defined the bill as "enabling legislation. Passage of A.B. 8 does not create any board. It simply enables local governments to provide a service if they deem it necessary for their remote areas." She explained the process of creating a general improvement district. Assemblyman John W. Marvel, Assembly District 34, testified regarding A.B. 8. He stated he was asked by a constituent to introduce the bill. He told the committee that he is neither for or against the bill, he will let the witnesses present their side. He stated the bill is enabling, but urged the committee to look at parity. Leo Puccinelli, Attorney, Elko TV District, read a written statement to the committee (Exhibit L). He stated, "We also want to point out to you that the boards created pursuant to NRS chapters 318 or 269 are not money-making boards. They are simply performing a public service for the benefit of those people living in outlying areas who do not otherwise have this entertainment available to them. We urge your adoption of A.B. 8 as amended." Senator Raggio asked Mr. Puccinelli, "How do you respond to the concerns that this creates a problem in those areas where there may be a local FM radio station and this provides competition through a publicly authorized facility?" Mr. Puccinelli stated this is better addressed by the local board. "Now there is a possibility there would be that competition, but it is also true, in the spectrum of FM's broadcasting, the two stations in Elko cannot cover the entire spectrum. What had been brought into Elko were stations and programming not otherwise available from local broadcasting. It is back to the locals; it is what is needed in the particular area." Senator O'Connell asked "Sir, was not one of the stations in direct competition with the same format?" Mr. Puccinelli responded, "I am not aware of it, if it was. I know one of the local stations in Elko is very much in favor of the programing as we have it. The other one is the primary opposition." Senator O'Connell stated, "I do see some nods so I think the format is the same. Could you give us an idea of how much we are talking about in government subsidies as far as bringing this..." Mr. Puccinelli interjected, "It is my understanding that our tax rate is .015." Senator Shaffer stated, "I guess what we are doing is allowing local entities to take control over this matter. Is that all you are asking to do? We do not have to get into this fight, other than that? We just need to make a decision whether we want to pass it over to the local authorized people to handle it." Mr. Puccinelli agreed, "Exactly. You are passing it to the Elko County Commission, to the Humboldt County Commission, to the Beatty Town Board and so on, and so on." Paul Burkholder, Communications Manager, Humboldt County, read a written statement to the committee (Exhibit M). He testified, "Giving local governments the authority to operate FM translators does not mean that tax supported FM translators will be appearing all over the state, competing with private businessmen trying to make a living as an FM broadcaster." He submitted a letter of support from the Humboldt County Board of Commissioners (Exhibit N). Senator O'Donnell asked how this bill will affect new technology. Mr. Burkholder stated commercial stations are not allowed microwave or satellite technology. He explained noncommercial and educational stations are allowed to use satellite feed to stations. He explained satellite feed is not allowed under current Federal Communications Commission (FCC) regulations. Mary Ball, Beatty TV and Radio Committee, Beatty Town Council, testified in favor of A.B. 8. She stated Beatty consists of 1600 people and is located 120 miles north of Las Vegas and 100 miles south of Tonopah, on Highway 95, in an oasis valley located between two mountain ranges. She stated they cannot pick up FM radio signals without retransmitting. She stated they receive two radio stations out of Las Vegas, KJUL and KFM which their transmitter picks up and broadcasts to a transmitter at Spring Mountain and then into Beatty. She stated they have a letter from the FCC and from both stations to retransmit these FM signals. She stated they are conducting public hearings to select another FM station so the teenagers can enjoy their music. She testified that without retransmission, Beatty would not have access to FM radio stations. Senator Shaffer asked if they alter the message at all when it is retransmitted. Mrs. Ball responded they just pick up the signal and pass it on. Bruce Wylie, President, Ruby Mountain Translator Association, testified in support of A.B. 8. He explained they are the entity who leased the translators from the Elko TV Board in order to keep them on the air for the local constituents. He stressed: This is an enabling piece of legislation and we strongly feel that all of the issues, pro, con, or somewhere in between, should be satisfied on a local level. I would like to go on record as being strongly supportive of the local radio stations in our area. We need those radio stations and we need all of them. However, at the same time, I can tell you that I also want a choice in what I listen to and I want that choice primarily in my vehicle as opposed to in my home where I own a satellite system and I can take any kind of format I want off the air. Mr. Wylie told the committee they seek donations to keep themselves on the air, but stated if the bill does not pass, they will have to compete with the local stations to keep the retransmitted stations on the air and keep a choice available for all people. He stated: Where there is no local service, the translators are the only source of emergency radio. Without the translators, the people would have no early warning system when it comes to tornadoes, or severe winter storms. If you have seen the news, you know what havoc they [tornados] did to Ardmore, Oklahoma here just a day or two ago. Without the early warning system that tire factory would have been leveled. In these rural areas, it is a big thing, but it is still a matter of choice. That's all we want, is a choice, and we