Hardy Consulting Group Report

8/20/2019 Hardy Consulting Group Report

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Hardy Consulting roup

Summary o the 2 15 Session

Of

the Nevada

Legislature

Prepared for

The Mesquite City Council

And Staff

Presented July 28 2015


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This memo will serve to update the Mesquite City Council and staff on the

recently completed 2015 session o the Nevada Legislature. Special emphasis is

given to the issues contained in the legislative agenda the Council adopted prior

to

the session. In addition, it outlines a few o the additional issues the city

engaged on during the session.

The Hardy Consulting group wishes to acknowledge the consistent support we

received during the session from the offices o the City Manager and the City

Attorney. Their input was critical to our efforts this session. We also coordinated

our efforts and worked very closely with representatives o the Nevada League of

Cities and Municipalities, other local governments and various law enforcement

and public safety agencies.

In

addition to this memo, we will be providing the city manager and attorney with

the complete tracking list we used this session to track over 200 bills on behalf o

the city. We advise that this tracking list be utilized to conduct a legal analysis o

all legislation for its potential impact

on

the City

o

Mesquite.

City Legislative Agenda Priorities

Prevailing Wage:

The council asked that we participate in helping reform

prevailing wage on public works construction in an effort to reduce the cost o

public construction. There were a number o measures introduced regarding

prevailing wage. Proposals ranged from eliminating prevailing wage altogether

to eliminating the payment o prevailing wage on the construction o education

facilities to raising the threshold on prevailing wage to 1 million.

We focused our efforts in working with members o the Republican Assembly and

Senate on a more comprehensive, across the board, reform

o

prevailing wage.

SB 392 was the bill containing the comprehensive reform we sought.

In

its

amended form the

bill increased the prevailing wage threshold to 1 million,

amend the current wage determination survey to eliminate the current statute

that causes the rate to automatically default to the collectively bargained wage if

40% o the surveys are submitted by contractor's signatory to the unions. It

further specifically defined the benefits that can be counted as part o prevailing

wage. Finally, the bill required that any worker who files a wage complaint must

actually be a party to the complaint so that organized labor cannot simply file a

complaint on someone's behalf.

This bill received support from certain sectors

o

the construction industry and

broad support from Republican members o both houses. However, organized

labor unions and the Democratic members o the legislature

in

both houses

vigorously opposed

it.

In the end, undoing the changes we had negotiated to

prevailing wage became the top priority

o

Democrats

in

their endgame

negotiations with the Governor and the Republican leadership.

The final changes to the state's prevailing wage laws came

in

the form o

AB 72

which increases the threshold before prevailing wage must be paid to $250,000


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and imposes

an

across the board 10 reduction

in

the prevailing wage for

school construction and eliminated the necessity to pay prevailing wage on

charter school construction.

Open Meeting

Law

Due Process Assemblywoman Robin Titus introduced a

bill draft on behalf of the city

to

require the Attorney General to adopt regulations

allowing any entity that is subject to

an

open meeting law complaint to provide a

briefing to the AG's office outlining their position.

As we were working with the Legislative Counsel Bureau to prepare the bill, we

scheduled a meeting with Attorney General Adam Laxalt to discuss the matter.

We were assured that the new Attorney General agreed with our concerns in this

regard and we received a commitment that his office would take steps to insure

that it was the process they would adhere to going forward.

The Attorney General asked for the opportunity to resolve this as a matter of

policy without being compelled to do so by the legislature. In light of these

assurances, we requested that Assemblywoman Titus withdraw the bill for this

session and allow the AG's office to proceed with this issue internally.

The Attorney General's office is currently holding public meetings to seek input

on this and other transparency issues. We will be participating in those hearings

and discussions.

Resolution to Congress Regarding Public Lands On this issue, we met prior

to the legislative session with legislative leadership and with Lt Governor Mark

Hutchison , who had expressed particular interest in this matter. We were told at

that time that there would be a number of resolutions coming forward on this

issue and the council decided to support

an

existing resolution instead of coming

forward with a separate proposal.

