MINUTES OF THE
SENATE Committee on Government Affairs
Seventy-second Session
April 2, 2003
The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:06 p.m., on Wednesday, April 2, 2003, in Room 2149 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4406, 555 East Washington Avenue, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Ann O'Connell, Chairman
Senator Sandra J. Tiffany, Vice Chairman
Senator William J. Raggio
Senator Randolph J. Townsend
Senator Warren B. Hardy II
Senator Dina Titus
Senator Terry Care
GUEST LEGISLATORS PRESENT:
Senator Dean A. Rhoads, Northern Nevada Senatorial District
Senator Mark E. Amodei, Capital Senatorial District
STAFF MEMBERS PRESENT:
Michael Stewart, Committee Policy Analyst
Scott Wasserman, Committee Counsel
Alice Nevin, Committee Secretary
OTHERS PRESENT:
Lynda Parven, Administrator, Nevada Equal Rights Commission, Department of Employment, Training and Rehabilitation
James C. Smith, Deputy Attorney General, Civil Division, Office of the Attorney General
Mark H. Fiorentino, Lobbyist, Vidler Water Company, Inc.
Timothy U. Perkins, Board of Commissioners, Lincoln County
Stephen D. Hartman, Executive Vice President and Corporate Counsel, Vidler Water Company, Inc.
Mike L. Baughman, Ph.D., Executive Director, Lincoln County Regional Development Authority
Michael Winters, General Manager, Virgin Valley Water District
Kraig Hafen, President, Board of Directors, Virgin Valley Water District
Kenyon Leavitt, Member, Board of Directors, Virgin Valley Water District
George Benesch, General Counsel, Virgin Valley Water District
Joseph L. Johnson, Lobbyist, Toiyabe Chapter/Sierra Club
Jim Slade, Douglas County Sustainable Growth Initiative Committee
David K. Schumann, Lobbyist, Independent American Party of Nevada
Barry C. Duncan, Lobbyist, Southern Nevada Homebuilders Association
Michael S. Lynch, Lobbyist, Builder’s Association of Northern Nevada
Melody L. Luetkehans, Lobbyist, Nevada Association of Realtors
Carole Thompson, Lobbyist, Douglas County Building Industry Association
Mark Forsberg, Deputy District Attorney, Civil Division, District Attorney, CarsonCity
John Garvin, Co-Chairman, Douglas County Sustainable Growth Initiative Committee
Walter Sullivan, Planning and Community Development Director, Carson City
Mary C. Walker, Lobbyist, Douglas County
Dorothy L. (Dotty) Merrill, Senior Director, Public Policy, Accountability and Assessment, Washoe County School District
Anne K. Loring, Lobbyist, Washoe County School District
Nancy J. Hollinger, Lobbyist, Washoe County School District
Gary Kraemer, Chief Financial Officer, Business and Finance, Washoe County School District
Carole A. Vilardo, Lobbyist, Nevada Taxpayers Association
Nicole J. Lamboley, Lobbyist, City of Reno
Andrew Green, Finance Director, City of Reno
Terri L. Thomas, Finance Director, City of Sparks, and Chief Financial Officer, Sparks Redevelopment Agency
Harry L. York, Lobbyist, Reno-Sparks Chamber of Commerce
Roberta Ross, President, Downtown Improvement Association of Reno
Daryl Drake, Downtown Improvement Association of Reno
Wayne R. Perock, Administrator, Division of State Parks, State Department of Conservation and Natural Resources
Patrick T.C. Smith, Lobbyist, City of Las Vegas
Pamela B. Wilcox, Administrator and State Land Registrar, Division of State Lands, State Department of Conservation and Natural Resources
Tony F. Sanchez III, Attorney
We will take the bills in a different order to accommodate several people who have to catch airplane flights. I will open the hearing on Senate Bill (S.B.) 450.
SENATE BILL 450:Makes various changes to provisions governing Nevada Equal Rights Commission. (BDR 18-475)
Lynda Parven, Administrator, Nevada Equal Rights Commission, Department of Employment, Training and Rehabilitation:
Senate Bill 450 covers three areas where we are requesting changes. I will discuss a proposed amendment (Exhibit C) and provide my testimony for the record (Exhibit D).
Chairman O'Connell:
You are saying most of this is a housekeeping bill to put you in compliance with requests from the auditors?
Ms. Parven:
Yes.
James C. Smith, Deputy Attorney General, Civil Division, Office of the Attorney General:
I represent the Nevada Equal Rights Commission (NERC), and I am here to answer any questions the committee may have.
Senator Care:
I am looking at section 11, subsection 2, paragraph (b):
The Commission may disclose information gathered pursuant to subsection 1 to: … (b) To any other person if the information is provided in a manner which does not include any information that may be used to identity … .
Who would that be?
Ms. Parven:
If I understand your question, it means when we are asked for statistical information, we can provide the information because it does not give the names of the respondent or the complainant. We give out statistical information to the media, to different companies looking for trends, and to a number of groups of people.
Senator Care:
The number of complaints filed and a breakdown of sex, race, or that sort of thing?
Ms. Parven:
Yes.
Senator Care:
Also in section 11, subsection 4, “The Commission may not disclose to the complainant or the party against whom the unlawful discriminatory practice is alleged … .” Could you elaborate on this and settlement negotiations?
Ms. Parven:
We would like to mirror the policies of the U.S. Equal Employment Opportunity Commission using a mediation of sorts where the two parties can come together, discuss their differences, and try to come up with a settlement without either side trying to do discovery to get information that would be subpoenaed later should the case not settle.
Senator Care:
How is the information gathered? Is there a stenographer or recorder when you have these discussions?
Ms. Parven:
They can choose to take notes, but it cannot be recorded. It is just between the two parties and a facilitator from NERC.
Section 7 of the bill was referenced as effective October 1, 2003. You will note in the proposed amendment (Exhibit C), sections 7 and 9 are effective on the date the Governor declares the federal government has determined certain provisions of the Nevada Revised Statutes (NRS) provide rights and remedies for alleged discriminatory housing practices substantially equivalent to federal law.
To reiterate, the amendment merely moves section 7 to not be effective on October 1, 2003, but to be effective along with section 9.
Senator Tiffany:
We reviewed this in the Senate Committee on Finance. I want to make sure the prioritization and confidentiality statements to disclose or not disclose are based on federal practices.
Ms. Parven:
Yes, that is correct.
Senator Tiffany:
Do you have levels for the prioritization just in case someone did not agree?
Ms. Parven:
There will be at least two steps to make the initial determination, and they will also have another option to submit more information prior to us making the final decision.
Senator Tiffany:
You are going to promulgate the regulations?
Ms. Parven:
Yes.
Scott Wasserman, Committee Counsel:
I want to speak to the proposed amendment. Sections 7 and 8 are basically making the same amendment and are parallel sections; one section becomes effective upon the date the Governor declares the federal government has determined that certain provisions of NRS provide rights and remedies for alleged discriminatory housing practices substantially equivalent to federal law. Section 7 amends the section as it exists now. Should this ever occur, section 8 then amends the section to carry the amendment forward. I do not think you want to change the effective dates of those sections. It will become effective now and even if this declaration is made, the amendment would continue in effect. It is a technical amendment for the parallel sections.
Ms. Parven:
What it references is NRS 233.165 which has the clause that says it will be effective on the date the Governor approves it and it is 8 and 9 that are parallel; 7 is different. I guess I am confused.
Mr. Wasserman:
I believe the parallel sections are amended correctly. I will resolve it so we are all in agreement.
Chairman O’Connell:
Ms. Parven, is there a time when you can meet with Mr. Wasserman? Please meet with him to work this out.
I will close the hearing on S.B. 450 and open the hearing on S.B. 487.
SENATE BILL 487:Authorizes certain smaller counties to enter into certain agreements relating to acquisition, development and distribution of water resources. (BDR 20-1312)
Senator Hardy:
I have a statement for the record:
As you know, for the past several Legislative Sessions, I have been registered as a paid lobbyist. Upon my election to the State Senate, I sold my lobbying business for a fixed sum to Mr. Randy Robison. Because the sale was for a fixed sum and because I have absolutely no continuing financial interest in the business, I have been advised by counsel that I may vote and participate on any matter which is lobbied by Mr. Robison.
To avoid any appearance of impropriety, I wanted to bring this to your attention. Staff is preparing a letter to be on file in the director’s office and this will serve as my public notification on this matter.
Senator Dean A. Rhoads, Northern Nevada Senatorial District:
Senate Bill 487 authorizes certain counties under 400,000 in population to enter into an agreement on certain water projects. I was approached several months ago by the county commissioners of Lincoln County and other people from private corporations. They wanted to request legislation which would allow a rural county and a private corporation to enter into an agreement on mutually funding a water development project. I realize this proposal is very confrontational in Lincoln County, and perhaps other rural areas, but I hope this hearing will provide an opportunity for an open discussion. I am not for or against the bill. I brought it up for discussion in the hope it can be discussed and amended, if an amendment is needed, to make it work.
Chairman O’Connell:
Will the proponents of S.B. 487 please come forward?
Mark H. Fiorentino, Lobbyist, Vidler Water Company, Inc:
We represent the Vidler Water Company and Lincoln County on this particular bill. I have with me Tim Perkins, Mike Baughman, and Stephen Hartman.
We want to give you a brief overview of the bill and background on the purpose of the bill. We hope to focus our remaining time on answering any questions or concerns about the bill.
Some of you heard testimony yesterday on another bill affecting Lincoln County. It provided a better understanding of some of the issues currently facing Lincoln County.
Lincoln County obviously has a very limited tax base and revenue stream. Approximately 98 percent of the county is made up of federally-owned land. We have about 4,000 people in the county at this time. They have no population core, no downtown core, no casino core, no county-wide sewer system to speak of, no county-wide water system and very little, if any, bonding capacity. All of those things add up to how difficult it has been to provide for the needs of the citizens. Commissioner Perkins and his colleagues deserve a lot of credit for working hard to find innovative solutions to some of the issues facing their constituents.
Our theme today is economic growth. It is difficult to increase your tax base if you cannot stimulate economic growth within the county. The key to economic growth in Lincoln County and probably elsewhere as well is the development of water resources. You cannot attract businesses or growth if you cannot convince them there is an adequate water supply to satisfy their needs. Senate Bill 487 confirms they have the tools they need to develop those water resources to encourage and develop economic growth. We think this bill is a clarification of existing law.
I will go through the bill. The first page and beginning of page 2 are just the number of findings. I do not think anyone would dispute the facts about the development of water resources and how difficult it is for rural counties without a lot of revenue or other resources. There are only two sections to the bill.
Section 1 says counties smaller than 400,000 may enter into contractual arrangements with private companies to develop water resources. Those agreements can allow them to require these private companies to advance funds and capital, and to repay them out of revenue streams, if and when water is appropriated. Section 1 also says those agreements can include, if the county commission deems it wise, a provision to share parts of revenue streams from the development of water.
