“Well, that wasn’t such a chore, now, was it?”
Ray Stantz to Pete Venkman, covered in slime, Ghostbusters

Tuesday, June 4, Carson City woke to the sweet sound of silence.  Legislator offices were empty, halls were quiet, committee rooms were dark.  Even the bill copies were removed from the wooden racks.  “Slimer” was safely in his trap, not to be seen again until the sequel; release date, February, 2021.  All that remained from the 80th Legislative Session were memories, and for those who got “slimed,” those were more than enough to beat back the nostalgia of another year passed in our charming Capital.  Like Venkman’s attempt to remove the cloth beneath a fully-set banquet table because he “always wanted to do this,” only to relocate the settings to the floor, the predominance of business-related bills this session were introduced with unacceptable language, significantly modified by the business community, only to have a stripped-down bill pass and the sponsor proclaim victory at the end of the whole ordeal; “and THE FLOWERS ARE STILL STANDING!”  For these reasons and others, 2019 will be remembered among the most challenging legislative sessions in recent memory.  However, as dawn broke on June 4, several pieces of legislation emerged as fundamental changes to the way Nevada does business, setting the state on a different course with the promise of correcting some well-known issues.  The only question remaining is whether these measures, untested in the past and possibly as foreboding as “crossing the streams” will avert the state from being stomped, even if it means we’re going to get a little marshmallow on us in the process.

Below is a glimpse at legislation we’ve earmarked as some of the most controversial business or commercial real estate bills of the 2019 Session.

AB 136

Bill Sponsor: Speaker Frierson

This bill amounted to a complete rollback of the prevailing wage reforms made in the 2015 session, mirroring AB 154 from the 2017 Legislative Session, which was ultimately vetoed. It decreased the minimum threshold for public works projects from $250,000 to $100,000, eliminated the exception for the public school districts and Nevada System of Higher Education (“NSHE”) requiring them to only pay 90% of the prevailing wage, and eliminated the exemption for charter schools from paying prevailing wage. No amendments to this bill were accepted. The bill had six fiscal notes, the Department of Administration, NSHE, Local Government, Department of Business and Industry, Office of Labor Commissioner, Carson City School District, and Carson City totaling $20,063,165 from 2018-2021. This bill passed out of both houses on party line votes, and was signed by the Governor.

AB 190

Bill Sponsor: Assemblyman Daly

This bill clarified when prevailing wage must be used, the rate, and for how long. The bill defines “bona fide fringe benefit” and addresses acceptable use of bona fide fringe benefit (in lieu of the prevailing wage) and assesses penalties for misuse. The bill defines reverse auction and prohibits a public body from using a reverse auction where a bidder may submit more than one bid if each additional response to online bidding is a lower price, when awarding a contract for public work.  It also makes clarifying changes to existing law regarding prevailing wage requirements that apply to certain construction projects that are not public works. As introduced, this bill mirrored the Speaker’s prevailing wage bill AB 136, but due to the existence of three identical bills, was amended to reflect the above. It passed party line out of both houses, and was signed by the Governor.

 SB 243

Bill Sponsor: Senator Hardy

This bill established four prevailing wage regions by which the Labor Commissioner shall determine prevailing wage, as opposed to doing it by county. It also created districts for Washoe County, Clark County, and separates the rural counties into two groups split by the north and south.

It changes the timeframe from annually to every odd-numbered year, for which the Labor Commissioner shall determine the prevailing wage in each region, and requires the determination be issued by the Labor Commissioner on October 1 of the odd-numbered year. This bill passed unanimously out of the Senate, and 32-7 in the Assembly, with Republican Assembly persons Hafen, Hardy, Leavitt, Roberts, and Tolles voting in favor, and has been signed by the Governor.

 SB 166

Bill Sponsor: Senator Spearman

This bill, dubbed the “Equal Pay Bill,” as introduced provided for expanded, higher penalties against an employer subject to a Nevada Equal Rights Commission (“NERC”) discrimination complaint. It provided for additional penalties should NERC find discrimination was on the basis of sex. Additionally, it expanded the role of NERC, and the amount of time to file a complaint for civil action. It also raised the amount of the civil penalties the Commission could award. The first amendment to the bill removed the requirement that any civil penalty collected by NERC go into a newly created NERC Gift Fund. It also reduced both the amount of back pay categories that could be paid and the civil penalty amounts. The second amendment codified federal law and removed both the additional penalties on sex-based discrimination and all other language inconsistent with federal law. This bill was a highly contentious and hard fought battle throughout the entire Session. The final version was the result of a huge lift by the business community to make the legislation more palatable, making it very clear that the bill would not be scuttled. This bill passed out of both houses with little opposition (Senator Hansen and Assembly persons Edwards, Ellison, and Wheeler being the only nay votes), and was signed by the Governor.