SJR1

was the vehicle chosen by the

legislature to address this matter. SJR 1 proposed, as a first step, to encourage

the federal government to release into state custody, all lands that they currently

have slated for disposal. We were a bit surprised by the level of opposition SJR1

received at its initial hearing. Mesquite submitted a letter of support for the

resolution and we worked individually with legislators to insure its passage.

More Cops: The only major piece of legislation dealing with MORE Cops was a

bill sponsored by Senator Parks to expand the use of the funds from the tax to

other governmental uses. Along with other local governments

in

the state we

expressed our concerns with the proposal. Senator Parks ultimately withdraw

that bill.

We took the lead in working with legislative leadership

to

draft a special

emergency measure that would have revisited the method of approving the next

installment of the More Cops increase

to

include the other impacted local

governments and not leave the entire matter

in

the hands of the County

Commission. We received support from some of the other local government

entities and the Speaker of the Assembly authorized the emergency measure.

However, in the rush to finalize the session,

we

were not able to get a vote from

the Assembly Taxation Committee and the measure failed. This issue is again


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being considered by the Clark County Commission .

We

are working closely with

other stakeholders on this effort.

Natural Gas Service: Mesquite was a strong supporter of SB 151, which

requires the Public Utilities Commission to develop regulations allowing a

provider of natural gas to expand into underserved areas. Mesquite was a

primary driver behind this bill and we worked actively with Southwest Gas to

advance the bill. The bill was approved

and

discussion with Southwest Gas and

the Public Utilities Commission are ongoing.

Collective Bargaining Reform: There were six bills this session that proposed

to reform local government collective bargaining. AB 182 was the most

comprehensive and the most controversial. The bill proposed to end binding

arbitration in the public employee labor agreement process as well as end the

use of evergreen clauses in contracts.

t

also prohibited local government from

paying union officials to conduct union business as part of their local government

contracts.

n the end a compromise was reached and the legislature adopted 58241

n

its

final version the bill makes several changes to collective bargaining practices for

education, including allowing school districts to more easily fire principals of

poorly performing schools that don t improve. n addition, school

administrators

who

earn more than $120,000 a year

cannot

belong to a

union.

With regarding to it's broader

impact

on local

government

entities;

SB241

provides that

government

agencies must post copies of proposed

collective bargaining

on

their

websites

three days before making a final

vote, as opposed

to simply

listing

the

item on the meeting agenda. n

addition, unions

must

either reimburse

government

agencies when

government employees

do union-related work,

or make concessions

in

negotiations that

are

financial ly equal. The bill also

ends the

use of so

called evergreen

clauses

in collective bargaining agreements.

Another important bill for the City of Mesquite

is

58 68 which allows local

governments to re-open agreements during times of severe fiscal emergency.

Under its provisions 25 percent of the total budgeted expenditures, less capital

outlay, is not subject to negotiation and cannot be considered by a fact finder or

arbitrator

in

determining ability to pay.

Additional Local Government Issues

n

addition to the issues

on

Mesquite's priority agenda, there were a number of

bills that were tracked due to their impact

on

the city. A few of those bills are

listed here:


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Administration

887

Makes various changes to the administration o Nevada's Open Meeting

Law. It clarifies that, for purposes o the OML, a quorum consists o a simple

majority o the members o the public body unless a different number is

prescribed

in

law. The bill further defines working days for purposes of

complying with time requirements associated with posting and minutes.

SB O

also expands the kinds o administrative functions that are subject to the open

meeting law. Finally, it provides that the public body must produce minutes with

45 days and clarifies the statute with regard to filing open meeting law complaints

with the Attorney General's office.

88481 prohibits a county, incorporated city or regional transportation

commission, respectively, from creating, maintaining or displaying a

comprehensive model or map o the location of all or a substantial portion o the

facilities o a public utility, public water system or video service provider. The bill

does not change the requirement for public utilities to provide information

regarding this information to a local entity upon request.

