MINUTES OF MEETING
ASSEMBLY COMMITTEE ON TAXATION
Sixty-seventh Session
June 1, 1993
The Assembly Committee on Taxation was called to order by Chairman Robert E. Price at 1:15 p.m., June 1, 1993, in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mr. Robert E. Price, Chairman
Mrs. Myrna T. Williams, Vice Chairman
Mr. Rick C. Bennett
Mr. Peter G. Ernaut
Mr. Ken L. Haller
Mrs. Joan A. Lambert
Mr. John W. Marvel
Mr. Roy Neighbors
Mr. John B. Regan
Mr. Michael A. Schneider
Mr. Larry L. Spitler
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Ted Zuend, Deputy Fiscal Analyst, Legislative Counsel Bureau
OTHERS PRESENT:
Robert S. Hadfield, Executive Director, Nevada Association of Counties
Michelle Bero, Nevada Association of Counties
Barbara Raper, Nye County
Bjorn Selinder, Churchill County Manager
Mary Henderson, Senior Administrative Analyst, Washoe County
Lucille Lusk, Nevada Coalition of Concerned Citizens
Carole Vilardo, Executive Director, Nevada Taxpayers Association
Chairman Price opened with testimony on AB 592. The bill explanation is attached as EXHIBIT C.
ASSEMBLY BILL 592 - Adjusts governmental fees to correspond to purchasing power. (BDR 20-464)
Robert S. Hadfield, Executive Director, Nevada Association of Counties (NACO), along with Michelle Bero, NACO, was first to speak. Mr. Hadfield explained Ms. Bero had done much of the research on the fee structures for county governments which were being addressed. He referred to Ms. Bero's recap of Assembly Bill 592 which is attached as EXHIBIT D. He stated they had found there had been no systematic review of county fees during the period reviewed, from 1971 to present. The changes had been haphazard and inconsistent as the county commissioners had always been last to request increases. He said it was critical to maintain revenues at a level which would sustain basic county services.
Mr. Hadfield also submitted tentative amendments to AB 592 which are attached as EXHIBIT E.
Mr. Hadfield read from his prepared remarks which are attached as EXHIBIT F. He added he did not believe there was a uniform fee structure, rather there existed lists of fees spread throughout Nevada's Revised Statutes relative to each county service: assessor, treasurer, clerk, fire, police, et cetera. If AB 592 was not passed, he suggested the next most helpful thing the legislature could do would be to create a mechanism which ensured when one fee was changed, which altered or affected a particular agency or service, all other attendant fees would be reviewed at the same time using a systematic approach. He said he did not believe anyone really realized in the past what was effectively happening to the overall fee structure because the focus was on individual increases for specific purposes. He recapped several bills which had affected various state fees to the detriment of the counties' ability to increase parallel county fees. He also explained how various new programs such as assistance to victims of domestic violence had been financed through existing marriage license fees, how mining records were supported by map and claim filing fees, and how legal services were supported by court filing fees. Yet, it was becoming more and more difficult to support basic services within the various counties without an increase in their fees. He referred to EXHIBIT D and reviewed it noting dates of last increase and proposed fee changes. He also explained costs of providing services had increased at least at the rate of inflation over the past ten years. He felt the proposed increases were not excessive and in concert with EXHIBIT E, they did not affect any fee, except one, which had been last increased in 1991.
Mr. Hadfield answered questions from Mr. Marvel and Chairman Price by stating, although the proposed changes had been sent to the various counties he had no way of projecting what revenues would be generated by the increased fees. He did point out the fees listed in his exhibits only represented the portion of the fee which applied to the county. State fees were not included in his figures. Discussion followed.
Mrs. Williams stated the taxpayers would pay for these increases. Mr. Hadfield replied the increases would be borne only by those who utilized the services of the various agencies, not by all the taxpayers in general. He stated originally the system had been set up so those people who had the greatest impact on the system contributed to its funding. The proposed increases would continue such concept. Even though fees had mostly remained constant, the cost of providing them had not. He stated there was no longer a revenue base within county government due to the caps on the ad valorem taxes. Mrs. Williams responded by saying she thought most citizens would need some of the services listed, at one time or another.
