MINUTES OF MEETING
ASSEMBLY COMMITTEE ON NATURAL RESOURCES, AGRICULTURE AND MINING
Sixty-seventh Session
April 19, 1993
The Assembly Committee on Natural Resources, Agriculture and Mining was called to order by Chairman Vivian L. Freeman at 1:15 p.m., Monday, April 19, 1993, in Room 321 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mrs. Vivian L. Freeman, Chairman
Mr. John B. Regan, Vice Chairman
Mr. Douglas A. Bache
Mr. John C. Carpenter
Ms. Marcia de Braga
Mr. Peter G. Ernaut
Mr. James A. Gibbons
Mr. Roy Neighbors
Mr. Robert M. Sader
Mr. Michael A. Schneider
Ms. Stephanie Smith
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Fred Welden, Chief Deputy Research Director
OTHERS PRESENT:
Joe Quinn, Nevada Emergency Management; Joe Johnson, Sierra Club; Tom Polikalas, Nevada Office of Community Service; Verne Rosse, Division of Environmental Protection; Glenn Miller, Sierra Club; Gary Hunter, Department of Taxation; Pat Coward, Grocery Industry; Mary Santina, Retail Association; Harvey Whittemore, Southland, Nevada Beer Wholesales and Nevada Soft Drink Association; Stephen Alastuey, University of Nevada; Doug Busselman, Nevada Farm Bureau.
The meeting was called to order by Chairman Freeman. She reminded the members of the committee there would be a joint meeting at 4:00 p.m. in Room 119 to hear information on the Implementation of the Federal Clean Air Act Amendments of 1990.
ASSEMBLYMAN BACHE MOVED TO ACCEPT THE COMMITTEE MINUTES THROUGH THE MONTH OF MARCH.
ASSEMBLYMAN SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY ALL THOSE PRESENT. (ASSEMBLYMEN REGAN, SADER AND ERNAUT WERE ABSENT AT THE TIME OF THE VOTE.)
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ASSEMBLY BILL 109:
Creates state center for emergency operations to receive reports of emergencies involving hazardous materials and maintain information relating to those emergencies.
Mrs. Freeman stated the amendment for A.B. 109 had not been finalized by all parties and would be heard at another time.
ASSEMBLY BILL 116:
Requires department of taxation to collect certain fees related to hazardous materials.
Mr. Welden spoke on the amendment for A.B. 116. He said the amendment was to delete the bill as it was and to incorporate several cleanup changes proposed by the Division of Environmental Protection. The amendment eliminated a provision which was not necessary and changed the wording from registrant to person. The other basic change was to allow the annual fee to be prorated.
Mr. Verne Rosse, Division Environmental Protection, came forward to answer questions from the committee.
Assemblyman Gibbons referred to section 1, subsection 2 of Amendment 127 to A.B. 116, and questioned the term "each person," which would be quite broad in terms of a facility. "Each person" could be a shareholder or a family of owners listed in a closely held corporation and each shareholder required to make a payment of the annual fee. Mr. Gibbons asked about the intent of the bill. Mr. Verne Rosse replied it was not the intent to bill each owner if there was more than one. He did not have a suggestion for change. In statute the definition of "each person" was very broad and all inclusive, said Mr. Rosse. Mr. Gibbons asked the committee for more time before processing the amendment to address other language for the bill.
Mr. Carpenter asked Mr. Rosse what was meant by a "regulated facility" in the bill. He wanted to know if it referred to a facility for chemical hazardous material, and Mr. Rosse agreed.
Mr. Carpenter asked if the two fees referenced in A.B. 116 a base fee and then a fee based on the amount of materials stored. Mr. Rosse said with the proposed amendment there would only be two fees and without the amendment there would have been an additional $100 for the inventory fee to set up the program. The $100 fee has no longer been charged and was the reason for the proposed amendment, stated Mr. Rosse.
Mrs. Freeman asked Mr. Gibbons, Mr. Carpenter and Mr. Rosse to resolve the problem with the help of Mr. Welden. The hearing was closed on A.B. 116.
ASSEMBLY BILL 475:
Imposes fees on beverages for use in removing or reducing litter.
Mrs. Freeman introduced A.B. 475 on behalf of constituents. She asked Mr. Glenn Miller to explain the intent, what the bill would accomplish and why the bill was requested.