Section 2 is a cleanup section, which would be required if you adopt section 1. Many of these water projects involve many years to develop and the expenditures and time it takes to begin and complete a water project often extend beyond the term of a county commissioner. Section 2 clarifies these contracts would be legal even if by definition they extended beyond the term of the current county commissioners.
The concepts we submit are not new. The concept of public and private entities getting together to develop resources for economic development, or for other things that benefit the public good, are clearly not new. Governments are doing them in airports with golf courses, with community centers, and with all kinds of different things to both promote economic development and other things important to the public. Airports have advertisements, billboard contracts, and slot contracts where they share in revenue. A number of government entities are joint-venturing projects where they are sharing in revenue and benefiting from revenue streams.
To avoid further confusion, I will give you a brief description of what S.B. 487 does not do. This bill does not in any way change the existing law with respect to the appropriation of water. That responsibility today is with the State engineer, and it will be after today, whether or not you pass this bill. This bill does not address who can apply to appropriate water. It is absolutely silent on that issue. It does not change whatsoever what the State engineer has to go through when water is appropriated. Obviously, it is a fairly complicated process. The State engineer has to find you have a beneficial use for the water before he will let you take it out of the ground. He also has to find you are not going to negatively impact someone with existing water rights when you take it out of the ground. The bill simply gives counties like Lincoln County the ability to do something they would not otherwise be able to do.
Yesterday you heard in another committee about the power plant project which required the development of water. Vidler assisted in processing the application which cost millions of dollars, somewhere between $3 million and $4 million at this point. Clearly Lincoln County does not have the money. Without the contractual agreement with Vidler, I could fairly say the county would not have been able to develop those water resources or attract interest in the power plant in their community.
We have talked to other local government representatives, for example, Mary Walker and Madelyn Shipman. We also talked with Nevada Association of Counties representatives. After reviewing the bill, I think I got a commitment from them that they had no concerns with the bill.
To summarize, we think there is nothing new in this bill. We think it is a clarification of existing law but an absolutely necessary one, given the investments made and what is at stake for Lincoln County. I would submit to you one final thought. Even if this was brand new and would radically change the law, what would be wrong with it? What would be wrong with encouraging private investment, especially in the millions of dollars and years it takes to develop water resources, this as opposed to spending taxpayer dollars to do it, if you had the taxpayer dollars to do it or ratepayer dollars if you were an existing water authority? We hope you will support the bill.
Timothy U. Perkins, Board of Commissioners, Lincoln County:
I would like to thank you for hearing the bill. I would like to express the importance of this bill to Lincoln County. It is something that we need to be able to do to grow our economy. We have taken steps to hopefully free up some water to develop or take a step to free up the land, but we need to be able to access the resource to help us develop those things. This is very important to our county.
Chairman O'Connell:
It would be helpful if you would remind us of how much of Lincoln County is owned by the federal government. How long have you been working on trying to put this plan together?
Mr. Perkins:
It is actually 98.2 percent. Our tax base is 1.8 percent of the county. We have been working to bring this together for the 4 years I have been involved with the commission, and some of the previous commissioners started the process. This has been an ongoing project to help our county grow. If we cannot, we will depend on the Legislature forever, and we do not want to do that.
Chairman O'Connell:
You do not have many businesses. You have Alamo, Panaca, Caliente, and Pioche. Where is the majority of the shopping done now?
Mr. Perkins:
Caliente is the only city in the county. Actually the majority of shopping from the northern end of the county is done in Utah. We are trying to keep that money in the county and State. It is not good for either one of us to see the money go out of the State.
Senator Care:
Do the parties contemplate a single contract or a series of contracts? What would be the term, or how long would the contracts or contract last?
Stephen D. Hartman, Executive Vice President and Corporate Counsel, Vidler Water Company, Inc.:
It contemplates a series of contracts. It was specific in the original understanding with the board that as a project came into the community, the project would be presented to the county commissioners and they would decide at that time whether they wanted to go forward on the particular project. Whatever the project was, for instance a power generation facility, it would maintain for the life of the project, whatever it happened to be. It could be a variety of other things but it would always be singular as to the project, both from an accounting standpoint and also from an approval standpoint, so the board always had the ability to reassess whether they wanted to move forward again.
Senator Titus:
Water law is very complicated. Would you explain if you enter into this partnership, who owns the water rights? How does that work?
Mr. Hartman:
The water is owned by the people of the State of Nevada, subject to being put to beneficial use by any number of individuals, corporations, or whatever. All of the rights filed on the master plan of Lincoln County were filed in the name of Lincoln County and Vidler Water Company (Vidler). There is always an equal interest in those water rights as they go forward. What we tried to do in the power generation scenario was since the power generators only wanted the water for 42 years, our plan was to convey the water for 42 years and at the end of that time it would revert back to Lincoln County. It would not be to Lincoln County and Vidler, but just to Lincoln County. We believed it was a way to generationally try to protect the county because the use would go away at some point in time and the county would, as all counties have grown in Nevada, have a new use for the water. It would stay in that ownership unless they made a determination to convey a specific project.
Senator Titus:
You said you do not like to see the money going to Utah. I also do not want to see our water go somewhere else. Do we have any guarantee as to what happens in the future or who owns those rights? Can you sell the water to California? Will the water stay in Nevada?
Mr. Hartman:
The water we develop, we want to put to beneficial use in Lincoln County. We do not want to sell it out of county. There has been a controversy over our master plan. It contains a section that refers to selling water to Clark County, and it was put in the master plan just to cover our options. Basically, we wanted to be able to help our neighbors if they came to us and needed help. Our goal and plan is to develop this water and put it to beneficial use in Lincoln County to grow our tax base and to help our constituents. That is our goal.
Senator Titus:
How about Vidler? Do we have any guarantee you will not sell the water to California?
Mr. Hartman:
The county has the ability to make the determination and it has always been that way. With respect to trying to sell it to another state, there is a specific statutory provision requiring the State engineer to give approval. There is currently a contractual provision between Lincoln County and the Southern Nevada Water Authority (SNWA) that does not allow the water to go into Clark County unless one of the entities requests it and the commission determines there is excess water.
Mike L. Baughman, Ph.D., Executive Director, Lincoln County Regional Development Authority:
The county’s economic development strategy really looks at a value added with this water. For example, if there is a demand for a water-based beverage bottling facility in the Las Vegas valley, for example another Ocean Spray, we are developing an industrial park in Alamo and have 250 acre-feet of water rights there. We would like to see the next water or beverage bottling facility located there. Let us move the water down in the form of a bottle. It would provide jobs and income in Lincoln County. The power project takes water, converts it to electricity, and moves the water into a marketplace. We want to put the water to use to create additional income and employment opportunities in the county. Hopefully, we have a product that moves out of the county, but then it becomes a part of the basic economy.
I would also note there is a precedent within Lincoln County. Two sessions ago, the Legislature passed a Nevada Test Site (NTS) regional development act, Assembly Bill No. 528 of the 70th Session. This was a bill to allow the NTS development corporation to enter into partnerships with Nye, Lincoln, and Esmeralda Counties to develop economic assets, and create jobs and income around the Nevada Test Site. The NTS regional development corporation has helped Lincoln County to develop both the Caliente industrial park, which is going to bid right now, as well as the Alamo industrial park, which is a bit further behind. This is a situation where this nonprofit corporation, the county, and the city have put assets on the table, and are going forward with these projects. The problem is the NTS regional development corporation is government financed; they do not have a lot of money. At this point, they do not have any more money to help us with our projects.
Caliente is going forward. We have $1.2 million and it will go to construction. At this point, Alamo lacks development funds for their industrial park. It is a very good example of the public-private partnership, which is working, and it has jump-started these projects. We think this proposal is an extension which will allow us to really do some serious economic development in Lincoln County.
Senator Titus:
I have served on the board and it is a good series of projects. Is there any connection between what you are doing and what is planned at Coyote Springs?
Mr. Hartman:
We have had discussions with the Moapa Valley Water District (Moapa). As you know, a fairly large portion of the Coyote Springs project lies within Lincoln County. The board began meeting with Moapa some time ago and we have had general conversations with SNWA, as well, about how to deal with the project. Currently the view is as the project comes on board, there would be a way in which Moapa would be the retailer and Lincoln County would be able to provide water to serve the portion of the project occurring within Lincoln County. That is what they are hoping for.
Mr. Fiorentino:
I think Mr. Hartman answered the question about whether any of this would be used outside of the State. I want to reinforce we think there is current law that prohibits it. Certainly, if it makes the committee feel better to reinforce it in this bill and say any water resources developed as a result of these contracts has to be used within the State of Nevada, I think we would have no objection to making sure it was in the bill.
Senator Hardy:
I appreciate the proponents of the bill. I spent more time with them on this piece of legislation than I have with anyone else on any piece of legislation. I appreciate their forthrightness and the dialogue we have had on this issue. I have some serious concerns with this, and they are aware of my concerns.
Lest we think this is only an issue that deals with Lincoln County in this particular situation, we are making a policy decision here regarding a State policy for all counties under 400,000. This has far broader reaching effects and there are peripheral agreements that impact and help resolve some of my concerns with regard to Lincoln County. There is an agreement with the SNWA, for example, that will not allow them to sell the water resources outside of Lincoln County unless requested by another water entity. I think this takes care of a large part of my concern with regard to the specifics in front of us on the issue.
I think there are portions of this which are codified in the State law, things that are in current practice; but I think this has significant sweeping effects on water law, on the doctrine of prior appropriation, and contemplated contracts under this law. I want the committee to understand this legislation came forward because of an existing contract and it has had an attorney general’s opinion. The attorney general opined the agreement between Lincoln County and Vidler was not legal for two reasons. First, it bound future county commissions; secondly, and more significantly in my mind, it found the objective of the agreement did not satisfy a public purpose. Specifically, profit making does not satisfy a public purpose.
Please look at section 1 of S.B. 487. I am bringing this up now because I want the proponents of the bill to have the ability to address my concerns. Section 1, subsection 2, clarifies two things. The board of county commissioners in a county whose population is less than 400,000 can enter into an agreement with a private corporation to pay for the acquisition of water resources; and to pay for and coordinate the planning and development. It says an agreement entered into may provide for the county to reimburse, from revenues, the private corporation for any of these items. To this point I have no problem. We are talking about essentially refunding agreements which are done all the time.
My heartburn comes in section 1, subsection 2, paragraph (b), the agreement may also provide for the sharing of net proceeds between the county and the private corporation. We are saying this bill has the effect of legitimizing water speculation. We are allowing a private entity to come in and for a profit, sell water, sell a natural resource. This is where I have difficulty. The commissioner mentioned, and I am very sympathetic to the county’s plight with not being able to attract economic development. It is a problem in a lot of places. You do not need infrastructure until you have economic development. There are things in place to help you deal with infrastructure and acquiring water resources. It is a function water boards serve in every other municipality of which I am aware. There are impact fees, exactions, and refunding agreements to help resolve those issues.
