MINUTES OF THE meeting
of the
ASSEMBLY SELECT Committee on State Revenue
and Education Funding
Nineteenth Special Session
June 6, 2003
The Select Committee on State Revenue and Education Fundingwas called to order at 9:22 a.m., on Friday, June 6, 2003. Vice Chairman David Parks presided in Room 4100 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Mr. David Parks, Vice Chairman
Mr. Bernie Anderson
Mr. Walter Andonov
Mrs. Sharron Angle
Mr. David Brown
Mrs. Vonne Chowning
Mrs. Dawn Gibbons
Ms. Chris Giunchigliani
Mr. Tom Grady
Mr. Josh Griffin
Mr. Lynn Hettrick
Ms. Sheila Leslie
Mr. John Marvel
Ms. Kathy McClain
Mr. Bob McCleary
Mr. Harry Mortenson
Mr. Richard Perkins
Ms. Peggy Pierce
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Assembly Fiscal Analyst
Mary Garcia, Committee Secretary
OTHERS PRESENT:
None
Vice Chairman Parks announced that the Select Committee would review its previous action regarding the Distributive School Account (DSA) and class-size reduction (CSR). According to Vice Chairman Parks, there had been further discussion regarding those issues and the Select Committee might want to reconsider previous action on S.B. 508 of the 72nd Legislative Session and S.B. 509 of the 72nd Legislative Session.
Assemblywoman Giunchigliani stated that after additional discussion, she would ask that the Select Committee rescind previous action whereby it funded kindergarten classes and restore funding to the level currently recommended. She noted that would simply involve a cost shifting.
Assemblyman Marvel asked why the Senate had objected to the action regarding the kindergarten classes. Ms. Giunchigliani replied that Senator Raggio did not believe that the Legislature should address the kindergarten issue at the present time. She noted that language had been included in S.B. 191 of the 72nd Legislative Session that would assist those students who failed the high school proficiency exam, which was part of the trade-off. According to Ms. Giunchigliani, that bill would come before the Select Committee for further consideration. In the long run, she would rather fight for class-size reduction at the present time.
Ms. Giunchigliani indicated that language had been agreed upon regarding S.B. 191 of the 72nd Legislative Session; it had been agreed that some sections would be removed which expanded the federal requirements regarding class-size reduction, and Ms. Giunchigliani believed that action had been a conciliatory move on Senator Raggio’s part. According to Ms. Giunchigliani, language had also been agreed upon regarding reduction in the score of the high school proficiency examination, which would allow additional students to graduate.
Vice Chairman Parks recognized Assemblywoman Angle.
Mrs. Angle indicated that when the bill was passed, it was in somewhat of a conceptual format as it had been amended, and, in fact, she did not realize there were actually two bills, but rather thought there was one bill that “rolled” all issues together. Mrs. Angle noted that she still had not seen the final bill, and asked for clarification.
Ms. Giunchigliani explained that S.B. 508 of the 72nd Legislative Session and S.B. 509 of the 72nd Legislative Session referenced the DSA and CSR, and no changes had been made other than to remove funding from the DSA and move it to CSR; there had also been a change regarding the size of kindergarten classes. Ms. Giunchigliani suggested that the Select Committee rescind its action in Section 19 of the DSA, in order to return to the original language. Mrs. Angle indicated that would reinstate the original language regarding the DSA; Ms. Giunchigliani stated that was correct.
Vice Chairman Parks recognized Assemblyman Anderson.
Mr. Anderson stated that he would be happy to either make the motion or second the motion.
Vice Chairman Parks explained that the following motion was currently before the Select Committee:
ASSEMBLYMAN MARVEL MOVED TO RESCIND THE PREVIOUS ACTION TAKEN BY THE SELECT COMMITTEE REGARDING S.B. 508 OF THE 72ND LEGISLATIVE SESSION AND S.B. 509 OF THE 72ND LEGISLATIVE SESSION.
ASSEMBLYMAN ANDERSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Assemblywoman Giunchigliani asked that Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), provide an explanation regarding the local school support tax (LSST), since there would be a difference in the collection allowance. She noted that when the final motion was made, the Select Committee should ensure that the action was “subject to final approval” in order to reduce the General Fund allocation based on the collection allowance.