want to solve it on a local basis. Assemblyman John C. Carpenter, Assembly District 33, stated he believes A.B. 8 is enabling legislation which puts the decision in the hands of county commissioners. He stated the intent is not to compete with or put the local radio stations out of business. Senator O'Donnell asked if anyone could address the cost of operating a translator on a daily or monthly basis? Mr. Carpenter stated this is a hot issue in Elko and he sees sides being formed over this issue. He urged the community to resolve its conflicts and work together. He feels the translators should be there for the benefit of the community and surrounding areas. He stated, "We do not want to break or cut into the business of our friends on the commercial stations, but we want them to get along. Maybe the TV people can help them to broadcast their signals further if that is what they need. I do not know, but we need to do something. What's happened up there is a bad situation. I think if we work it out on the local level it is much better." Gene D'Asto, Chairman of the Board, Elko Rural TV District, clarified Senator O'Donnell's question regarding cost. He stated, "I recently checked into the cost because the company I work for wants to put two translators on the air to provide radio coverage into one of our mines that has no radio coverage at all. They use these radio signals to keep the haul truck drivers alert. We plan to bring in a country and western station and also Elko broadcasting's KLKO station. The cost of the translator is about $5,000 to put one on the air. $5,000...that's for the equipment. The cost to power one for a year comes to about 6› per each taxpayer in our district for each FM station." Senator O'Donnell questioned Mr. D'Asto several times about the cost. Mr. D'Asto maintained that the cost is $.06 per taxpayer per year. Senator O'Donnell remarked, "Less than a penny." Mr. D'Asto continued his testimony: The taxpayers in our district for our TV translator service and our FM service...our previous FM service, since we've gotten a translator association who is leasing it. They [the taxpayers] pay around $4.00 a year for that service...I would also like to clarify an earlier statement, 'Do we provide programing that competes?' To my knowledge, we do not. Elko TV District started out with an oldies station out of Reno. We received our signal from the Battle Mountain TV District which obtained their signal directly from Reno. The Battle Mountain TV District changed their input frequency, therefore, we got ours changed, it went over to KOZZ. The other FM translator that is being used now, it is being rebroadcast by the Ruby Mountain translator association bringing it out of Salt Lake. As was cited earlier, the Christian broadcast services, which are an educational service, they are nonprofit. Senator Porter stated after reading A.B. 8, some changes are evident. He asked if there has been an attempt for both sides to discuss and come to a consensus on the issue and the bill. Mr. D'Asto stated the Elko TV District holds monthly meetings which are open to the public. Senator O'Connell explained to Senator Porter that a decision by the attorney general stated that is was illegal for the FM stations to piggyback off the TV signals. Senator Porter asked if the attorney general's opinion was based on NRS statutes? Senator O'Connell responded the Elko County Commission had a lot of testimony on it, and had asked the attorney general for an opinion on it. She explained it is a law from the 1960s which is why there is new legislation being processed. Senator Porter asked if the Federal Communications Commission was consulted. Mr. D'Asto stated every translator is licensed and legal to be operating under FCC laws. Senator Porter stated, "Those stations are illegal under NRS, are [legal] under federal law." Mr. D'Asto stated, "They are legal by federal laws but not by NRS." Senator Townsend stated, "I'm trying to follow the original enacted law, [NRS chapter] 318, that was handed to us. Number three says for several years the Elko TV District, in addition to its TV translators, translated two Christian stations. Do you mean radio stations, is that what that means? Now are those AM or FM?" Mr. D'Asto replied, "FM." Senator Townsend continued, "Where did the language in the bill come from? Is that a result of the current activities, prior to the attorney general's opinion?" Mr. Carpenter responded, "We did have the attorney general's opinion that it was illegal for the TV district to broadcast those radio station signals. That is the reason the bill was brought forward and the language there comes from the bill drafters so it would enable the TV district to broadcast FM radio signals. The one in Elko, along with many throughout the state started bringing in FM radio stations because of the demand." Senator Townsend asked, "Are they broadcast across a TV band?" Mr. D'Asto responded, "The TV district, assuming they had legal authority to do so, put the translators on the air. Legally licensed by the Federal Communications Commission to do so. When the issue was presented to the attorney general, the opinion was no." Senator Townsend stated, "I understand that. Why does the bill say what it does? You are asking specifically for local authority to go back and deal with this, basically to clear up the attorney general's opinion and go back to what we had." Mr. D'Asto said, "That is correct." Senator Townsend stressed, "I have no problem with that. I'm not necessarily for or against it. We have a bill in front of us. That is what we are dealing with. Unfortunately, so far, sitting here today, we've had a lot of people come up here with problems and the bill does not address any of those problems we've heard so far today. I'm trying to get to that point. Why do we have all of this language under subsection 1? Why would you want the state to tell the local entity all of this specific stuff? What is the point in that...2 minutes from now, technology may change all of this. Then you are stuck with this and you are back here 2 years from now, late in the