Nearing the halfway point of the 2017 Legislative Session, schedules have become habitual, and patterns predictable. As the excitement of a new Legislature wears off and the mid-winter doldrums take hold, Carson City continues to buzz. While the end is not yet in sight, the pieces continue to move about the board with purpose, leaving little doubt strategies embraced over the interim are being implemented and tweaked to ensure agendas are adopted or defended, and interests are protected, for the upcoming biennium.
More than 840 pieces of legislation have been introduced between the two chambers so far this Session, and as we pen this update, we are awaiting the final deluge of bills introduced by the various legislative committees (likely more than 150 additional bills). Holders of majorities in both chambers, the Democrats control all committees, and all committee bills, this Session. Although the Democrats have consistently pointed to their Nevada Blueprint as an articulation of their overall agenda, introduction of the committee bills will give the best roadmap on where the Democratic caucus wants to push its agenda this Session, and by contrast, where the Republicans will likely concentrate their resources in defense of their priorities. Ever-present is the Governor’s veto, which certainly influences the negotiation dynamic as positioning and posturing begin in earnest. While moving a bill out of the legislature is certainly commendable, getting the Governor’s nod is a completely different ballgame, and all of these factors play into whether bills live or die on a day-to-day basis.
After 7 weeks, we’re happy to finally say; “Let the games begin!”
Real Property Tax Abatements – And Then, There Were Two
Introduced in February as a pre-filed bill, AB 43 stood for nearly two months as the only bill seeking to modify Nevada’s real property tax abatements. Although the entire reason the abatements are under scrutiny is because local municipalities have claimed an inability to provide services as the post-recession market recovers and the population grows, AB 43 does not address raising revenue. Rather, the bill simply protects against further loss of revenue caused by dramatic dips in the real estate market. To that end, NAIOP opposes AB 43 as incomplete legislation. On March 20, 2017, the Senate Committee on Revenue and Economic Development, chaired by Senator Julia Ratti, introduced SB 425, which simplifies calculation of the abatements by removing the CPI contingency, and abates increases to real property taxes in excess of 3% for residential, and 8% for non-residential properties. Accordingly, SB 425 allows for moderate increases in revenue. That said, SB 425 as drafted does not address a failing market and would allow tax assessments to fall unencumbered, placing municipalities into roughly the same position they’re in now, should the market again collapse. Interestingly, AB 43 and SB 425, when combined, appear to compliment each other and present a complete solution worth discussing substantively.
Infrastructure Bank – Economic Development Rules
Economic Development continues to be popular at the legislature. Infrastructure banks are economic development tools utilized by municipalities to spur development in certain areas by expending “bank funds” to improve the property and make it “shovel-ready.” NAIOP strongly supports this concept. Extensively vetted at the Southern Nevada Forum and highlighted by NAIOP as a legislative priority for 2017, the first of at least two bills creating an infrastructure bank was introduced on March 20, 2017. Sponsored by Assemblywoman Irene Bustamante Adams, AB 399 is a combined bill, in that it seeks to authorize “banks” for transportation, as well as infrastructure. NAIOP has assembled a committee to analyze and comment on the bill. Additional legislation seeking to authorize infrastructure banks is expected with the introduction of committee bills.
As expected, several bills have been introduced which seek to amend prevailing wage. We expect several more with the introduction of committee bills. Currently pending bills include measures reducing the public work threshold from $250,000 to $100,000 in estimated cost (AB 154), reducing the public work threshold from $250,000 to $25,000 in estimated cost (AB 406), and raising the public work threshold on redevelopment projects from $100,000 to $250,000 (SB 87). More, there are bills removing prevailing wage exemptions applicable to NSHE and charter schools (AB 154, 406), applying full prevailing wage to public school projects (currently priced at prevailing wage, less 10%) (AB 154, 406), and applying prevailing wage to projects in an Achievement School District (SB 173). NAIOP has opposed prevailing wage bills related to charter schools, as construction of such projects is privately financed, and continues to monitor the remaining proposed modifications.
Vacant Property Registry
Following numerous conversations with local municipalities and chambers of commerce, NAIOP continues its opposition to SB 24, a bill seeking to require owners of vacant commercial property to register the property and pay a fee. As such could further distress a property in financial difficulty, would create a public record of vacant properties and thereby could pose a safety risk, and because this bill is just plain burdensome, NAIOP has opposed this measure. That said, those supporting the bill have not aggressively pursued it, and it has not received a hearing as of this update.
Two bills have surfaced in the last two weeks, which may restrict development in southern Nevada. AB 277 – the “Save Red Rock” bill – would prohibit a local government from allowing increased density of residential zoning, additional nonresidential zoning districts, and expansion of existing nonresidential zoning districts, within 5 miles of a national conservation area. In addition, AB 393 seeks to prohibit Clark County from approving development of projects with increased density at the base of Sunrise and Frenchman Mountains. We are continuing to gather facts regarding these bills, and we will provide an update as we obtain additional information.
Odds and Ends – Life in the Left Lane
Following the Legislature’s passage of SB 2 in 2015, Nevada’s citizens rejoiced at the prospect of increasing speed limits to 80 mph. Following the effective date of the bill, however, nothing happened. Why? The legislation was enabling, and allows the Nevada Department of Transportation to implement the increased speed limit where the Department feels it safe to do so. Apparently, the Department has reason to believe existing conditions in the areas where speeds could be hastened do not yet support an increased speed limit.
Help may be on the way
So far in the 2017 Legislative Session, 3 bills have been introduced which restrict use of the left lane on Nevada highways. AB 329 and AB 334 both prohibit use of the left lane by drivers traveling slower than the speed of traffic. In the opinion of these lobbyists, such should be a capital crime, but we’ll happily tackle this issue in small bites, and reserve application of the death penalty to later sessions. In addition, AB 208 prohibits use of the left lane by vehicles weighing over 26,000 lbs. (trucks). Together, these measures could “clear the way” for application of the 80 mph speed limit in some areas.
Jonathan P. Leleu, Shareholder
Kerrie Kramer, Assistant Director