Mr. Stevens indicated that one of the items in the passive revenue generators segment, Exhibit C, would be to reduce the state and LSST retainer allowance to zero. That amount was $19.2 million the first year of the biennium and $20.3 million the second year, and was a combination of two major items: (1) the 2 percent sales tax, which would generate revenue for the General Fund; and (2) the LSST, which would be retained within the DSA. According to Mr. Stevens, the only way to retain those savings would be to adjust the General Fund appropriation that was listed in the DSA bill. Mr. Stevens explained the LSST revenue would be increased and the General Fund appropriations lowered in the neighborhood of $7 million to $9 million. He noted that action had not been taken on the major revenue source needed to balance the budget. The Select Committee had not approved a unified business tax, however, had approved other taxes, and the only way to address the LSST portion was to have the General Fund appropriation amended within the DSA bill with the authorized revenue increased. According to Mr. Stevens, LCB staff would also request authority to make those adjustments within the DSA bill.
Vice Chairman Parks advised that the Assembly had approved the necessary changes; however, the Senate had not approved those changes. He opined that a motion should be structured that would address the eventual outcome.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS S.B. 508 OF THE 72ND LEGISLATIVE SESSION, CLASS-SIZE REDUCTION, AS ORIGINALLY CONSIDERED, WITH NO CHANGES.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
Assemblywoman Angle stated that she would vote in opposition to the motion, as she did not agree with the class-size reduction as presented in the original bill.
Vice Chairman Parks inquired whether there were further comments from the Select Committee.
Assemblyman Anderson asked whether Ms. Giunchigliani’s motion would incorporate the opportunity for staff to make the necessary adjustments. Ms. Giunchigliani explained that action would be included in action pertaining to S.B. 509 of the 72nd Legislative Session.
THE MOTION CARRIED, WITH ASSEMBLYWOMAN ANGLE AND ASSEMBLYMEN GRADY, HETTRICK, AND MARVEL VOTING NO.
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Ms. Giunchigliani pointed out that within the motion pertaining to the DSA, the rural entities would receive flexibility; Elko would be held whole, and a report would be forthcoming regarding how implementation had been undertaken. She noted that the action would at least preserve class-size reduction so that the size of the classes for first and second grades would remain at 1 to 16, and the size of the classes for third grade would remain at 1 to 19. According to Ms. Giunchigliani, she would “fight” for the kindergarten issue in future sessions, and she reminded the Select Committee that it had taken her 12 years to pass legislation that made kindergarten mandatory.
Ms. Giunchigliani offered the following motion:
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS THE DSA PORTION OF S.B. 509 OF THE 72ND LEGISLATIVE SESSION WITH THE AMENDMENT THAT STAFF BE GIVEN THE AUTHORITY TO MAKE THE NECESSARY ADJUSTMENTS REGARDING THE LOCAL SCHOOL SUPPORT TAX, SUBJECT TO FINAL APPROVAL BY THE SENATE.
SPEAKER PERKINS SECONDED THE MOTION.
Assemblyman Marvel asked whether the motion would decrease the General Fund appropriation.
Mr. Stevens explained that the total would remain approximately the same at $19 million to $20 million, which included a combination of LSST and the 2 percent sales tax. The 2 percent sales tax would be received as General Fund revenue, but the LSST revenue would be retained in the DSA. Mr. Stevens stated the only way to capture that savings within the General Fund would be to reduce the General Fund appropriation by the amount of the additional LSST.
Vice Chairman Parks asked whether there were further questions or comments from the Select Committee.
Assemblywoman Angle asked about the percentage of increase within the DSA as approved for the 2001-03 biennium and the current proposal.
Mr. Stevens stated he did not have that figure available, and referenced Exhibit D, “Distributive School Account – Summary for 2003-05 Biennium.” He noted that the General Fund had approximately $588 million in FY2002 and $642 million in FY2003. Mr. Stevens advised that he would provide the requested information.
Vice Chairman Parks asked whether there were further questions or comments.
Assemblyman Hettrick commented that he would remain consistent in his vote, and pointed out that while he fully supported the DSA, he had voted against passage of the budget at various times because he believed the overall budget was too high. Mr. Hettrick advised that he would vote in opposition to the motion only because he believed the overall budget was too high; he stated he did not want to be accused of voting for the DSA and then voting against the taxes to support it.