afternoon, late in the session, saying, 'Gee, we did not know about that...' If you want local authority, why do not you ask for local authority. You are asking us to dictate all of this to you in the statute. I am not sure that is exactly what you want. I could be wrong, you have already had a hearing on the other side. You have already amended the bill. But do you want all of this stuff in here?" Ms. Gang responded, "This language is exactly duplicative of the language which applies to the television district. They duplicated that language...all they did was substitute FM radio wherever it said television. NRS [chapter] 318 lists 19 different powers, I'm not sure of the number, powers that can be granted to improvement districts. All the Elko TV District was asking for was to have one additional responsibility added to that list and that was FM radio. [The] Legislative Counsel Bureau just duplicated the language everywhere the TV districts operated, they put in the same language." Senator Townsend asked, "But you are under NRS [chapter] 318, under the TV?" Ms. Gang responded, "NRS [chapter] 318 applies to general improvement districts...section 3 is the present language in NRS [chapter] 318, which lists all of those powers that are possible to be granted. Without the Legislature putting in FM radio broadcasts, the county commission or the local government cannot do that." Senator Townsend asked, "Why do you need everything in section 1? Why cannot you just do section 3, subsection..." Ms. Gang stated this needs to be answered by the Legislative Counsel Bureau, because they are the ones who wrote the language. Senator Townsend stated, "I do not exactly sure how I feel about this bill, but I do know how I feel about something specifically, and that is the amount of words we specifically put into statute. I am a guy that believes very strongly that the less said, the better for the public. We are doing as much as we can in all of our committees not to fill up the NRS." Mr. Puccinelli noted that the Legislative Counsel Bureau told them an FM district could be set up. He said if that were the case, there cannot be a three-line statute. He said it requires taxing authority and other statutes. He explained this bill says the things that can be done and it can be incorporated with the TV district or it can be incorporated with the sewer district, if that is what the county commission chooses to do. Ms. Gang told the committee that Mr. Carpenter told the committee that the Elko County Board of Commissioners did not support A.B. 8. She provided a copy of the minutes of April 16, 1995 from Elko County Board of Commissioners where this was discussed (Exhibit O). She asserted the board took no action on this topic. Paul Gardner, President and General Manager, KELK-AM and KLKO-FM Radio Stations, testified against A.B. 8. He read from a prepared statement (Exhibit P). Senator O'Connell asked, "Why do you not want this handled at the local level?" Mr. Gardner responded: I do not think it belongs at the local level. I think this 'enabling legislation' that they are talking about is simply passing the buck. It is pure and simple subsidized radio. Let's take a shoe store for instance. If my shoe store in Elko sold Nikes and only Nikes, the government would not come in and open a store that sold Reeboks, just because Reeboks were not available at my store. If I go into a market and I research it and find the biggest format hole, to find the format that reaches the most amount of people that I can find, and give them that format, and give them the news, the public service, the emergency broadcast, the things that they need to have with a radio station...then I do not think it is fair for any government agency to come in and compete with me with tax dollars, or to subsidize those radio stations and those radio stations' advertisers with tax dollars. I think the Elko Television District and the Ruby Mountain Translator Association have come up with a remarkable plan. They told you about it here, themselves. They should be proud of it, it saved our city a lot of heartache. It is true, it was tearing our city apart. That is not right. That is not what radio is all about. A lot of uninformed constituents say 'Yeah, give us that service. Boy that is great! It is just radio! It is intangible, you cannot touch it, it is just another service.' If it were just another service, we would not be here today. The issue is choice. And if it is just choice and people want to hear different kinds of music on the air, not just oldies, or adult contemporary or classical; the list goes on and on as to what is available to us in choices. If it is not truly a matter of choice, I think the private sector is certainly up to the challenge. There's plenty of frequency space available in rural Nevada. Anybody who wants to put their own radio station on the air can certainly do so. But that way, they are playing on a level playing field. They are playing by the same rules we have to play by 365 days a year. Senator O'Donnell asked, "You have a radio station that you sell advertising on. You have expenses and the difference between the amount of revenue that you get for your advertising minus your expenses is what you make. How do you think that will change if we pass this bill? Or will it change?" Mr. Gardner responded, "It already has changed, sir...I can go right down the line on projections and contracts that were in force last year at this same time, that are no longer in effect now." Senator O'Donnell asked, "Are the revenue projections lower because of your stand on this issue?" Mr. Gardner replied, "I am not afraid of the competition." Senator O'Donnell stated, "There is not any competition." Mr. Gardner asserted, "But there is...the competition is in the radio signal itself. The more radio signals that are on the air, the smaller the listener pie gets." Senator O'Donnell asked, "Are these radio stations already going?" Mr. Gardner responded, "The translators? Yes." Senator O'Donnell remarked, "It's the attorney general's opinion that we need a law or we need to remove them." Mr. Gardner