MINUTES OF THE MEETING OF THE ASSEMBLY COMMITTEE ON TRANSPORTATION

Seventy-Ninth Session February 23, 2017

The Committee on Transportation was called to order by Chairman Richard Carrillo at 3:17 p.m. on Thursday, February 23, 2017, in Room 3143 of the Legislative Building, 401 South Carson Street, Carson City, . The meeting was videoconferenced to Room 4404B of the Grant Sawyer State Office Building, 555 East Washington Avenue, Las Vegas, Nevada. Copies of the minutes, including the Agenda (Exhibit A), the Attendance Roster (Exhibit B), and other substantive exhibits, are available and on file in the Research Library of the Legislative Counsel Bureau and on the Nevada Legislature's website at www.leg.state.nv.us/App/NELIS/REL/79th2017.

COMMITTEE MEMBERS PRESENT:

Assemblyman Richard Carrillo, Chairman Assemblywoman Ellen B. Spiegel, Vice Chair Assemblywoman Shannon Bilbray-Axelrod Assemblyman John Ellison Assemblyman Ozzie Fumo Assemblyman Richard McArthur Assemblywoman Daniele Monroe-Moreno Assemblyman Michael C. Sprinkle Assemblyman Justin Watkins Assemblyman Jim Wheeler Assemblywoman Melissa Woodbury

COMMITTEE MEMBERS ABSENT:

None

GUEST LEGISLATORS PRESENT:

None

STAFF MEMBERS PRESENT:

Jann Stinnesbeck, Committee Policy Analyst Marsheilah Lyons, Committee Policy Analyst Darcy Johnson, Committee Counsel Joan Waldock, Committee Secretary Trinity Thom, Committee Assistant

Minutes ID: 204

*CM204* Assembly Committee on Transportation February 23, 2017 Page 2

OTHERS PRESENT:

Rosemary A. Vassiliadis, Director, Department of Aviation, Clark County Dean E. Schultz, A.A.E., Executive Vice President/COO, Reno-Tahoe International Airport Bobbi Thompson, representing Nevada Airports Association Kay Bennett, Owner/Manager, Silver Springs Airport, LLC, representing Nevada Airports Association Reza Karamooz, President, Nevada Business Aviation Association

Chairman Carrillo: [Roll was called. Committee protocols and rules were explained.] If you have an amendment, please work with the bill's sponsor prior to the bill hearing. Please make sure we get all amendments within 24 hours of the bill hearing. We need the following information to accompany amendments: name, contact information for the person bringing the proposed amendment, and a statement of the intent of the amendment. I am reiterating these guidelines because we have had problems with amendments coming in late. We want to make sure that we correct that now.

We will now get started with our presentations. Clark County Department of Aviation will begin.

[Assemblywoman Spiegel assumed the Chair.]

Rosemary A. Vassiliadis, Director, Department of Aviation, Clark County: I have with me Mr. Chris Jones, our chief marketing officer, and Ms. Tina Friez, our community affairs manager for the airport.

I would like to begin by showing McCarran International Airport as it started, over 60 years ago [page 2, (Exhibit C)]. There we were, out in the middle of nowhere. We served a little over 89,000 passengers a year. Today, we have 2 unit terminals, a very complicated roadway system, 4 runways, 110 gates, and serve more than 89,000 passengers each day [page 3, (Exhibit C)]. We actually serve 130,000 passengers a day [page 4, (Exhibit C)]. Last year we hosted over 47 million passengers. We have more than 1,500 Department of Aviation county employees, but there are also another 15,000 jobs at the airport—including airlines, tenants, and concessionaires. We are ranked as the 8th-busiest airport in the United States and the 26th-busiest in the world. An important statistic for us is that we are the 8th-busiest airport in the world for operations—actual planes coming and going. That includes our commercial, private, helicopter, and military flights. I am sure that many of you remember May 2015, when Las Vegas hosted the Pacquiao-Mayweather fight. We had over 200 private general aviation airplanes nested in parking for that fight. It was exciting, but I am not sure we would want to do that again.

Assembly Committee on Transportation February 23, 2017 Page 3

The most important fact for us is that we are the second-busiest origin and destination airport in the nation [page 5, (Exhibit C)]. Nearly 85 percent of the 47 million passengers are coming to Las Vegas and leaving Las Vegas. We have to have facilities for every part of the experience. Departing passengers use the roadway system, our curb, ticketing, security checkpoints, and the gates. Arriving passengers use the concessions, restroom facilities, baggage claim, and the curb for transportation to leave the airport. After 9/11, when the Transportation Security Administration (TSA) was born, it allocated officers for checkpoints by total number of passengers. We had lines wrapped around the terminal, out into the garage. We wondered what was happening. Hartsfield-Jackson Atlanta International Airport, John F. Kennedy International Airport, and Los Angeles International Airport were not having any issues as they had a tremendous number of officers. We learned the hard way that it is not the bottom line number; it is the origin and destination number—that uses all parts of our facility. We went to Washington, D.C., and were able to change the formula computing how many TSA officers an airport needed. With Atlanta's airport being the busiest in the nation (they recently surpassed the 100-million-passenger mark), only 35 percent of their traffic is classified as origin and destination. They actually have fewer passengers going through their facility than we have going through ours. That is something we keep in mind when we look at our budget and the types of capital projects we need.

