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Nevada Government Affairs & Advocacy Nevada Update – July 9, 2020

Government Affairs Daily Update

July 9, 2020

Governor to Impose New Restrictions on Bars and Restaurants — Governor Steve Sisolak held a press conference Thursday evening announcing additional restrictions on bars and restaurants as statewide COVID-19 numbers continue to climb. As of 11:59 pm on Friday, July 10, bars in certain counties deemed “high-risk” will return to Phase 1 regulations and will be restricted to curbside services. Restaurants and taverns must have bar areas closed and continue operating at 50-percent capacity for food service. A new limitation requires all food establishments to not serve parties larger than 6 people and while indoor dining is still permitted, Governor Sisolak strongly encouraged establishments to operate with outdoor dining only. During a Q&A with reporters, the Governor confirmed Clark and Washoe Counties will be impacted, but a final list will be released Friday. The new policy was announced after the Governor and his staff had a call with the U.S. Department of Health and Human Services and the Federal Emergency Management Agency in which they were advised to take action via policy to help stop the spread of the coronavirus. The Governor additionally shared comments regarding Nevada’s compliance with current Phase 2 regulations, noting that OSHA has completed over 1,500 observations and recorded a 79-percent compliance among businesses. The Governor’s latest Directive outlining the details of the new restrictions is expected to be released tonight or tomorrow.

Day Two of Special Session – The 31st special session of the Nevada Legislature continued Thursday morning as legislators take action to address the $1.15-billion shortfall for Fiscal Year 2021. The Senate and Assembly heard from various state departments, each house reviewing budget presentations previously given to the other house on Wednesday. The $233-million cut to the Department of Health and Human Services and $156-million cut from K-12 education remained center-stage, prompting lengthy discussion among lawmakers and state officials for day two in Carson City.

Second Special Session? – Lawmakers worked close to 9 PM Wednesday night and late evenings are expected throughout the special session. Many anticipate lawmakers will work through the weekend. The possibility of a second special session to immediately follow the current budget-focused special session has not yet been ruled out. The second special session, while not definitive, would be a possible opportunity to delve into policy issues such as shielding employers from liability lawsuits related to the pandemic.

Tax Package? – There is talk of a potential tax package to be heard in this special or the second one, although no details are known at this time. Governor Steve Sisolak has publicly stated he is not inclined to implement any tax increases, but clearly left the door open for legislators to explore the possibility. Note that if legislators were to hear a tax package, it would only be a tax rate increase, not any new taxes, as implementation of something new would not give the state the immediate revenue it needs to close the budget shortfall. However, any increase would be entirely dependent on a state Senate Republican crossing party lines to clear the constitutional two-thirds majority needed to raise revenue.

Protesters Opposed to K-12 Cuts – Dozens of members and supporters of Nevada State Education Association (NSEA) are participating in the organization’s “Education is Essential: Line the Street at 6 Feet” event in Carson City to protest the proposed $156-million cut to K-12 education. Participants are stationed outside of the legislative building with shirts and signs identifying their cause. The organization has been extremely vocal in its opposition to the rule restricting the public from being in the legislative building. Representatives of NSEA who have provided public comment virtually are calling for a budget plan that allows every dollar cut from K-12 education to be supplemented with a dollar of new revenue.

Nevada System of Higher Education – The Nevada System of Higher Education (NSHE) presented its plans for budget cuts to the Senate Thursday and gave insight into what higher education institutions can expect in the upcoming school year. NSHE is planning to reduce its operating budget by approximately $110-million, accounting for nearly 16-percent of its original General Fund appropriation. The system received nearly $60-million in emergency assistance funding from the CARES Act, with 50-percent being dedicated to financial aid for students. NSHE has already taken additional steps to address the budget shortfall, previously approving a temporary surcharge for students that will generate $10-million more in revenue and mandating a certain amount of furlough days per year for staff.

Capital Improvement Projects – Lawmakers heard a presentation Thursday on the proposed cuts to Capital Improvement Projects (CIP), filling a $72.6-million to the state’s fiscal year 2020-2021 budget. As of March 2020 the state had 192 active CIP projects, all approved during the 2017 and 2019 legislative sessions. The largest single cut will come from the construction of UNLV’s College of Engineering, after the 2019 legislature included $20-million in the state General Fund to construct the building’s shell. The plan also includes a substantial $13.8-million cut to the Health Sciences Building at the College of Southern Nevada. Other large pieces of the CIP reductions include $8.9-million from eliminating deferred maintenance projects at the university system, $8-million in advance planning for the Grant Sawyer building remodel in Las Vegas, and upgrades to the Capitol building in Carson City.