In reading the bill, and with my historical prospective on this, at one point I sat across the table from a county commissioner who said, and I know this is not the position of the county commission today, “It is our water because it is geographically located in Lincoln County. We will develop it and sell it as we see fit.” This bill has the potential to do that. There is nothing in the law currently that prohibits Lincoln County from economic development the same way everybody else develops economically. The only purpose this bill would serve would be to allow you, in my opinion, to make water an instrument of commerce for the purposes of economic development and gaining profits.
I have some very significant concerns. The comment was made they could not have attracted a power plant in Lincoln County without the agreement with Vidler. Well, everyone else does; everyone else requires as a condition of approving the power plant, the infrastructure to that power plant exists for purposes of providing water.
Those are some initial comments I want to make and I would like to give the proponents an opportunity to respond to my concerns. As far as the question about water leaving the State, there is an agreement in place between Lincoln County and the SNWA which provides a high level of comfort that in the scenario we are talking about today, it is not going to occur. Vidler also owns significant water resources in Pershing County and other counties where it could occur and could apply. I wanted to express my concerns and give them an opportunity to respond.
Mr. Fiorentino:
I will say for the record some of the things I have tried to say to you privately to address some of those concerns. There is nobody in this room who is interested in appropriating water and selling it to California or anywhere outside the State. We can add a provision in the bill to say that if you want. I think it is already precluded under State law.
Senator Hardy:
I do not want us to get caught up on selling water outside of the State. My problem is interjecting a middleman whose purpose is to make money by selling a natural resource of the State belonging to the people of the State. My primary concern is if Vidler and Lincoln County sell water to the Virgin Valley Water District (VVWD) or to SNWA, I guess it is fine, but it is the method we are going about it and the level of profit that will be taken from it.
Mr. Fiorentino:
This is the heart of the issue. I will say it again. If you do not take any action on this bill today, there is nothing in the current State law that I am aware of which would prohibit Lincoln County from appropriating the water and selling it to the power plant or the Las Vegas Valley Water District today, if they had the money and the resources, and did not need someone like Vidler filing their applications and spending $3 million. There is nothing in the law today that would prevent Vidler Water Company, without Lincoln County, from filing applications, spending their own money, and selling the water to the power plant or to the SNWA, if they need it.
I do not think we are talking about a for-profit enterprise and I do not think we should get caught up in those discussions. If the attorney general’s opinion on that point is right, there are a lot of illegal contracts. All of the slot contracts at the airport share revenue. They share revenue from billboards at the airport. There are golf course contracts and other public facility contracts all across the State where governments have brought in a private entity to operate it, they have contributed the land, a resource that belongs to the people of Nevada, or to Clark County, or whatever the case may be, and the private company puts in the capital, builds the buildings, and pays them a stream of revenue. I say we should not get caught up on this because I think it is just an innovative way they structured their contract to the benefit of Lincoln County.
If Vidler had come to Lincoln County and instead of saying let us put up the money and you pay us back when there is revenue, and then you pay us $5 million a year in order for us to do it. That would be much worse for Lincoln County than the way they did it. Under today’s law, Vidler could have approached Lincoln County and said for $50 million we will develop the water permit for you. I think we are getting caught up in definitions and missing the point. You and I have been over this numerous times. I think if you are concerned a private entity, Vidler or anyone else, can profit from the sale of water, you need a different bill to fix the problem. This bill does not address that issue.
Mr. Hartman:
The issue of being able to generate impact fees, exactions, and refunding agreements works in most of the counties or cities because they have more than 1.8 percent to deal with. When you do not have the base infrastructure, you do not have the base numbers; when you end the year with about $14,000 to $70,000 left in your budget, you cannot do it. It is a practical impossibility. You have to find ways to accomplish those goals.
These are the ways to do it. Rural Nevada is very different from North Las Vegas or Washoe County, where you have certain things available. Moreover, I do not think this is an attempt to perpetuate or create speculation of water. There was a specific project taken to the Board of Commissioners of Lincoln County. They went forward on a specific project, which was not speculative. The only speculative thing was whether there was actually water there. Unless you have a rate base or a taxpayer base, you cannot accomplish those goals. If you are a community trying to get off on the very first leg, it really becomes doing the ultimate chicken and egg analysis.
Senator Hardy:
I understand Lincoln County does not have the financial wherewithal to put the infrastructure in the ground and then go out and attract economic support. I understand it, but it is the same for everybody else in the State. No one has the ability. I have been involved in the legislative process for 12 years. To protect the concept of exactions when we talk about impact fees, these actions are necessary for cash-poor communities. They need to be able to say to a developer, if you are going to come in and build your development, you are going to run the infrastructure. We are going to oversize it and you will get your money back through refunding agreements.
Regarding Mr. Fiorentino’s comments on the attorney general’s opinion, I did not think it was so far reaching. It did not say those kinds of arrangements you spoke to were illegal. In the summary it spoke specifically, saying the agreements entered into between Lincoln County and Vidler had, as their primary purpose, development and purveying of water resources for profit. That is what I am speaking to. I will leave it there for now.
Chairman O'Connell:
Are there other comments?
Mr. Fiorentino:
I did not mention the attorney general’s opinion is a legal opinion. It ends with a sentence which says we are not saying the Legislature could not grant this authority, we do not think they have. It then references a footnote that says for example, it has before; we have granted the right to the VVWD to buy and sell water, and trade water rights.
We met with the attorney general. We met with the attorney who wrote the opinion. We gave them this bill. They are obviously not going to take a policy position on whether the bill is the right or wrong thing to do, but they did authorize us to tell you they think it absolutely addresses their opinion and it is well within your purview to adopt it.
One final thought, I disagree with respect. Let us use the power plant as an example. It is impossible as a practical matter for Lincoln County to say you can bring your power plant here, but you have to pay huge exaction fees; because the power plant is going across the county line into Clark County, where they have developed infrastructure and they do not pay the same exaction fees, or much less exaction fees because they are not starting with you having to develop the water rights to begin with. We have the water rights. We just have to figure out how to get them to you. As a practical matter, the power plant will go to Clark County where they do not have to pay those exaction fees. I think that is what they experienced in this particular case.
Senator Hardy:
If they did come across the county line into Clark County, and if they asked the VVWD to provide a will-serve letter, there is an ordinance in the VVWD that would require they bring the infrastructure from the line to their proposed site. That is the exaction; there is no exaction fee, it is the requirement. They will bring water to their site. It is done all the time. The growth Mesquite has experienced in the last few years is exactly similar to what you are trying to accomplish in Lincoln County.
When I first started representing Mesquite, as an Assemblyman 10 years ago, there were 2,400 people in the town. They faced all of the same problems you are talking about. When economic development came, the community grew.
Mr. Fiorentino:
That is exactly how the power plant agreement works in this particular case. The power plant is required to provide the infrastructure to get the water to the site. It is a different issue than providing the $3 million or $4 million it takes to develop the water rights, to begin with, to put the water in the pipes.
Senator Care:
In light of the dialogue between Senator Hardy and the panel, could you go over one more time the role of the State engineer? He does not have anything to do with the terms of the contract but could he at some point say I am not going to allow execution on this contract because? What is his role again in relation to what you want to do here? I would like just a little more specificity.
Mr. Fiorentino:
In the case of the power plant, we had to file an application. In this particular case, it was a very expensive application, somewhere between $3 million and $4 million. Both the test wells and the monitoring wells have to go very deep. The State engineer has to make a finding there is a beneficial use; that today when we file the application, there is someone who can use it. In our case, to bring the power plant in, we had to show the power plant contract.
The State engineer also has to make a finding that if he allows us to take the water out of the ground, it will not negatively impact anyone else who has existing water rights in the area, or downstream or down basin, whatever the correct technical term is. He does not have control over the contracts; but he can, as I understand it, and he has issued water permits for this power plant.
The State engineer knows very well the dispute on whether these contracts were legal, because there were interests trying to get him to dismiss or deny our water applications based on the legality of the contracts and not on water law. He appropriately said it was not his issue. The issue is whether there is water here and will it negatively impact anyone. He has issued our permits.
In our particular case, and maybe Mr. Hartman needs to answer this, but we still have to make a continuing showing to the State engineer that we are continuing to put it to a beneficial use and we are not negatively impacting anyone. He does have certain revocation powers, if we go beyond putting it to beneficial use, or go beyond what he granted when he granted the application. Mr. Hartman, is that right?
Mr. Hartman:
Yes, that was a good description.
Chairman O'Connell:
It there anyone else to speak in favor of S.B. 487? If not, please come forward if you have a concern over this issue.
Michael Winters, General Manager, Virgin Valley Water District:
I have with me today Kenyon Leavitt, Board Member; Kraig Hafen, Chairman of the Board; and George Benesch, our legal advisor.
We are opposed to this bill for several reasons. I will give you a brief overview of the VVWD. When I moved to Mesquite in 1993, 2,700 people lived there. Today we have over 16,000 people. At one time, we were the fastest-growing small city of under 100,000 people in the nation. We have made it on our own. With the growth of VVWD, we have seen what could happen to Lincoln County, our neighbors to the north. Our basin is unique in the way we are situated. We share a water basin with Utah and Arizona, Clark County, and Lincoln County. We have 12,000 acre-feet of permitted water rights to use in the basin. We are presently using about 4,500 acre-feet. Several years ago, seeing what happened with the growth in Mesquite, we approached the Lincoln County commission and offered to help them develop the land to the north in the Lincoln County land act, which is in the neighborhood of 13,000 acres. Even though we did not have to, we wanted to help them. When we approached the Legislature two sessions ago, we were advised not to go forward because Lincoln County did not want our help and would fight the bill. This is where we are today.
Regarding the power plant, we approached the county and told them they could use one of our existing permits to drill on site as long as they would drill or construct an air-cooled power plant. They wanted a water-cooled plant because it costs less to build and was more efficient. An air-cooled plant would use about one-third of the water. We did not hear from them again. The infrastructure to get water to the power plant project was on site and could have happened, but it did not happen.
We believe approval of this bill would greatly affect VVWD rates in the future. We know one day we will be out of water and we will have to approach our neighbors to the north to bring in water. Our concern is they can set a rate now. In the future if something beyond our control happens to the company, if they were to go bankrupt, where does it leave the water district? As I understand it, the contracts, signed with Vidler and Lincoln County, would be out the window. A new company could come in, create a new contract, and hold us hostage by increasing the water rates.
One of my responsibilities as a general manager is to provide water to our customers at the cheapest rate possible. My belief is we, as a water district, can bring the water to our customers at a cheaper rate than a private developer can because prior to the district’s creation in 1993, the Mesquite farmstead was a private, nonprofit corporation. The only funding available was known as the farmer’s home loan. It was the only source of money they had. They could go to a bank and get a higher interest rate, but it was the only source available.