stated, "I do not think they need to be removed. I think they need to change hands. Just as the Ruby Mountain Translator Association has taken over the ball and they are carrying the torch for the translators in Elko County, I think that is a viable option. That way everybody wins. Those people who want to hear that music, pay for it themselves through donations which are tax deductible. We run public service announcements in support of the translator association. It is all the separation of government and free enterprise. It is strictly a free enterprise question." Senator O'Donnell queried, "If we did not pass this bill, how many radio stations are you prepared to go out and get to provide the choice of service that maybe your constituency would want." Mr. Gardner responded, "The FCC allows us a certain number right now. In a small market the size of Elko, for instance, you can own an AM and an FM. There are some big things going on in Capitol Hill right now. Our very own Senator Richard Bryan has introduced some amendments to the telecommunications bill that will help deregulate so that we can own more stations in small markets. Right now in Reno I think you can own up to four, two AM and two FM. The question here is not the fact that we chose not to service our communities. We do that very well. The question here is that these people are bringing translators into markets that are already served." Senator O'Donnell stated, "But they are not going to sell any advertising on those radio stations." Mr. Gardner asserted: Yes, they are. Right now we are providing a public service for the Elko High School Jazz Band. That public service has been running for about the last 3 weeks. The local high school, who should not have to pay any money for anything, came to us with a check for $200, because they know our policy on public service. As long as it is strictly public service, we'll do it for free, but if they are spending money in the newspaper or on cable television or something, we appreciate a piece of the pie as well. We give them very much discounted rates, and bonus plans and all of that to make it very affordable for the nonprofit groups. The Elko High School Band came in with a check for $200 out of their general fund and bought advertising on KELK and KLKO, probably doing the same on our competing station, KRJC, because the Red Lion Inn and Casino, a big company in Elko, was buying advertising on KBZN. KBZN is the contemporary jazz station that was discussed before, licensed to Ogden, Utah and not participating in any public service in Elko, Nevada. So they are buying space on these translators. If you go into Winnemucca, there's an AM station there that is just about ready to fold up and close its doors because of... Senator O'Donnell asked, "Are they buying the radio advertisement for the translator, or are they buying it to reach people in Ogden, Utah to come down to the Red Lion?" Mr. Gardner responded, "That could be. The fact is, who are they going to fill up with a high school concert? Are people going to drive from Ogden, Utah to hear a bunch of high school kids? It is a great band. I'll be there, but I would not drive 300 miles to get there. It is a long drive from Ogden, Utah." Senator O'Donnell remarked, "Yeah, but there's no gambling in Ogden, Utah." Mr. Gardner agreed, "I understand your point, do you understand my point?" Senator O'Donnell suggested, "I'm saying...if I am a shoe salesman...I'm certainly not going to buy radio advertising on an Ogden, Utah station. I'm not going to spend those bucks. I'm going to go to my local station." Mr. Gardner stated, "You are going to go to your local station, unless of course, you think you get more people in there by listening to that translator that is tax-subsidized." Senator O'Donnell asserted, "It would not pan out. I do not think the economics are there." Mr. Gardner testified, "There's a radio station in Reno that goes into Winnemucca two times a week with a rate card and a Reno arbitron book which the local Winnemucca station does not show up in, because it is a Reno book, and says, 'Take a look, this is the ADI, KWNA [the Winnemucca AM radio station] does not show up anywhere in this book, cause [because] nobody listens. They're all listening to us. Now, buy our advertising.' I swear to God, I would not lie to you." Senator O'Donnell asked, "Well, why are they not listening to you?" Mr. Gardner responded, "We had plenty of listeners, sir, before they started this stuff up. If they came in with different signals, maybe that would be okay. The station that we are talking about, KWNA, is an AM station and you cannot get AM in stereo unless you upgrade a lot. The industry has not yet decided upon which kind of AM stereo they are going to have, so no one has really done it yet. This tax-supported, tax- subsidized translator out of Reno comes in stereo and the sales person comes in and just says, 'Let's do it. We got it.' It is the exact format as the one that was on the air there on KWNA." Senator Porter asked, "When we are talking about state regulations as opposed to local regulation or federal regulation, we have to formulate policy that affects every community in the state. When we formulate policy for the full state, that means that what we do today will also affect Overton, Sandy Valley, and every other large and small community in the state. There are communities which do not have the benefit of a local station. Would not it be better to have your communities decide what is best for them, rather than for us to put in a law that affects everybody? We have to find a compromise that is going to help Sandy Valley, you and everyone living in Elko." Mr. Gardner stated, "The broadcasters have tried to compromise from the beginning on this." Senator Porter said, "...We have to look at every community in the state and I would encourage again that if you want to work out something, the two groups [should] sit down and come up with some language, or we are going to do it for you, and no one may be happy when we are finished...There are other directions we do not want to have to