Mr. Glenn Miller, Sierra Club, spoke in favor of A.B. 475, "The Clean Nevada Bill." The proposal would generate funds to pay for cleanup of the states roadways and littered areas at 1/2 cent per container. Mr. Miller suggested many people had attempted to pass similar legislation over the years. He perceived A.B. 475 to be new and innovated. Mr. Miller said people from the beverage industry were opposed to the legislation but he would like the committee to think about how their constituents would feel about living in a clean area. Other states have used deposit legislation as a way of controlling litter, but because of the bottles potentially being recycled many confuse litter legislation with recycling legislation. Mr. Miller said recycling had to do with resource utilization and litter removal would be aesthetic. A container deposit legislation was one form of litter utilization with some states requiring 5 or 10 percent deposit on a container which could be returned for deposit. This would be considered as the classic Oregon style of legislation, said Mr. Miller. Oregon felt there was 50 percent reduction in litter not only because of the deposit refund but an educational program of not littering. He talked about the problems which existed in the Oregon type of container deposit. It would not cover other types of litter such as paper and plastic products which were not beverage containers. The "Clean Nevada Bill" would consist of a 1/2 cent per container fee collectable at the wholesale level. Fifty percent of the funds would go directly toward cleanup of the highway. Research and education would receive 20 percent, 15 percent would be enforcement and 15 percent for enforcement not to exceed $50,000. The cost would be built into the product and the small stores would not have to handle the paperwork. The program would support nonprofit organizations such as cleaning up a stretch of highway. Mr. Miller said three years ago his class picked up litter between Fallon and Fernley (Exhibit D) on three 100 yard sections of the highway. The litter picked up was calculated at l.8 tons per mile. The majority of the material picked up pertained to beverage containers, solid and paper waste.
Mr. Neighbors agreed everyone in Nevada would be concerned with litter on the highways. He did note Nevada had stiff penalties for littering. Mr. Neighbors felt Nevada had the authority in place to keep highways clean. Mr. Miller had not felt litter penalties had been used except for gross dumping. Mr. Neighbors understood stiff penalties would be issued in the new legislation, but asked if penalties did not work before, why would they work now. Mr. Miller explained A.B. 475 did not have penalties for littering as there were stiff penalties in existing legislation which covered convictions for littering. He did not believe the threat of a penalty prohibited littering. Mr. Neighbors believed it was just another tax for the taxpayers and issues should be brought forth for stronger enforcement of laws already on the statutes. Mr. Miller felt A.B. 475 would be far less bureaucratic than legislation in other states. Mr. Neighbors stated dividing up the fee would be an administrative "nightmare," and asked how much would be generated from the fee. Mr. Miller suggested $1.6 million could be generated from the fee.
Mr. Gibbons asked why wine coolers and distilled alcohol were left off the list. Mr. Miller said those were left off the list by mistake. It would exclude dairy products or any product where the container was reusable. Mr. Miller stated the reusable containers were very rarely dumped. Was the intent to have the wholesaler pay asked Mr. Gibbons. Mr. Miller said yes. Mr. Gibbons asked how the fee would be passed on to the consumer ultimately. Mr. Miller said the cost of a six pack would go up 3 cents. Mr. Gibbons asked why syrup was listed under seller when all other items were listed under wholesaler. Mr. Miller said it was important all drinks at 7-11's and fast food groups were included. He said it was difficult to separate those places which have syrup in a restaurant in a reusable container from one with a disposable container. The determination was made to see if the business used a disposable container or a reusable container predominately and the determination would have to be made by taxation. Mr. Gibbons directed Mr. Miller to section 10 of A.B. 475 and asked the purpose of giving the Governor authority for the balance of funds from the fee. Mr. Miller stated National Beverage Legislation had been proposed and had been around for some time and there was still a chance for it to go forward. If the legislation was passed it would make this legislation superfluous. Mr. Gibbons asked about the balance of the fund and what the governor would use the balance for. Mr. Miller said the monies not used for litter could be used for solid waste management. Mr. Miller indicated it would be a very small amount and was not meant to funnel money into solid waste management. Mr. Gibbons felt it would be the policy of the legislature to dictate how money was spent rather than the governor and this committee should dictate rather than the governor. Mr. Miller suggested section 10 could be changed very easily.
Ms. de Braga wanted the definition of carton or paper containers clarified and understood it did not include dairy products. Mr. Miller said the containers were in two general classes, a bottle for drinking and disposable type container used for syrup. There would be a fee of 1/2 cent for every 16 ounces.
