MINUTES OF THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session May 24, 1995 The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:00 p.m., on Wednesday, May 24, 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 STAFF MEMBERS PRESENT: Dana Bennett, Principal Research Analyst Teri J. Spraggins, Committee Secretary OTHERS PRESENT: Michael R. Alastuey, Assistant Superintendent, Clark County School District Fred Turnier, Assistant Director, Clark County Sanitation District Brenda J. Trainor, Manager, Regional Telecommunications, Clark County Robert Seale, State Treasurer, State of Nevada Brian Krolicki, Chief Deputy Treasurer, State of Nevada Douglas Bell, Manager, Community Resources Management, Finance Department, Clark County Charles W. Joerg, Lobbyist, Nevada Manufactured Housing Association Gub Mix, Executive Director, Nevada Manufactured Housing Association Ron Lynn, Assistant Director, Clark County Building Department Barbara McKenzie, Lobbyist, City of Reno Kurt Fritsch, Assistant City Manager, City of Henderson Jared E. Shafer, Public Administrator, Public Guardian, Clark County Pat Coward, Lobbyist, Nevada Association of Realtors Senator O'Connell opened the committee with hearings on four bill draft requests (BDRs). BILL DRAFT REQUEST 30-182: Eliminate prohibition on special elections for school bond issues. Michael R. Alastuey, Assistant Superintendent, Clark County School District, testified for this BDR. He stated this bill eliminates the prohibition on special elections for school bond issues. He said last session there were restrictions placed on the holding of special elections due to emergencies. He explained the intent of the language is to allow municipalities to piggyback on top of one another's elections, to save funds and not create the need for as many special elections as were being held. However, upon later review of the law, the bond counsel recommended to the Clark County School District that they not chance the language passed by the last legislative session, and in effect, refrain from piggybacking on other municipal elections. He stated this language is "housekeeping" to provide the latitude that the last Legislature intended. Senator O'Connell asked if this would allow Clark County School District to call a special election. Mr. Alestuey responded that the language provides for a special election to be called in an emergency. He stated any special election would require an emergency declaration according to the bill language of last session. He provided a history of the BDR to the committee. SENATOR PORTER MOVED FOR COMMITTEE INTRODUCTION OF BDR 30- 182. SENATOR RAGGIO SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR TOWNSEND, SENATOR TITUS, AND SENATOR SHAFFER WERE ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST 40-1912: Exempts Clark County Sanitation District from requirements to mark sewer lines. Fred Turnier, Assistant Director, Clark County Sanitation District, testified for this BDR. He stated this BDR is an amendment to Nevada Revised Statutes 455.120 and 455.130. He said this section relates to the "call before you dig" program. He said the approved law from last session required that the sanitation district, along with other utilities, join the Association of Utility Owners to receive excavation and demolition notification. He explained for the first 2 1/2 years, the sanitation district was unable to join because of a bylaw problem with the Association of Utility Owners. He explained the problem to the committee. He said they changed the bylaws last year, so the sanitation district joined for 1 year. He testified the sewer lines in the Las Vegas Valley are 7 to 8 feet below the surface of the ground. He said many are 20 feet deep and explained that the lines never get hit. He stated prior to the law, there were never any problems. He said since they have joined the association, they get 100 phone calls per day which require the district to respond within a 2-day period. Mr. Turnier testified this program is costing the sanitation district $100,000 per year, which they feel is inappropriate for ratepayers. He stated the district agrees that utilities need to let contractors know where the lines are. He said there is usually a manhole to identify the sewer. He said there has not been a problem with the lines getting hit, so they would like to be exempted from the law. Senator O'Donnell asked how often they have hit a line. Mr. Turnier explained that they have hit lines three times in 4 years. He said the contractor repairs the line. He said usually they do not get contractors hitting sewer lines; they get people that are boring for soil samples hitting the lines. He said the sanitation district is usually right there when that happens. Senator O'Donnell asked how many calls they get per day. Mr. Turnier reiterated that the district receives 100 calls per day. Senator O'Donnell asked, "And you've only had three hits?" Mr. Turnier explained those were on projects where there are inspectors in the field. Senator O'Donnell asked how many hits were after the sanitation district marked the sewer line? Mr. Turnier responded that all three of the hits were after they marked the lines. He explained that heavy equipment sometimes hits the lines. He said the "call before you dig" program makes sense for water and gas, because their lines are 2 or 3 feet below the surface of the ground. He reiterated that sewer lines are a lot deeper. SENATOR O'DONNELL MOVED FOR COMMITTEE INTRODUCTION OF BDR 40-1912. SENATOR PORTER SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR TOWNSEND, SENATOR TITUS, AND SENATOR SHAFFER WERE ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST R-2039: Interim study of laws relating to services provided by counties and cities. Senator O'Connell told the committee BDR-2039 will ask for the interim study for home rule. There was no further discussion on the BDR. SENATOR PORTER MOVED FOR COMMITTEE INTRODUCTION OF BDR R- 2039. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR TOWNSEND, SENATOR TITUS, AND SENATOR SHAFFER WERE ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST 25-710: Authorizes districts to furnish television facilities in certain counties. Brenda J. Trainor, Manager, Regional Telecommunications, Clark County, testified for this BDR. She said Clark County's vision is to be a very proactive developer of the coordinated information of the infrastructure which would enable them to deliver high-quality, reasonably-priced information services in a regulatory environment that promotes competition. She cited several advantages to having information services. She explained this BDR is a procedural and simple matter that will help to streamline the process of activating a competitive environment within counties. She explained how the bill would work in different sized counties. Senator Porter asked for clarification on the bill draft request. He asked if an association wants to install a community antenna, what would happen? Ms. Trainor explained they could apply for a franchise and they would not have to go through the additional action provided in the bill. She stated they could not form a district unless there is a precedent action. Senator Raggio asked if this bill exempts Clark County from the present restriction in the law? He explained if there is a community antenna system, another district cannot be formed, unless both agree. He said this would exempt Clark County from the restrictive provisions which are now in the law. Ms. Trainor explained the current board would have to create the district to provide the public television facility. She stated it could be a repeater facility. She said a community antenna television service could apply for a competing franchise, as none of the franchises are exclusive. She said it is the difference between a community antenna television company, and public television facilities, which are essentially repeater facilities. Senator O'Connell asked if a problem caused the request for this BDR. Ms. Trainor responded none of which she was aware. She said they are looking to streamline and make things more efficient. SENATOR PORTER MOVED FOR COMMITTEE INTRODUCTION OF BDR 25- 710. SENATOR TITUS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. ***** Senator O'Connell closed the hearing on BDR 25-710 and opened the hearing on Assembly Bill (A.B.) 403. ASSEMBLY BILL 403: Revises definition of "allocable local revenues" for purposes of provisions governing issuance of state securities to acquire revenue securities issued by municipality. (BDR 30-822) Robert Seale, State Treasurer, State of Nevada, spoke regarding A.B. 403. Mr. Seale explained this bill allows for the municipal bank to intercept revenue that would normally be coming to them at a county level through the Distributive School Fund. This bill is identical to the situation in White Pine County, where they authorized the treasurer to intercept money out of the Distributive School Fund to service their debts. The proposal in A.B. 403 is to allow municipalities to come to the bond bank for purposes, other than natural resources, to finance their debt. Mr. Seale told the committee the reasoning is the state's bond rating is greater than the municipalities' bond rating. Thus, the state can offer a significant advantage in the capital markets. This, he opined, is a good thing because it will significantly aid the municipalities, and will not impact the lending cap in the state. The bill also clearly states these debts are not debts of the state, Mr. Seale reported. Senator O'Connell asked the witness if the bill would apply to all bonds, general revenue or general obligation bonds. Mr. Seale replied it would apply to general obligation bonds at the municipal level. The senator confirmed then, the bonds would already have been sent for a vote of the people. Mr. Seale agreed, also confirming they are bonds not backed by the state. The senator asked what the rate of interest was currently on the bond rating. Mr. Seale stated the state has an AA rating, and the bond market is "all over the place." The most recent purchase was at a rate of 5.87 percent, there is another bond sale anticipated but the rate is not set, because it is a competitive bid, he added. Senator O'Connell asked if there were members of the Assembly opposed to the bill. Mr. Seale replied there were none. She asked about the support from the municipalities. Mr. Seale said those who had been contacted saw some usefulness to the proposal. Not every municipality will find it useful, but if the setup can generate a better interest rate, they are likely to use it, he opined. He added that the local entity using the bond bank will reimburse any costs incurred by the state. The chair asked if this bond banking is something being done around the country. Mr. Seale replied that is not so, Nevada is "on the leading edge" with a couple of other states also using a similar system. He noted the rating agencies are aware of the setup, and they cannot point to any negative "downside" to the concept. The chair opined the smaller municipalities would really