SB 312

Bill Sponsor: Senator Woodhouse

This bill as introduced was a reprisal of SB 196 from the 2017 Legislative Session and required an employer in private employment to provide forty hours of mandatory sick leave for all employees. The first amendment changed sick leave to paid leave and amended the manner in which it could be accrued. The second amendment changed the accrual from a calendar year to a benefit year. This bill was also contentious and heavily amended by the business community, but it could not be killed because it was designated as a priority bill for the Democrats. The bill passed unanimously out of the Senate, and 31-9 in the Assembly, with Assembly persons Hardy, Roberts, and Tolles voting in favor, and was signed by the Governor.

SB 36

Bill Sponsor: Senate Committee on Government Affairs

This bill would allow a Board of County Commissioners to do a number of things when it comes to sales and appraisals of real property, including:

A county may purchase real property for above the appraised value, if selling or leasing county owned property, the county shall use the average of two independent appraisals, if two were obtained; or, the appraised value if only one independent appraisal was obtained, if there is a material change relating to title, zoning, or an ordinance governing the real property, or the appraisals were prepared 6 months before the date which the real property is offered for sale or lease the second time, the county must obtain a new appraisal, and allows the county to use an internet website to auction real property and hold a public meeting once the auction has closed to make a final acceptance of the highest bid. Currently a county may not purchase real property for above the appraised value, potentially keeping them out of certain real property sales that may benefit the county. The county also must sell real property using the highest appraised value of the real property. The ability for a county to use an online auction would assist them in getting multiple bites at the apple to assist in selling real property. An amendment to the bill removes the county’s ability to purchase land above the appraised value and added additional clarity regarding notice provisions. This bill passed unanimously out of both houses and was signed by the Governor.

SB 151

Bill Sponsor: Senator Ratti

This bill sought to increase the amount of time a tenant has to remedy after receiving a notice of an eviction action, from 5 judicial days to 10 judicial days.  Additional increases in time are provided for pertaining to removal of a tenant, from “within 24 hours” to “not earlier than 48 hours” once the eviction order is received from the court. The notice to surrender timeframe for which an individual may holdover and continue in possession of real property or a mobile home after certain actions would change from 3 days to 30 days. The bill also removed from statute a landlord’s ability to utilize summary eviction procedures on a tenant who is part of a “low rent housing program operated by a public housing authority.” Finally, the procedure by which certain notices to surrender are delivered would be dictated by either the Nevada Rules of Civil Procedure or the Justice Court Rules of Civil Procedure. This bill had both residential and commercial impacts in eviction and unlawful detainer proceedings.  Many meetings were conducted with the bill sponsor and Legal Aid (ultimately behind the legislation) regarding the impact this legislation would have on commercial properties, even though the intent was purely to change residential statutes. A deal was struck whereby Legal Aid would state on the record, during the committee hearing that there would be a forthcoming amendment removing references to commercial premises. The bill was amended, creating two sections within Chapter 40; one that deals specifically with the residential changes and one that maintains commercial exactly as is. This bill passed out of both houses on party-line votes, and was signed by the Governor.

 AB 538 & SB 551

Bill Sponsor: AB 538 Speaker Frierson / SB 551 Senate Majority Leader Cannizzaro

Both of these bills sought to remove the scheduled buydown of the Modified Business Tax (the “MBT”), passed along in the 2015 Session. Within that piece of legislation, should the Commerce Tax produce excess revenue in certain amounts, the MBT would decrease from 1.475% to 1.378% for most business, and from 2 % to 1.853% for the mining and finance industries. By removing the buydown of the MBT, Democrats found an additional $100 million for the coming biennium. AB 538 was limited to just the MBT language, which Republicans vowed they would never vote for, due to promises made in 2015. This bill ultimately died.

SB 551 was likely one of, if not the most polarizing pieces of legislation in 2019. It was brought by the Majority Leader as an emergency measure the Tuesday before Sine Die. This bill however, took the “found money” and put it toward school safety, which was previously stripped of $30 million. It also funded Opportunity Scholarships, which also saw their budget money removed. Both defunding measures disturbed the minority party to no end. In addition to MBT, SB 551 as introduced, would have used excess revenue from Clark County’s “More Cops Tax” to fund additional school safety measures. In an effort to garner some Republican support, Democrats amended the bill to put the 2/3 majority requirement back on it (after an LCB opinion came out earlier in the month stating 2/3 was not needed, supremely frustrating Republicans and causing them to threaten a lawsuit, should either of these measures pass), taking the “More Cops” language out, and detailed the amounts each county would receive over the next biennium. On the day of Sine Die, fireworks were seen on the Senate floor as legislators opposed to the bill had their floor speeches cut short by a call of the question, after which the measure was put to a vote.  The bill failed to receive a 2/3 majority. After a brief recess, the amendment was rescinded. A new amendment was proposed, the bill remaining mostly intact, but removing the 2/3 requirement and also removing Education Savings Accounts – an unfunded GOP priority – from the statute altogether. After little floor debate, a number of Senators again called for the question, and the measure passed out of the Senate 13-8. It was passed 28-13 out of the Assembly, and signed by the Governor.