While we are a department of Clark County, we operate as a self-sustaining enterprise fund, meaning we do not receive any state or local tax dollars [page 6, (Exhibit C)]. We generate the revenue for our operations. We do that through fees and charges to the airlines, concessions, parking, and advertising. We generate an annual economic impact of almost $30 billion.

One of the reasons for our success is the partnerships we have [page 7, (Exhibit C)]. They start at the local level, rise to the state level, and move on to the federal agencies. Many of those agencies regulate us through several different layers—the Federal Aviation Administration (FAA), TSA, all the environmental organizations, and the U.S. Customs and Border Protection. We work closely with them, which is key for what type of service we provide. We are the first and last look of Las Vegas. We take that role very seriously. We service the discretionary passenger—a person choosing to come to Las Vegas. You will hear that with all of the airports in this state. We want the experience to be as smooth and as efficient as possible for our airlines and all of our partners.

The graph [page 8, (Exhibit C)] shows our traffic over the past 30 years. Our watermark year was 2007, at 47.7 million passengers. Last calendar year, our busiest post-recession year, we reached 47.4 million passengers. We hope to hit a new watermark in 2017. Thirteen domestic airlines and fourteen international air carriers operate at McCarran, reaching 135 cities [page 9, (Exhibit C)].

During the recession, international service became our bright spot [page 10, (Exhibit C)]. It provided the largest growth we have ever had, and it has proven to be sustainable. Studies show that our international passengers stay longer and spend more while they are here. Assembly Committee on Transportation February 23, 2017 Page 4

That gives us some unique opportunities to make sure that we provide for the comfort of those world travelers. We welcomed our first nonstop flight from China. Hainan Airlines began service last December. That caused us to look at our terminal differently in order to make it "China-ready." We had to make sure that we offered concession items, including something as simple as hot water that would appeal to these passengers. We had never had hot water available for passengers before, but that is something our China passengers look for. We evaluated our terminal, looking at signage and items available, to make sure we were China-ready. We will keep doing that for our passengers. Passengers from Canada top our international visitors, followed by Mexico, then Great Britain. We will keep on working on the success of that program. We have discovered that our international passengers love all the natural wonders of our area—the Grand Canyon; Mount Charleston; Brian Head, Utah; and Lake Tahoe.

The physical side of the airport is crucial to our smooth and efficient operation. In the last five years we have completed many large projects, in which we invested to ensure that the airport experience remains smooth [page 11, (Exhibit C)]. We use construction manager at risk (CMAR) and project labor agreement (PLA) for our large projects. We use CMAR for the critical operating areas. Those of you who have been through McCarran International Airport know that we have been working on ticketing in Terminal 1. It has not been an easy project, but the outcome is worth it. Our airlines approve of the completed project, but were not happy with the pain of moving and the detours their passengers had to make during the first phase. The terminal is now lighter, brighter, much more modern, and more efficient for today's operation.

The aviation industry is constantly evolving. Now we all tag our own bags. Ten years ago we were getting our own boarding passes. We have self-boarding in Terminal 3. We have to be flexible to be able to keep up with changes. Every once in a while, it is nice to tear out the old and put in the new to improve efficiency. The common element for all the airports in Nevada is the discretionary passenger. Smoothness of operation helps. Passengers may come here for a weekend but decide to stay a few more days; they can do that because we have such an efficient operation as a result of investing in our airport.

Because of the discretionary passenger, we look at what they will experience at our airport [page 12, (Exhibit C)]. We are concentrating on customer service and on the hospitality our state is known for because of our No. 1 industry. We are trying to upgrade and evolve our culture through a program called, "McCarran At Your Service." This is a little bit different than a regular customer service program. In the past, we just used our aviation personnel, but we now include everybody—all 16,000 of us have a responsibility for this program. We hope it becomes noticeable and effective.

I have already spoken about the airport's being the first and last look our passengers have of Las Vegas. When people come to Las Vegas, they want the Las Vegas culture. We are branding the airport much more like the city than we have in the past—the music, the Voices of Vegas, and icons of people of the Strip. It has been noticed. We hope this helps the experience for our travelers. Assembly Committee on Transportation February 23, 2017 Page 5