support the idea. Mr. Seale agreed, especially in the area of refunding. He added it will enhance the capabilities of the smaller entities, and the state will review the bond issue as it occurs. Senator O'Connell asked if the state treasurer will examine the "entire picture" of the entity that might wish to use the bond bank. Mr. Seale responded there would be an examination of the entire debt load of the entity, providing a two-step review of the bond issue. Senator O'Connell closed the hearing on A.B. 403 and opened the hearing on A.B. 407. ASSEMBLY BILL 407: Makes various changes concerning state treasurer. Mr. Seale explained that the State of Nevada currently pays for its banking services by having a compensating balance at the bank. He provided Exhibit C to the committee. He testified the compensating balance fluctuates between $14 and $22 million depending upon the rate of interest and the services for which the state is paying. He said the ability of the state to make direct payments in the form of checks for fees or services could be advantageous. He explained the banks pay the state a short- term rate on the balance of the money in the compensating fund. He told the committee they could invest the $14 million in a long-term rate at 6.5 or 6.75 percent instead of a short-term rate of 6 percent. He said: That differential, of course, 50 basis points or 75 basis points . . . on $14 million is a chunk of change. We think we ought to have that chunk of change in our pocket instead of the banking community. They are not opposed to this. They are not enthralled with it either, but this will give us the opportunity to pay for these things directly, reduce the compensating balance along with other things that we are doing, and earn more money for the state. Senator O'Connell asked if the interest on the $14 million floats in the bank or if it returns to the General Fund at the end of the year. Mr. Seale responded it would be returned to the General Fund. He said instead of the money being in a demand deposit. He explained the bank uses the money and gets a higher rate of return on it, but the state only gets the short-term amount. He stated, "We want that spread and we are going to take it if the legislation passes." Senator O'Donnell asked Mr. Seale to clarify his testimony. He asked, "You've got 50 or 75 basis points you could have gotten if you had deposited the money." Mr. Seale responded, "If we were able to invest that money and not have it as a compensating balance." Senator O'Donnell asked why compensating balances are required? He asked if the compensating balance pays for services rendered by the bank. Mr. Seale stated that was correct. He said the bank gives an interest rate that they are going to calculate on that compensating balance. He explained the rate is less than the state can get if they have access to the money. He said if the state paid the fees, there is no longer a compensating balance. Senator O'Donnell asked if the state would pay those bank fees. Mr. Seale responded the bill allows the state to pay the fees in lieu of having the compensating balance. Brian Krolicki, Chief Deputy Treasurer, State of Nevada, stated their office is aware of the monthly fees for each bank. He said it is the revenue side which fluctuates. He said the revenue in their estimation is far above what the implied revenue value is. He said the treasurer's office would like to specifically pay the dollar amount on the fees and let the treasurer's office secure the compensating balance to invest. Senator O'Donnell asked if this is a substantial amount of money. Mr. Seale and Mr. Krolicki stated it was. Senator O'Donnell stated he was concerned about the reserve requirements for the banks? He asked if removing these compensating balances would cause the banks to be unable to lend revenue? Mr. Seale responded he did not think so. Senator O'Donnell asked if the compensating balance was in a demand account. Mr. Seale answered that it was. Senator O'Donnell stated it was a demand account because the bank could use the demand account as part of the reserve requirements of the Federal Reserve Board. Senator O'Donnell asked if they would put the compensating balance in treasury bills at a higher interest rate. Mr. Krolicki explained the demand account stays the same. He said the compensating balance does not affect the capital reserve requirements of the bank in any way. Senator O'Donnell stated it would affect their ability to meet those reserve requirements because the dollars the bank has now in demand accounts would be $14 to $22 million less. He said in order to meet their demand requirements, they would have to find $20 million worth of demand accounts. Mr. Krolicki testified this was not his understanding when speaking to the banks. He stated the banks are encouraging this process as well. He said, "This inexact science is bothersome to both sides. In this case, it is Bank of America. They are highly supportive. They have worked together to do this with us. In terms of them setting aside capital to meet this change, it does not change it, as I understand it." Senator Porter questioned if this bill would be okay for any successor who would follow Mr. Seale? Mr. Seale responded this bill refers to insured savings and deposits. Mr. Krolicki explained that the bill standardizes language. Senator O'Connell closed the hearing on A.B. 407 and opened the hearing on A.B. 454. ASSEMBLY BILL 454: Revises provisions governing investment of state money. Mr. Seale explained A.B. 454 as doing two things. The first would be