 SJR 14

Bill Sponsor: Senate Committee on Revenue and Economic Development

Originally introduced in 2017, SJR 14 returned for the second round of legislative approval necessary to send the measure to the voters in 2020.  This Resolution would have removed the constitutional prohibition on “reset on sale,” allowing the legislature to consider the concept along with other available options to reform Nevada’s real property tax structure. Due to legislative neglect over the 2018 interim, this measure did not get the traction it needed to pass its second round.  In addition, a single late-session stakeholder meeting and disclosure of a 377-page report commissioned by LCB less than a month prior to sine die sealed the fate of this Resolution, which never received a hearing.

 Odds & Ends

Leaving Carson City following a legislative session is always an awkward ride.  Exhaustion, memories of the final thoughts of debate and subsequent immediate silence, and the realization that everything which has dominated your thoughts and conversation is now moot make for a very strange 7-hour drive back to Las Vegas.  This year, instead of beating feet back to the heat, we detoured to visit Virginia City, enjoy a bourbon at the Bucket of Blood Saloon, and take a walk through the Silver Queen Hotel.  Rated among the most haunted places in Nevada, the Silver Queen Hotel was built in 1876, and is said to be home to a Ghost named “Rosie,” who reportedly  committed suicide in Room 11.  Overnight guests have reported hearing voices, doorknobs turning, and footsteps on a wooden floor, which is particularly odd, given the entire hotel is carpeted.

Enjoy your summer…and sleep well!

 Jon & Kerrie

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

 

The Nevada Independent
By Megan Messerly
May 26, 2019

Jeremy Aguero, Applied Analysis
Jonathan Leleu, Fennemore Craig, PC
Click here for the article

 

 

Do not arouse the wrath of the Great and Powerful Oz!

I said come back tomorrow!

If you were really great and powerful, you’d keep your promises!

Do you presume to criticize the Great Oz, you ungrateful creatures?

Think yourselves lucky that I’m giving you audience tomorrow, instead of 20 years from now!

The Great Oz has spoken!

Pay no attention to that man behind the curtain!  The Great Oz has spoken!

    -The Wizard of Oz

 

Sometimes, when the chips are down and circumstances require radical, “out-of-the-box” solutions, you take a chance.  You stick your neck out for a concept, not because it’s in your best interests, but because it’s the right thing to do in the long-term.  It’s what we do when we sear a steak – we take a chance on ruining the whole thing because locking in that flavor is just plain worth it!

Such was the reasoning behind NAIOP’s support of SJR 14 in 2017.  Nevada’s state and local governments, agencies, school districts, and everyone else you can think of, are revenue-starved, and have been for a long, long time.  With state and local services cut to the bone, education per pupil funding nationally ranked last, and growing infrastructure concerns, the time had come to support a revision of Nevada’s real property tax “caps.”  SJR 14, an initiative to amend Nevada’s Constitution to allow the concept of “reset on sale,” seemed to be the vehicle to start a conversation, which would move Nevada to a more financially-secure place.  So, NAIOP conditionally supported the Resolution, not for its substance, but for the purpose of starting what was promised to be 18 months of tax policy discussions in the interim leading up to the 2019 Session.  It was a position, which, though benign, drew a lot of fire.  Senate Minority Leader Roberson publicly questioned whether we even represented NAIOP during our testimony.  Members unaware of the caveat in our positioning questioned our sanity and sobriety.

As we know, despite our best efforts, those discussions never took place during the interim.  Discussions did not take place for the first 60 days of the Session.  In fact, the first stakeholder meeting took place on April 24, 2019 – Day 80 of the 120-day Session.  More, a study was commissioned by proponents of the Resolution.  It was not shared until that same day of the 120-day Session.  The financial impact report consists of 377 pages detailing the impact reset on sale will have on every single one of Nevada’s taxing districts and entities. As you can imagine the stakeholders in the room were both elated to finally have something to pour over, yet concerned about the abbreviated timeframe in which to do so. Of greater concern was the ask that stakeholders put their money where their mouths are and support the ballot question in the upcoming election, should it get that far. At this time, the Resolution has not come up for a committee hearing and there is no proposed date for one. We are hearing rumblings of another stakeholder meeting, but that has not been confirmed either. So, as it stands, we have to date had one stakeholder meeting, in conjunction with receiving a very lengthy report, and still no substantive discussion.