go to try to facilitate as many people as possible. I understand your investment...you are entitled to certain rights, having a major investment as a private enterprise, but we have to find a way to facilitate those folks that do not have the benefit of your station." Mr. Gardner finished his testimony by telling the committee that the Elko TV District spends over $100,000 per year and that no one ever includes the AM station in Winnemucca when they are talking about choices. He provided the committee with a copy of the Federal Communications Commission rules, subpart L of part 74 regarding FM translator service (Exhibit Q). Lori Gilbert, News Director, KELK/KLKO Radio Stations, Elko, read from a prepared statement (Exhibit R). She stated: The point is, if the government, whether local, state or federal, grants the outside stations a free ticket - in the form of a tax-subsidized translator - to broadcast in outlying markets to thousands of listeners in rural communities, that same government should require those stations to provide airtime in case of an emergency. Even if the emergency is not a full-scale event worthy of news coverage. An emergency can become newsworthy if hundreds of people are poisoned by a toxic cloud after a tractor trailer rolls over on the interstate. The TV stations will be there with their satellite trucks and helicopters, but it will be too late for people who could have and should have been warned by the government-licensed radio station. It is the responsibility of all federally licensed radio and TV stations to provide emergency broadcast system's information to their licensed area of coverage. If the government provides for outside stations to come into an area, the government should be prepared to be accountable to those citizens in the event of an emergency. Ray Gardner, Concerned Citizen, told the committee how the lack of radio stations to serve rural areas affected Americans during World War II. He provided the committee with statistics regarding the dramatic growth of FM radio stations and TV stations since that time. He explained because the rural areas did not have TV services, chapter 318 of the NRS allowed for improvement districts which would allow for translators to bring programming into the rural areas. He explained: The original intent was to charge the TV owners a fee to pay for this imported signal. Collecting this fee was not practical, so the commissioners in Humboldt, Lander, White Pine, Elko, Eureka, Pershing, and some other counties, formed TV districts and paid for them through general revenue funds. The TV service to a large segment of the rural population was thus accomplished. Today there are over 4500 radio stations throughout the United States, almost half of them are FM outlets. Now new technology is being provided that gives us direct broadcast service from satellites. There are no areas that cannot be served. Elko, Ely, Winnemucca and Fallon stations have all added FM services to their existing facilities, plus other FM stations have come in and joined the broadcast for eternity, and we now find FM broadcasts being translated, as well, into these small markets using tax dollars to add signals to areas already served by local stations. I would like to close with an analogy. The Elko Daily Free Press is a daily newspaper serving Elko. It publishes evenings, 6 days a week, Monday through Saturday. The Reno Gazette Journal has a significant distribution plan in Elko and they publish 7 days a week. The cost of distribution is borne by the publisher and is passed on through your subscription rate to the ultimate user. The Carson City Nevada Appeal does not deliver to Elko, but we have some people there who would like to read the Carson City Nevada Appeal's Sunday Edition. Should it be allowed that a newspaper district be formed to transport and deliver the newspaper using taxpayer funds? Newspaper, radio...the medium is different, but the principle is exactly the same. I urge you to vote in opposition to A.B. 8. Senator O'Connell asked the witnesses to explain why they are opposed to this issue being settled by county commissioners or boards. She told them the committee, as business people, understand how this impacts their business, but do not comprehend why the witnesses are opposed to it being returned to local control. She stated, "The people are getting this for nothing when they turn on their dial and so, naturally, they are going to want the additional stations because perhaps they do not clearly understand what competition means and putting your own money at risk. Is that the issue here, with not wanting it to return to the local commissioners? " Mr. Gardner responded, "Do not use my taxpayer money to fund a few people in a minor market where they actually do have the ability to receive the kind of music they want. It is going to cost them, it is going cost somebody. I do not think I should pay for your FM if it has to be imported. We are not against having signals imported into the place as long as it is done with an outside, nongovernmental entity that does it." Senator O'Connell asked, "You do not trust your own county commissioners to make that judgement?" Mr. Gardner replied, "I think we do trust our county commissioners, but if we allow the FM, then why not the newspaper, why not the shoe salesman getting this government subsidy as well. If it is written into the law, it is tough to change." Senator O'Connell stated, "Your objection to this law is that we have added, not returning it to the county, but added FM to the television district." Mr. Gardner responded, "That is correct. If it becomes written in the statutes then anyone can come in and it is still using a tax dollar. Ruby Mountain translator, as soon as it became an issue of not being able to have the county fund it, they formed a group, leased the equipment and were back on the air in 4 days." Senator O'Donnell asked, "If I were a radio station in Ogden, Utah, and I had the capability of doing a translator to Elko, and it was profitable for me to do that...why would not I, as a radio station operator, go out and