MINUTES OF JOINT MEETING
ASSEMBLY COMMITTEE ON TAXATION
SENATE COMMITTEE ON TAXATION
Sixty-seventh Session
February 2, 1993
The joint meeting of the Assembly Committee on Taxation and the Senate Committee on Taxation was called to order by Chairman Senator Dean Rhoads at 2:05 p.m., 1993, in Room 119 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.
ASSEMBLY COMMITTEE MEMBERS PRESENT:
Mr. Robert E. Price, Chairman
Mrs. Myrna T. Williams, Vice Chairman
Mr. Bernard Anderson
Mr. Rick C. Bennett
Mr. Peter G. Ernaut
Mrs. Joan A. Lambert
Mr. John W. Marvel
Mr. Roy Neighbors
Mr. John B. Regan
Mr. Michael A. Schneider
Mr. Larry L. Spitler
SENATE COMMITTEE MEMBERS PRESENT:
Senator Dean Rhoads, Chairman for Joint Meeting
Senator Ann O'Connell, Vice Chairman
Senator Ernest Adler
Senator Bob Coffin
Senator Sue Lowden
Senator Raymond Shaffer
Senator Randolph Townsend
COMMITTEE MEMBERS ABSENT:
Mr. Ken L. Haller (Excused)
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Mr. Ted Zuend, Deputy Fiscal Analyst, Legislative Counsel Bureau
Mr. Kevin D. Welsh, Deputy Fiscal Analyst, Legislative Counsel Bureau
OTHERS PRESENT:
See Exhibit B, attached.
Chairman Rhoads opened the meeting of Taxation committees by stating he and Chairman Price had felt it would be good for the committees to hear several taxation subjects jointly, including this review of the Supplemental City/County Relief Tax (SCCRT).
Kevin Welsh responded to Chairman Rhoads' request for opening remarks by stating the SCCRT bill (AB 104 of the Sixty-sixth session) was put into effect in 1991 primarily to make up for revenues which would not be realized because of reduction in property tax. Because of the extreme differences in the structures in the various local governments, their revenue sources, demographics, and economic conditions, the formula by which such distribution was effected was extraordinarily complex: it was a 60-column formula.
Historically, because of the formula's complexity, implementation resulted in some unexpected consequences. Although it basically did its job replacing property tax revenue, it did not function as had been expected. Coupled with changes in demographics as well as economic situations within the counties and state, the formula required modifications and simplifications in every legislative session after inception of the SCCRT in 1981.
The 1991 amendment and modification of the SCCRT was the single largest modification of the SCCRT distribution in the ten years it had been in effect. It was also the most successful attempt in simplifying the formula. Mr. Welsh then introduced the representative of the counties for further testimony on the matter.
Mr. Robert S. Hadfield, Executive Director, Nevada Association of Counties, thanked both committees for allowing county governments to demonstrate their ability to cooperate with one another as well as the counties' ability to cooperate with the legislature in implementation of the complex revenue formula as it was amended in 1991. He assured the committees it was working now and would continue to work into the future. He introduced Mr. Guy Hobbs of Clark County and Mr. John Sherman of Washoe County.
Mr. Hadfield said he had been present, as a county manager, in 1979 when the process actually began. He reflected there had been a basic change in all the counties' philosophies since that time. He elaborated counties have learned, as a result of AB 104 of the Sixty-sixth session, what their role was in the administration of this revenue distribution system and the importance of having created a positive environment of cooperation among the counties and legislature to bring forth solutions to changing needs. He stated the counties had assumed a greater role and responsibility in working with the Department of Taxation during the past eighteen months. He explained those meetings had been very amiable. The meetings had included extensive dialogue relative to review of the law and how it would be implemented. He felt such cooperation was an important departure from the period prior to 1979 when he was a county manager and was only interested in the net amount of revenue received by his county.
He explained he had not realized, as many others had not, how important the dynamics of the system were for all concerned. The potential for movement from one status classification to another was an important aspect of his realization, i.e. rural guarantee county versus export county status. He explained how those changes had recently affected several of the small mining-based counties.
Mr. Hadfield stated one of the key beneficial features of the structure of AB 104 (of the Sixty-sixth session) was to allow for recognition of those unique relationships. Whereas prior to its enactment all counties were generally consolidated into one large pool in which the individual member counties did not understand nor did they care what was going in other counties. Further, he explained the counties predominant involvement was due to county governments being the first-tier in the distribution plan for the SCCRT revenues, as it was based on how counties compared to one another.
In summary, he reported the approach set into motion in 1991 had brought about understanding, thereby establishing the groundwork for making it work even better. He hoped the dynamic changes and modifications necessary during this session could be addressed by a team: the counties, Department of Taxation and this legislature.
In response to questions and comments from Mr. Marvel, Senator Adler and Mr. Neighbors, Mr. Hadfield responded although there was not a current BDR relative to the changes proposed for Churchill and Lander Counties, modifications had been discussed. He agreed to complete language to accomplish the necessary technical corrections and revisions within the next few weeks.
Mrs. Williams stated she was happy to see the congeniality of those present, sitting before the committee demonstrating integrity and communicating as a single group. She recognized no technical piece of legislation had brought about such cooperation; cooperation had come from the participants as the legislation was being implemented. She congratulated the counties on achieving unification.
Guy Hobbs, Clark County Finance Director, reaffirmed the development of the cooperative process, subsequent to the passage of AB 104 (of the Sixty-sixth session), had brought the counties closer together than they had ever been before. He explained the various counties had been meeting regularly and those meetings created many positives in the implementation of the SCCRT and many other common issues.
Senator Rhoads asked if Mr. Hadfield could have the technical corrections ready for the committees' review by the time everyone returned from Las Vegas after the two-week adjournment. Mr. Hadfield affirmed he would have them available by then.
Bjorn Selinder, Churchill County Manager, confirmed the counties' cooperation in working to resolve irregularities which had negatively impacted Churchill County during the fiscal year following the close of the 1991 session. He stated Washoe and Clark counties had been very helpful. Therefore, he felt satisfied appropriate modifications would be forthcoming. He stated the negative impact on Churchill County had been approximately $1 million over the two-year period; but, the county was currently struggling along in the belief corrections would be made during this session to solve the problem.
Senator Rhoads thanked those present for their cooperation and attendance.
There being no further business to come before the joint committee, the meeting was adjourned at 2:25 p.m.
RESPECTFULLY SUBMITTED:
LINDA CHANDLER LAW
Committee Secretary
APPROVED BY: _____________________________
SENATOR DEAN RHOADS, Chairman
Senate Taxation Committee
APPROVED BY: ___________________________
ASSEMBLYMAN ROBERT E. PRICE
Assembly Taxation Committee
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Assembly Committee on Taxation
February 2, 1993
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