All that said, the narrative has shifted this session, putting the focus of the additional funds solely on bettering Nevada’s schools. While there is no denying the need for increased funds in our schools, there is a dyer need for more and better transparency. The Resolution would not change in any way the allocation of tax revenue; it would just increase the amount of revenue flowing into the General Fund. With respect to education, additional revenue into the State General Fund would then be allocated into the Distributive School Account, or “DSA,” which is, in essence, another general fund for public schools.  Given this, the business community and municipalities have grave concerns about what the money moved into the DSA will actually be used for. Much of the increased revenue could be subject to collective bargaining agreements, which only increases the concern about transparency. With this now being the main focus for getting this Resolution passed through both houses and then by the voters, it raises a number of red flags as to how this additional revenue will actually be spent and how it will benefit Nevada as a whole. Given there are only 34 days left in the Session as of the date of this article, a number of existing budgetary  concerns, not the least of which is the school funding formula (for which a major overhaul has also been proposed, but no bill language has been seen), and the Economic Forum coming up May 1, 2019, there is precious little time left to have the robust discussions required when considering a complete shift in how property taxes are calculated in the State of Nevada. As ever, we remain vigilant on this issue, so as to help NAIOP craft a position that accurately represents its membership and the CRE industry. What that position looks like will depend on just exactly what’s behind the curtain.

ODDS & ENDS

History is always the best teacher, even though we sometimes don’t want to listen.  Take, for example, the instant situation of overhauling real estate tax policy with just over a month left in the Session, and consider the following:

The current Nevada state flag was designed as part of a contest in 1926. Although a man by the name of Louis Schellbach III won the contest and the $25 prize which went along with it, the Legislature got involved, and of course, the two houses disagreed – this time over the placement of the word “Nevada” on the flag. Although a compromise was eventually reached, the Legislature waited until the last minute to push the amendment through, and it got lost. The bill nevertheless passed, and Gov. Balzar unknowingly signed the bill without the proper amendment. The flag used from 1929 until 1991 was not the flag approved by the Legislature, and thus, not the official state flag. The oversight went unnoticed for more than 60 years.

 

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

First, your return to shore was not part of our negotiations nor our agreement so I must do nothing. And secondly, you must be a pirate for the pirate’s code to apply and you’re not. And thirdly, the code is more what you’d call “guidelines” than actual rules. Welcome aboard the Black Pearl, Miss Turner!

Captain Hector Barbossa

Deadlines are what turns a dream into a goal.  The goals of everyone in Carson City?  Pass solid legislation and adjourn sine die on June 3, 2019…or so we thought.  As we approached Monday, March 18, the first major deadline of the 80th Legislative Session – legislator bill introductions (bills sponsored by individual legislators must be introduced or forever entombed as BDR’s) – approximately 150 BDR’s had yet to be introduced on the floor of their respective houses.  Yet, the Legislature did not convene the weekend prior.  Morning sessions were not scheduled for Monday the 18th.  US Senator Jackie Rosen spoke to a combined floor session in the Assembly Chambers that evening.  As the sun set, rumors began to fly around Carson City that perhaps…just maybe…we would witness the earliest culling of the bill herd the state has ever seen.  Hope rose that maybe, just maybe, our attention would be focused on existing legislation and upcoming committee bills, as the overall bill count would be reduced by roughly 10%.

Then, it came.  An after-dark concurrent resolution moved through both chambers and quietly passed.  Buried at the end of the resolution appeared language which suspended the deadline due to recent resignations of Senate Majority Leader Kelvin Atkinson, and Assemblyman Mike Sprinkle.  Legislator bills were saved, no one was allowed off the ship, and we turned and set sail, salvation fading into the distance.  The Code of the Brethren had struck again.

Highlights of the legislation we continue to track for NAIOP include the following:

SB 151
– Sponsored by Senator Ratti, this bill seeks to amend existing statutes pertaining to summary eviction.  Senator Ratti has clarified this bill is not intended to touch commercial leasing, and an amendment is being crafted to remove commercial from the impact of the bill.  As such, this bill is on its way toward a positive resolution.

AB 197 – This bill seeks to make certain terms of form contracts – contracts of adhesion – unconscionable by statute, and allow a private right of action against the drafting party for including the unconscionable term(s).  The current language in the bill covers all contracts, including business-to-business, business-to-consumer, employment, AIA, and various other form contracts.  Assemblyman Edgar Flores, the Sponsor, met with us several times, and has committed to remove references to business-to-business transactions such as commercial leases and take a look at our concerns with references to employment contracts, however, the bill will be specifically aimed at mandatory arbitration clauses.  We will continue to work with the Assemblyman toward a resolution of our concerns.