The creation of the water district opened many doors for us. We were able to get grants, low-interest loans, and bonding from the State-revolving fund. Today the water district has received over $10 million in grants for infrastructure because we have the government entity clout behind us. Lincoln County, I believe, could do the same thing if the Legislature would create a water district for them. We would help them. I cannot speak for SNWA or the Moapa Valley Water District, but we have worked with those agencies in the past and we work very well together as government entities leaving out the middleman. We are very concerned with water rates and contracts with the middleman in there.
Chairman O'Connell:
Do you contribute at all to the tax base?
Mr. Winters:
We do not pay any taxes.
Chairman O'Connell:
Mr. Fiorentino, in your agreement would you pay property taxes to the county?
Mr. Hartman:
Yes, the way it was structured, a private entity would own the infrastructure and they would pay an ad valorem tax and a personal property tax.
Mr. Winters:
We have offered to help them with their land act. We would sell water to them and treat them as a customer. We drafted an agreement for them to sign to get them automatic revenue. They would not have to pay back an infrastructure; they would get revenue automatically in the form of a franchise tax; they could set a rate, and we would deliver water to them. The rewards would be immediate. They would not have to pay the capital expenses up front. In this land act, we have been unable to get a number from them, but our engineering people tell us it would be close to $70 million to bring water from the nearest basin to this land act. I cannot speak for the board, but I believe if we were working with Lincoln County, we could help them through it.
Chairman O'Connell:
You made this proposal and they indicated they were not interested?
Mr. Winters:
Yes, we made the proposal and they were not interested.
Kraig Hafen, President, Board of Directors, Virgin Valley Water District:
I serve on the board and have been involved with the negotiations, not only with the commissioners but with individuals from Vidler. The board is responsible to provide quality water at a reasonable cost. It is no secret water is the most valuable commodity we have in Nevada, most definitely in Mesquite. We know in the future we will need more water. Lincoln County is probably the closest source of water.
Mr. Winters alluded to how a number of years ago the residents of the Virgin Valley came and legislation was created to allow the VVWD, the greatest thing that ever happened to the area. We have been able to bond, get grants, and meet the demands of growth without sharing the profits. We are nonprofit. We do not have a middle person. Elected officials and the people in the valley make the decisions. One of my concerns with this bill is we are adding another tier of expense to the economic development of Lincoln County. I am not sure at what point they will have a benefit come back. I have asked for some of the projections and have not yet seen those, so it is a question I have. I hope we create legislation that is not only good for Nevada but for the individuals we are trying to help. My issue is I am not sure it is what we are doing at this point.
Kenyon Leavitt, Member, Board of Directors, Virgin Valley Water District:
I am new to this process and I do not understand everything. As I have tried to study and learn about this bill, I have always understood water in the State of Nevada belongs to the people in the State. My concern is this bill might change that. I formerly served on a town advisory board. On looking at this bill, it seems to say contracts will be made and boards will be held accountable when they do not have a say over it. As Mr. Hafen said, it is our responsibility as the water board to provide cheap water to the residents of the Virgin Valley. Sometime down the road, if this bill passes, I feel those water rates will go up. I am opposed to S.B. 487.
George Benesch, General Counsel, Virgin Valley Water District:
Senator Hardy mentioned Mesquite when the population was 2,400. When I started working with the water company in Mesquite, I believe there were 1,700 people and Mr. Hafen has lived there all of his life and can remember when it was down in the hundreds. It is a totally different situation today. My opposition to the bill and remarks are twofold. I am concerned it is just a matter of time before the VVWD will have to go to Lincoln County to supplement its water source. I do not personally think it is appropriate or good policy to have to pay a private entity their profit in providing a resource which belongs to the people of the State. Nevada Revised Statutes 533.024 provides water from all sources above and beneath the surface of the ground belongs to the public.
Lincoln County and Vidler Water Company have sought to appropriate all the unappropriated water in Lincoln County, bundle it up, and control it. They do not like to think of it in these terms, but the net effect I see of this bill is the encouragement of monopolization and speculation with regard to the State’s limited water resources. This is being done under the veil of economic development. Acquisition of water rights from monopolization and speculation has been discouraged or not sanctioned under western water law in virtually all of the western states. Utah, for example, has a statutory requirement the State engineer make a finding that the appropriation is not filed for purposes for monopolization and speculation.
We think acquisition of water rights in a partnership with a corporation like this is not an appropriate county government function. This was spelled out in the attorney general’s opinion. The attorney general did opine there was recourse to come back to the Legislature; but if you review the opinion, the reasons the attorney general offered do not go away if this bill is approved. I would urge you to take a look at the opinion. We do not like to be thought of as bad neighbors, but we do have a legitimate concern here. Right now it is the tying up of the water; there is no project contemplated, and the net effect is to preclude other legitimate users from appropriating the resource.
This happened in Amargosa Valley a few years ago. Amargosa Valley resources sought to have the State engineer forfeit some 25,000 acre-feet of water, which they sought to appropriate. Every time the State engineer tried to pin them down as to the proposed beneficial use, he got a different answer. The last proposal was in-place use of the ground water for fish and wildlife. The State engineer denied the applications on the grounds a project must be contemplated at the time of the appropriation. Tying up a resource for monopolization and speculation, which belongs to all of the people of the State, was found to be inappropriate. We feel it is analogous to what is being done here. The proponents of this bill have attempted to tie up all the unappropriated water in Lincoln County, to hold the water and have it available for their purposes. This is not the way the water law used to work.
The VVWD service area abuts Lincoln County. Mr. Winters mentioned the Lincoln County Land Act. It is right up against the boundary or service area of the district. We know Lincoln County is struggling and we would like to work with Lincoln County. We have tried to keep the door open. We have real trouble with a for-profit water company coming in with their own ideas on how much needs to be made, and what we feel is a profit margin that has to be there. If they are not making money, we feel like they will not be around. From the standpoint of the water law, if it is not broke, we do not feel you should fix it. The water law works very well the way it is.
Senate Bill 487 would sanction the monopolization of unappropriated water for later speculation with for-profit entities. Looking at NRS 244.320, addressed in the same bill, I feel it was wisely enacted to keep the county commissioners from binding counties in perpetuity. My feeling is NRS 244.320 mandates financial accountability and should not be compromised because of what we view as profit motivation.
Chairman O'Connell:
Does anyone else wish to speak on S.B. 487?
Joseph L. Johnson, Lobbyist, Toiyabe Chapter/Sierra Club:
We have concerns about this bill and would like to be kept informed. We may be in opposition.
Jim Slade, Douglas County Sustainable Growth Initiative Committee:
I did not come to comment on S.B. 487 but as I listened to earlier testimony, I was inspired to make a few brief comments. I am not well versed in this bill or the issues and problems facing Lincoln County; however, as Senator Hardy rightly pointed out, this is a Statewide bill. If I heard correctly, it applies to all counties under 400,000 people, which at this point in time would be 16 of the 17 counties in our State. Certain phrases mentioned earlier raised my concerns. When a bill talks about developing water resources to encourage economic growth, this can mean many different things to many different people. To some people, economic growth is equated with residential growth. This is a concern of mine and of many in Douglas County. There is talk of intermingling the water resources of Douglas, Carson City, Lyon, and even Churchill counties. This is a Pandora’s box, which could create all sorts of problems down the road. Not only would I be concerned about selling water to California, an issue Senator Titus raised, but also about the possibility of buying water from California in order to allow further growth beyond the capacity of the ground water of any given county.
I believe residential growth should be controlled by available water. As you know, the State water engineer does have the ability to limit growth by limiting the issuance of building permits, if there is insufficient water. I urge you to contemplate these corollary issues and the effects Statewide that this bill might have.
Chairman O'Connell:
I will close the hearing on S.B. 487 and open the hearing on S.B. 279.
SENATE BILL 279: Imposes requirements relating to certain actions proposing to limit number of dwelling units that may be constructed within city or county during specified period. (BDR 22-913)
David K. Schumann, Lobbyist, Independent American Party (IAP) of Nevada:
I am here partly in support and partly in opposition of S.B. 279. I have a problem with section 5 of the bill. I do not think you can put these kinds of onerous things on just one type of bill. We have a bill, S.B. 468, which raises the real estate tax cap from $3.64 to $4.50. Nevada may very well need to have a proposition 13 very shortly. The people who put proposition 13 into effect in 1975, in California, had to do this sort of groundwork. That bill has been found to be constitutional all the way to the U.S. Supreme Court and is still approved by a two-to-one margin among Californians.
SENATE BILL 468: Revises limitation on total ad valorem tax levy. (BDR 32‑625)
While I agree government should have to jump through the hoops before they start taking away someone’s right to develop their property, I think the attorney general could give an opinion on it, and one of the fiscal officers of the State could give an estimation of the total amount of takings the county would be responsible to pay. If you have private property and you want to develop it, and the State takes away the right to do that, it is a taking and the State should have to pay for it. I am in favor of the bill, except for section 5.
Senator Mark E. Amodei, Capital Senatorial District:
I am appearing today on behalf of S.B. 279, which was requested by an attorney from Douglas County. There was an initiative petition passed in the last election which concerned the rate of growth in Douglas County. I think it is before the Nevada Supreme Court now. My first point is if you look at section 7 of the bill, on page 9, it indicates the act becomes effective on passage and approval. This legislation has no impact on presently pending matters before the Nevada Supreme Court, as far as the last election cycle’s initiative petition in Douglas County. This is in a going-forward context. I would draw your attention to section 2 of S.B. 279 where it talks about the requirement of four findings to be made by any governmental entity or petitioning entity wanting to limit the rate of growth. The description of the findings in the bill is similar to those found in chapter 278 of NRS. I will read two excerpts so you can see, for purposes of tracking, what we require for development-related approvals already in chapter 278 of NRS.
Nevada Revised Statutes 278.020 says:
Regulation by governing bodies of improvement of land and location of structures for general welfare. 1. For the purpose of promoting health, safety, morals, or the general welfare of the community, the governing bodies of cities and counties are authorized … to regulate and restrict the improvement of land and to control the location and soundness of structures.
We see a reference there to the promotion of public health, safety, and welfare.
We are talking about action on a tentative map; NRS278.349, subsection 3, says: “The governing body, or planning commission if it is authorized to take final action on a tentative map, shall consider: … .”
This is important because these four areas we are saying are appropriate areas for consideration when you are thinking about doing one of these things. I will not read all of this, but this section has subsections (a) through (j) which are ten things that talk about the availability of water, utilities, public services, environmental issues, master plans, and all those traditional things considered before approving something significant in the development context.
I think the way this bill has been drafted, it is not aimed at strictly the initiative petition process. This says if a county commission or city council wants to do this, they should also make these findings. Other important distinctions are the findings required, if you are in the initiative process, they are not required after you hold a mandatory hearing. You are not required, if you are an initiative petitioner, to use any of the findings your political subdivision city or county entity has used. You are completely free to make the findings you think are appropriate for your petition; however, it does change the policy saying if we are going to impact something as significant as this in a growth context for our community or county, you should make some level of findings in support of it. It is very open ended in terms of how those are made and who can make them.