Vice Chairman Parks asked whether there were further questions or comments from the Select Committee.
Assemblywoman Angle wondered about class-size reduction and the possibility that if the Elko model were extended across the state, there could be a reduction in the amount of cost by approximately $40 million, and she asked whether that was still a possibility.
Assemblywoman Giunchigliani explained that aspect was included in S.B. 508 of the 72nd Legislative Session. The Senate had proposed a class size of 1 to 22 with flexibility, however, the flexibility had disappeared from the proposal and the mandate was for a class size of 1 to 22. According to Ms. Giunchigliani, various school districts had testified that they could not implement such a class-size reduction program. Some of the rural districts could maintain that class size, and under S.B. 508 of the 72nd Legislative Session it appeared they would actually be able to attain a class size of 1 to 22. Ms. Giunchigliani pointed out that there was no savings or reduction in cost, and the bill that would be adopted, which included the class-size reduction, actually contained exactly what the Governor had recommended. The bill would not prevent use of the Elko model and some of the rural entities should be able to reduce class size, providing classroom space was available.
According to Ms. Giunchigliani, the Elko class-size model of 1 to 22 students was adopted in reality because Elko had classrooms available which would eliminate team teaching. She further explained that was the key piece to any model regarding class size. Unfortunately, the two urban areas of the state, Clark and Washoe Counties, did not have the classroom space to implement further changes, other than what the law currently required. Ms. Giunchigliani noted that those entities would like to eliminate team teaching and that aspect would be included in the study proposed by S.B. 508 of the 72nd Legislative Session. A report would then be provided to the Legislature next session regarding what would be needed for further class-size reduction. Ms. Giunchigliani emphasized that the DSA had nothing to do with class-size reduction.
Assemblywoman Angle stated that she, like Mr. Hettrick, believed that the spending was too high; however, she would vote in favor of the DSA because she believed that the state could fund education if there was not excessive spending in other areas of the budget.
Mr. Stevens informed the Select Committee that the increase in the Distributive School Account (DSA) for the upcoming biennium would be approximately 25 percent.
Ms. Giunchigliani noted that the increase would be mostly due to the salary increase in the second year of the biennium, rather than actual program costs.
Mrs. Angle pointed out that those salaries would go up and down the scope without limiting the increases to classroom teachers, but rather, the increase would include unclassified staff and administrative staff, et cetera. Mrs. Angle stated that testimony had been heard that 89 to 90 percent of school budgets were dedicated to salaries and benefits.
Ms. Giunchigliani pointed out that the percentage was lower than it was in most businesses.
Mr. Stevens advised that the salary increase would be for all K-12 personnel.
Vice Chairman Parks called for a vote on the motion before the Select Committee.
THE MOTION CARRIED WITH ASSEMBLYMAN HETTRICK VOTING NO.
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Vice Chairman Parks called the Select Committee’s attention to Exhibit E, “General Fund Revenues, Value of Revenue Alternatives, Based on SB 508 Revenue Sheet,” which had been compiled by LCB Fiscal Division staff and provided to members. He noted that the figures took into consideration the changes that the Select Committee had voted on at its meeting of June 5, 2003. Vice Chairman Parks asked staff to highlight pertinent information.
Assemblywoman Giunchigliani pointed out that the figures contained in Exhibit E had already been agreed upon by the Select Committee at its meeting on June 5, 2003. She believed there were only a few figures that were somewhat different, and part of the decision before the Select Committee would be how to fill the revenue “hole” and which broad-based tax should be implemented.
Mr. Stevens reported that the figures contained in Exhibit E were basically those reviewed by the Select Committee at its June 5, 2003, meeting and the changes were depicted in bold print. For example, stated Mr. Stevens, the first item referenced a reduction of the cigarette stamp fee allowance to 0.5 percent. The figure had been set at $3.5 million in each year of the biennium; however, a change had been made to increase that amount to $3.6 million in FY2004-05. Mr. Stevens stated that the figures depicted in the exhibit under the heading “Tax” had been approved by the Select Committee at its June 5, 2003, meeting. Staff had been asked to review the net profit tax, which would be implemented in January of 2005, along with whatever revenue source would be needed in order to balance the budgets that had been approved by the Assembly Ways and Means and the Senate Finance Committees during the 2003 Legislative Session.