Knowing that we provide economic benefit to the community, we feel that it is our duty to partner with it on several different programs. We do this with the Clark County School District by providing back-to-school items for students. The Department of Aviation, the entire airport, and the Clark County office downtown participate. We are proud to have the "Stop DUI" part of our holiday program. We kick off the holiday event with that program as our focus. We have two United Service Organization (USO) lounges, one in each terminal, that exist for the military and their families to have a place to rest or meet. "Community Enrichment Team" is a fancy name for our volunteer programs. We have about six events a year. It is great for the community, but it is also nice for the airport as people from different departments get together and get to know each other. We participate in what we call Paper Plane Palooza with the Boys & Girls Clubs of Southern Nevada. It started off as an event marking the anniversary of the opening of Terminal 3, but has since turned into something phenomenal. We have teams adopted by airlines competing in a paper airplane contest. These underprivileged children come to the airport, get to know the airport master concessionaire for food and beverage that supplies lunch, and they receive backpacks and school supplies. They have an opportunity to learn about aviation and engineering by flying a paper airplane. We have three different types of competition. This event has grown each year. If we introduce two or three students a year to aviation, they may think about that when they are making hard choices in their teen years.

We want to represent our community. As it grows in different areas, we want to make sure that everyone has the same opportunities. When we have an opportunity to add a new concession, we wait until we have two or three applicants, then we have a thorough workshop to teach concessionaires how to fill out a request for a proposal. We show them what they need in order to start a business. We do not want businesses to fail; we want them to succeed. Some small businesses do not know what it takes to start.

We will now move on to the efficiency side of the airport [page 13, (Exhibit C)]. We work in tandem within an airport system. McCarran International is the commercial airport in this system. and Henderson Executive Airport act as reliever airports—we entice smaller jets to use those facilities. We invest in them, making sure they provide the amenities that private pilots need. Jean Sport Aviation Center is for aviation enthusiasts—parachutists, jumpers, and gliders—so that their activities do not interfere with commercial airspace. Overton/Perkins Field is a spillover for our enthusiasts. There is a new parachute business with grand plans starting out there. We are working very closely with them. We do that because McCarran's airspace is constricted. We try to make sure that our airspace is going to be available for our No. 1 industry, commercial aircraft. The smaller aircraft tend to take longer and occupy the airspace more, so we entice them to use the other airports.

Cargo is not a big business at McCarran. Although there is a lot of cargo flown into Las Vegas, we do not do much manufacturing in the Las Vegas area, so there is nothing to fill departing aircraft. No airline is going to make a profit by providing one-way cargo service. We could accommodate growth if the time for it came, but it is not a large portion of our business currently. Assembly Committee on Transportation February 23, 2017 Page 6

Moving on to the future, I am sure you have heard and read about the possibility of a National Football League (NFL) stadium being built in Las Vegas [page 14, (Exhibit C)]. I was on the Southern Nevada Tourism Infrastructure Committee (SNTIC). We collaborated on the NFL stadium site. Current plans are for its construction at Russell Road and Interstate 15, which will not have a negative effect on pilots or on airspace use. We provided a white paper of factors that would have to be mitigated, and were mitigated, for this site. It was presented to SNTIC [page 19, (Exhibit C)]. If this site does not work out, we will work collaboratively on any other site.

Ivanpah is a commercial airport site that we are preserving off I-15, about five miles north of Stateline [page 15, (Exhibit C)]. It is on hold, but we are preserving it for future use. It is airspace that we need. It does not supplant anything at McCarran. One day, we will need McCarran's full capacity and also this for a full build-out for southern Nevada. During one of our booms in the early 2000s, when there were over 50,000 hotel rooms in the permitting process, we learned that we need the airspace from both airports to accommodate that many guests. We have capacity for our current level of visitors. Ivanpah would be very expensive to build, probably a $10 billion project. We will not be able to pay for that with fees and charges at McCarran. We were able to fund Terminal 3 that way, but this will be too big a project. We will have to be more creative in coming to a funding solution.

I would like to go over the legislative items that are of interest to us [page 16, (Exhibit C)]. Long-term fuel redundancy for aviation is needed. Right now, there is one pipeline for southern Nevada that can bring in jet aviation fuel. We have had some challenges with that in the past. It comes in through California, so when California had mudslides, blackouts, and flooding, it had an impact on us. We asked SNTIC to take a look at it. If Governor Sandoval recommends it, a subcommittee will be formed to study the issue.

Surface movement has been discussed at every level. We have great concerns about moving people from the airport to their destinations. We do not want the airport experience to be as smooth as can be, only to have visitors stopped at the first stoplight through seven cycles just to exit the airport. We have been beneficiaries of PLA and CMAR processes, and support both. We know that unmanned aircraft systems (UASs) create a wonderful opportunity for Nevada to diversify. Our part in UAS is to ensure that it remains safe and does not conflict with federal regulations.

Vice Chair Spiegel: Having part of the runways in my district, I especially appreciate your work.

Assemblywoman Bilbray-Axelrod: I appreciate that you attract local businesses, especially in Terminal 3. I hope you continue to do that. When I travel to Reno, I notice that the University of Nevada, Reno (UNR) is heavily advertised in the airport. Could we highlight our University of Nevada, Las Vegas (UNLV) at McCarran?