Finally, the operative provision, for purposes of initiative petitions, is found in sections 5 and 6 of S.B. 279. It does not change any of the existing requirements or move the bar higher, it just says if you are initiating an initiative referendum in a county or city, you have to comply with these same four requirements which are indicated in section 1 of the bill.
I received correspondence from the Builder’s Association of Northern Nevada. They had some concerns about how this would play out in a regional planning context, which is significant to people in Washoe and Clark Counties. They suggested if this is something the committee is interested in, perhaps a population amendment. In looking through chapter 278 of NRS, we have exempted the activities of the Tahoe Regional Planning Agency for purposes of it taking precedence over any local government jurisdictions. There are several ways to deal with it. If the committee thinks it is important to have some level of findings, whether you are a county commission, a regional planning entity, or an initiative petition group, you ought to have some findings for this as part of the process, and it ought to apply Statewide because obviously the initiative petition process is available to citizens throughout the State.
Chairman O'Connell:
Mr. Schumann was concerned about section 5, page 7, of S.B. 279. Would you want to comment on it?
Senator Amodei:
Section 5 of S.B. 279 is identical to section 6, except section 5 applies in a county context and section 6 applies in a city context. I did not hear Mr. Schumann’s testimony, but the only thing it adds beyond existing law is you plug in these findings as part of your process in an initiative process. If you are concerned about it, I suggest you are concerned about the bill.
Senator Titus:
When the questions or findings are filed, who do you file them with? How does that work?
Senator Amodei:
When you file the initiative petition, depending on where you file it, if it is a Statewide petition or a local petition, there are certain things you are supposed to include in the petition. If you look at section 5, it indicates what is in existing law, and what would be added to the list would be a description of these four findings found at the top of page 2 of S.B. 279.
Senator Titus:
Would this become part of the ballot question? What would be the purpose of this?
Senator Amodei:
I do not think it would become part of the ballot question process because the wording of the ballot question is often left up to the Legislature for Statewide matters. I do not think the intent was to require this as part of the actual question on the ballot. It is to require it as part of a standardized process which many elected boards go through already. In order to certify the petition, you would need a statement concerning these four issues.
There might be language on some of the four issues included in the actual ballot question, but it was not intended to require a detailed description of the four issues be included in the initiative process. The objective here is to require more of a process, whether you are a county commission, a city council, or an initiative group, when you are dealing with areas like this. It is in the context of chapter 278 of NRS because you are dealing with master plans, growth issues, and zoning issues. We tend to require, under existing statute in chapter 278 of NRS, there be much circumspection, much notice, and much procedure before affecting property rights.
Senator Titus:
I was involved in passing a bill requiring developers to do infrastructure impact studies prior to getting major developments approved by local governments. You are asking developers to justify why they want more housing so they can see what kind of a burden it places on government and on taxpayers. Are you asking local governments to justify why they might want to limit development? Is that what you are saying?
Senator Amodei:
Yes, there would be the same findings procedure although this would be the smallest level of findings. If you want to build more, you have to justify these and if you want to build less, you have to have the discussion of those issues as part of the procedure also.
Senator Titus:
The difference is you are asking the developers to justify it to government who makes the ultimate decision. In this case, are you asking government to justify it through developers?
Senator Amodei:
We are asking government to justify everything they do, whether it is more or less. This bill would ask the county commission and the city council to justify placing, like in Carson City, where there is a 3 percent growth limit. If it were to be enacted in Storey County, this would say to the Storey County commission, if you are going to do this as a county commission through an ordinance, you must have the discussion of these four items in your ordinance. If the people of Storey County wanted to pass an initiative petition to say we want to limit growth, they would have to, as part of their initiative petition when they file with the Storey County clerk, have this same discussion of the four items in the petition before it can be certified as appropriate under the law.
Chairman O’Connell:
Is there anyone else wishing to speak in favor of the bill?
Barry C. Duncan, Lobbyist, Southern Nevada Homebuilders Association:
We think this is a good idea and we support this bill. It requires some additional diligence when a community is deciding to make these types of development decisions. We believe it is a wise and prudent thing to do as these decisions are made from community to community.
Michael S. Lynch, Lobbyist, Builder’s Association of Northern Nevada:
We have some concerns because of the unique and oftentimes adversarial regional planning process in Washoe County. There are currently several bills to address our concerns.
This bill would give one more opportunity to contest a region-wide local jurisdiction plan. For instance, our regional planning commission which drafts the regional master plan, could include and make the findings. Hypothetically, if Reno and Sparks felt Washoe County was fiscally inequitable with the tax distribution, they could limit the number of dwelling units built in a given year. They would be the one to make the findings. It would be an unfair situation if Washoe County property owners could not vote for the representatives who drafted the plan and voted for it.
The bill has a noble purpose but it also has an unintended consequence regarding the local and regional planning process. We feel perhaps it is not necessarily using a population cap to amend around Washoe County. Perhaps saying those jurisdictions with a regional planning process pursuant to NRS 278, if that regional planning process went away, they would fall under this statute and it might be one technical way to resolve the concern.
Melody L. Luetkehans, Lobbyist, Nevada Association of Realtors:
We support S.B. 279. We have always been supportive of anything that opens up housing including the idea that when a bill is proposed to limit housing growth, the government entity proposing it take a look at the whole housing picture instead of just the small immediate concern they may have. We believe the questions being asked are reasonable and the public needs to know how the housing is going to be affected, especially affordable housing in any given area. We believe this is a good bill.
Carole Thompson, Lobbyist, Douglas County Building Industry Association:
I am here to speak on behalf of our membership. We would like to take a neutral position on S.B. 279 at this time. I am presenting my testimony for the record (Exhibit E).
Chairman O'Connell:
Is there anyone here to testify against the bill?
Mark Forsberg, Deputy District Attorney, Civil Division, District Attorney, Carson City:
The city has some concerns about the bill. Carson City is a city, a consolidated municipality with a growth management ordinance since 1978. The ordinance was passed because of the city’s inability to provide resources to new development, particularly water and sewer capacity.
Carson City has since added other essential services to the list of items which must be considered in managing our growth, such as public safety and fire protection. I think Senator Amodei agrees with me this bill would be prospective only and would not affect Carson City’s current growth management ordinance, unless the city elected to amend it. I suggest the bill might be a disincentive for us to fine-tune the ordinance, because it could bring us within the purview of this bill, whereas otherwise we would not be. We have concerns about the necessity of making the findings as required by the bill. Carson City cannot make the findings without the apportionment of housing needs between the city and the region. In Carson City, the region and the city are coextensive, so the city would not be able to make such a finding. We would ask you consider language in the bill and recognize Carson City’s unique status as a region, a city, and a county.
Furthermore, we have questions about who would judge the adequacy of the findings. We are concerned about the post hoc challenging of the findings made in the courts. We think they are broad and vague and may lead to challenges about whether, for example, our regional planning commission and board of supervisors can determine there is or is not an adequate housing supply in Carson City. Our growth management ordinance is strictly based on our ability to supply services and not on the availability of housing. We would like to keep it that way. Our growth management ordinance has worked many years and has been enforced by both the community and the building community. We have concerns about the scrutiny any decision would have under this bill.
John Garvin, Co-Chairman, Douglas County Sustainable Growth Initiative Committee:
I am testifying in opposition to S.B. 279. I will present my written testimony for the record (Exhibit F).
Walter Sullivan, Planning and Community Development Director, Carson City:
Regarding Carson City’s growth management program, I was involved in the initial research on our growth management ordinance in 1978. Since that time, the ordinance has evolved somewhat and there have been three major changes. In 1983, the city adopted a 3 percent growth rate; in 1988, in order for a builder to acquire a growth management entitlement, the city adopted they must pay for sewer and water fees, which preempted the hoarding of permits; in 1999, the board of supervisors, after many years, relinquished the hearing process for industrial review of our growth management ordinance requirement to the planning commission themselves. The ordinance is not perfect, but it has worked for about 25 years. We have a public notification process and we involve the builder’s industry, utility companies, school districts, State agencies, and city departments. Many people are involved with our process. We have public hearings through the planning commission which acts as our growth management commission, as well as the board of supervisors. The board passes a resolution every year regarding the growth management process.
Since our last major revision in 1988, Carson City has experienced approximately a 1.6 percent growth rate on average. We came close to allocating all the entitlements only in 1 year; the rest of the years were at 1.6 percent. I have concerns with the findings of S.B. 279. I think Carson City has stepped up to the plate with a process in use for 25 years, and although it is not perfect, it serves Carson City very well. I would agree with Mr. Forsberg’s comments as to where Carson City stands on this bill.
Mr. Slade:
I speak on my own behalf, and also as a member of the Douglas County Sustainable Growth Initiative Committee. I am presenting my testimony for the record (Exhibit G).
Mary C. Walker, Lobbyist, Douglas County:
I would like to state for the record Douglas County is neutral on this bill. I would also like to state the same thing I stated when I was asked to assist Senator Amodei in introducing this bill. This is not a Douglas County bill. It was a request by a Douglas County constituent to Senator Amodei.
Chairman O'Connell:
I will close the hearing on S.B. 279 and open the hearing on S.B. 402.
SENATE BILL 402: Revises provisions governing distribution of certain property tax revenues to redevelopment agencies to exclude revenues from taxes levied by or for benefit of school districts in redevelopment areas in certain counties. (BDR 22-577)
Dorothy L. (Dotty) Merrill, Senior Director, Public Policy, Accountability and Assessment, Washoe County School District:
Senate Bill 402 has been introduced on behalf of our school district. With me are Anne Loring, Nancy Hollinger, and Gary Kraemer. There has been some confusion about this bill which we hope to clarify, and to indicate for you how we came to make this proposal.
Anne K. Loring, Lobbyist, Washoe County School District:
I am here on behalf of our superintendent, Dr. James Hagar. He regrets he cannot be here today. As you are aware, redevelopment districts freeze the assessed valuation at the time the districts and areas are defined within the area. The incremental increase in the assessment, the taxes that would accrue with the various entities that tax the area, go into the redevelopment district for the life of the district. This used to affect school districts in two ways because we have two different tax rates that affect property taxes in Washoe County. The first is the capital budget for school district, and the other is the 75-cent tax, which is the amount that funds our operating budget. Since about 1996, capital budgets of school districts have been excluded from the effects of redevelopment, and it is beginning to have a positive impact; however, our operating budgets are still impacted. The impact is complex and not a dollar‑for‑dollar amount because of the Nevada plan for funding operations for districts.