According to Mr. Stevens, the scenario depicted in Exhibit E under the heading, “Other Revenue Alternatives,” would increase the business license tax from $100 to $190 in each year of the biennium. Mr. Stevens noted that the scenario would also implement a 5 percent net profit tax in January 2005, based on 1 percent equaling $32 million and retaining 15 percent of the collections in a stabilization reserve. Finally, stated Mr. Stevens, the banking franchise fee was included within the database regarding the calculation of net profit revenue, and had been included in the base numbers. Implementation in January of 2005 would reduce the bank franchise fee value by 50 percent in FY2005 in order to take that action into account. Mr. Stevens indicated that overall, that particular scenario would generate an estimated $356.2 million in the first year of the biennium and $509.8 million in the second year, for a total of $866 million over the biennium.
Mr. Stevens pointed out that the figures reviewed by the Select Committee at its June 5, 2003, meeting had included a unified business tax, which would have added $869.1 million. He advised that the figures depicted in Exhibit E were approximately $3 million below that amount, however, would still finance the expenditures that had been approved by the Assembly Ways and Means and the Senate Finance Committees during the regular session.
Vice Chairman Parks asked whether there were questions or comments from members of the Select Committee.
Assemblywoman Angle advised that she had not voiced opposition at the June 5, 2003, meeting when the list was compiled; however, she wanted to make it clear that she was willing to fill the “hole” created by the estate tax. She asked about the cigarette tax, and stated she thought the Select Committee had agreed to a 40-cent increase: a 25-cent increase in the first year of the biennium and a 15-cent increase in the second year, rather than a 65-cent increase. Various Select Committee members stated those figures had pertained to the Senate version of the tax package. Mrs. Angle stated she thought the Select Committee had agreed to approve the Senate version.
Vice Chairman Parks inquired whether there were further questions from the Select Committee.
Assemblyman Hettrick stated that he had voted on June 5, 2003, to consider those taxes he felt were appropriate to be included, depending upon what the Select Committee decided to fund. He did not agree with the total amount, and if the motion before the Select Committee was to support the figures as depicted in the exhibit, he would vote no on the total amount.
Speaker Perkins noted that ascertaining the appropriate revenue sources and ensuring that the budget balanced across the biennium was difficult. One of the things that appeared to cause some Select Committee members concern was the increase in the business license tax to $190. Speaker Perkins pointed out that was seen as a “bridge” revenue source, and once a broad-based business tax was up to full speed in the revenue structure, he believed the business license tax could be reduced to an appropriate amount, such as the current amount or, if possible, below that amount.
Vice Chairman Parks recognized Mr. Stevens.
Mr. Stevens indicated that the comments made by Speaker Perkins were accurate regarding the business license tax. If the proposal was approved and included the 5 percent net profit tax, which would be implemented in January 2005, the revenue from that source would only be received for half of that fiscal year. However, stated Mr. Stevens, a full year of revenue would be realized in FY2006 and at that time the Legislature could review the business license tax and reduce it, if such action was deemed appropriate.
Vice Chairman Parks recognized Assemblywoman Gibbons.
Mrs. Gibbons stated her fear was that someone would “sneak” something into the tax package as approved by the Select Committee which some members would not be comfortable with. Mrs. Gibbons believed Exhibit E represented the work of the Select Committee rather than suggestions by gaming representatives, and she felt comfortable with approval of those figures. She noted that budgets had been approved and it would be impossible to take further action regarding those budgets. According to Mrs. Gibbons, funding had to be approved, and she reiterated that the figures depicted in the exhibit had come about based on the hard work of the Select Committee rather than lobbyists.
Vice Chairman Parks recognized Assemblyman Griffin.
Mr. Griffin asked whether it was the intention of the Select Committee to create some deductions to offset the net profit tax for some industries, specifically the real estate transfer tax.
Vice Chairman Parks recognized Mr. Stevens.
Mr. Stevens advised that the figures included in Exhibit E would provide for no exemptions.