Assembly Committee on Transportation February 23, 2017 Page 7

Have you looked into a reusable water station for the airport? I have seen them in many airports. I would also like to know what the Siegfried and Roy Park is [page 11, (Exhibit C)].

Rosemary Vassiliadis: We have a few water stations at McCarran just past the TSA checkpoints in Terminal 3. It was easier placing them in a facility that could accommodate them. We will be adding them to all parts of the terminal. They are in the budget. We will need to try to put them in the footprints of the old water fountains, bringing them out to the gates over time. We hope to complete that project by the end of this fiscal year.

We built the Siegfried and Roy Park as the last project of Terminal 3. It provides a buffer between Terminal 3 and the adjacent neighborhood. When we built Terminal 3, we had to remove 450 houses. A federal program provided for relocating the residents of those homes. It would have left a residential neighborhood abutting an industrial use area—our parking garage. As part of the project, we wanted to create something for the neighborhood. It is heart-warming to go past it.

We do feature UNLV at the airport. Our display is static; it is not interactive like the one displaying UNR at the Reno airport. If you go through the esplanade, you will notice signage above the escalators on your way to the tram area. Concourse D also has a UNLV display.

Vice Chair Spiegel: Are there additional questions from Committee members? [There were none.] Next on our agenda is a presentation from the Reno-Tahoe Airport Authority.

[Assemblyman Carrillo reassumed the Chair.]

Dean E. Schultz, A.A.E., Executive Vice President/COO, Reno-Tahoe International Airport: We are an independent airport authority, originally created in 1977 by the Nevada State Legislature. Our sole purpose is to own and operate Reno-Tahoe International and Reno-Stead Airports for the benefit of our region [page 2, (Exhibit D)]. We are governed by a nine-member board of trustees appointed by the Cities of Reno and Sparks, Washoe County, and the Reno-Sparks Convention and Visitors Authority. There are eight passenger airlines that serve Reno and three cargo airlines. We have 3 runways, 23 gates, and are open 24 hours a day, 7 days a week, 365 days a year.

As an independent airport authority, we are financially self-sufficient [page 3, (Exhibit D)]. We solely rely on fees and rents collected from airport tenants, the commercial businesses that operate on our facilities. We are proud to say that 65 percent of those operating revenues are generated by non-airline sources. It is critical that we maximize non-airline revenues and diversify our revenue sources to keep the cost low to the airlines, to entice them to enhance their air service at our facility. Major sources of revenue for us are the parking facilities, rental cars, and concessions—food and beverage, news, and gifts. We also generate Assembly Committee on Transportation February 23, 2017 Page 8

a substantial amount of revenue from land rents and other operations at the airport. It is important to note that, like McCarran, we take no local tax dollars to operate the airport. We are, in essence, a little city unto ourselves. We have our own police and fire departments, engineers, accountants, and human resources specialists.

We are the 66th-busiest airport in the United States [page 4, (Exhibit D)]. We would like to improve that number, but I am not sure we will ever get to be the size of McCarran. We strive to increase air service for our community. In 2016, we served 3.6 million passengers. We have 59 daily nonstop departures to 23 different destinations. There are 250 Airport Authority employees. There are approximately 2,500 total employees working at the airport at various businesses. As Ms. Vassiliadis mentioned, we are overseen by numerous organizations and regulators—U.S. Customs and Border Protection, the FAA, TSA, and others. We are a highly regulated business. Although customer service is extremely important to us, safety and security is our top priority.

The UNR College of Business analyzed the airport's economic impact [page 5, (Exhibit D)]. It was determined that the airport provides a $2 billion per year economic benefit to Washoe County. Each Boeing 737 landing at our airport equates to about $100,000 worth of economic benefit to the community. There are 22,000 jobs generated as a result of the activities conducted at the Reno-Tahoe Airport.

As I previously mentioned, we have direct flights to 23 destinations, served by 8 airlines [page 6, (Exhibit D)]. The solid red lines on the map indicate year-round destinations. The dashed red lines indicate seasonal services. The blue dots are the destinations served with one stop. Even for a community and an airport of our size, we have really good air service. Air service expansion remains a top priority within our organization. We would like to fill in a few more holes on the map.

On the next slide [page 7, (Exhibit D)], you see that the Great Recession was very hard on air service. We declined by about 35 percent in passenger volume; however, in the last 18 months, we have been successful in adding back a lot of that lost service. We have also increased the number of new markets that we serve. Guadalajara, Mexico, is a great example. Prior to 2014, we had not had international scheduled service since 1999. With Volaris Airlines serving Guadalajara, international service was brought back to our airport. It is doing very well; we hope to expand that service. Direct service to JFK Airport in New York City is new for us. Other routes we have added include Long Beach, California; Atlanta, Georgia; and Dallas Love Field, Texas. We were also able to recover service lost during the recession to Boise, Idaho; Oakland, California; and San Jose, California.