to adopt regulations under chapter 355 of the Nevada Revised Statutes. Mr. Seale explained: One of the major reasons that I want to do this, is we've got [a] statute on the books that allows us to do some specific things. We also have policy in the state treasurer's office which is approved, periodically, by the State Board of Finance. Between the two there is, what we think is, a fair large gap. Policy can be changed easily and quickly, and statute cannot, obviously. Since you [the Legislature] only meet every 2 years, there is not an opportunity to respond to a very rapidly changing market. We feel that regulation, and this regulation impacts only one area, the treasury and specifically, more specifically, the treasurer. I've frequently heard in the 4 years that I've had the pleasure to serve, that everybody is comfortable with Bob Seale. But, what happens when he is no longer there. This is my attempt to create regulations that put it in a little bit tighter language, the policy itself, so that people wanting to make change to the investment policy will have to go through a public hearing process; will have to deal with the Legislative Counsel Bureau and the attorney general, in order to change the way we make those investments. Mr. Seale noted the current method for making investments, as statutorily outlined, allows "a great deal of mischief to happen." He observed the Nevada statutes are very conservative in this area. In order to ensure there is no opportunity to "wreck mischief" on the state's very large portfolio, it is important to make this change. Mr. Seale told how the state's investments have grown during his tenure. He opined it is imperative to provide regulation that will preclude "any unfortunate occurrences in the future." The second thing the bill does, Mr. Seale continued, is to allow the state treasurer an opportunity to "rent" part of the state's portfolio to others. The state holds certain securities that other parties would be interested in holding for a short time, he explained, in order to "cover a position they have not been able to fulfill for some reason." These parties are major banks and brokerage houses, he pointed out, offering the Bank of New York as an example. These parties would provide collateral that would equal 102 percent of the securities the state would "rent" them. Additionally, the state would receive a fee for this rental, along with higher earnings on the collateral securities. Mr. Seale admitted there is some risk, as there is in all investment activity. The risk factor, in this situation, would be very small, he emphasized. Both Public Employees' Retirement System (PERS) and State Industrial Insurance System (SIIS) use this opportunity, the witness offered, and the state's treasury should also be afforded this opportunity. The state treasurer must have specific statutory permission for every type of investment activity, and this is the reason for this bill. Senator O'Connell asked Mr. Seale if part of this bill was presented in the previous session. He explained they submitted both parts, but they did not succeed. The senator asked if the 102 percent collateral is the "natural amount" or is it a particular allowance which suits this particular type of transaction. Mr. Seale replied it is a common percentage for collateral coverage. They will contract to ensure any slippage is covered, the witness stated. Senator O'Donnell asked to whom they would lend the securities. Mr. Seale explained a firm, such as the Bank of New York or J.P. Morgan, would be the borrower in these transactions. These companies have huge portfolios, and would be responsible for meeting all the criteria the state must meet in the investment of state funds. This should be a very profitable arrangement, "worth somewhere in the neighborhood of one-half a million dollars a year." Senator O'Donnell questioned what kind of instrument would be used as collateral. The treasurer explained they would be the same kinds of instruments the state can invest in, U.S. treasury bills or agency bills. He told the committee he works for the state and it appears to him that the profits of the banks are "reasonably healthy." Senator O'Connell closed the hearing on A.B. 454 and opened the hearing on A.B. 143. ASSEMBLY BILL 143: Authorizes board of county commissioners to convey certain property belonging to county to nonprofit organizations for development of affordable housing for low-income families. Douglas Bell, Manager, Community Resources Management, Finance Department, Clark County, testified first on A.B. 143. He read a written statement to the committee (Exhibit D). Senator O'Connell stated there was quite a bit of opposition to this bill in the Assembly. She asked him to share some of that opposition with the committee. Mr. Bell stated the original concerns related to the issue of public notice. He said originally public notice was not a requirement in the bill. He said with those changes added to the bill, there was little opposition. Senator O'Connell reminded him that there were 13 votes cast against the bill. He explained he was unaware of the concerns on the floor for the bill. He said he dealt with the committee. Senator O'Connell asked if there was opposition in the committee. Mr. Bell responded there was less opposition after the public notice was addressed. Senator O'Donnell asked if this allows the county commission to donate property to a nonprofit organization? He asked if the nonprofit organization could be any nonprofit organization? Mr. Bell stated the bill requires that the