88311 authorizes the board o directors o

an

irrigation district that has entered

into a contract with the United States for the purpose o complying with the

Reclamation Safety o Dams Act o 1978, to incur an indebtedness not exceeding

in the aggregate the sum o $6,000,000. The bill also provides that for the

purpose

o

calculating assessments to pay the indebtedness o the district,

fractional acres may be rounded up to the nearest whole acre.

Campaign and Elections

A86

Makes various changes to Nevada Ethics law including providing a time

frame for the Ethics Commission to determine whether i t has jurisdiction over a

case. It also provides new confidentiality requirements and guidelines

on

the

safe harbor provisions

o

the law.

881 4 Amends the law regarding political campaigns to exempt articles o

clothing and other campaign items costing less tat $5 per item from having

certain political disclosures printed on them.

88293

Makes various changes regarding unspent campaign contributions,

requiring a candidate to spend any contribution in excess o $100.00 within four

years. Exceptions are provided for candidates seeking other office.

883 1 Makes changes to the requirements o lobbyists and public officials to

disclose travel for educational purposes that has been paid for by a third party .

Additionally, it provides specific definition o key terms, including gifts, and

provides additional prohibitions.


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Finances and Bonding

AB17 Makes changes in law regarding general obligation bonds by providing

additional restrictions and transparency measures on the use o municipal bonds

AB345 would have changed the statute regarding acceptable types o bonds for

construction contracts. Current law requires corporate surety bonds. AB345

would have changed the law to allow less traditional and less secure bonds.

ABC felt that this had the potential to open the industry to contractors that are not

financially secure. This bill did not pass.

AB497 (Emergency Measure for The City o North Las Vegas) Provides that a

portion o the sales and use taxes imposed within certain tax increment areas

and the excise tax imposed on financial institutions and employers (the modified

business tax ) located

in

certain tax increment areas may be allocated to pay the

debt incurred by the municipality to finance or refinance the undertaking if the

undertaking is a water project, the estimated cost

o

which exceeds $50,000,000.

Human Resources

AB3 4

would have provided significant new rights to employees in the filing o

discrimination clai

ms

against employees and would have provided penalties for

employers who discussed the salaries of their employees. While ABC believes

all employees should be treated fairly and equitably, this bill tipped the scale too

far

in

the direction of employees. This bill failed to gain passage.

AB3 6 would have imposed requirements on businesses to provide a separate

location for breast-feeding by employees. The bill created requirements in excess

o what is currently required by federal law. While we support the concept and

worked

on

a compromise,

in

the end we felt the federal guidelines were

sufficient. AB306 failed to pass the deadline for first house passage ..

58160

removes the burden

o

liability from a business for an injury to a person

who is

on

their premises without invitation, permission or license. The bill brings

Nevada into conformity with 42 other states

in

this regard.

SB19 would have added a significant number o offenses to those considered

discriminatory against employees. This bill failed to gain passage.

58193

n

its original form this bill would have removed the 8-hour workday for

Nevada and returned the state to the federal 40-hour overtime standard.

Unfortunately, during the hearing on the bill

in

the Senate,

an

amendment was

adopted to increase the state minimum wage for those not providing insurance to

$9.00 per hour. The Assembly adopted an amendment returning the bill to its

original draft.

However, the Senate refused to accept that amendment sending the bill to

conference committee for final consideration.

n

the end the conference

committee adopted an amendment that reinstated the $9 minimum wage while

changing the daily overtime requirement from 8 to 10 hours per day. Ultimately


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the Assembly, by a single vote, refused to adopt the conference committee

report, which caused the bill to fail on the final night of the session.

88224

Provides a clear definition of the term independent contractor and, more

importantly, limits the period

in

which

an

employee can recover unpaid wages

without written notice.

88231

Limits the amount

of

a controlled substance that healthcare providers

may dispense to an injured employee and revises the time that an insurer has to

pay a bill submitted by a healthcare provider. t further changes the rights of

injured employees who were injured while intoxicated or under the influence of a

controlled substance.

88232 Revises various provisions

of

the Nevada Industrial Insurance Act, which

provides for the payment of compensation to employees who are injured or

disabled as the result of an occupational injury. Changes were made to the right

to re-open claims and to how compensation is provided

in

permanent partial

disability claims.