SB 251 – Similar to the City of Las Vegas’ golf course/open space ordinance, this bill would require a new owner of a golf course to do a number of things as conditions of approval prior to any redevelopment of the golf course to another use. Sponsored by Senator Woodhouse, this bill would place a restrictive covenant restricting the use to a golf course only, and allows an owner of a plot or parcel within 2,000 feet of a converted golf course to bring a private right of action against the new owner of the property if there is a diminution of value to the nearby property. Should a diminution be determined by the court, the owner shall recover the sum equal to the diminution and reasonable attorney’s fees.  Senator Woodhouse proactively reached out to NAIOP for feedback on this bill, and we continue to work with her.

We continue to be involved in discussions regarding paid sick leave, minimum wage, and workforce development.  Unfortunately, the elephant in the room continues to be real property tax reform, which has not surfaced as of yet (recall, SJR 14 (reset on sale/depreciation) will need to move and pass this session if it is going to be included on the upcoming ballot).  While stakeholders have waited to discuss this issue since the close of the 79th Legislative Session in 2017, few conversations have taken place, and the municipalities have seemingly moved on from the issue.  To be sure, the time-frame to discuss such a massive issue is inappropriately tight, given the 2019 Legislative Session is half over.  That said, we do anticipate movement on this issue at some point, and our hope is such comes sooner than later, such that even a cursory analysis can be made by stakeholders.

ODDS & ENDS

The City of Reno was named for Civil War Major Gen. Jesse Lee Reno who was killed at the Battle of Fox’s Gap, South Mountain, Maryland on Sept. 14, 1862.  Neither Jesse Lee Reno, nor President Lincoln (who, along with Union-sympathetic congressmen, expedited the granting of statehood to ensure Lincoln received 3 additional electoral votes in the 1864 election) ever stepped foot in Nevada.

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

 

A pessimist sees a dark tunnel;
An optimist sees the light at the end of the tunnel;
A realist sees a freight train;
The engineer sees three idiots standing on the tracks.

– Unknown

Entering Week 5 of the 2019 Nevada Legislative Session, the capitol has eased back into a familiar rhythm; bill introduction… legislator meetings… committee… support… opposition… neutral… more legislator meetings… work session… As the first bill deadlines approach and we get closer to the deadlines (March 18 for legislator bill introductions) than we are to convening of the Session, we become acutely aware of the progress the Legislature has made in the past 30 days as the revelation hits that the 80th Session is 25% complete.  As of the date of this missive, 483 bills have been introduced – a sizeable figure until you realize this represents just more than 33% of bills traditionally introduced in a Nevada legislative session.  There are still 800 more bills coming.  That Carson City and the Sierra Nevada mountains have seen snow nearly every day of the 2019 Session could not be more ironic, as we stand in the Carson valley awaiting an avalanche – in one way or another.

The legislation introduced thus far touches several areas of policy interest; workforce development, apprenticeships, and prevailing wage bills have all been introduced and some have even been heard.  That said, legislation NOT introduced has been the buzz of Carson City in the first 5 weeks.  Understanding that somewhere in the remaining 800 bill draft requests are bills addressing real property taxation, construction defects, and other fees and costs which could be used to fill budget gaps, the Nevada business community prepares for the other shoe to drop, hoping the shoe is not an ACME anvil.  Blind faith never worked out well for the Coyote.  However, true preparation is difficult without language, and given the diminishing timeframe until the upcoming deadline, an element of nervousness has entered day-to-day conversation in Carson City.

A policy bill immediately identified as problematic is SB 151, legislation aimed at softening the blow of summary eviction proceedings on tenants – both residential and commercial.  The bill proposes to double the time a tenant who is delinquent in rent has to pay or quit, from 5 to 10 days.  The bill also doubles the time a tenant may remain on the premises from 24 to 48 hours following issuance of a court order for the constable to remove the tenant.  Always amenable to discussion, Sen. Ratti, the Sponsor of SB 151, has begun stakeholder meetings and aimed at providing a forum for reasonable discussion regarding alternative language for this bill.

Odds & Ends

Facts regarding Hoover Dam are common knowledge in Southern Nevada, making residents coveted assets for trivia night at the local pub.  But, did you know the hard hat, a staple of construction sites second only to the crane, was devised and used for the first time at Hoover Dam?  Here’s to seeing more hard hats and cranes in Nevada!


Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

“Back to school. Back to school, to prove to Dad that I’m not a fool. I got my lunch packed up, my boots tied tight, I hope I don’t get in a fight. Ohhhh, back to school. Back to school. Back to school. Well, here goes nothing.”

