Understanding and responding to the business and legal impacts of COVID-19

Nevada Government Affairs & Advocacy Nevada Update – July 11, 2020

Government Affairs Daily Update

Day Four of Special Session – Lawmakers worked through the weekend, spending Saturday continuing discussions, hearing legislation and contemplating painful budget cuts in order to fill the state’s nearly $1.2-billion budget shortfall for Fiscal Year 2021. The Senate Committee of the Whole heard Senate Bill 3, while the Assembly Committee of the Whole heard Assembly Bills 1 and 2. Twelve members of the Assembly, as well as Senator Pat Spearman (D), began participating in legislative proceedings virtually on Saturday, an action authorized in the Senate and Assembly special session rules.  A member of the State Assembly reportedly testified positive for the coronavirus Friday, which is likely what prompted the dozen Assembly members to opt to participate virtually.  Yesterday’s positive test result caused major delays in the Assembly and hampered the Assembly’s ability to accomplish much at all. The Assembly is expected to work tomorrow – Sunday – to make up for the setback, though that is not confirmed at the time of this writing.  The Senate will not convene until Monday morning at 9 a.m.

Second Special Session to Tackle Policy?– Lawmakers are expected to host a second special session next week, after finishing this budget-focused special session – however, that is not confirmed.  Either Governor Steve Sisolak or a constitutional 2/3 majority of lawmakers can call a special session. Notably, there is no requirement for how much notice must be given to call a special session – a proclamation simply must be issued. Potential topics include social justice, police reform and limiting liability for businesses that are following CDC guidelines in order to shield them from lawsuits alleging employees or customers contracted coronavirus at their place of business.  The Vegas Chamber and Nevada Resort Association are taking the lead in conversations with Governor Sisolak and legislative leadership, pushing for the liability piece be to be heard next week.  Many businesses have opted to remain closed in fear of frivolous lawsuits and both groups argue that businesses that are reasonable and compliant in implementing CDC guidelines should not bear the risk or live in fear of being sued when so little is known about tracing the spread of the virus.  Additionally, schools could also be offered a liability shield, as CCSD Superintendent Jesus Jara testified to lawmakers earlier this week that liability protection is critical for the reopening of schools.

Protests Outside of Legislative Building –A number of dueling protests took place outside of the legislative building in Carson City, with demonstrations spanning from promoting the Black Lives Matter movement and supporting President Donald Trump. Additionally, others protested again the legislature passing new taxes, the governor’s face covering mandate and more.  While the variety of protests were not related, they were for the most part peaceful.

Senate Bill 3 – SB3 was presented by Taxation Department Director Melanie Young. The bill would require advanced payment of net proceeds of mineral taxes and direct 50-percent of the proceeds to the General Fund and 50-percent to the State Highway Fund. Currently, the State Highway Fund receives 75-percent of net proceeds of mining taxes. The change takes an additional step in attempting to close the budget shortfall as the state would be able to access the money immediately. The bill provides that the collection of the tax reverts back to the former method beginning calendar year 2024. Representatives from Nevada Department of Transportation (NDOT) and Susan Brown from the Governor’s Finance Office answered questions regarding the transfer of funds and the potential effect on ongoing NDOT projects. While the transfer from the State Highway Fund is estimated to be approximately $21-million, NDOT had $340-million in reserves at the end of Fiscal Year 2019, indicating there will likely be no direct impact on current projects. SB3 also provides for amnesty for those owing back taxes and allows them to get current on taxes without penalty or interest. This provision applies only to amounts owed prior to the enactment of this bill and does not apply to delinquent taxpayers who have already negotiated a payment plan with Nevada Department of Tax. There was no public comment in support of the bill, however, a number of representatives from various organizations testified in opposition and urged lawmakers to amend the bill to do away with current deductions enjoyed by mining companies and to take action to begin the process to amend the Nevada Constitution to remove the cap on taxes (5 percent) for the mining industry. No action was taken on the bill.

Assembly Bill 1– AB1 makes various adjustments to employment conditions for state workers. The bill provides for an increase in the the annual amount of leave that an employee is authorized to take from 30 days to 40 days and allows unused time to carry over to the following year. It would require each full-time state employee to take 96 hours (equivalent to 12 eight-hour workdays) in unpaid furlough. It additionally reduces state agency contributions to Public Employees’ Benefits Program (PEBP) from 12 months in a calendar year to 11 months and prohibits merit-based pay increases to state employees. As written, the measures in the bill are estimated to save the state an approximate $66-million. During the hearing, Republican Assemblyman Greg Hafen II suggested members of the Legislature take a 4.6-percent pay cut in solidarity with state workers. Several state employees and union representatives provided public comment in opposition to the bill. No action was taken on the bill.

Assembly Bill 2– AB2 temporarily removes a requirement for year-end balances of certain local school precincts to be carried forward as restricted fund balances. The bill requires that funds may not be used for administrative functions, transportation, food, custodial, payroll, legal, IT, EMS or police services, risk management, maintenance, internal audits, capital projects or utilities. Funds may be used for services to promote and ensure equity and diversity, compliance with civil rights laws, services related to Individuals with Disabilities Education Act, English learners program implementation and state mandated assessments and accountability reports. The Clark County Education Association (CCEA) proposed an amendment to the bill that limits that practice to local school precincts that have lost funding resulting in program reductions. CCEA Executive Director John Vellardita presented the amendment that prompted a lengthy discussion among legislators on accountability and carryover dollars. No action was taken on the bill.


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