Mr. Hadfield replied he agreed with her. However, he contended this issue had not been addressed in a comprehensive manner for over fifteen years. He felt now it was urgent because the counties were at a severe disadvantage. He referred to a letter of support from Margaret Lowther, Storey County Recorder, which is attached as EXHIBIT G, which compared Nevada's fees with those of surrounding states.
Mr. Hadfield stated NACO's goal was to remain user-friendly and efficient, but it was becoming more difficult to do so without being able to pass on some of the increased costs to users of services. They just wanted to be treated as other entities had been, whose fees had already been increased.
Mr. Schneider asked Mr. Hadfield if NACO wanted to be the agency through which all other entities must pass in order to seek future increases in fees. Mr. Hadfield responded he did think there should be a more comprehensive approach. Perhaps the counties were not necessarily the appropriate vehicle, but the fee increases should be evaluated from an overall view, not item by item at different times during the session.
Mr. Hadfield stated the bill had taken an inordinate amount of time to draft and then had needed extensive amendments. NACO, too, would have preferred a hearing earlier in the session. An additional problem was many of the fees were approved by different legislative committees. That situation left many agencies unaware of what was happening to fees in related areas of interest and complicated the tracking of potential fee increases. He stated the counties did need to pay more attention to the process to avoid having many little, special-interest bills being sent to the legislature without a cohesive plan, when a single bill might be more appropriate to serve the needs of the whole.
Chairman Price answered a question posed by Mr. Schneider relative to combining all fee-related matters into one area by stating it was difficult to do, practically, since many different elected officers and entities were involved. Each person or entity generally looked to its own needs whether it was for law enforcement, tax collections, the courts, welfare or whatever. Chairman Price complimented NACO on its research efforts and presentation of the information. He added this was a problem which had existed for a long time. Mr. Hadfield stated the situation was out of control. Chairman Price concluded he did not believe it was appropriate for all the fees to be played off against each other. The debate could go on forever.
Answering a question from Mr. Marvel, Mr. Hadfield stated he felt the fee increases were basically user fees, but in most small counties they would not offset actual costs. He added the fee structure had started out as and should be geared toward providing a uniform statewide system; and provide the ability to fund such a system with the user helping to pay the cost of the service with a fee.
Mr. Haller stated the current fee structures were fraught with excessive charges, particularly in voter registration operation in Washoe County. He discussed the practice of charging up to $1 per page for copies and other abuses. Mr. Hadfield stated it had been difficult to separate taxes from fees since 1979 when California cut its tax base and/or tax rates and began to switch to user fees to pay for services. He continued the argument was between those who said, "We pay taxes, so we should have a basic level of service for that and you shouldn't need to charge all these other things.", then others who said, "We're not using this system and therefore we shouldn't support the whole system. The people that use the system should pay more."
Mr. Haller pointed out making a certified or official copy was not the same as making a regular copy. He could understand the $1 charge for a certified copy but felt $1 per copy was exorbitant for regular document copies. Discussion followed relative to over-the-counter copies versus certified documents.
Mr. Hadfield added the county fee base did not start out as a Christmas tree, but it had had many ornaments hung on it which it had not been designed to support. It was about to collapse unless the roots could get some much needed nourishment. The counties were having more and more difficulty in maintaining and equipping the necessary offices and providing the services which were required by statute. He stated something had to be done in order to stabilize the system. He added it should include the counties being accountable to the legislature next session. They would appreciate the opportunity to report the good which had been done for the citizens of the counties with these increased fees, and to tell the legislature next session it had done the right thing.
Mr. Hadfield said he had been working toward passage of a bill like this one for fifteen years, unsuccessfully. Chairman Price asked if it would not be simpler to legislate this matter back to the county commissioners so the commissions could set fees by ordinance with ratification by the voters. Mr. Hadfield stated the problem with such an approach was there would be no consistency and those counties with lower fees would attract more filings. Only the legislature could set up a uniform fee structure. He pointed out the voters were not concerned with consistency in fee structure and depending on them to vote wisely could be dangerous as had been experienced in White Pine County. Chairman Price stated Mr. Hadfield had made a good point.