buy a translator; go out and stick it on top of mountaintop and ..." Mr. Gardner replied, "There are federal regulations that control that. You can only do it in certain specified areas, and this would not be one of them." Senator O'Donnell asked, "Why is this prohibited?" Mr. Gardner responded, "The FCC in its infinite wisdom has declared it so." Senator O'Donnell stated, "I am just trying to understand the issue. Why would the FCC prohibit such activity?" Mr. Paul Gardner answered, "Prior to 1991, a radio station could operate its own translator anywhere it wanted to, and expand their small signal bigger and bigger. In their origins, FM translators were meant for fill-in service only, a secondary service." He provided a graphic illustration to the committee on what FM translators were designed for. He stated, "There were many, many abuses of the system prior to 1991. I think about 1989, things were shut down completely. There was a freeze on FM translators for a long, long time. It was to put a stop to the abuses of the system at that time. Since then, as my father said, they are prohibited from participating in a translator that goes outside their licensed coverage area. If their licensed area is the size of this cup, they cannot put a translator up here, but any private citizen can, or any qualified group..." Senator O'Donnell interjected, "Or any governmental agency." Mr. Gardner stated, "If it is legal for that governmental agency to do so. They were authorized, the TV districts were authorized and have been given licenses, but we had a little legal battle going on a year ago in regard to the transfer of those licenses to the Ruby Mountain Translator Association...When it went to the attorney general, and they said they are not, and it went to the FCC said, 'Wow, we'd better wait and see on this thing,' and grant a temporary authorization, which is fine with me until the Legislature there [Washington, D.C.] decides what to do with it, because now it opens up the FCC for liability because they have allowed all these people to do it who were not legally authorized to do it in the beginning." Senator O'Donnell stated, "I... decide that I want a translator for my people who work for me, I could go out and buy a translator, hook it up, power it...license it and get it going all on my own." Mr. Gardner responded, "Absolutely. There's nothing to stop you from doing that. You could put a radio station on from New York City, if you like. If you can get their signal terrestrially through the air, you can rebroadcast it. It is legal to do. There is no problem with that. The question about taking it out of the hands of the local people, I truly do not think the local governments want this on their back. It tears communities apart. That's why Carson City is where it is and that's why this is a nice quiet room so the constituents are not here to hear this. It is a decisive thing and it is going to tear our communities apart. It will tear Ely apart and Bart Reed will be hurt by that. It will tear Winnemucca apart and Torrey Sheen will be hurt by that. It has already torn my market apart and I almost had to sell the radio station last year...it had a tremendous impact. It is not something that needs to be hashed out on a local level. It is pure and simple...government should not compete against local business." Senator O'Donnell asked, "Can you get a special license to multiplex your radio waves to your antenna?" Mr. Gardner responded, "The FCC at this point is deregulating or the Congress is giving alternatives to the FCC. At this point it should take place within the next 2 weeks...Right now, in a large city, you can own multiple signals. In a small town you cannot. They are trying to deregulate so that some of us small market broadcasters have more ability to do this. Elko is certainly big enough to support another radio station. I'm not saying, 'Hey, Mr. O'Donnell, come out and put a radio station out there and sell advertising against us. It is certainly big enough and the population there have shown that they can support their own translator network as well." Senator O'Donnell asked, "When do you surmise this FCC change will come about?" Mr. Gardner replied, "The FCC bill should be voted on any time in the next 2 weeks...the deregulation should be handed off to the FCC. Some people on Capitol Hill want to do away with the FCC altogether." Senator Shaffer asked, "You claim these repeaters are causing you a lot of problems, business-wise, but how do you determine that?...I do not see how they could be causing you a problem if they are repeating your program, with your advertisers and your commercials on there, they are getting it to a larger area that you are not getting it to. Are not they repeating what you are broadcasting?" Mr. Gardner clarified, "No, they are not repeating what I have. They are repeating my competition's signal. That upsets me. He can go out to the same advertisers that I have to talk to and say, 'Hey, tell you what Joe, Paul cannot reach Wells, but I can, because the government is subsidizing my signal. Advertise with me, I'll give you Wells.' I do not have that authority. I cannot do that. I do not have a translator in Wells. I cannot pay for my own translator in Wells." Senator Shaffer asked, "Who is me? I am confused, who is 'me' that can compete against you that is not licensed or that is subsidized? How are they subsidized?" Mr. Gardner explained, "There is another radio station in Elko. They are receiving subsidy from our county government in the fact that their signal is being retranslated 50 miles away to another town." Senator Shaffer asked, "They are not doing it themselves? What's the government have to do with it? Are they putting money into the operation?" Mr. Gardner responded, "The TV district was doing it. Now it is Ruby Mountain Translator Association and I do not have a problem with that. But if the government is doing it, that's where I have...." Senator O'Donnell asked, "What if we did a couple of things...what if we allowed this to happen with two caveats...number one, the radio station in mind would have