– Billy Madison

As we write this month’s newsletter, Carson City is being blanketed in snow while legislators, lobbyists, and press all converge in Northern Nevada.  Indeed, when it’s quiet, you can almost hear the local children practicing “Home Means Nevada” one last time before it’s showtime on the floor of the State Senate and Assembly chambers.  Yet, despite the pomp and circumstance, reality has set in that although we are hurtling toward the constitutionally-mandated beginning of the biennial legislative session with a brand new Governor, Lieutenant Governor, Attorney General, Controller and Treasurer, as well as many, many freshman legislators, there are strikingly few bills to review, which makes predicting the direction this legislature intends to move our small state incredibly difficult.

Nonetheless, the 80th Legislative Session will gavel-in on February 4, 2019 whether there’s a plan or not, so kicking off the NAIOP monthly updates with a bit of positivity seemed most appropriate. And what better way to do that than to talk about workforce development, apprenticeships, proposed grant funding and a possible appropriation for federal lands?

Lack of skilled labor is a national issue with profound adverse economic repercussions in smaller states. Workforce development has always been a priority for NAIOP and something the organization consistently supported in recent years at the legislature. Two pre-filed bills are intended to bolster the state’s workforce development programs. Assembly Bill 32 offers an expansion of the Governor’s Office of Economic Development’s current workforce recruitment and assessment programs to include programs for non-profit organizations, as well as existing employees of a participating employer. Should this bill pass, the expanded training and recruitment opportunities for participating employers will allow businesses to grow organically from the inside and provide better workplace opportunities for their employees. In addition, Assembly Bill 68 aligns Nevada’s apprenticeship programs with federal law and moves all of the state’s apprenticeship programs under the Office of Workforce Innovation. The bill is intended to move Nevada into a position where it may benefit from federal programs which were previously unreachable due to structural issues created by antiquated or ill-written state statutes. In increasing opportunities for apprenticeships, AB 68 takes aim at increasing workforce development in the state.

Senate Bill 96 seeks to enhance Nevada’s ability to maintain and develop its public lands by creating a state-level grant program aimed at awarding municipalities funds they need to evidence matching funds, which will qualify the municipalities for federal grants. As we continue to work toward a funding source for the infrastructure bank created by AB 399 in the 2017 Legislative Session, these grants could prove to be an important step toward enhancement of federal lands throughout the state.

As we move through the session, bills such as the three mentioned here can provide a lot of positivity in what can be an otherwise tough 120 days. In a world of partisanship, political fist fights, and substantial unknowns, the ability to support legislation which benefits all stakeholders and the state itself increases the pie, raises all boats, is a win-win, and a dozen other clichés for good things.  But importantly, they ultimately benefit the commercial real estate industry; a good omen indeed for NAIOP and its members.

ODDS & ENDS

Mark Twain, though commonly thought of as a Nevadan, only lived in Nevada from 1861-1864.  However, the brief time Twain spent in Nevada is often referred to as among the most impactful on his life and works.  To that end, and in the spirit of the beginning of the 80th Session of the Nevada Legislature, the following quote seems appropriate:

“The secret of getting ahead is getting started.”

– Mark Twain

 

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

Who can it be knocking at my door?
Make no sound, tip-toe across the floor.
If he hears, he’ll knock all day,
I’ll be trapped, and here I’ll have to stay.

Who Can It Be Now?
Men At Work (1981)

Moving through Election Day on November 6 to Thanksgiving, followed by NAIOP’s annual meeting and concluding with the final meeting of the County Commission prior to a 3-seat recomposition which will include Chairman Steve Sisolak vacating his seat to assume his role as Governor of the State of Nevada, and the December holiday season, one is left to wonder how to stay ahead of the curve as we run headlong into the 2019 Nevada Legislative Session.  Set to begin on February 4, a mere month from now, Legislators have put in place 968 Bill Draft Requests, and Legislative Counsel Bureau has dropped 177 bills – not quite 20% of outstanding BDR’s – for the upcoming Session.  Indeed, comprehensive speed-reading seems to rate high on the agenda of “things to do” as we prepare for our biennial trek to Carson City.

Yet, just when screaming “UNCLE” is right on the tip of your tongue, the phone rings and the Caller-ID doesn’t recognize the number.  Intoxicated by festive holiday spirits and more than a bit of egg nog, you pick up the phone to hear the cheery voice of…a candidate for city office.  GAH!  I thought this ended back in November!  But then you remember and just as Seinfeld whispered “Newman” between his gritted teeth, you exhale “Nevada” and hear the familiar campaign spiel, as your mind drifts to strangling whoever had the wonderful idea of running city elections separately from the general statewide and national elections.  How did running an election every single year seem like a good idea?  “There ought to be a law.”

There might be one.

Amid the nearly 1,000 BDR’s and 177 bills, AB 50 has emerged as a potential favorite to stem the tide of perpetual fundraising currently enabled by Nevada law.  As written, AB 50 moves all city elections – both primary and general – to the statewide election cycle beginning in 2022.  The bill also makes accommodations for elected officials who were elected in 2017 as well as 2019 such that the present “staggered” election for offices with 4-year terms remains in place.  While it notes a fiscal impact to local municipalities, no fiscal note has been attached, yet.