Michelle Bero explained there was currently an assembly bill which had passed to Senate Government Affairs which addressed the increases in fees for copies of marriage licenses, on page one, at lines 16 and 17.
Barbara Raper, Nye County representative, read from a letter dated May 2, 1993, from Cameron McRae, Chairman, Nye County Board of County Commissioners, which supported passage of AB 592. The letter is attached as EXHIBIT H.
Chairman Price requested other letters received from counties in support of AB 592 be entered into the record. Attached are letters from Marlene Bunch, Mineral County Clerk and Treasurer, and from Wayne Cameron, White Pine County Commissioner, EXHIBITS I and J, respectively.
Bjorn Selinder, Churchill County Manager, spoke in support of AB 592. He stated in the nineteen years he had been involved in county government he had never seen a concerted effort to increase and standardize county fees. The process had always been haphazard which resulted in serious revenue shortfalls compared to services provided. Those shortfalls had effectively led to subsidizing some specialized services at the cost of reducing more basic and other specialized services. He also stated since most county revenues had not been increased over the past twelve years, it had resulted in distortion of revenue patterns. Many of the specialized services had been in the area of building databases for the public. The equipment required to store and access those public records was expensive. He elaborated there was more to setting a fee than just the obvious busywork entailed. In conclusion, Mr. Selinder stated if the counties were not allowed to increase fees, the public would necessarily receive reduced services.
In answer to a question from Mr. Marvel, Mr. Selinder stated fees generally did not generate sufficient revenues to recover the costs of providing most services. Even if the fees were increased by the suggested amounts, they would not totally recover those costs in most counties, they were simply general fund subsidies. Mr. Marvel stated he liked the user-fee concept: if someone used a service, they should pay for it.
Mary Henderson, Senior Administrative Analyst for Washoe County, spoke in favor of AB 592. She stated the bulk of the increase would be realized in the Washoe County Recorder's Office and she wanted to give an overview of its effect as they were the only county which had reviewed the bill and its fee structure and the potential impact on county revenues. She forecasted the increase in revenue to the county would be $679,000 in the coming fiscal year, if the bill passed. She explained there had been no increase in staff levels within the Recorder's Office since 1981. There was one staff position and it was frozen. There had been reductions in services and supplies each year over the past four years to the point it had been difficult to keep the doors open. The work load since 1983 has increased by approximately 44 percent compared to an 83 percent increase in expenditures over the same period. The gap between the revenues generated and the level of expenditures incurred was currently being covered by monies from the general fund. Therefore, it was spread among all the taxpayers of the county.
Ms. Henderson confirmed, as had been indicated by Mr. Schneider, there had been other increases for court-related services which had been processed through bills heard by the Judiciary Committee. She said approval of those increases simply eroded the foundation of local governments because all agencies were looking to share in the same tax dollars.
In response to a comment from Chairman Price, Ms. Henderson said if the counties were not recovering their costs or coming close to recovering costs of services then the general fund monies had to be used to make up the difference. Since the revenue side was capped, there was a great deal of shuffling between departmental budgets to be able to maintain basic service levels. Traditional revenues which previously went directly to the counties and then were distributed were now being picked off by agencies within the counties, some of which were relatively new.
Mr. Spitler discussed with Ms. Henderson a bill relative to making topographical maps of county roads and whether the public would be charged for bringing in information which would be of benefit to the county recorder.
Ms. Henderson represented the technologically advanced equipment which was required for new databases, archival services and retrieval was extremely expensive, but it did payoff in avoiding access problems within the system.
Lucille Lusk, representing the Nevada Coalition of Concerned Citizens, stated she was not particularly opposed to some degree of reasonable user fees. However, there were particular parts of the fee structures which she found objectionable. Page 9, lines 14 and 15 required a $1 per page charge for the county clerk to prepare any copy of any record, proceeding or paper. She explained that language was current law and it presented a great difficulty. She stated such language was used to justify charging citizens for notices of public meetings of county commissioners in Clark County. She did not know whether other counties were doing likewise. Sometimes getting the backup information on an agenda item was upwards of $100 which was an impossible situation.