to sign an agreement for emergency broadcasts. If there was an emergency broadcast, such as the Carlin incident where people had to be notified, if there is a translator in that area, then they would have to respond. The second caveat would be that they cannot sell advertising on a radio station that has a translator into a certain area...two situations here, if they were accommodated, would you have a problem?" Adriene Abbot, News Director, KOH-AM, Reno and KBUL-FM and KNEV- FM, Reno, stated, "We have no translators that I am aware of, but we are rebroadcast by several community translators. I have been appointed by the FCC as the state coordinator for the new Emergency Action Notification System (EANS). This is the new system that is being updated from the old Emergency Broadcast System (EBS). There will be some changes coming down in the very near future to facilitate broadcasting of emergency notices by the radio stations that sign on board with this system. It is very important that membership in the EBS, which is still currently active, and the EANS, or the new, revised version of the EBS, is strictly voluntary. The FCC cannot mandate that any station join, participate, cooperate, or in any way, provide through the law that they [the radio station] cooperate in this." Senator O'Donnell stated, "But we can here. We cannot allow this to happen unless a private agreement is signed between KOH and their local government entity. Say for instance, their government entity says, 'We'll put a translator for KOH in our area, providing that you abide by the law...that if I call you up on the phone and ask you to do an emergency broadcast for our area, you will do it." Ms. Abbot stated, "I do not feel such an agreement would be possible. First of all, we cannot even right now, with the EBS, get emergency broadcast cooperation among the Reno stations for the Reno market. My management's interest in the translator in Elko or Winnemucca or Ely is such that there's not a lot of profit in it for us. We are not going to go out on a limb and say, 'We are going to broadcast all your emergency broadcast messages just to get on your translator.' Number two, if I did want to get on your community translator, I could challenge such an agreement as a first amendment violation...If I as an FM station out of Reno felt it was critical enough to be on the air in Winnemucca and Winnemucca says, 'You've got to sign this agreement that you will broadcast our emergency messages.' I can challenge that under current FCC regulations under a First Amendment challenge." Senator O'Donnell asked, "Does the FCC preclude you from putting a translator out there?" Ms. Abbot responded, "There is no reason for me to sign such an agreement...I would have no interest in that, but you, as Mr. Remote Area wanting big city rock and roll music, came to me and said, 'Well, we'll pay for this translator and we'll put this in, but we want you to broadcast our emergency messages,'... I'm still going to laugh at you. There is no way you can make any station in Reno, in Salt Lake City, in Twin Falls, or whatever, broadcast your emergency messages." A discussion ensued regarding licensed broadcast areas, emergency broadcasts, ancillary translators, and FCC licensing regulations between Senator O'Donnell and Ms. Abbot. Senator O'Donnell noted, "So right, you do not have legal authority to put a translator in Elko, according to the attorney general." Ms. Abbot responded, "According to the attorney general and the FCC, we do not have authority to put translators in." Senator O'Donnell asked, "Do they have a translator for KOH in Elko?" Ms. Abbot responded, "No, KOH is an AM station, our two FM stations are rebroadcast on community translators in Winnemucca and Carlin. Again, as a choice of that community." Senator O'Donnell stated, "...Without the passage of this bill, those two translators would have to be removed under FM?" Ms. Abbot replied, "Under the attorney general's decision, they can not be used to rebroadcast these FM signals. I do not know if the attorney general's opinion says take them out." Mr. Puccinelli interjected, "The attorney [general] said we cannot do it, we do not have the authority." Bart Reed, Owner and Manager, KELY AM and KELY FM, Ely, provided a letter from Torrey Sheen, in opposition to A.B. 8 (Exhibit S). He stated, "I am also opposed to competition on a state or local basis, it makes no difference to me. I do not think goverment has any place in this business of providing variety for people in local areas, especially considering that technology has made it possible for all people to have as much variety as they want...there is no reason why government should be involved in this at all. As far as advertising in Ely, if you were to preclude a station from Ogden or Salt Lake [City] from selling advertising, it really makes little difference what happens to me. My advertising revenues go down. I am against the competition of government, I have no problem with local individuals coming in and putting up translators or radio stations to add variety to the area if that is what they want to do, but for the government to subsidize it, I do not think the government has any place in doing that, especially with the technology that is available." Gerald Pugh, Construction Permit Holder, KYOU, Wendover read a written statement to the committee (Exhibit T). He stated, "This translator business is moving right into the heart of my area. It is going to hurt. I have been selling my station on the fact that it is virgin territory. If you are driving Highway 80 between Wells and Wendover, you know the signal does not last very long. My station will be able to provide a steady signal throughout that entire area. It will serve the emergency warning system in that area, I might add. These translators are going to make my investors think twice. I cannot offer them this fairly virgin territory...It is knocking the pins right out from under me. These people who put up these transmitters, they put the cost at $5,000, the upkeep cost is so minimal. A transmitter does not require any investment. It