nonprofit organization must be an Internal Revenue code 501C3 organization. He said they have to meet federal requirements. He said there are current grants to the 501C3 organizations through the community development block grants and other federal grants. Senator O'Connell asked how would they acquire most of this property? Mr. Bell responded that the county has a variety of properties that they have obtained over time. He said a developer recently gave the county 9 acres of property in North Las Vegas. He stressed if the county commissioners wanted to use that land for housing, it would have to be sold, because they could not give it to a nonprofit organization to build housing. He said the county has been working with nonprofit organizations to generate housing. He cited examples. He explained they have been working through the nonprofit organizations to generate additional housing. He said they have also given the organizations grants to go buy HUD [Housing and Urban Development] properties and rehabilitate them for housing for clients. He stated they work with 8-10 nonprofit organizations on a regular basis in the area of housing. He said this bill would provide another tool for them to work with the nonprofit organizations. Senator O'Connell asked if the property goes back on the tax rolls? Mr. Bell responded it does not, if it is for the nonprofit organizations. He said it would be used as an equity contribution in the housing development. He stressed that nonprofit organizations frequently have a problem acquiring property, so that they can finance to actually build the housing. Senator O'Connell asked if they comply with zoning regulations. Mr. Bell responded that it does. Senator Titus asked if this would be like Habitat for Humanity? Mr. Bell answered it would depend upon how the transfer occurs. He said it could be a piece of property with multiple homes, or a piece of property with a single family dwelling on it. He explained they could give the land to Habitat for Humanity and they could, in turn, could make it available for an individual to own. He said in that instance, it would return to the tax rolls. He said the multiple family housing would not go back on the tax rolls because it would probably be a rental situation. Senator O'Donnell explained there are many 501C3 organizations which would be eligible to receive land under this bill. He suggested the developer who donated the 9 acres of land to the county should donate it to the low-income housing organizations. Mr. Bell responded the county actually owns land they may have acquired 20 years ago, in parcels which could be used for housing. He said they cannot donate those because they may have acquired them through patents from the federal government 30 years ago. He explained there is a public purpose to provide housing for people, not to compete on the market. Senator O'Connell asked Mr. Bell to explain about eminent domain properties. Mr. Bell explained if they have acquired the property from a private property owner, then the property owner is given the first chance to repurchase the property. He said section 6b addresses parcelization where there are small remnants which they would bring together. He explained that by themselves, they would have no, or limited, use because they might not be big enough by themselves. He explained when they were brought together as a development, they would have more benefit. He stated this is property that they would not otherwise constrain. He said if the county uses federal funds to buy property, those funds have to revert, as program income, back to the federal fund when they sell the property. He noted there may be other occasions where land has been acquired and there are remnants that could then be assembled that could potentially be used for housing developments, after the original owners have a chance to rebuy those properties. Senator O'Connell asked if the original owner will receive a discounted rate on repurchase of their properties taken by eminent domain? Mr. Bell stated the property has to be purchased at fair market value. Senator Titus asked when they take property through an eminent domain, is fair market value paid? Mr. Bell said yes, the fair market appraised value must be paid. He said sometimes after the improvement is completed, the land may be worth more because of the improvements done in the area. Senator Titus suggested if they put a freeway through their land, it could be worth less. Mr. Bell stated, "Well, then they may decide they do not want to buy it too. So they still have that option; they do not have to rebuy it after we purchase it from them." Senator O'Connell closed the hearing on A.B. 143 and opened the hearing on Senate Bill (S.B.) 451. SENATE BILL 451: Requires manufactured homes to be included in definition of "single-family residences" for purposes of certain ordinances relating to planning and zoning. Charles W. Joerg, Lobbyist, Nevada Manufactured Housing Association, introduced Gub Mix, Executive Director, Nevada Manufactured Housing Association. Mr. Mix asked for committee support of S.B. 451. He testified that Nevada is in the midst of an affordable housing crisis. He explained that soon many of our citizens probably could not afford a home of their own. He stated manufactured housing is the only form of nonsubsidized affordable housing available to most Nevadans. He stated local city or county ordinances limit manufactured houses to certain areas such as mobile home parks, where the home owners are forced to rent the land, or to purchase lots or