Over the past few years, Ms. Lusk asserted, the public had increased its contribution significantly by the increase in taxes paid and in other ways. It was her position there should be no cost to the citizens for meeting notices or agendas for meetings of publicly elected bodies which were making public policy decisions. Levying a cost on those notices represented, to her, an infringement on the rights of the citizens affected by those bodies. She said if copies of the majority of the information disseminated were simple copies and if the counties could not make them economically, they should send them out to be copied by someone who could do it more reasonably.
Ms. Lusk stated it was policy for the school board and for the legislature to make available copies of agendaed items without charge but Clark County Commission used the NRS $1 cost provision to charge for their materials. She suggested there should be provision within this bill, if it was passed, to provide for written notices at no charge and a reasonable charge (based on prevailing costs for simple copies) for information relative to public meetings. Discussion followed amongst the members and Ms. Lusk relative to costs of making copies and receiving notices of meetings et cetera. Mr. Spitler elaborated in 1991 the Education and Ways and Means committees had paid $8 each for copies of the Washoe County budget projections for their own use.
Carole Vilardo, Executive Director, Nevada Taxpayers Association, stated she understood the need to increase the fee structure for the counties; however some of the increases were in excess of what she felt was actually necessary. She did not believe basing the increases on the Consumer Price Index (CPI) was appropriate, and she requested all language which referred to the CPI be deleted if the bill was passed. It was her opinion fees should not be an item which augmented county budgets, they should only be used to cover the services provided by the clerk or recorder and the supplies required to execute those services, such as seals, paper, et cetera. She added fees were mandated by law and fees were set up in statute, but the fees were not established to fund the operational costs. The operational costs of the agencies were supposed to be funded by the county governments through a mix of revenue sources such as sales and property taxes.
Ms. Vilardo explained when the fees for copies were raised to $1 in 1983, it was done at the request of the county clerks association. She said the argument used for raising the fee from 25 cents to $1 was attorneys had been requesting photocopies of court transcripts which ran up to 1,200 pages in length. At 25 cents per page, the attorneys could have transcripts reproduced by the clerk's office less expensively than they could buy them from the court stenographer. After sitting and listening to that testimony, she then went back to Washoe County to get a copy of an adopted ordinance which had passed out while she had been gone and it suddenly had cost her $1 per page. Listening to the testimony it had never occurred to her the commission clerk would benefit from an increase to what she believed to be the court clerk's fee structure.
Ms. Vilardo encouraged the committee to make a distinction between the court clerk's fees and the county commission clerk's fees, if the bill was passed, in order to avoid future confusion. She would suggest county commission copy charges not to exceed 25 cents per copy. She added the $20 mailing charge currently charged in some counties was not a copy charge, per se. Rather, it was a charge to offset mailing costs and she did not feel it was exorbitant but noted it was not set out specifically in statute.
In response to a question from Mr. Regan, Ms. Vilardo replied the commission clerk should be allowed to charge up to 25 cents per copy for public information items in order to have an informed public. A brief discussion followed.
Chairman Price stated there would be no action taken on the bill. However, he would allow further testimony on AB 592 at a later date.
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ASSEMBLY BILL 458 - Provides exemption for Indian reservations and Indian colonies from imposition of certain taxes on motor vehicle fuel and special fuel under certain circumstances. (BDR 32-290)
Chairman Price directed the members' attention to a handout on their desk entitled BDR Request, attached as EXHIBIT K, relative to the Mineral County School System. He suggested he would entertain a motion on Assembly Bill 458 to amend the bill and rerefer it to the committee so the proposed language could be integrated into the bill and then reconsidered by the committee.
MR. SPITLER MOVED TO AMEND AND REREFER.
MR. REGAN SECONDED THE MOTION.
THE MOTION CARRIED.
Chairman Price reminded those present of the business tax subcommittee meeting which was scheduled for 5:00 p.m.
There being no further business to come before committee, the meeting was adjourned at 3:30 p.m.
RESPECTFULLY SUBMITTED:
LINDA CHANDLER LAW
Committee Secretary
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Assembly Committee on Taxation
Tuesday
June 1, 1993
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