Mr. Griffin agreed that the budget had been approved, which he believed was a responsible and compromised budget that should be funded. He was concerned about the net profit tax, and did not believe it would be a broad-based business tax. Mr. Griffin stated that those who had been critical of other business taxes based on the possibility of rate changes could expect the same with a net profit tax. He strongly believed that the net profit tax rate would change and he voiced concern about implementation of such a tax. Mr. Griffin stated he would reluctantly support the figures as proposed, but reiterated that he did have concerns.
The Vice Chair recognized Assemblywoman Giunchigliani.
Ms. Giunchigliani stated that she would reserve her comments until after all questions had been asked.
Assemblyman Marvel pointed out that the increase in the business license tax to $190 in FY2004 would almost double the current amount. He was unsure whether he would support the figures as depicted in Exhibit E.
Ms. Giunchigliani noted that everyone would eventually like to see a reduction in the business license tax, and that would be the intent. The net profit tax would not be implemented until January 2005, based on the estimate submitted by the Department of Taxation in explanation of the regulatory process. Ms. Giunchigliani emphasized that the goal would be to eventually decrease and/or eliminate the business license tax. Regardless of that eventuality, a “bridge” tax was necessary at the present time, and it appeared the business license tax would serve that purpose. Ms. Giunchigliani stated that unless the Select Committee wanted to propose an increase in net profits or an increase in other taxes, the proposed increase in the business license tax appeared to be the most reasonable way to bridge the gap. She also pointed out that the issue could be revisited during the 2005 session. Ms. Giunchigliani advised that the Legislature could issue a Letter of Intent to legislators of the 2005 session that the goal of the 2003 Legislature was to eventually eliminate or reduce the business license tax.
Vice Chairman Parks asked whether there were further comments or questions from the Select Committee.
Assemblyman Andonov stated if the proposed revenue package would be fully implemented from day one and biannualized over the two-year period, the live entertainment tax would raise an additional $33 million; the gaming increase would raise an additional $26 million; the real estate transfer tax would raise an additional $24 million; and the net profit tax would raise an additional $68 million. Mr. Andonov stated that would be approximately $140 million of additional revenue if taxes were fully implemented from day one and biannualized. The point was that it was not simply an $866 million tax package, but, in fact, it was over a $1 billion tax package.
Vice Chairman Parks asked Mr. Andonov to repeat the numbers.
Mr. Andonov pointed out that the live entertainment tax would not be implemented from day one. Vice Chairman Parks asked whether it would be fully implemented in the second year of the biennium, and Mr. Andonov replied in the affirmative. If the tax were implemented from the first day of the biennium, it would raise $81 million in both years.
Vice Chairman Parks stated that he saw the logic behind Mr. Andonov’s comments. The Vice Chair recognized Assemblywoman Angle.
Mrs. Angle advised that the proposal was still a concept to her rather than a bill. The rules of the Special Session stated that once the Select Committee voted on a bill, members were not allowed to change their vote on the Floor. Therefore, stated Mrs. Angle, if members voted in favor of the proposal, they could not change their vote on the Floor. She wondered whether there would be additional information forthcoming during the current hearing, and asked whether there would be an actual written bill that the Select Committee could vote on. Mrs. Angle stated when she cast her vote, she wanted it to be very clear and did not want to vote on a concept or figures on paper; she wanted to see an actual bill. Mrs. Angle asked for clarification.
Vice Chairman Parks advised that there was a legal draft of the tax package which was approximately 150 pages in length, and members should realize it was still a work in progress as amendments were added.
Assemblywoman Giunchigliani stated it would be her suggestion to request a bill introduction that would include the aforementioned legal draft which contained most of the elements of the tax suggestions. According to Ms. Giunchigliani, the Select Committee had been attempting to compromise, and she resented the term “concept” because issues could not be finalized if ideas were not discussed and then made into concrete form. The intent, stated Ms. Giunchigliani, would be to introduce the legal draft, which included the suggested changes made by the Select Committee after its discussion. She would offer the following motion:
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED COMMITTEE INTRODUCTION OF THE LEGAL DRAFT WHICH WOULD INCLUDE:
· THE LIVE ENTERTAINMENT SEGMENT WOULD INCLUDE BOXING, WHICH WAS APPROXIMATELY 5 TO 7 PERCENT, AND WOULD BE RAISED ACCORDINGLY WITHIN STATUTE TO BE COMMENSURATE WITH THE LIVE ENTERTAINMENT TAX OF 10 PERCENT, IN ORDER TO ELIMINATE DISPARITY.