The first year of our recovery from the recession was 2015 [page 8, (Exhibit D)]. In 2015, we grew passenger volume by 3.8 percent. In 2016, we increased by 6.4 percent. Based on current flight schedules, number of seats available, and load factors, we anticipate that 2017 Assembly Committee on Transportation February 23, 2017 Page 9

will show growth as well. However, if you will notice, even though we are recovering, we are still not fully recovered from years prior to the Great Recession. We still have work to do.

Air cargo is a bit of a different story for us [page 9, (Exhibit D)]. It was not as negatively impacted by the recession as was passenger volume. We had a year or two of decline in 2008 and 2009, but in 2010 and every year since then, cargo activity has been growing at the Reno-Tahoe Airport at levels equal to or above the national average. In 2016, you see we have grown 13 percent. That number is our highest year ever for cargo activity at the airport.

I will change gears a bit by showing you an aerial photograph of Reno-Stead Airport [page 10, (Exhibit D)]. Reno-Stead Airport is a very busy general aviation airport, but it is also used as a UAS test site. The Airport Authority has actively supported the state's efforts in UAS testing and safe integration into the national airspace since the beginning. We have over 5,000 acres of land at Reno-Stead Airport which allows us to accommodate that testing without interfering with manned aircraft operations. If you follow the yellow line from the bottom of the slide to the top of the slide, that covers 3.5 miles, all located within the airport property. The blue rectangle and the blue circle are areas identified for use by the UAS activities. Our primary is the east-west runway at the bottom of the slide. There is plenty of separation to be able to accommodate both of those operations safely. Like Ms. Vassiliadis, we are concerned about the safe integration of unmanned aircraft into the national airspace system; however, we do see the economic benefit that could be gained by this new, evolving industry. Our philosophy has been that we want to bring companies in to do their testing and support that development. Hopefully, that gives us the opportunity to show them all the attributes of our community and all the wonderful things we have to offer, eventually attracting them to build or expand facilities in northern Nevada.

The next slide [page 11, (Exhibit D)] shows the FAA roadmap to UAS integration. Starting in August 2016, the FAA moved to step two on the chart, that is, Part 107 operations. As a result, you can see there is a long way to go between where we are today and full UAS integration. There is still a lot of opportunity for testing in the state as well as at Reno-Stead Airport.

We hosted the National Aeronautics and Space Administration (NASA) national demonstration of their unmanned traffic management software system [page 12, (Exhibit D)]. They are in a five-step process of their own to develop a software program that will track unmanned aerial systems. We hosted step two of their process. This gave not just the "wow" factor of having NASA working with us, but they brought 10 of their private sector partners with them. That afforded us an opportunity to showcase our region to them. We are currently under a nondisclosure agreement with three large corporations while in talks with them regarding testing. One is an e-commerce company; another is a multinational retail store chain; the third is an international convenience store chain. Assembly Committee on Transportation February 23, 2017 Page 10

All three are ultimately hoping to use drones for product delivery. We are working with them to ensure that deliveries are handled in a safe manner. The FAA formed the national Drone Advisory Committee (DAC) to help them move forward on their roadmap. Our CEO, Marily Mora, was selected to be on that prestigious committee. I was selected to participate in the subcommittee that supports DAC. To give you an idea of the level of stakeholders on DAC, the committee is chaired by the CEO of Intel [page 13, (Exhibit D)]. The committee has 35 members. The subcommittee has 71 members. In January, we hosted their advisory committee meeting here. Nearly 200 individuals—including all 35 members of DAC as well as many subcommittee members—were here for this event.

We understand that we serve as an economic engine for northern Nevada. We take that responsibility seriously; therefore, we strive to be the best we can be in all aspects of our business. Here are just a few examples of areas in which we have been recognized by colleagues in our industry [page 14, (Exhibit D)]. First is recognition for our customer service, and second is acknowledgment for our creative approaches and programs in human resources. Third, our airport police department is certified, one of only a small percentage of airports. And lastly, for the past 30 years, our finance and budget department has been recognized by the Government Finance Officers Association for its income statements and budget document preparation.

I forgot to create a slide and to talk about the customer service programs that we have at the airport. One is our "Paws 4 Passengers" program. We have 19 dog-and-owner teams that frequent the airport. It is a very successful program. We also have a Kindness Takes Flight program. This involves having members of our staff going out and buying a random customer a cup of coffee. On national compliment day, we set up a booth and offered compliments for our passengers. These are fun ways for us to interact with our customers and change up their routine a little bit. We are very proud to be active in veterans' honor flights. We have hosted several and look forward to doing a number of those through the rest of 2017.

Our board of trustees recently adopted a general platform of legislative priorities. This slide lists our primary ones [page 15, (Exhibit D)]. We encourage and support anything that relates to investment in infrastructure and in economic development to create more jobs and opportunities for development in Nevada. The airport is generally opposed to any bill that would lessen the prohibition on guns in airport, or that would allow more people to travel with guns than what we currently have. We have a solar farm on the airport which offsets all of our electricity usage for our fire station. We are always looking for opportunities to enhance renewable or alternative energy projects. Air service is a top priority for us. I have already talked with you about UAS.