Although we are expecting more BDR’s (more than 1,200 were filed in 2017), an up-to-date list of legislation we are currently tracking heading into the 2019 Legislative Session is being assembled for the Government Affairs Committee.  Please contact the Committee with any questions you may have.

Odds & Ends

From 2015 through 2016, Republicans held all Nevada state constitutional offices and majorities in both houses of the Legislature.  On November 6, 2018, incumbent Secretary of State Barbara Cegavske (R) defeated challenger Assemblyman Nelson Araujo (D) by just more than 6,200 votes, or .6%, to stave off a Democrat sweep of all Nevada state constitutional offices (Democrats already held majorities in both the Nevada Senate and Assembly) thus denying Democrats’ ability to hold all Nevada state constitutional offices and majorities in both houses of the Legislature for the first time since 1938 – the second of President Franklin D. Roosevelt’s four-term Presidency.

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

“It becomes a gift for one, as opposed to a gift for all.” – the esteemed Jon Leleu, Ladies and Gentlemen

To TIF, or not to TIF, that is the question. For many, many years, almost every state in the US, save Arizona, has had TIF enabling laws on its books. While they all say different things, the goal is the same – to invest in infrastructure and other improvements in blighted areas, to increase and promote neighborhood stability, development, and redevelopment.

So, what is TIF and what does it do? Tax increment financing, or TIF, originated in California in 1952. At the time, it didn’t really take off and over the course of almost 20 years, only 6 other states enacted TIF legislation – Minnesota, Nevada, Ohio, Oregon Washington, and Wyoming. Due to TIF initially being a way of providing matching dollars for federal “urban renewal programs,” and those funds drying up in the 1970’s, cities began looking at TIF funding without federal dollars as an alternative. By the time we were through the 1990’s, the federal role was all but eliminated. In the modern era, TIF dollars typically are pulled from the real property tax base. In certain states, funds are generated from sales tax, personal property, PILOT, or some other revenue stream. Sales tax is a tough sell however, as it is difficult to predict, inferring greater risk.

As with any type of redevelopment incentive, the jury is still out in the court of public opinion. Generally, the decision all comes down to 2 policy arguments. Those who are in favor of economic development incentives will tell you that but for the incentive, development would not occur in certain areas. On the opposite side, you have those that contend it’s a public subsidy for development, where development might have already occurred due to favorable pricing created by a depressed market.  Who’s right?  Both.  We can all point to projects which would not exist without the TIF, as well as projects which would likely have come out of the ground regardless of the public spiff.

Let’s drill down the support and positive side of TIF. To do this, you need look no further than the City of Las Vegas’ Economic and Urban Development Department. Through the years, they have used TIF incentives in their Redevelopment Areas, attracting multiple new businesses to otherwise under-developed and blighted areas. Their process is one of the most transparent and smooth, with a high level of oversight and due diligence mixed in. Projects like the World Market Center Las Vegas have benefited from TIF incentives and have been able to expand operations and announce new development, in part due to TIF incentives over the years. This program can be pointed to as a shining example of the way TIF incentives can benefit a community and city, when done properly.

On the flip side, rampant misuse of TIF incentives in other municipalities have shed light on the issue of what happens when there is little to no transparency and understanding of where the funds are coming from and going to, by the public. In Chicago for instance, taxpayers are incredibly wary of TIF incentives as they are used so frequently, without restriction to blighted areas, and very little public discussion on what they will be used for, until it’s printed in the paper. Many feel like it’s a valuable tool, but only if used with a higher sense of scrutiny, because public dollars are being re-rerouted away from general purpose funds. Projects like revamping skyscrapers, large developer incentives, the renovation of Navy Pier, to the tune of $55 million, and more recently the renovation of a theater in the Uptown neighborhood, have made the public question whether or not TIF incentives are being abused, if their taxes will increase, and whether the subsidies are necessary.

When considering whether a project should receive TIF incentives, municipalities should ensure a very transparent, public process. The public must be able to understand the need for the project and the reason behind the incentive. A mistrust amongst the tax base could lead to trouble for municipalities that rely heavily on this incentive for growth, especially if there’s a chance that property taxes, or other taxes will be raised as a result.

Back in Las Vegas however, as the World Market Center Las Vegas embarks on development and soon-to-be construction of the only downtown convention center, it is clear that TIF incentives bring a lot to the table, and to the benefit of the entire valley.