Mr. Regan referred to section 8, subsection 2 of A.B. 475, and asked about the research and education of the public. Mr. Miller said it was designed to let the Office of Community Services use whatever public relations methods would be appropriate to convince the public not to litter. Mr. Regan questioned section 8, subsection 2 (b), regarding 50 percent for grants to agencies of the state......, and questioned what Mr. Miller considered as nonprofit organizations. Mr. Miller named as examples a high school soccer team, explorer scouts, anyone wanting to raise funds for their activity, but a group which would not be for profit. Mr. Regan suggested there would be other problems, i.e. picking up litter and being hit by a car, or cut, etc., who would be liable. Mr. Miller said the same issue existed on the clean the highway groups who advertise; if something happens to someone, who would be liable.
Mr. Sader asked about page 1, section 4, line 21, and indicated the language would not be broad enough as given in Mr. Miller's example of McDonald's for consumption both on and off the premises. Mr. Miller said the term nonreusable containers would broaden the language. Mr. Sader said a classic restaurant would not be one in which beverages would be taken off the premises. Mr. Sader asked the difference between taxing syrup in a restaurant or a bar. Mr. Miller said a distinction could be made by saying anything in a disposable container should be taxed. Mr. Sader said the syrup not used in disposable containers at a restaurant should not be taxed.
Mr. Gary Hunter, Department of Taxation, said the department was neutral on the bill but did have concerns on how the mechanics would work. He said the bill provided for a permit but no fees had been set. The due date of tax would be on the 10th of the month, stated Mr. Hunter. He suggested most taxes have a date of the 25th or 30th of the month. Provisions for penalty or interest charges on late payments were not indicated. Would a permit be revoked or doors locked for enforcement reasons or what manner would be used. Mr. Hunter said one problem he could foresee was retailers buying from unlicensed wholesalers (out-of-state wholesalers). Nevada would not have jurisdiction over those wholesalers. The same problem occurred with tobacco products tax, and the problem was solved by letting businesses know if they were buying from an unlicensed wholesaler, the burden would be shifted to the retailer. There needed to be provisions adopted to administer the tax. The goal would be to include the tax on the Department of Taxation's new system and tie it into the sales tax, tire tax, etc. He asked if anyone had done a study on the number of accounts which would be involved.
Mr. Jim Hawke, Director of Community Services, did not feel the duties assigned to Community Services regarding A.B. 475 would be a problem. The question of liability was raised and Mr. Hawke said whenever a grant or contract was given to nonprofit organizations they must as part of receiving the grant prove they were non-profit with the Secretary of State and IRS. They must also indemnify the state of Nevada as well as provide SIIS coverage for all of their employees. He said Community Services administered grants and had a process which has been efficient. Mr. Hawke suggested the "Adopt A Highway" program could be enhanced by the fee. Examples of letters from tourists regarding the need for clean-up of Nevada highways were given by Mr. Hawke.
Mr. Tom Polikalas, Community Services, Recycling Education Programs, gave figures for the container fee. The figures derived were initially ascertained from a nonprofit organization in Washington, D.C., Public Container Recycling Institute. Based on a population of 800,000 Nevada would use some 391 million containers. The July, 1992 population of 1,343 million, persons in Nevada would generate 657,181 thousand containers. Tourists would add l.34 containers used per capita. The residents of Nevada would generate some $3.285 million, and tourists would add another $663,000 from the 1/2 cent container fee. Mr. Polikalas gave examples of money saved nationwide by litter cleanup.
Mrs. Freeman asked for those in opposition to A.B. 475.
Ms. Mary Santina, Executive Director, Retail Association of Nevada spoke from written testimony (Exhibit E) in opposition to A.B. 475. Mr. Pat Coward represented the Grocery Industry Council and the Neighborhood Stores Council of the Retail Association of Nevada, both of which were strongly opposed to A.B. 475. Mr. Coward spoke from written testimony (Exhibit F).
Mr. Harvey Whittemore representing Southland, Nevada Beer Wholesales and California/Nevada Soft Drink Association, spoke in opposition to A.B. 475 which would impact those entities in a number of ways. Mr. Whittemore felt enforcement would be a problem. He asked how a wholesaler would know if a plastic drink container would be used to hold milk or a soft drink, the tax would be on the container by the wholesaler. The definitional section of "beverage" was not specific enough. "Syrup" would also create a problem, said Mr. Whittemore. How would a wholesaler know what portion of a can of syrup was taxable and what portion would not be by the definition in section 4 of A.B. 475. Mr. Whittemore stated the container tax was unusual and felt the committee should know what states had adopted similar beverage container taxes. He said the state of New York and three other localities, Honolulu, Baltimore and Montgomery County, Maryland were the only ones to use this form of container tax. Section 10 was placed in the bill as an attempt to impose this issue on a national level. Mr. Whittemore did not think this was likely, however, he believed it would be better at a national level than a state level. He asked how a tax would be imposed on a California wholesaler. A number of clients had prepared an analysis of total dollars the tax would generate and came out with a significantly higher figure than testified too. He stated the tax was discriminatory against the beer industry as well as the soft drink industry, and was regressive and penalized those least able to pay. Mr. Whittemore commented on the commitment his clients had made toward recycling and keeping Nevada clean.