88241

Largely addresses the collective bargaining rights

of

educational

personnel. However, it also makes changes to the general collective bargaining

laws including the elimination of so-called evergreen clauses

in

collective

bargaining agreements.

SB 59 would have mandated sick leave for employees under certain

circumstances.

88 59

failed to pass the deadline for committee passage.

SJR - This resolution proposed to take a ballot question to the voters to raise

the minimum wage to $15 per hour. This bill failed to gain passage.

ublic Works

A81 6 Eliminates the authority

of

a public body to include in a contract with

certain design professionals a provision requiring that the design professional

defend the public body

in

any lawsuit alleging negligence, errors or omissions,

recklessness or intentional misconduct on the part of the design professional or

his or her employees or agents which are based upon

or

arising out of the

professional services of the design professional.

A8125 represents the most sweeping construction defect reform in the United

States. The new provisions of the bill amended the definition of construction

defects to include only a defect which presents

an

unreasonable risk

of

injury to a

person or property; or which is not completed in a good and workmanlike manner

and proximately causes physical damage to the residence or appurtenance.

The bill also addressed indemnification issues in a way favorable to contractors

not involved

in

the actual defect. The bill further removes the provision of

existing law that provides that a claimant may recover reasonable attorney's fees

as part of the claimant's damages

in

a cause of action for constructional defects.


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Also

of

significant importance is the fact that the bill reduces the statute

of

limitations to six years from the 10 years in current law and disallows homeowner

association boards from filing a defect suit on behalf of homes within their

communities.

A8 37

makes various enhancements regarding the requirement that contractors

be licensed before performing work in this state.

It

adds the omission

of

certain

information to the prohibition against providing false information.

A8 59

Prohibits the use of Project Labor Agreements

in

most public works

projects. An opportunity exists to exempt certain water infrastructure, airport or

public safety projects from the prohibition.

A8332 prohibits any public body which sponsors or finances a public work from

entering into a contract for a public work which provides that any construction

materials or goods to be used on the public work be purchased or otherwise

supplied by the public body. This is designed to stop agencies from using their

tax-exempt status

on

construction projects since that status was authorized by

the legislature for the purchase

of

supplies and equipment only.

58223

limits the circumstances under which a primary contractor is liable for

labor and other costs accrued by a subcontractor.

58233

This bill requires that a new employee for a construction company

obtain an OSHA 10 card within 15 days

of

hiring, and requires supervisory

employee to obtain an OSHA 30 card within 15 days of the hiring date. It

removed OSHA 10 and OSHA 30 renewal requirements. This legislation took

effect June 10, 2015.

58254

Changes the law regarding retainage

in

both public and private

construction in a way that creates equity for contractors while protecting the

interests of project owners. This bill passed and was signed into law.

5834

required that any contractor that has been debarred from doing projects

for the federal government is also barred from doing public works projects

in

Nevada. ABC proposed an amendment to narrow the scope of this legislation.

While not all

of

ABC s changes were accepted, the bill was narrowed significantly

from its original version.

58371 proposed to require that 10

of

the workers on every public works project

in the state be part of a registered apprenticeship program in the state. ABC

requested and was given

an

amendment to exempt any contractor that did not

have access to a program. In spite

of

the amendment, ABC continued to

express concerns with the bill and ultimately it failed to pass.

School istrict econsolidation

A8

394

Sets up an advisory committee and a technical committee to develop a

plan for reorganizing the district into five or more separate school precincts.


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The committee is charged with developing a plan to implement deconsolidation

before the 2018-19 school year. Mesquite will need to make

an

appointment to

the advisory committee.

Home Rule

Mesquite worked hard to gain passage o SB11, a bill that was designed to grant

home rule

to

Nevada counties and clarify home rule for Nevada's charter and

general law cities. Unfortunately, the original draft o the bill had the potential o

undoing the current clear statutory language that grants home rule to Nevada's

General Law

or

Chapter 266 cities (Like Mesquite).