· THE BUSINESS LICENSE TAX INCREASE TO $190, WHICH WOULD BE A “BRIDGE” REVENUE AND WOULD INCLUDE A LETTER OF INTENT TO THE 2005 LEGISLATURE THAT IT CONSIDER SCALING DOWN TOWARD POSSIBLE ELIMINATION OF THE BUSINESS LICENSE TAX.
· THE CASCADING AND PYRAMIDING LANGUAGE ALREADY INCLUDED, AND ANY REGULATORY LANGUAGE NEEDED BY THE DEPARTMENT OF TAXATION IN ORDER TO MOVE TOWARD THE PUBLIC HEARINGS NEEDED FOR ADOPTION OF THE NEW TAXES.
· THE CHANGE OF THE REAL ESTATE TRANSFER TAX TO $1.10 IN FY2004-05 WITH NO EXEMPTIONS.
· RESTRICTED SLOTS WOULD BE INCREASED BY 33 PERCENT IN FY2004 AND 50 PERCENT IN FY2005.
· IMPLEMENTATION OF THE 5 PERCENT NET PROFIT TAX.
Ms. Giunchigliani noted that a new plan had been submitted on June 5, 2003, which included some worthwhile concepts, however, there was not sufficient time to ingest that proposal. She believed that, at the present time, the net profit tax was the best broad-based tax to implement. Ms. Giunchigliani noted that there would be those who opposed implementation of the tax, but that would be her motion.
Ms. Giunchigliani pointed out that the sole proprietors and direct sellers would still be exempted, and the business license tax would be set at $190, but the Letter of Intent would allow the issue to be revisited.
ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.
Assemblyman Griffin referred to the motor speedway, and asked if that would be part of Ms. Giunchigliani’s recommendation. Ms. Giunchigliani indicated that the motor speedway would fall within the live entertainment tax, and boxing would be equalized up to the 10 percent, so there would be no disparity. Mr. Griffin asked whether there would be an appetite on the part of the Select Committee for language regarding the motor speedway that would place the tax at 10 percent on its current venues, but if a second venue were to appear, the tax on that second venue could be reduced somewhat.
Ms. Giunchigliani did not believe such language was feasible, and she did not think exemptions should be considered. She pointed out that there were some exemptions included for public entities versus business entities. Some individual groups would be protected under the plan. Ms. Giunchigliani indicated that her motion would not include Mr. Griffin’s suggestion.
The Vice Chair recognized Assemblyman Anderson.
Mr. Anderson stated he was unclear regarding the sole proprietor, and asked whether it was specific to businesses such as Mary Kay representatives. Ms. Giunchigliani indicated such sole proprietors would be exempted.
Assemblyman Hettrick noted that there was no language for the Select Committee to review pertaining to the net profit tax, and asked whether entities such as hospitals and medical services would be exempt.
Vice Chairman Parks indicated that the for-profit hospitals and medical services would be subject to the tax.
Mr. Hettrick stated it appeared to be counterproductive to raise a doctor’s taxes, which would then be passed on to the patients and cause an increase in medical insurance; it would ultimately circle to the “little people” who could not afford to pay. Mr. Hettrick believed there should be the realization that taxes were simply passed back to the people, which would occur in every single tax that was passed.
Mr. Hettrick advised that he had discussed adoption of the rules with leadership on the Floor, and wanted to make it very clear that the rules for the Special Session did indeed stipulate that if a legislator voted for the introduction of a bill, that legislator was required to support that bill on the Floor. According to Mr. Hettrick, the Legal Division had advised that the language did stipulate that a legislator had to cast the same vote; however, it was the same language that had been used in every session and special session. Mr. Hettrick wanted a clear understanding that if the rule was to apply as written, he would vote no on the motion to introduce the bill because he could not support it on the Floor. If the clear understanding was that the rule was actually meant to avoid the introduction of frivolous bills, and legislators were not bound by any vote on the Floor if that legislator agreed to introduction, that would be a different matter. Mr. Hettrick emphasized that the rule needed to be clarified in Select Committee on the record before a vote was called for the motion to introduce the bill.