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

Voters approach Mid-Term Elections with the same enthusiasm they show when shopping for a new refrigerator; some just grumble and go, and others put it off until the next time an issue arises.  Yet, a variety of factors, most notably the Donald Trump presidency…Click here to Read More

 

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

“The best argument against democracy is a five-minute conversation with the average voter.” – Winston Churchill

Election season is upon us, with only 19 days until early voting begins, 36 days until the general election and 126 until the first day of the 2019 Legislative Session.  528 BDRs are already submitted, and things are moving fast. As is customary in any election these days, there are a never-ending supply of commercials about the ballot questions, demanding that you vote yes on this, and no on that. We’ve all heard them thousands of times, this cycle alone. However, when it comes to ballot questions, there is typically one thing you never hear in any of the commercials: 4 of the 6 questions on November’s ballot amend the Nevada Constitution, the remaining 2 amend or enact statute. While this might not seem like a big deal, voters must be very analytical, educated, diligent, and levelheaded about ballot questions. Does it make sense to amend our Constitution or our statutes in this way, rather than leave it to the individuals we have voted into office, to vet and pass them during a legislative session? Understanding the process to bring an initiative or resolution forward and the effect the ballot question will have on Nevadans once it becomes law, is a critical component before casting your vote.

Nevada offers a couple different ways to enact or amend a statute. Traditionally, the 63 members of both houses of the Nevada Legislature, elected by the voters of Nevada, bring forth a bill, vet it through committee hearings in both houses, and vote on its approval or disapproval. Upon bicameral passage, a bill will go to the Governor and is generally signed into law. This is called “representative democracy.”  Growing in popularity in Nevada is “direct democracy,” where a vote of the people enacts or amends statute. As opposed to legislative action, direct democracy in Nevada begins with a petition describing the amendment or proposed law, which is circulated for signatures among voters statewide. Once 10 percent or greater qualifying signatures from 75 percent of the counties in the state are gathered, the petition is filed with the Secretary of State. It then goes to the next regular legislative session, where it has 40 days to be acted upon. If the Legislature approves the initiative, it will go to the Governor for approval and will become law subject to a referendum petition. Should the Legislature not take any action in 40 days, the Secretary of State shall put the initiative to a vote of the people in the next general election. If approved by the voters, it will become law after a canvass of votes by the Supreme Court, and may not be amended, repealed, or otherwise touched for 3 years.

Similarly, there are a couple of ways to amend the Nevada Constitution, all of which require a vote of the people. Just like a petition may be circulated to amend or enact statute, the same may be done for a constitutional amendment. The process differs somewhat, as the petition does not go to the legislature, but is published by the Secretary of State 3 times in newspapers in every county in the state, with the full text and explanatory matter. It then goes on the ballot at the succeeding general election, where it will be voted on. Should the measure pass, the Secretary of State publishes and resubmits the measure to be voted on again at the next general election. Once the matter passes two general elections, it becomes part of the Constitution upon a canvass vote of the Supreme Court.

A joint resolution is the only way a constitutional amendment may be brought forward by legislators. During the legislative session, the resolution will be heard just as a normal bill is heard before committees in both houses. It must pass out of its committees and out of both houses in two consecutive legislative sessions. Gubernatorial approval is not required. After the resolution receives bicameral passage in two consecutive legislative sessions, it will then go on the ballot at the next general election to be voted on, and upon approval shall become part of the Constitution.

Of critical importance when it comes to direct democracy and constitutional amendments, is understanding in Nevada, amendments take 6 years to implement, and another 6 years to repeal or amend, should there be any issues or unintended consequences. By contrast, a bill brought forward and passed during a legislative session can be amended or repealed during any regular legislative session. Many times, direct democracy and ballot questions come about as a means to getting something passed outside the legislature’s purview. If a representative of an issue does not feel they can get a measure passed during a regular legislative session for any number of reasons, direct democracy now seems to be the answer.

Even more troubling perhaps than the extended timeline for change, when it comes to constitutional amendments, is that most voters only know of the issues what they’re told in ad campaigns, what they were told when they signed the petition, or what they read in their ballots right before going to vote. There is no public debate in direct democracy, and most voters do not realize the issue before them has not been vetted by their elected representatives. Most voters have no idea what the timeframe for amendment or repeal is, should there be problem with the measure; but more importantly, the average voter does not ask themselves if this is something that belongs in the Nevada Constitution, as opposed to its statutes. There is little recognition of the difference between those two things. A Constitution, whether state or federal, should provide the skeleton and backbone of our statutes, it should not be treated like and amended as they are, such that every little thing ends up being amended into the constitution. Lawmakers and constituents alike should have the flexibility to change laws that are outdated, not working, need clarification, or otherwise need to be amended. That process is provided for every two years, for 120 days, during the regular meetings of the Nevada State Legislature, who are elected for precisely this purpose – voting on laws – by the people of the State of Nevada.

Click here for information on all ballot questions you’ll see on the November ballot.

 

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037