acreage in remote, out-of-the-way, or undesirable locations. He stated manufactured home owners should have the right to choose where to site their new home. Mr. Mix testified S.B. 451 joins the lead set by adjoining states by recognizing the importance of this housing resource. He stated California passed similar legislation in the early 1980s. Oregon passed similar legislation in 1992. Idaho passed similar legislation in 1994. He stated although no aesthetic restrictions exist in the uniform building code for site-built homes, he stated the association recognizes the need for manufactured homes to be compatible with existing neighborhoods. He outlined the major provisions of the bill. He stated: Because our homes are built to a national code, regulated by the State of Nevada Division of Manufactured Housing, and are sold and delivered across the boundaries of all of our 17 counties and to every one of our cities; it is important that we have one statewide law that will insure compatibility with existing housing and allow our citizens to achieve that home ownership dream. I urge your support of Senate Bill 451. Senator Titus asked if this bill were to pass, would it overturn zoning limits? Mr. Mix responded this bill would not affect deed restrictions. He stated in open zoning where there are no deed restrictions, it would require the county to rephrase their ordinances in such a way to allow manufactured housing to meet the requirements. Senator Raggio asked if this bill was limited only with respect to ordinances as far as mandating that a manufactured home must be allowed where it designates "single-family residences." He asked if it applied where deed restrictions or covenants, conditions and restrictions (CC&Rs) exist. Mr. Mix responded that in regular residential zones, either in a county or city situation, it would require that manufactured housing be treated the same as site-built housing since the manufactured housing met these standards. He stated if there were existing CC&Rs or deed restrictions, those would prevail. Senator Raggio asked how this would affect the future? Mr. Mix responded a deed restriction is a contract between the buyer and the seller of the land and is not part of the zoning ordinance and is not addressed in this bill, other than the bill does not interfere with those. Senator Raggio asked if it would prevent a county or city from approving a subdivision which did not include manufactured housing? Mr. Mix stated they could approve a subdivision with CC&Rs that prohibit the placement of manufactured housing. A discussion ensued over CC&Rs, stick-built housing, manufactured homes, custom homes, property values, deed restrictions, zoning requests, and development agreements. Senator O'Donnell stated, "You could have a subdivision made up of mobile homes, manufactured housing. I think that's what causes the concern. It is the definition here you've placed in." Mr. Mix responded: Definitions are a problem . . . first of all, the mobile home has not been built for 19 years. Today's product is a manufactured home, totally unlike a mobile home. As far as I am concerned, as far as most people are who have looked at it, manufactured housing is a single-family dwelling. When properly sited with proper aesthetics, it has the same appeal as site- built housing, the same ability to appreciate if the ground it is on is in the right location and the thing is done properly. Senator O'Donnell stated the neighbors contiguous to the property have no control. He suggested the establishment of other zoning for manufactured housing. He stated the bill precludes that. Mr. Mix testified: ...Our intent is to aesthetically be compatible with the area. We understand the problem. A manufactured home can have a stucco exterior. It can have a tile roof, if that's what the neighborhood requires. All of those things cost more money, and we are most interested in affordable housing. If the CC&Rs say every home has to be 3000 square feet, and I cannot produce a 3000 square foot manufactured home, then I am not going to be a player on that lot or in that particular area. All we ask is a level playing field so that we have to meet the same standards that everyone meets. Just remember that in site-built housing, the uniform building code does not require in any way, shape or form, any aesthetic requirements. You can build an 8 feet wide by 40 feet long site-built house that looks like trailer to the uniform building code, and there is not a single thing that any county or city can do about it, because that is the law of the land, currently. I'm suggesting that we are going to give you a lot more so that we do not cause the problems you are concerned about. Senator O'Connell asked Mr. Mix to address lines 12-14. Mr. Mix responded this particular language requires that the home be "ground set" so that it has the same appearance as neighboring homes. He stated manufactured homes are built to a federal standard which requires that the home be installed to an engineered manufacturer's set of standards. Ron Lynn, Assistant Director, Clark County Building Department, testified next regarding S.B. 451. He stated he opposes the bill because the National Manufactured Housing Construction and Safety Act is different from the uniform building code. He said it does not establish installation standards or provide minimum maintenance standards. He explained his experience with manufactured buildings is that maintenance is not provided in the units, and therefore they receive extensive complaints from neighbors regarding