While we were unable to find compromise language

in

time for SB11 to survive

the deadlines imposed by the legislature, an emergency measure was adopted

late

in

the session that clarified and strengthened the home rule standing o both

Chapter 266 and 288 cities.

Recreational Marijuana

At least one major piece

o

legislation was introduced to expand the use

o

marijuana into the area o recreational use. However,

no

bill gained passage this

session.

udget and Taxes

The 2015 Session o the Nevada Legislature was very much about achieving the

reforms and spending enhancements that the governor outlined

in

his State o

the State address in Mid-January, particularly the reforms and increased funding

for education. Very early

in

the process a consensus began to emerge among

legislators and interest groups that the governors budget should be funded as he

requested. Many pundits observed that there seemed to be less contention over

the Executive Budget than at anytime

in

recent memory. We would agree with

that analysis.

n

the end the legislative money committees put their own spin on the budget

and advanced their own priorities but the debate did not causing a great deal of

contention

in

the halls of the legislature and the final budget emerged largely as

the governor had intended.

More controversial however was how that budget would be funded once it was

finalized. The Governor consistently doubled down on his suggested method to

fund his budget through a business license scheme based on a company's gross

receipts. Specifically,

he

offered SB252, which proposed increased business

license fees using a tiered method that was similar

to

what many local

governments utilize to calculate their business license fees. Under the bill the

minimum rate for state business licenses would double from the current flat

$200.00 to $400.00 with the top rate capped at $4 million.

While the Senate was able to get sufficient votes to pass the measure out o that

house (Four Republicans voted against the measure), it was never able to gain

traction

in

the State Assembly where the Republican leadership had offered an


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alternative to the governor's plan. Specifically Assemblyman Derek Armstrong,

who chairs the Assembly Committee on Taxation and Assembly Majority Leader

Paul Anderson introduced AB 464. The Assembly proposal proposed a modest

increase in the business license fee but the primary source of revenue was an

increase

in

the current Modified Business Tax (MBT) or payroll tax. The bill also

lowered the threshold under which businesses are exempt from the payment of

the tax. As a preferred alternative to the governor's plan many business groups

began to voice support this proposal.

Several other proposals came forward including a proposal by Democratic

Senator Pat Spearman, to eliminate the payroll tax for all businesses except

banking and mining and instead impose a tax

of

gross receipts

of

all businesses.

Throughout the session, the so-called Gross Receipts Tax was a non-starter for

most Republicans so Senator Spearman's proposal never got much

consideration.

In

the end the Legislature adopted a Hybrid plan that included a so-called

Commerce Tax designed to meet the governor's objective of broadening the tax

base

in

Nevada. Under the final plan, named the Nevada Revenue Plan, the

business license fee for corporation's increases from the existing $200 a year to

$500, while the fee for all other business entities will remain t $200.

The existing modified business tax increases from 1.17 percent to 1.475 percent

of wages and it reduces the current exemption to the first $200,000 in payroll a

company pays out each year. The tax remains at 2 percent for the mining

industry and financial institutions. Companies will also still get to deduct health

care premiums for employees.

The new commerce tax will apply to businesses with more than $4 million in state

revenue each year. Businesses can count 50 percent

of

their commerce tax bill

as a credit against their modified business tax bill. The intent

of

the commerce

tax is to capture revenue from businesses that do business in Nevada but aren't

based in the state.

The plan also includes a complex provision that will lower the modified business

tax rate if revenues from the new commerce tax and MBT rate bring in more

revenue than projected. Finally, more than $500 million of overall tax increase

comes removing the sunset on expiring payroll and sales taxes. The bill also

raises the tax on cigarette by 1 per pack.

In

addition to the Nevada Revenue Plan the legislature made adjustments to the

Live Entertainment Tax LET including clarifying that the tax is only applicable at

events where patrons are charged for admission and that it does not apply to

food and beverage.

This document is intended to be informational only.

he

Hardy Consulting

Group recommends your city attorney determine how this n w legislation will

impact

or

alter the business practices of the city.

** Bills in italics and underlined did not pass

Hardy Consulting Group Report

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