Mr. Regan asked how many bottlers there were in Nevada. Mr. Whittemore said there was one actual bottler in the state and the others would be distributors who obtained there product from outside the state.
Mr. Sader asked if it would be better to tax the disposable container at the wholesale level. Mr. Whittemore said it would be an attempt to refine the focus but a problem would still exist with the delivery of the containers in determining which portion was being used for taxable beverages versus nontaxable beverages. A disposable plastic cup could be designed for water, however some waters could be taxed. The difficulty would still fall on the wholesaler in the delivery of the container product. The proponents have said the cause of litter on the side of the road was the disposable container, and it should not matter what had been in the container, stated Mr. Sader. Perhaps one should not look at "syrup" but look at taxing the container. Mr. Whittemore agreed with Mr. Sader's analogy but argued the policy issue would be if it was appropriate to tax the entire consumer population for a problem being generated by a few individuals.
Mr. Schneider asked about Mr. Whittemore's statement of taxing the bottlers out of state. Mr. Whittemore explained they moved to larger facilities in California due to exposure of larger liability costs, workers compensation costs, etc. Mr. Schneider asked if Mr. Whittemore felt this kind of bill would compound the problem and keep the bottlers out of Nevada. Mr. Whittemore answered yes, it would compound the problem.
Mr. Carpenter felt much of the paper products were biodegradable and the metal cans and bottles were more of a problem.
Mr. Peter Krueger, Nevada Petroleum Marketers Association, which was made up of the major convenience store and petroleum operators in the state of Nevada, stated the tax would not be directed at the store operators it would be a nightmare and a costly operation to keep track of the products in a disposable container which would be taxable. Mr. Krueger said his association felt the highways were cleaner than three or four years ago much to the efforts of the beverage manufacturers and distributors. Mr. Krueger's association was opposed to A.B. 475 and felt there was a better way to take care of the problem.
Mr. Sader asked Mr. John Cummings, Nevada State Education Association, if cleaning up litter was not a laudable thing to do. Mr. Cummings agreed. Mr. Sader said he would be happy to pay the tax if it was just he and asked if Mr. Cummings agreed. He did agree. Mr. Sader remarked many at this session had said they were not going to vote for new taxes, but said education would be one institution in need of more money. If taxes were raised for the issue of cleaning litter, should taxes be raised for cleaning litter or for education. Mr. Cummings stated there were many areas of need in Nevada, the first need, from Mr. Cummings point of view, would be education of Nevada's children. Mr. Sader asked Mr. Cummings if he would prefer taxes to be raised for litter or education. Mr. Cummings said, "I don't think you ought to raise one single tax, one single dime in this state until you have raised a tax for children."
Mr. Ernaut stated the bill was a good idea "turned bureaucratic." If 50 people were paid $10 per hour, 40 hours a week, 52 weeks a year, the labor costs would be $1 million, and by adding transportation and miscellaneous expenses the profit generated would be $2.5 million. He felt some things should be done at the local level and community standards needed to be enforced at the community level.
Mrs. Freeman informed Mr. Ernaut the bill was drafted in an attempt to help the nonprofit organizations and local governments to address the litter problem. Because of the amount of litter there was a need for the private sector and the community to confront this problem. The bill was drafted by Mr. Miller in an effort to help those organizations address the litter problem. Mr. Ernaut said he understood, and if the legislature wanted to tax every person in the state of Nevada to clean up Nevada, then why would they litter in the first place. Mrs. Freeman said Nevada has a tourist economy and many people passing through the state did not necessarily live here.
The hearing was closed on A.B. 475.
There being no further business to come before committee, the meeting was adjourned at 2:45 p.m.
RESPECTFULLY SUBMITTED:
PAT MENATH
Committee Secretary
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Assembly Committee on Natural Resources, Agriculture and Mining
April 19, 1993
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