The Vice Chair recognized Assemblyman Marvel.
Mr. Marvel pointed out that the motion included the net profit tax, and he really did not understand how that would work as the summary presented to the Select Committee during its June 5, 2003, meeting was unclear. He would not support the motion to introduce the bill based on that fact.
Assemblywoman Leslie indicated that she would go on record in support of the motion, and advised that 47 other states had implemented some version of the net profit tax. Ms. Leslie noted that the Select Committee had been informed that the surrounding states included franchise fees of between 5 percent and 10.8 percent, while Nevada had implemented nothing in both of those areas. During the regular session, Ms. Leslie stated that she had asked to see the language regarding the net profit tax. She had reviewed that language, and the Legal Division had answered her questions; she was content with the language and believed it was time to move on. Ms. Leslie emphasized that the people had sent the legislators to do their business, which had been done during the regular session.
Assemblywoman Giunchigliani stated that Mr. Hettrick was correct in his interpretation of the rules; however, the current motion was simply to introduce the bill and legislators would not be bound by their vote to introduce. However, when the bill was before the Select Committee for consideration, the rules would apply. She reiterated that the introduction was separate.
Assemblywoman Pierce believed that if a legislator had questions or was confused about what was contained in the net profit tax and how it would work, it was their responsibility to seek an explanation from staff.
Vice Chairman Parks recognized Speaker Perkins.
Speaker Perkins stated that he wanted to address the concern voiced by Mr. Hettrick, and noted that the rules were written as he described; however, with 22 votes, the body could overcome anything. Speaker Perkins advised that it was not leadership’s intent to hold legislators to a vote cast for introduction, and he wanted to assure the Select Committee that the bill would come back before it for review. Speaker Perkins indicated that the comment regarding voting on a “concept” rather than a bill should have been addressed by the motion to create the bill. He reminded the Select Committee that it was the same method used when the budget was reviewed. The budget consisted of line items of numbers that eventually came back to the Legislature in a bill with the language that told how the revenue would be spent.
Speaker Perkins emphasized that bills would always be brought back before the legislators for review prior to casting a vote. He acknowledged that he did not believe the net profit tax was the best business tax, and there had been other suggestions which might have been better business taxes for Nevada; however, given the political circumstances and in recognition of the need for compromise, he was in the position of supporting the net profit tax as described.
Vice Chairman Parks called for a vote on the motion before the Select Committee.
THE MOTION CARRIED UNANIMOUSLY.
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Ms. Giunchigliani indicated that a copy of the language pertaining to the net profit tax would be provided to members of the Select Committee for perusal prior to receipt of the bill.
Vice Chairman Parks concurred with Ms. Giunchigliani’s proposal. The Vice Chair recognized Assemblyman Anderson.
According to Mr. Anderson, bill introduction was done to ensure that committees would have bills to review, whereas voting the bill out of committee was the vote that tied a legislator’s hands. He did not believe the rules for special sessions changed from those for regular sessions. Mr. Anderson noted that some of his colleagues were having difficulty in recognizing the difference between those two votes, and he reiterated that introduction and voting a bill out of committee were two separate functions.
Speaker Perkins stated he would like to draw a distinction in the special session process to the regular session process in that in special session rules, a description was included which depicted how bills and amendments would come through the committee. The purpose of that language was to lessen the burden placed on staff regarding bill draft requests. Speaker Perkins pointed out that all requests had to come through committee in order to be integrated into discussion.
Assemblywoman Angle asked whether the bill would come back before the Select Committee for further review and vote, or would the bill be considered on the Floor for vote.
Vice Chairman Parks assured Mrs. Angle that the bill would return to the Select Committee for further review and vote.
With no further business to come before the Select Committee, Vice Chairman Parks declared the Select Committee in recess at the call of the Chair.
Carol Thomsen
Transcribing Secretary
APPROVED BY:
Assemblyman David Parks, Vice Chairman
Date: ________________________________ _