Chairman Carrillo: Are there questions from the Committee?

Assemblywoman Monroe-Moreno: To what did you attribute the 13 percent increase in cargo business? Assembly Committee on Transportation February 23, 2017 Page 11

Dean Schultz: That is due to a combination of factors. We are seeing more business travelers. Our economy is diversifying in northern Nevada—we are relying less on gaming, and more on business activity. Tesla and Apple are coming to our area. Amazon has a large distribution facility in Reno. There are a number of e-commerce companies that have built facilities and are expanding in the area. A lot of the cargo is coming from those businesses.

Assemblywoman Monroe-Moreno: I see that your police department is accredited by the national law enforcement agencies, but are they also certified by Peace Officers' Standards and Training (POST)? Do they work with the local police department?

Dean Schultz: They are POST-certified; that is a minimum requirement for hire at the airport. The Commission on Accreditation for Law Enforcement Agencies is a program similar to U.S. Green Building Council Leadership in Energy and Environmental Design certification. That is a national certification an entity can choose to pursue that establishes standards that must be met. They are then audited for compliance with those standards before they are issued certification.

Chairman Carrillo: Are there any further questions? [There were none.] I have a question. Would much of the increase of cargo at your airport be a result of the Amazon distribution center?

Dean Schultz: Our three cargo operators are FedEx, United Parcel Service (UPS), and DHL. Most of their business is shipping of small packages. Most of the small packages they are handling are from companies like Amazon. Arrow EXP ships 6,000 to 8,000 packages a day through FedEx or UPS. Most of the cargo is not large, palletized materials.

Chairman Carrillo: Is the airport controlling UAS deliveries? I know that the FAA regulates their use. I heard that a UAS recently delivered a Slurpee from 7-Eleven. Also, how does Ms. Mora's involvement on DAC benefit you as an airport?

Dean Schultz: The airport authority's involvement is when the operations are occurring on the airport's property. The State, through the Office of the Governor's Office of Economic Development, has an organization called the Nevada Institute for Autonomous Systems (NIAS). They are the designated FAA test site certificate holder. When there is testing done on the airport, we have a lot more involvement; when it is done off the airport, it is primarily done through NIAS. The Slurpee delivery took place in south Reno, off the airport, so we were not directly involved with it. We also have Reno-Tahoe International with its controlled airspace, so we were involved in monitoring the delivery for safety purposes, to ensure that it did not interfere with manned operations. Assembly Committee on Transportation February 23, 2017 Page 12

Chairman Carrillo: Are there any other questions from Committee members? [There were none.] We will now have our presentation from Minden-Tahoe Airport.

Bobbi Thompson, representing Nevada Airports Association: You have heard from the tremendous assets our state has in McCarran and Reno-Tahoe Airports, but there are more than 40 other airports in the state. The rural airports make up the Nevada Airports Association. I am going to talk about them today and the important role they play in our state. Since we are Nevada, I used a roulette wheel, and titled my presentation "Bet on Black" [page 1, (Exhibit E)]. When I talk about betting on black, I am talking about asphalt. Asphalt is critical to these airports. It is important to remember that the rural airports have to abide by the same regulations—other than ones that affect commercial air traffic—that McCarran and Reno-Tahoe have to abide by. We have to seek out the same funding, vie for the same dollars that come to our state, provide for the same kinds of services, and follow all the regulatory requirements when we develop or work on our airports. Nothing changes there. Where we differ is in the area of passenger money which we do not get.

It is my belief that our runways are the Main Street of many of our rural communities. In Minden, we have one of Starbuck's three roasting plants. Do you really think the CEO of Starbucks wants to land at Reno-Tahoe and then drive to Minden when there is an airport right there? He can land and be one minute away from the plant.

Our rural airports are critically important and play no more important role than public safety. When you talk about public safety, think about all the fixed-wing air tanker bases we have at those rural airports. Wells, Elko Regional, Ely, Lincoln County, Mesquite, North Las Vegas, Battle Mountain, Austin, Winnemucca, Yerington, Minden-Tahoe, Reno-Stead, Jackpot, Owyhee, Tonopah, Hawthorne, Eureka, Fallon, and Carson City all provide important public safety services—even beyond the firefighting capability.

Why am I here today? In 2015, this legislative body was kind enough to place $200,000 in the Fund for Aviation [page 2, (Exhibit E)]. This trust fund was created in the 71st Session of the Legislature in 2001, through Nevada Revised Statutes (NRS) Chapter 494.048. Nevada Revised Statutes listed very strict guidelines on how that money was to be spent. Unfortunately, no money was put into that fund until 2005. I am not saying that we need funding; I am saying that we need investments. In 2005, the money was leveraged against federal grants to get $75 million in the state. That money would not have been granted otherwise. In 2015, another $200,000 was put into the fund. In the ten intervening years, no money was added. The contribution from 2015 netted us $25 million in federal grants, money that Nevada would not have received otherwise. Most of the jobs benefitted construction companies in Nevada, many out of the Las Vegas area.

What did that mean for our rural airports? Ely Airport spent approximately $16,000 to get the match grant required to do a runway reconstruction [pages 3-4, (Exhibit E)]. When a rural airport gets a grant from the federal government, it funds 93.75 percent of the Assembly Committee on Transportation February 23, 2017 Page 13

project. State funding, local money from the city, or county sponsorship must contribute 6.25 percent. Why was runway reconstruction important at Ely Airport? This is what the asphalt looked like before the work was done [page 5, (Exhibit E)]. There was even a point in time when the airport was closed because of the condition of the asphalt [page 6, (Exhibit E)].

Nye County-Tonopah Airport was able to have runway work done [page 7, (Exhibit E)]. Nye County contributed $13,993 for the project [page 8, (Exhibit E)]. They added signage required by the FAA [page 9, (Exhibit E)]. Regulations require a rotating beacon, which Nye County installed [page 10, (Exhibit E)].

Jackpot Airport added navigational aids [page 11, (Exhibit E)] and runway end identifier lights [page 12, (Exhibit E)]. Minden-Tahoe Airport installed fencing [page 13, (Exhibit E)]. The airport was built in 1941 but had never been fenced. We also upgraded our runway lights [page 14, (Exhibit E)]. Our taxiways had not been improved in over 20 years [page 15, (Exhibit E)]. At Silver Springs, taxiway construction was done [page 16, (Exhibit E)], along with striping to comply with regulations [page 17, (Exhibit E)].

It is important for you to know that Nevada is at the bottom of the list of states in funding of its airports [page 18, (Exhibit E)]. Our entire division of aviation under the planning department of NDOT consists of one person. Yet those rural airports are doing much in the area of emergency service: firefighting; medical needs; and evacuations [page 19, (Exhibit E)]. A few weeks ago, U.S. Route 395 was closed due to flooding, but we could still get in and out of Minden-Tahoe Airport.

Economic development is critical. You heard about the economic impact of the two large airports in our state. Minden-Tahoe Airport contributed a $52 million economic impact, even though we are only a general aviation airport.

Our education component is important. We have a Build A Plane program in which juniors and seniors in high school actually build an aircraft. When it has been built, the students will sell it in order to purchase another kit for students to build. Each year we have over 600 students come to our airport to find out about careers in aviation. We run them through several steps as they learn about aviation careers besides being a pilot. An educational curriculum based on disciplines in science, technology, engineering, and mathematics (STEM) is a great background for aviation. There are many jobs in our state as a result of airports, both indirectly and directly. Consider tourism—every day aircraft bring tourists to Lake Tahoe along with other areas of our state that offer hiking and mining opportunities. Think of all the places tourists go that would be difficult to reach by landing at McCarran or Reno-Tahoe.

Assembly Committee on Transportation February 23, 2017 Page 14

What was achieved with your investment of $200,000 [page 20, (Exhibit E)]? We were able to complete 41 projects at 20 different airports. We received almost $25 million in FAA funds. The local match, over and above what the state provided, was $1.6 million. The state invested approximately $234,000—some of that coming from the sale of Nevada Airports Association's specialty license plates.

We would like to see permanent funding of the NDOT Aviation Trust Fund, although we would be happy with another $200,000 to leverage into another $25 million through federal matches [pages 21-22, (Exhibit E)]. We would also like to see something done with our aviation department at NDOT. Our one employee is good, but he is one person. He tries to visit the 40-plus airports as much as he is able, but we do have a very large state with many needs in aviation. He also has a very small budget. We would also like to see enhancement to the air service fund, in Senator Goicoechea's bill [BDR 18-92] which you will likely hear more about as time goes on.

Chairman Carrillo: Thank you for your presentation. Assemblyman Wheeler has a question for you.

Assemblyman Wheeler: You told us how important the Aviation Trust Fund is to rural airports. What can this Legislature do to make sure that funds are available for you?

Bobbi Thompson: In those two years when we had money in the fund, NRS Chapter 494 required us to spend it within two years and limited its use to rural airports for grant matching. Because of the financial condition of the sponsoring city or county that owns the airport, many rural airports cannot undertake projects without some help from the Aviation Trust Fund. Rural airports receive a $150,000 annual entitlement from the FAA. A year ago, there were four airports that had to return their entitlements because they had no other money to contribute to that amount. They could do no projects at their airports. If you look at airline tickets when you fly somewhere, you will see a line item for the Airport Improvement Program (AIP) at the federal level—that is what funds airports. If our rural airports cannot come up with matching monies, the money you are spending is going to go to another state. We want to make sure that we get our fair share of AIP money coming back to us here in Nevada. An allocation to the Aviation Trust Fund would allow the rural airports to aggressively go after grants because they had money to match.