appearance and reduction in property values. He cited a recent lawsuit in Clark County, which the county won in district court. He told the committee it is interesting that the bill addresses aesthetic issues. He stressed that the state should not stipulate the type of aesthetics and accessories that a manufactured house requires. He stated this type of accessories and aesthetics raise the building department's plan check and inspection activities. He said the accessories and aesthetics standards in the bill are neither needed nor recommended. He noted there is an accepted definition of single-family dwelling. He testified: We have an accepted definition, unfortunately, by putting it in here, using those terms, you create a semantic confusion. Yes, single-family residence means this in these communities in the state. By making manufactured homes by that definition does not mean single families do not live in it. But by making it that definition, which has readily been acceptable, you are putting it [a manufactured home] anywhere that a single-family residence has currently been zoned for. Mr. Lynn testified there are special zones in Clark County and other counties for manufactured housing subdivisions. He stated there are planned unit developments, and open districts where manufactured homes can be placed. He said this bill creates the situation where new CC&Rs violate state law because they are using the accepted definition of single-family residence. He stated there are many existing properties and many that are being built that do not have CC&Rs. He stated it is not the obligation of the developer to protect the integrity of the community. He stated the government who develops the zoning plans is responsible for that issue. He stressed that Clark County is adamantly against this bill because it adds aesthetics which is not the purpose of goverment. Barbara McKenzie, Lobbyist, City of Reno, stated the City of Reno is opposed to this bill. She stressed that they are not opposed to manufactured housing and the city has ordinances which encourage and provide for manufactured housing. She stated concern in the fiscal note for field inspection required. She stressed the fiscal note "far outstrips the amount of money we are allowed to charge for a flat rate for the inspection of a manufactured home." Senator O'Donnell asked if the definition was a problem for Ms. McKenzie. She responded that they do have concerns about the definition. Senator O'Donnell asked if the standards and law that all counties conform to the same standard are a problem for her. Ms. McKenzie responded that her building officials have a problem with putting manufactured homes next to stick-built homes because of the quality of construction. She stated they do not meet uniform building codes. She said aesthetics is one issue, but the type of construction is another. Kurt Fritsch, Assistant City Manager, City of Henderson, stated opposition to the bill. He stressed this bill discusses a different type of housing which explains why zoning is planned the way it is. Senator O'Connell closed the hearing on S.B. 451 and opened the hearing on S.B. 414. SENATE BILL 414: Makes various changes relating to public administrator, public guardians and other fiduciaries. Jared E. Shafer, Public Administrator, Public Guardian, Clark County, stated he has no amendment to the bill, but would like input from the committee on sections of the bill which they like. A discussion of the real estate portion of the bill ensued. Mr. Shafer assured the committee that all of the estates held in probate go through a listing process so the public can bid on the property, unless the estate is large enough to pay off all debts of the owner and the family requests that the property be given to them to distribute. Pat Coward, Lobbyist, Nevada Association of Realtors, testified in favor of S.B. 414. He gave the committee a history of the bill and cited some problems which caused the bill to be written. He explained the people who are doing all of the work to sell the property are not being given commissions by the judges who are hearing the probate of the estate. A discussion ensued regarding the differences between listing agents, selling agents, procuring agents and disclosure forms. Mr. Shafer told the committee that the intent of the bill is that the listing agent gets their commission, the selling agent gets their commission, and no one else who gets involved gets any commission. A section by section discussion of the bill ensued next. Mr. Shafer asked if the committee opposed section 6 which states convicted felons are not allowed to be a guardian. He stated the potential guardian must sign an affidavit that he or she is not a felon. The committee did not oppose this section of the bill. The committee did not oppose this section of the bill. Mr. Shafer asked the committee if they opposed section 1, the investment section. The committee opposed this section. He asked if the committee had a problem with section 2 which deals with the bonding issue where they are allowed to charge estates which require bonding. The committee did not oppose this section of the bill. He proposed amending the bill by deleting section 1 of the bill. He urged the committee to consider the proposed amendment and the bill. Hearing no further testimony on any of the bills, Senator O'Connell adjourned the committee at 4:00 p.m. RESPECTFULLY SUBMITTED: Teri J. Spraggins, Committee Secretary APPROVED BY: Senator Ann O'Connell, Chairman DATE: Senate Committee on Government Affairs May 24, 1995 Page