Dr. Merrill asked me to comment on how this came about. Last year the Washoe County School District had to make approximately $8 million in cuts to our education programs in order to produce a balanced budget, which we are required to do. As I believe you are aware, we have to file an amended budget for the next fiscal year within the next couple of weeks. In our district, we have directed our superintendent to file with the anticipation of approximately $20 million in cuts to our educational programs, pending whatever happens here in this Legislative Session with the budget. Within that context, our board had considerable discussion about various things which impact our operating budget.
In our discussions with school board members about this issue, we were specifically aware of the concerns about outstanding debt incurred by the redevelopment agencies in Washoe County. We wanted the bill constructed so it would not be impacted, because we did not feel it was reasonable to do that to our other entities. We apologize for the apoplexy caused Statewide by thosewho read the initial draft and were asked for a fiscal impact. The initial draft did not have the wording in it.As Ms. Hollinger will allude to, it has subsequently been added.
I want to recognize an extraordinary gesture by Mayor Tony Armstrong and the City Council of the City of Sparks. Several years ago, Mayor Armstrong and the council approached our school board and said they understood the impact of redevelopment funding on school districts’ operating budgets and the importance of schools in the economic development of the community. Realtors tell us it is the first thing people ask about when they are relocating to an area.
Mayor Armstrong and the council approached us about whether we would enter into a memorandum of understanding with them where they would voluntarily provide some money from their redevelopment projects for redevelopment of some schools in Sparks. We have some old school buildings in that area.To date, they have contributed roughly $250,000, most of which has gone to rehabilitate Sparks High School. It has influenced the community to develop a sense of pride in the community for an older school. We did not have the funding in operating or the capital budget to make those improvements. We congratulate the City of Sparks for recognizing the need.
You should be aware our financial department has been in contact with the financial departments of both Sparks and Reno on this issue. I want to note specifically this is not about the pros and cons of redevelopment. This is about the impact of this type of funding on the Washoe County School District; on schools, and the educational programs we offer to the citizens of Washoe County.
Nancy J. Hollinger, Lobbyist, Washoe County School District:
I would like to review some proposed changes that are recommended in the bill (Exhibit H).
Gary Kraemer, Chief Financial Officer, Business and Finance, Washoe County School District:
Shortly after I came to work for the school district, we arranged a meeting with the City of Reno to discuss the effect of the redevelopment money going from the school district to them. They offered to meet with us again and we met earlier this year to discuss this bill. We indicated our concerns of the redevelopment effect on the school district. We have not heard back from them. The effect of this bill would be, there are $325 million in valuation in the redevelopment districts of Reno and Sparks, which translates to about $2.4 million per year, relating to the 75-cent tax. Again, we have the transition language which would phase in very slowly as they issue more bonds, effective after July 1, 2003.
Chairman O'Connell:
Has this changed language been presented to the opposition and has there been any comment about it?
Dr. Merrill:
These changes (Exhibit H) refine the language of the bill as it proposes to amend NRS 279.676. These are not amendments to our own bill; this is just a clarification of the bill.
Chairman O'Connell:
You are just talking about the changes in the bill. Is there anyone here in support of S.B. 402? Is there anyone here in opposition to S.B. 402?
Carole Vilardo, Lobbyist, Nevada Taxpayers Association:
I am speaking in opposition to S.B. 402. Last week, Mesquite had a bill to increase the percentage of assessed valuation, and I opposed that bill also. It is not that these are unworthy provisions. I have supported previous legislation; in fact, it was previous legislation we recommended in 1997 that took out voter‑approved debt from redevelopment agencies, so it would accrue to where the voters thought it should go. The problem with all of these individual bills is they are piecemeal changes that are absolutely needed within tax increment financing statutes. The statute, as it is written, is probably no longer totally effective in its use and the way it is being used. It is being used not only for redevelopment, but also for infrastructure financing and economic development. Those are valid uses for tax increment financing, but many states have recognized when it comes to that type of financing, there are different conditions, definitions, and what I call various peel-back provisions to get money to otherwise effected entities.
I would make the same recommendation with this bill I made with the other bill. The committee should encourage the standing committee on local government taxes and finances, over the next interim, to come back with recommendations to clean up tax increment financing in law.They should look at what the committee started to look at, tax increment financing for redevelopment, for economic development, and for infrastructure finance purposes.All of these would have different conditions. We would not be playing games with trying to find what parts of the definitions allow you to use redevelopment for these other areas. It is too important an issue to piecemeal with all of these different bills.It will chip away and make it even harder to straighten out in the future what needs to be straightened out with tax increment financing.
Nicole J. Lamboley, Lobbyist, City of Reno:
I would like to present a letter Charles McNeeley, City Manager, City of Reno, has sent to the committee (Exhibit I). I will summarize the content. The City of Reno is concerned this legislation pertains to one specific county, a county between 100,000 and 400,000 in population. Clearly, this legislation was designed to target the cities of Reno and Sparks. As you have heard, Sparks has come to some financial arrangements with the Washoe County School District. This legislation then is targeted at the City of Reno.
The school district testified there had been preliminary conversations at the staff level and that is accurate. However, we extended an invitation, and there has been an open invitation to the school district to come before the city council to work with us on this issue. We are well aware of their concerns and we are not opposed to sitting down and discussing their need for financing. We are concerned though, that they brought the issue before this body for consideration to help resolve an issue clearly between two local government entities. Mr. McNeely wanted me to convey to you we would extend the offer to the school district to sit down and further address their issues. Mr. Green will talk with you about the impact this bill will have on the redevelopment agency in Reno.
Chairman O'Connell:
We have not had an opportunity to read the letter, but we would appreciate the testimony as to how you see an impact in your redevelopment district.
Andrew Green, Finance Director, City of Reno:
The City of Reno has been hit with continual decreases in assessed value in the downtown redevelopment project area. Just recently, we experienced a $15 million decrease in assessed value due to appeals by certain casinos in the downtown area. For the City of Reno, that represents a hit of about $510,000 annually to tax increment.
To explain a little further, the Reno redevelopment agency spends about 84 percent of the tax increment it receives for debt service. We receive a total of about $5.9 million in increment, and almost $4.9 million of it is for debt service. It leaves about $964,000 of available increment the agency currently uses to deal with economic development issues, staff support, those types of things that will generate future economic development, and increases in the redevelopment agency.
This bill will take the available increment away in its entirety. This is after the amendments, and is just dealing with the 75-cent operating rate that would be stripped out. The actual calculation would be $1.3 million, but since the bill excludes debt service, it only leaves $964,000 and they would take all of it. That represents about 54 percent of our ongoing operating budget in the redevelopment general area. It would be devastating for the Reno redevelopment area.
We had preliminary conversations with the school district.The way it was left was the school district would get back to us with some information to see if we could come to some type of arrangement within the bounds and responsibilities of legislative approval of redevelopment agencies. I am surprised it was taken as if we ignored them, because we did not. We were waiting for additional information and once the information was provided, we were supposed to sit down and talk again.
The City of Sparks has a little different situation because they do have a school within their redevelopment district, which made it easier for them to do some of the things they are doing. The City of Reno is not in that situation. We do not have any schools in the immediate redevelopment area, so we have to look at establishment of benefit and some other legal requirements before we look at sharing redevelopment funds. We needed to work through all of those things. We are willing to sit back down and work through this issue. We did not ignore the school district.
I think this type of legislation only serves to pit agencies against each other, especially in these difficult economic times. We need to encourage cooperation and collaboration, and we would like to sit down to review and discuss any of those types of issues with the school district.
Chairman O'Connell:
Mr. Green, will you clarify something? You were talking about the decrease and did you say $15 million?
Mr. Green:
The $15 million in assessed value in the redevelopment area leaves our assessed value at about $180 million total. Applying the 75-cent school district rate, if we carved it out, would leave about $964,000.
The appeal process is based upon decreasing economic times, where the various businesses are allowed to appeal to potentially get a decrease in their assessed value. This decreases our taxes, but it does not decrease the responsibility of providing the service.
Terri L. Thomas, Finance Director, City of Sparks, and Chief Financial Officer, Sparks Redevelopment Agency:
I would like to say the City of Sparks’ redevelopment agency and its city council are strongly opposed to S.B. 402. I will give you a quick summary and present my remarks for the record (Exhibit J).
Harry L. York, Lobbyist, Reno-Sparks Chamber of Commerce:
I am here to oppose S.B. 402. As personal background, I have been connected with redevelopment agencies for up to 35 years. I have worked with the Reno‑Sparks Chamber of Commerce for 9 years; I spent 13 years with the Concord, California, chamber; previous to that I worked as a legislative assistant to a state assemblyman in California and concurrently served 9 years on the Concord planning commission and as an elected school board member.
I was working at different times either with or as a partner of various committees with redevelopment agencies. While working with redevelopment agencies, I found some other governmental agency always wanted to make a run on redevelopment funds. In Concord it was always the county. It seemed when they looked at the agencies, they would never really look at the whole picture. They never really looked at the millions of dollars an agency may sink into the infrastructure.Particularly in Reno, I believe the first $35 million or $50 million of the agency’s money literally went into the ground, into sewer, water, and things you would never see which improved the whole community.
The part that never seems to be identified is when redevelopment happens, and works, and there are buildings and new construction happening within the redevelopment agency, there are also things happening outside the agency. I would suggest the expansion after the Silver Legacy was built in Reno, and Harrah’s expansion, the Eldorado’s expansion, Circus Circus’ improvement and the Nugget’s expansion of their new tower, were all within agencies, but they also improved the whole community. Outside of the redevelopment agency, in another major area, there was the expansion of the Atlantis and the Peppermill. Along with that are all the other things which have happened in the Reno area.
The same thing happened in Concord. Bank of America came in and built a 1.2 million square foot office complex.This spurred more office complexes within the district and a significant number of office complexes outside the district. I believe without what happened within the district, the outside expansion probably would not have happened. There is a value to it. The major infrastructure and investment redevelopment agencies make creates additional dollars within the agency which generates other tax dollars. If we look at downtown Reno and downtown Sparks, we have the additional revenues from sales tax, which happens from all the construction and new projects that have happened there.
It seems to me there are runs on redevelopment funds after an agency has been operating for some time, and it appears there is nothing happening.If you look at Reno, some people would say what is happening?You still have empty lots. I suggest agencies take their time and be patient. I would cite my experience in Concord.Even after all of the office development, it took years for the support and the retail to follow, but it is there now.
In California, downtown San Jose is probably 25 to 30 years old now and is just now starting to see success. Other instant successes I am familiar with are downtown Santa Rosa and downtown Walnut Creek, both of which continue to grow. The City of Pleasant Hill was an agency which was considered a joke for a long time. They had a redevelopment agency and district but nothing happened. If you were to go there now, you would see a model of redevelopment projects; a place you would take people to see this is how you want something to happen. My suggestion is let the agency continue; do not take any funds away from it, let them reinvest those funds back into the overall community, not just the new district itself.
Roberta Ross, President, Downtown Improvement Association of Reno:
We are an advocacy group for the Reno redevelopment area. We believe the reduction of property tax revenues to the redevelopment agency will be detrimental to our redevelopment area for existing and future real estate development.