First Bills Introduced – The Senate introduced its first two bills Wednesday night, providing the first glimpse at proposed actions to address the budget shortfall. An additional Senate bill was introduced Thursday morning along with two Assembly bills. As no legislators are able to sponsor bills individually, all bills are sponsored by either the Senate Committee of the Whole or Assembly Committee of the Whole.

AB1– Revises provisions relating to public employment.

  • Increases annual leave limitation for state employees from 30 working days to 40.
  • Currently, leave days not used expire at end of year. This allows carryover to next year.
  • Reduces state agency monthly contributions to Public Employees’ Benefits Program (PEBP) from 12 months in calendar year to 11 months. The waived amount does not need to be paid by the state employee or retiree.
  • Requires each full-time state employee to take 96 hours (equivalent of 12 8-hour days) unpaid furlough, and part-time the same, proportionately, in FY 2020-2021, unless employee is in critical position, or if employee works for Dept of Tourism and Cultural Affairs with a standard 32-hour workweek. For these employees, their salary will be reduced by 4.6-percent.
  • Allows employees participating in Public Employees’ Retirement System (PERS) to take furlough leave due to extreme financial need are held harmless in accumulation of retirement service credit.
  • Prohibits merit pay increases to state employees during FY 2020-2021.

AB2– Temporarily removes a requirement for year-end balances of certain local school precincts to be carried forward as restricted fund balances.

  • For fiscal year beginning July 1, 2020, a large school district (public school district with more than 100,000 enrolled pupils) may treat year-end carryover balance by a local school precinct as unrestricted funds.
  • Funds may not be used for administrative functions, transportation, food, custodial, payroll, legal, IT, EMS or police services, risk management, maintenance and repair of buildings, buildings and grounds, internal audits, capital projects or utilities.
  • Funds may beused 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.

SB1– Revises provisions relating to capital improvement projects.

  • The bill cuts the budget for certain line items and reverts funds back to General Fund.
  • Examples of line items reduced:
    • Supreme Court Building central plant renovation, reduced from $1,866,240 to $1,566,407.
    • Heroes Memorial Building Annex in Carson City, roof replacement and roof seismic stabilization, reduced from $577,668 to $340,494.
    • The bill also increases the amount of use of proceeds from state-issued general obligation bonds from $3,469,121 to $10,325,417.

SB2– Authorizes certain changes to eligibility requirements for the Governor Guinn Millennium Scholarship.

  • This bill authorizes the Board of Regents, in response to a state emergency or declaration of disaster, to temporarily waive or modify the requirements to be eligible for the Millennium Scholarship
    • These requirements may include the minimum grade point overage for one or more semesters of enrollment, the minimum number of credits a student must be enrolled, or any other requirement as deemed by the Board of Regents
  • The bill gives Board of Regents the authority to adopt procedures necessary to implement the temporary modifications to be eligible for the Millennium Scholarship
  • The temporary waiver or modification may remain in effect for as long as the Board of Regents deems necessary due to the state of emergency
  • The Board of Regents must submit a report on or before February 1 of the year immediately following the year in which the state of emergency is proclaimed stating the impact of the waiver on student
  • The report must be submitted to the Governor and to the Legislative Counsel Bureau for transmittal to the Legislature, and if the Legislature is not in session to the Legislative Committee on Education

SB3– Revises provisions governing governmental financial administration.

  • This bill temporary requires advance payment of the taxation of net proceeds of minerals based upon the estimated net proceeds and royalties that will be paid for a certain number of years.
  • The bill provides that the collection of the tax on net proceeds of minerals reverts back to the former method of collection on actual net proceeds beginning calendar year 2024, and the bill enacts a transition provision governing the duties of the Department of Taxation for money to counties and other local government for fiscal year 2024.
  • That bill allows the Department of Taxation to implement a penalty and interest forgiveness program in exchange for payment of delinquent taxes in full. The Department is authorized to implement the amnesty period over a 90 day period at any point prior to June 30, 2021.
  • This bill temporarily requires the Department of Taxation to direct 50-percent of the proceeds to the State General Fund and 50-percent to the State Highway Fund
    • Previously the State General Fund received 25-percent and the State Highway Fund received 75-percent

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