Assembly Committee on Transportation February 23, 2017 Page 15

Assemblyman Wheeler: I see Silver Springs Airport as pivotal to the Tahoe Reno Industrial Center when USA Parkway has been completed. Corporate aircraft will be coming in and out, and maybe freight as well. What are you planning to do to prepare yourselves for that influx of aircraft?

Kay Bennett, Owner/Manager, Silver Springs Airport, LLC, representing Nevada Airports Association: The airport I manage is in a public/private partnership with Lyon County. If it were not for the Aviation Trust Fund during the years of the recession, the Silver Springs Airport would not be where we are today. We are strategically located at the terminus of USA Parkway. We have a great facility that is ready to begin to take the next step to address the corporate and general aviation needs of the Tahoe Reno Industrial Complex. When the USA Parkway is completed, we will be about 15 minutes away from the major industries there. We see ourselves as an important economic engine in being able to develop the airport, as well as providing additional hospitality services, truck stops, and the kinds of services that are related to aviation and to the support of the means of transportation that will be coming and going from the Tahoe Reno Industrial Center. We have the full support of the Tahoe Reno Industrial Center and our colleagues at Storey County.

We have a new master plan that we are ready to present to the Lyon County Board of Commissioners in March. We are optimistic that it will be accepted. Over the next 15-20 years, we expect that our runway will grow from its current 6,000 feet to 8,000 feet and that it will be about 100 feet wide. This will better serve the corporate and general aviation needs of the Tahoe Reno Industrial Center. We anticipate being able to attract aviation-related industries as a result of a consortium of private property owners adjacent to us. The 78th Session of the Nevada Legislature was effective in creating economic incentives to aviation industries that repair and maintain corporate jets. We work closely with the Nevada Institute for Autonomous Systems and with Reno-Stead Airport. We are part of a corridor for a system that starts with Reno-Stead in the north, with Silver Springs in the middle, and Hawthorne in the south. We will eventually be part of a corridor for what is known as beyond line of sight drone activity. We have hosted several drone companies at our airport for training and have three companies we are in talks with today. We have primitive access to a 22,000-acre Bureau of Land Management site that can be used for testing and development.

As a charter member and a past president of the Nevada Airports Association, I would like to add my voice to Ms. Thompson's testimony. The dollars invested by the State capture many other dollars that are translated into improvement of the transportation system that is important to the state. They serve as the catalyst of the economic development and improvement that are associated with airports that thrive in our rural communities. We are proud of what we have. We accomplish much with very little. Every dime that is invested on our behalf is well used and much appreciated.

Assembly Committee on Transportation February 23, 2017 Page 16

Chairman Carrillo: There are no further questions from the Committee. We will move into public comment, starting in Las Vegas.

Reza Karamooz, President, Nevada Business Aviation Association: It was wonderful to see the presentations by Ms. Vassiliadis from McCarran and Mr. Schultz from Reno-Tahoe Airport Authority. What they said is true—aviation makes an incredible impact on our state. Ms. Thompson and Ms. Bennett made good points about how important our rural airports are to our state. We need all of our small airports to be functional in order to be able to reach all corners of our state of over 110,000 square miles. When you look at the pavement conditions in the slides Ms. Thompson showed us, you can see what we need [pages 5-6, (Exhibit E)]. In response to the question that came up earlier—what would we need to improve our infrastructure?—those matching funds are very important. To reemphasize that, when $200,000 or $500,000 is put into our Aviation Trust Fund and it is matched by the AIP of the FAA, we get $25 million or more. That money goes into improving our airports, the infrastructure, and the economic engine that drives our rural communities' ability to attract business into our state, to attract companies that are aviation- and aerospace-based. We also have the amazing opportunity to bring in companies that are in the business of unmanned aviation. In the future, they can do testing here and, hopefully, manufacturing, and other operations. Our state will become known as being aviation-friendly and looking for more business.

Chairman Carrillo: There is no one wishing to make public comment in Carson City. This meeting is adjourned [at 4:33 p.m.].

RESPECTFULLY SUBMITTED:

Joan Waldock Committee Secretary

APPROVED BY:

Assemblyman Richard Carrillo, Chairman

DATE: Assembly Committee on Transportation February 23, 2017 Page 17

EXHIBITS

Exhibit A is the Agenda.

Exhibit B is the Attendance Roster.

Exhibit C is a copy of a PowerPoint presentation titled "Nevada State Legislature Senate and Assembly Transportation Committees, McCarran International Airport Update", dated February 23, 2017, presented by Rosemary A. Vassiliadis, Director, Department of Aviation, Clark County.

Exhibit D is a copy of a PowerPoint presentation titled "Assembly Committee on Transportation, Reno-Tahoe Airport Authority," dated February 23, 2017, presented by Dean E. Schultz, A.A.E., Executive Vice President/COO, Reno-Tahoe International Airport.

Exhibit E is a copy of a PowerPoint presentation titled "Bet on Black," presented by Bobbi Thompson, representing Nevada Airports Association.