There are many people who have invested their lives and finances in businesses in the downtown Reno redevelopment area. There are large businesses downtown because of the redevelopment area. Both large and small businesses have come forward with their financial investments and blood, sweat, and tears, with the expectation of a continued improved real estate development brought forward by the redevelopment agency.
Our redevelopment area will suffer without all of the funds they have budgeted for the life of the redevelopment area. Existing businesses will suffer without these dollars to help promote their businesses and bring in new businesses to complement the progress in the redevelopment area development. We as the downtown improvement association oppose this bill.
Daryl Drake, Downtown Improvement Association of Reno:
I am here as a private citizen who has observed the Reno redevelopment activity for the last 15 years. I will take a different tack on this because I know the chamber, and I myself personally have been supportive of the Washoe County School District. With all due respect to Ms. Loring, I never thought I would be on the other side of any legislation from her. I have great respect for Ms. Loring, Dr. Hager, and the Washoe County Board of Trustees. We are all faced with very severe revenue shortfalls, as you are acutely aware. The external conditions have been very onerous on the Nevada economy, as well as in northern Nevada.
I want to emphasize the importance of the redevelopment effort to ensure we stabilize the tourism industry and the linkages to the rest of the northern Nevada economy. A few years ago, I started a study of the impacts of the tax situation, the assessed value situation of properties in the redevelopment district. In the last 6 years, there has been a decline of approximately 0.7 percent annually of the assessed valuation. With the appeals, as well as the drop in the appraisals prior to the appeals, Mr. Green indicated the impact would be around $15 million. I believe the impact is going to be closer to $25 million as we start this next budget year.
The impact of S.B. 402 on the budget for the redevelopment district will be devastating. I would just put it in these terms. If in fact the school district’s revenues are going to decline approximately $20 million this year, the benefit of S.B. 402 to the school district on a percentage basis will be about 4.5 percent to 5 percent, while the cost to the Reno redevelopment district will be 28 percent to 35 percent. This is the fundamental reason I am against S.B. 402.
Chairman O'Connell:
Is there anyone else wishing to address S.B. 402? I will close the hearing on S.B. 402 and open the hearing on S.B. 424.
SENATE BILL 424: Revises provisions relating to composition of membership of redevelopment agency. (BDR 22-1270)
Ms. Lamboley:
Bob Cashell, Mayor, City of Reno, was here earlier but had to return to Reno for an event. He regrets he was not able to appear before you.
Senator Townsend worked with us to introduce S.B. 424 through the Senate Committee on Commerce and Labor. This legislation is the result of the Reno city council’s first retreat following the 2002 election cycle. The new council reestablished and restated its priorities, with downtown redevelopment being one specific priority.
This legislation is enabling.Its purpose is to give flexibility to the city council.The current composition of the council is five appointed resident electors of the community or the legislative body. This bill would allow the council or the legislative body to consider a third option. The city would use the option to further develop a public-private partnership in the decisions of the agency. The city council indicated they would like to add expertise from the private sector.
In addition, we are recommending the agency not exceed 11 members with the third option. The appointing authority could determine the exact number of members. For instance, the City of Reno has a 7-member council and they would be allowed to add up to 4 resident electors. They would not be able to exceed 11 members. That is the purpose of this legislation.
Senator Tiffany:
I do not understand why you want to go from 5 to 11 because 11 is an unwieldy size for a committee. One nice thing about local government is the county commissions and city councils are small. Why would you want to go to the number 11?
Ms. Lamboley:
Our mayor, being a former member of the Board of Regents, laughed at the question as well. I believe the discussion among the council members was we have 7 members on the city council and 4 additional members from the private sector would take us to 11. It does not have to be 11; it could be any number up to 11, but it cannot exceed 11. Yes, they did express concern, but they wanted to leave it flexible for local government entities to determine what number would work best for them.
Senator Tiffany:
The idea is you are starting with seven and you have to put a number on it to add some private sector people.
Ms. Lamboley:
Yes, the 11 members would apply only to the third option we are asking you to consider.
Senator Care:
As to the makeup of the agency, you would still consult with people from the private sector?
Ms. Lamboley:
Yes, but I believe the council wanted them to serve as members of the agency along with the elected officials.
Mr. York:
I am here to speak in favor of this measure. I think it would give the current council an opportunity to add to their body the expertise they do not have from the elected group. This would allow them to pick people who had more expertise. To answer Senator Care’s question, it would allow, and maybe take out a little bit of the politics of some projects.It would bring on people who could look at projects more in black and white.
Ms. Ross:
I concur with what has been said. We really look forward to having four people from the private sector on the board to vote and make decisions. People other than staff could give guidance on what comes to the table. People with real estate development expertise could sit on the board, and they would add to discussions at meetings.
Mr. Drake:
Again, I am here as a private citizen and an observer of Reno redevelopment for the last 15 years. I participated in a number of workshops and hearings held last year by the redevelopment agency citizen’s advisory committee. We studied different models of redevelopment agencies throughout the West Coast, their effectiveness, and how they were structured.
This bill appears to be a reasonable compromise that would allow the agency board to get the benefit of professional expertise on their board. Among the decision makers, we feel this is a step in the right direction as it would remove some of the politics and allow a reasonable degree of professional expertise to the decision-making board.
Senator Raggio:
In the City of Reno, the City Council sits as the redevelopment agency and they are saying they would like to have some additional expertise.
Chairman O’Connell:
I will close the hearing on S.B. 424 and open the hearing on S.B. 444.
SENATE BILL 444: Authorizes transfer of certain real property owned by State of Nevada to City of Las Vegas. (BDR S-517)
Wayne R. Perock, Administrator, Division of State Parks, State Department of Conservation and Natural Resources:
I will give a brief overview of the bill. I have two handouts for the committee. The first is a written position statement on this bill and the second is a map of the property in question (Exhibit K).
Governor Kenny Guinn desires to give Floyd Lamb State Park to the City of Las Vegas. He has requested this legislation to authorize the State to transfer to the city all of the State’s interest in the property, including land being leased from the Bureau of Land Management (BLM). The State intends to keep only the plant nursery being managed by the Division of Forestry. The State expects the city to continue to manage the property as a public park and protect its historic and recreational values.
This legislation requires continued public use of the park and will prevent any future transfers of the property to any other party without the State’s consent. The Division of State Parks notes whether owned by the State or the city, all uses must be in full compliance with the federal Land and Water Conservation Act, section 6(f)(3).
Chairman O'Connell:
Does it mean the water rights for the property would be transferred to the city as well?
Mr. Perock:
We would transfer those water rights. They would need the water rights to maintain irrigation of the turf, the pond, and things like that.
Chairman O'Connell:
I realize irrigation has been going on. Did you decide you needed both bills, S.B. 144 and S.B. 444 because of the 10 percent grant money you are looking for in S.B. 144?
SENATE BILL 144: Authorizes Administrator of Division of State Parks of State Department of Conservation and Natural Resources to charge and collect certain fees under certain circumstances and authorizes Division to enter into certain cooperative agreements. (BDR 35-493)
Mr. Perock:
This bill is specific to Floyd Lamb State Park. There is a partnership clause with S.B. 144 to allow the administrator to do greater partnerships with political subdivisions. Both bills are really necessary.
Chairman O'Connell:
Has the city has agreed to take over the responsibility and the maintenance of the park?
Patrick T.C. Smith, Lobbyist, City of Las Vegas:
We look forward to continued discussions in taking over the park. This would provide for discussions to continue. We have not received any kind of clear direction from our city council as to whether we will or will not take over the park.
Chairman O'Connell:
I wanted to get those concerns out in the open because I was not sure there had been any agreement yet.
Mr. Perock:
This allows a “may.” It allows Pam Wilcox, administrator of the Division of State Lands, to negotiate those kinds of things with the city. It opens the door to those discussions.
Chairman O’Connell:
Does any private property abut the park or is it part of what is now laid out as the park?
Mr. Perock:
Using the map on page 2 (Exhibit K) the area in yellow is State-owned property with approximately 920 acres in the park. You will notice, on the far right, there is another section of property which is not included. It is the Tule Springs Archeological Site. It actually sits in the City of North Las Vegas and even though we manage it, it is not included in this legislation. It would remain in State ownership.
The dark border on the map shows the entire park. The part not in yellow is the property we lease from the BLM through the Recreation and Public PurposesAct and it is basically open space. To answer your question about in‑holdings, we did some trades a few years ago and we have taken care of the ones that really compromised the historic core of the park. We do not anticipate any other land acquisitions for this property. On the map, you will notice a red area which indicates the State tree nursery. It will be maintained in State ownership along with the water rights that service the nursery.
Senator Raggio:
I am not sure I understood your statement. The question was if this were transferred to the city, what responsibility will there be on the part of the State, if any, for the maintenance and operation of this park? Did you say you do not know?
Mr. Smith:
We recognize this is a park, a recreational and cultural resource. We have yet to receive direction that we will go out and take over the park. I guess it will remain a park.
Senator Raggio:
When do you plan to do that? I think before we process this bill, we need to know the answer to this.
Mr. Smith:
We have done some calculations and held discussions with the people at State parks. I envision this process to be pretty lengthy, certainly well past this Legislative Session. Currently, we are in the process of meeting with the residents in the greater northwest of the valley, determining the future of recreation out there, and doing a true master plan.
Senator Raggio:
Are you considering the State would still have some responsibility financially for the operation of the park?
Mr. Perock:
It is our understanding we would move away from any financial responsibility for the park. We will still have some oversight for the property which is encumbered by the Land and Water Conservation Act. We have it with any grant recipient political subdivision, plus ourselves that have used these federal funds. We will have some oversight if there is any desire to trade, because certain types of development can or cannot occur on these properties. We would have oversight there.
Senator Raggio:
The deed in section 2 of S.B. 444 includes certain restrictions. Would anyone object to an additional restriction that the name of the park could not be changed without the consent of the Legislature? It should be a condition probably in the deed. I think if we are to process the bill at all, with this kind oflong-term discussion going on, the authority ought to be granted only if the State would not have any financial requirements to maintain or operate the property. You are saying you are not sure whether you want the park.
Mr. Smith:
I think these are items that will be addressed in our negotiations. I cannot perceive the State turning over the park with any kind of commitment other than oversight if there are any changes needed in the future.
Senator Raggio:
It is not a financial obligation.
Pamela B. Wilcox, Administrator and State Land Registrar, Division of State Lands, State Department of Conservation and Natural Resources:
This bill was drafted at our request and I am prepared to take you through the bill briefly. It is a simple bill. Section 1 authorizes the transfer; section 2, subsection 1, includes some deed restrictions which would have to be attached to the property and requires the title would revert to the State if the deed restrictions are breeched; section 2, subsection 2, requires the State to transfer not only the land we own but also to relinquish the land we lease from the BLM; section 3 is the legal description for the land we own; section 3, subsection 2, page 4, beginning on line 20, is the provision the land used by the Division of Forestry tree nursery would be retained by the State; section 4 is the legal description for the lands leased by the BLM; section 5 provides the act becomes effective upon passage and approval.