does not require construction of any kind. It does not employee people. It does not improve the tax base. My station will do all of these things. But these people are really going to hurt. They hurt the stations that are already in business. They are really going to hurt somebody who is trying to start. All of the rural areas you are talking about are looking for growth, an increase in jobs, and...an increase in the tax base. When these translators go in, there will not be that growth. You will stop it dead. I can see your position...wanting to serve the interest of the people and they want to be entertained...at the same time you have to look at what is best in the long run. Real growth, true growth in the rural areas is what is best in the long run." Senator O'Connell asked how much of the testimony in opposition to A.B. 8 was heard by the Assembly? Danna Sturm, Carson City, told the committee she attended the Assembly hearings and none of this was presented. She explained Paul Gardner was the only person to testify in opposition at the Assembly hearings. She testified that the Assembly hearing was about an hour long. A discussion was held about the disparity between the testimony presented in the Assembly and the testimony presented in the Senate. Mr. Pugh asked how someone gained access to the translators? He asked if they would be restricted, and who would determine what radio stations would use what translators. He asked if the translators would be open to every radio station in the area? He asked if the Ruby Mountain Translator Association carried every Elko radio station? He asked if they were truly serving the needs of the community or are they restricting access to the facilitites. He stated these points need to be examined. He said, "I think it would be naive of us to think that the Ruby Mountain Translator Association is only interested in serving the general need. I think we have to all recognize there is money involved here. We should not jump into this thing and create something without knowing entirely...exactly how this thing is going to work. We do not know right now. My recommendation would be that you vote no on this thing simply because we do not know. There are a lot of unanswered questions here that need to be looked at." Don Stubbs, Owner, Stubbs Broadcasting, KDSS FM, Ely, stated he and a majority of rural broadcasters adamantly oppose full-time in any form. He stated he could not concur with any compromise because there is no motivation to perform emergency broadcasts. He stated the benefit is to the big city broadcaster who has outlying areas rebroadcasting their signal. He stated their advertising people can say they cover all of Nevada and charge more for their rates. He asserted the small rural broadcaster is the person who suffers because if 30-50 signals were brought into Ely, it is too small an area to support that kind of infusion. He stated the direct economic repercussions would be clients who could no longer afford the small, rural broadcaster because of the excess signals in town, and if they could not reach a large segment of the population, the advertiser would rely on newspapers and flyers. He stated KDSS makes a small profit to support a family of two. He stated they do not have full-time employees, they can only employ part-time people. He stated their situation is not as critical as the situation in Elko, but it is on the verge of becoming as critical. He asked the committee, "Do not report this bill out, or table it, or something and do not take it up until you are able to hear more input. It could be disasterous for us in the local FM business. It could put us under, a lot of us. No more public service announcements, no more sports, no more local news, no more lost dogs, no more emergency warnings...because we are gone." Ms. Sturm presented a letter of support from Linda Wilson, a past Elko resident who worked at rural Elko radio stations (Exhibit U). She stated, "Not only do I think you should kill A.B. 8, but I think you should take a look at NRS [chapter] 318 and consider disbanding other special taxing districts. I think there is no need for this taxing district, given the fact that there can be private enterprise coming in and doing this." Sam McMullen, Lobbyist, Nevada Broadcasters Association (NBA), testified in opposition to A.B. 8. He stated the NBA's position is, "They are concerned about the impact in the small markets on the public surface aspects of broadcasting. Beyond all the issues a business may have about economic competition from government, the tax-subsidized aspects of these districts...will jeopardize the regular local market function currently in place in a lot of these areas...that is a serious concern to them." He explained about translators and told the committee there are some communities which have no radio broadcasting and some which are served by either an AM station or by both an AM and FM station. Mr. McMullen stated, "When you look at [NRS chapter] 318, it is for utility type endeavors. It is for those kind of services that either are not there or are inadequate. If someone does not want to provide those, it may be necessary to step in. That is not the case across the board in this situation...The advertising dollar in itself is not the defining thing...The issue for the broadcasters' association is very touchy because broadcasters were conceivably on both sides of this, but they basically became concerned that if it affects the local market in a rural area...that public service aspect in a rural area has to be something we think about and at least monitor the impacts of your actions upon it." Discussion ensued regarding how to make the translated stations operate under the same rules as the local FCC licensed stations. Senator O'Connell closed the hearing on A.B. 8 and adjourned the meeting at 6:15 p.m. Senators O'Connell, Townsend, Porter and O'Donnell were present in committee at adjournment. RESPECTFULLY SUBMITTED: Teri J. Spraggins, Committee Secretary APPROVED BY: Senator Ann O'Connell, Chairman DATE: Senate Committee on Government Affairs May 8, 1995 Page