I know you are aware this land was originally given to the State by the City of Las Vegas. I cannot return the favor and give the land back to them without authorization from the Legislature. Senate Bill 444 would authorize us to continue our negotiations with the city to make a transfer if those negotiations are successful. We would accept a condition that we could not transfer unless there was no continuing financial obligation to the State.
Chairman O'Connell:
I want to reiterate there is no private property attached or abutting that would be in question, as far as the ability of the person holding any kind of private property to be able to sell their property, to build on it, or whatever they determined was appropriate.
Ms. Wilcox:
Private property rights would not be affected by this bill. There are no in‑holdings in the park, there is no access that goes through the park, and there would be no effect.
Mr. Smith:
We would like to support the intent of the boundaries on the map which is shown on page 2 (Exhibit K). We have yet to receive word back from our survey folks in public works that the true legal description in the bill is actually what is displayed on the map. We would support the intent of the map boundaries.
Chairman O'Connell:
I will close the hearing on S.B. 444. We will recess for 15 minutes and then go into the work session.
Chairman O’Connell:
I will open the work session on S.B. 290.
SENATE BILL 290: Requires armories and other places used for storage of weapons to be equipped with alarm system under certain circumstances.(BDR 36-914)
Michael Stewart, Committee Policy Analyst:
You will recall we heard S.B. 290 on March 31, 2003, and it is regarding alarm systems for armories. There are two amendments. The first amendmentremoves the Nevada National Guard from the provisions of the bill, therefore changing the title to reflect the change. The National Guard apparently has secure armories already.
The second amendment adds language throughout the bill specifying the provisions of the measure do not apply to any agency that stores weapons in an area secured under constant supervision. This bill was provided by Clark County.
I would note there were no specific amendments offered on this particular item, but Senator Margaret (Maggie) A. Carlton, Clark County Senatorial District No. 2, did note a period of 12 months would be a reasonable amount of time for the entities identified in the measure to have alarms put in place. There was no specific amendment or fiscal note offered; however, a representative from Washoe County did indicate some concerns about the implications of section 4 of the bill. That concludes my review of the two amendments offered for S.B. 290.
Senator Townsend:
I was following this with great interest. Assembly Speaker Richard D. Perkins, Assembly District No. 23, had a bill and I believe Senator Raggio has his own bill regarding homeland security issues. I do not know whether this bill overlaps, or steps on, or does anything relative to the efforts being made there, particularly with regard to our homeland security regulatory ability to deal with things like this. If you pull the armory out, and you have these other issues, I am not sure there is a need for this bill at this time. I certainly was not sold. It seemed more cumbersome. I think the effort is a good one, but I just have trouble with it.
Senator Raggio:
I think the intent is good, but it is not needed in statute. I am concerned because everyone seemed negative about it. If you look at the fiscal notes from all the agencies, I think the intent is good, but I think we should not process the bill.
SENATOR RAGGIO MOVED TO INDEFINITELY POSTPONE S.B. 290.
SENATOR TOWNSEND SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS TITUS AND CARE VOTED NO.)
*****
I will open the work session on S.B. 309.
SENATE BILL 309: Makes various changes concerning support for participatory democracy.(BDR 18-1167)
Mr. Stewart:
Senate Bill 309 makes various changes regarding participatory democracy. It calls for the creation of the advisory committee on participatory democracy. There is an amendment from the State Board of Education.
Senator Titus:
“Participatory Democracy in Nevada” is a report to the 2003 Legislature by the Nevada Department of Cultural Affairs (Exhibit L. Original is on file in the Research Library.).
The Nevada State Education Association requested the proposed amendment. It would delete the proposed language in section 12 of the measure and replace it with the following conceptual language:
The State Board of Education and the Board of Regents would consider and develop recommendations to the 73rd Session of the Nevada Legislature concerning how principles of participatory democracy can be better taught and practiced in Nevada’s schools, colleges, and universities.
SENATOR TITUS MOVED TO AMEND AND DO PASS S.B. 309.
SENATOR TOWNSEND SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman O’Connell:
I will open the work session on S.B. 312.
SENATE BILL 312: Requires state and local governmental entities to accept consular identification card for purpose of identifying person under certain circumstances. (BDR 19-823)
Senator Raggio:
I would like to request this bill be deferred to the next meeting. I do not think this bill should be processed with just one-party sponsors on it. If they are amenable to adding the names of the other members of this committee on the bill, I would support it.
Chairman O'Connell:
Mr. Sanchez, you did not have the opportunity to testify after the testimony was given to us about the federal government. Do you remember the testimony and could you elaborate on why the federal government has not taken any action on this issue?
Tony F. Sanchez III, Attorney:
I am testifying today in my capacity as President of the Latin Chamber of Commerce. It is my understanding with everything occurring in Washington, D.C., with the creation of the Homeland Security Department, that all security measures are under review at this time. The federal government’s decision to stop using this card was not due to any fraudulent purposes but due to a review of the Homeland Security Department. It is being looked at across the board.
Senator Raggio:
I will defer to the main sponsors of the bill if they agree to the addition of other members of the committee as sponsors. I do not want it to sound like a partisan bill. It currently has democrat sponsors and I think we all have the same interest. I would like to be a sponsor.
Senator Titus:
I would be happy to add the names.
Chairman O'Connell:
Committee, Senator Carlton had submitted proposed amendments (Exhibit M). I think the committee would like to be added to the bill as sponsors except for Senator Tiffany, who has indicated she does not want to be listed as a sponsor.
SENATOR TOWNSEND MOVED TO AMEND AND DO PASS S.B. 312 BY ADDING THE NAMES OF SENATORS RAGGIO, HARDY, O’CONNELL AND TOWNSEND AND INCLUDING THE PROPOSED LANGUAGE THAT IS PERMISSIVE IN THE WORK DOCUMENT (EXHIBIT M).
SENATOR TITUS SECONDED THE MOTION.
Mr. Wasserman:
I need to look into it but I believe the joint rules do not allow for the amendment of a bill to add sponsors in the same House. You can add sponsors from the other House. I need to confirm that. If you want to go ahead with the motion, if it is permissible under the rule, I will be happy to include it in the amendment and if not, we would not include it.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman O'Connell:
I will open the work session on S.B. 335.
SENATE BILL 335: Increases maximum amount that may be paid to redevelopment agency in small community. (BDR 22-1172)
Senator Hardy:
I would like to move this bill to next week. Work is being done on some amendments and I would like to hold the bill for another week.
Chairman O'Connell:
We will hold S.B. 335. I will open the work session on S.B. 347.
SENATE BILL 347: Provides for creation and administration of incorporated towns. (BDR 21-249)
Senator Townsend:
I have received correspondence from various sections of the State and different groups, both industry and government types and I have not found any support for it.
SENATOR TOWNSEND MOVED TO INDEFINITELY POSTPONE S.B. 347.
SENATOR RAGGIO SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman O’Connell:
I will open the work session on S.B. 358.
SENATE BILL 358: Provides for certain protections relating to certain lands adjacent to Red Rock Canyon National Conservation Area. (BDR 22-645)
Mr. Stewart:
The only amendment to the bill was to delete section 11 of the measure, which requires the Board of County Commissioners of Clark County to submit an advisory question to the voters of the county asking whether the provisions of the bill should remain in effect. It was proposed by Clark County.
Senator Titus:
I support the amendment.
SENATOR TITUS MOVED TO AMEND AND DO PASS S.B. 358.
Chairman O'Connell:
Is there any possibility of a lawsuit considering there is private property involved? Did you investigate that issue?
Senator Titus:
I consulted with Brenda Erdoes, Legislative Counsel, who drew up a 3-page paper on the issue which says it is not, and I talked to the county attorneys who say it is not. I think Mr. Wasserman will back it up.
Mr. Wasserman:
Our office has reviewed the various opinions addressing whether regulation of the use of land is a taking. The rulings are consistent that the regulatory restriction on the use of property must deprive the owner of all economically beneficial use of the land so the property is rendered useless before it could be considered a taking. Courts have frequently held a speculative or potential use of the land, for which it is not currently zoned, is not a constitutionally protected interest in the land.
Senator Titus:
This bill does not remove the ability to develop one house for every two acres, which is existing zoning. We learned in the testimony the mine has 20 years left, so this does not in any way touch the economic viability of the mine to operate on the land.
SENATOR TOWNSEND SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman O’Connell:
I will open the work session on S.B. 359.
SENATE BILL 359: Revises provisions relating to freedom to display flag of United States. (BDR 22-310)
Mr. Stewart:
There are three amendments to this bill (Exhibit N).
Senator Care:
I would point out this would be a content-based regulation. If we say a home owner’s association cannot prohibit someone from flying the United States flag, does it mean a home owner’s association could prohibit you from flying a prisoner of war flag or a Nevada flag?
Chairman O'Connell:
It was to be code specific to just the American flag. Nothing else was involved. Would you like to discuss this issue?
Senator Care:
I can see a statute that says a home owner’s association cannot prohibit you from flying a flag.
Mr. Wasserman:
The statute is modeled after a statute enacted by the California Legislature. We did look at the issue. The legislation prohibits these organizations from keeping you from flying the American flag. It does not address whether they can or cannot prohibit other flags. The way it was drafted, it may withstand the challenge.
SENATOR CARE MOVED TO AMEND AND DO PASS S.B. 359 WITH THE THREE PROPOSED AMENDMENTS.
SENATOR TOWNSEND SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman O’Connell:
I will open the work session on S.B. 392.
SENATE BILL 392: Establishes pilot program for use of indefinite quantity contracts by Clark County School District for certain public works. (BDR S‑1277)
Mr. Stewart:
This bill provides for the use of indefinite quantity contracts by the Clark County School District. We have three proposed amendments (Exhibit O).
SENATOR TOWNSEND MOVED TO AMEND AND DO PASS S.B. 392 WITH AMENDMENTS TWO AND THREE OF THE PROPOSED AMENDMENTS.
SENATOR HARDY SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS TITUS AND CARE VOTED NO. SENATOR RAGGIO ABSTAINED FROM THE VOTE.)
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Chairman O'Connell:
I will open the hearing on S.B. 443.
SENATE BILL 443: Revises manner in which public books and other public records of governmental entities may be declared confidential. (BDR 19‑790)
Chairman O’Connell:
Senate Bill 443 has been withdrawn and I need a motion to indefinitely postpone it.
SENATOR TOWNSEND MOVED TO INDEFINITELY POSTPONE S.B. 443.
SENATOR HARDY SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman O’Connell:
The meeting is adjourned at 5:54 p.m.
RESPECTFULLY SUBMITTED:
Alice Nevin,
Committee Secretary
APPROVED BY:
Senator Ann O'Connell, Chairman
DATE: