MINUTES OF MEETING
ASSEMBLY COMMITTEE ON TAXATION
Sixty-seventh Session
March 23, 1993
The Assembly Committee on Taxation was called to order by Chairman Robert E. Price at 1:25 p.m., 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:
Speaker Joseph E. Dini, Jr., Assemblyman, District No. 38
STAFF MEMBERS PRESENT:
Ted Zuend, Deputy Fiscal Analyst, Legislative Counsel Bureau
OTHERS PRESENT:
C. O. Watson, Executive Director, Nevada Association of
Tobacco and Candy Wholesalers (NATCW)
Marilyn Patton, owner of U & I Distributing Co., Sparks and Yerington and Secretary of the NATCW
Jim Weishaupt, Manager of Walker River Irrigation District
Janice Wright, Deputy Executive Director, Nevada Department of Taxation
Robert Austin of Fallon, Nevada
Leon Hensley, Lander County Superintendent of Schools
Gerald LaMiaux, past president, Nevada State Board of School Trustees
Bill M. Welch, Executive Director, Nevada Rural Hospital Project
Greg Betts, Nevada Rural School District and Nevada Association of School Boards
Bob Hadfield, Nevada Association of Counties and representing Lander County Commissioners
Carole Vilardo, Executive Director, Nevada Taxpayers Assoc.
Marvin Leavitt, City of Las Vegas
Chairman Price announced he would briefly receive rebuttal testimony and exhibits from C. O. Watson on AB 295, prior to hearing items on the agenda.
ASSEMBLY BILL 295 - Clarifies provisions governing sale of
cigarettes by wholesale dealers.
C. O. Watson, Executive Director, Nevada Association of Tobacco & Candy Wholesalers, submitted rebuttal documents attached as Exhibit C. Exhibit C was made up of three submittals. Submittal #1 refuted briefly statements made on behalf of McLane Company at the March 16, 1993 hearing. Submittal #2 reviewed the process from October, 1992 to present which resulted in the drafting of AB 295. Submittal #3 confirmed activities by McLane, relative to pricing of cigarettes, which was rescinded after the March 16 hearing.
Mr. Watson pointed out although it had been stated in the previous hearing RJ Reynolds opposed passage of AB 295, it was an associate member of his organization and, therefore, would be in support of the association's stand. He also stepped through the development of the bill draft as reviewed in Submittal #2. He concluded by stating the association had followed the instructions of the tax commission and the taxation department in requesting the bill draft.
Marilyn Patton, U & I Distributing, affirmed she had supplied rebuttal information from her company. See letter of March 19, 1993 attached as Exhibit D.
Chairman Price called for testimony in support of AB 305. See bill explanation for AB 305 attached as Exhibit E.
ASSEMBLY BILL 305 - Authorizes levy of property tax for costs of protecting the supply and distribution of water of irrigation districts.
Jim Weishaupt, Manager of Walker River Irrigation District (WRID), was first to speak in favor of AB 305. He read from his written remarks. His testimony is appended as Exhibit F.
In response to a question from Mr. Spitler, Mr. Weishaupt stated attorneys were currently paid directly through the assessment to the water use tax base, based on water right acres within the irrigation district. Mr. Spitler voiced his concern as to how assessments would affect property owners if this bill was passed. He asked how much money the assessment could generate if the assessment was made frequently. Mr. Weishaupt explained there were 262,000 acres within the boundaries of the irrigation district, presently 79,000 of those acres were water-right acres. He stated the district had, in the past, taxed up to five cents per acre. He projected passage of this proposal could increase the rate to 10-15 cents per acre.
Mr. Weishaupt told Chairman Price the Walker River Irrigation District existed within Lyon County and a portion of Douglas County.
Chairman Price stated he could not find a line item for the district in the "Red Book."
Chairman Price read from NRS 539.636 relative to tax rates permissible by water districts and asked Janice Wright to offer some clarification of the exemption on limitation of tax rates.
Ms. Janice Wright, Deputy Executive Director, Nevada Department of Taxation, explained it was true there was no limitation on the tax assessments which could be levied by the irrigation district. However, she pointed out the other problem which would exist, if AB 305 passed, would be in NRS Chapter 354, the statute which defined the Local Government Budget Act. She stated NRS 354 defined Nevada local governments. It referenced irrigation districts and while one portion of the statute did not limit tax rates levied by irrigation districts, the other portion - The Local Government Budget Act - did set forth restrictions on tax rate levies.
Ms. Wright said the department was asking for input and clarification from the legislature as to how the department would administer the change proposed in this bill. Passage of the bill would require the removal of the districts from NRS 354; otherwise, they would be subject to the same restrictions as other governmental entities. Under the language proposed in AB 305, the assessment could be an unlimited amount. It would only be the constitutional limit, she thought, which would restrict the rate so the overall tax rate would remain below the ceiling limitation.
Speaker Joe Dini, Jr., District 38, explained he had introduced this bill on behalf of the district. Historically, there had been no problem in Mason or Smith Valleys. But, because of the extensive interstate litigation over water in the area, the bill had been proposed to give the district some necessary relief by allowing it to recoup some of its legal costs incurred.
Mr. Weishaupt added he realized there would be an impact on the cities, counties and property owners. However, because the water rights in the area were being threatened this would allow funds to be collected in order to resolve some of those water right issues on everyone's behalf.
Mr. Dini stated there was pending litigation by the tribe at Schurz to open the decree relative to the Walker River which would probably result in additional legal costs in the near and long term. He noted there had been legislation passed in the 1991 session, which permitted districts to apply to the Interim Finance Committee for assistance to pay litigation costs incurred in interstate water fights. He pointed out WRID had not taken advantage of that ability. This bill was an attempt to try to fund those costs within the district.
It was noted there were five members on the WRID board of directors. Those positions were filled from the approximately 560 water-right-acres owners on the district tax roll, weighted by number of acre feet owned, elected at large.
Mr. Weishaupt answered Mr. Marvel's question by reviewing the cost of district litigation since 1988 which was in excess of $750,000; in the past year and a half the state had participated in negotiations with the State of California. Mr. Marvel asked if the projected $200,000 per year which would be generated under this bill would be sufficient to continue the fight. Mr. Weishaupt said the cost would depend on what the future held for the district.
Speaker Dini also responded to Mr. Marvel saying the state had been helping the district considerably in the negotiations with California over the Bridgeport fight. The WRID simply had not been in a position to pursue it alone, so the state interceded and became responsible and responsive in the negotiations. It was his feeling the state's involvement would pay off well by getting it out of the courts and resolved. He said no money could be made by fighting those cases through the Supreme Court.
First to speak in opposition to AB 305 was Mr. Robert Austin of Fallon, Nevada. Mr. Austin spoke from notes attached as Exhibit G, referred to a letter from Truckee-Carson Irrigation District, (TCID) Newlands Project, dated April 15, 1991 attached as Exhibit H, and read excerpts from two Pacific Reporter Second citations: State v. Williams, (pages 461 and 462), and Truckee-Carson Irrigation District, a corporation, Appellant, v. Ralph W. Baber, Jerry E. Jones, Elmer J. Flick, and Southern Pacific Company, a corporation, Respondents, (pages 46, 47 and 48) attached as Exhibit I.
Mr. Austin contended passage of AB 305 added yet another layer of taxation to his water-righted property. He compared the assessor's valuation of his 4.63-acre parcel with average five-acre non-water-righted parcel. He pointed out valuation of his parcel was over $3,000 more than other parcels due to the existence of the water rights. He stated even though he did not use his property for any agricultural purpose, in addition to his regular county real property taxes, he paid TCID an additional assessment of $119.50.
He said this bill would allow a public corporation (not a political or governmental subdivision) to levy assessments against his property without making any permanent improvement to the irrigation district or his property. He felt there was a constitutional question. He cited Article 4, Section 20 of the Nevada Constitution which prohibited local and special laws, and Article 4, Section 21 which provided general laws were to have uniform application.
Chairman Price pointed out to Mr. Austin it was not uncommon to have several layers of assessments against any parcel of real property, it depended upon where the property was located with regard to the boundaries of various special assessment districts. Discussion of assessments against Mr. Austin's property and whether or not the TCID was a political subdivision followed. Mr. Austin stated the courts had ruled the TCID had no political function and its books were not open to public scrutiny.
Tom Grady, Nevada League of Cities, testified the TCID was organized under the same irrigation district laws as WRID and Pershing County Irrigation District, all as political subdivisions. Chairman Price asked if they were taxing districts, receiving ad valorem taxes. Mr. Grady told Chairman Price the districts did not receive ad valorem taxes, but rather they were paid for out of the water use monies.
Mr. Austin read from Exhibit I, page 47, ibid, (as marked with dark line).
Chairman Price asked Jim Weishaupt to come back to explain the district which would be created under this bill. Mr. Weishaupt stated it would be an irrigation district, operated under statute as a quasi-municipal organization, which had taxing powers in terms of water use taxes. He substantiated there were different mechanisms, but they operated under the Nevada Irrigation District Act as a quasi-municipality and had done so since it began in 1919.
Mr. Austin indicated he would rather fight his own battles than allow the TCID to represent his interests. He told Chairman Price the TCID, to his knowledge, did not have the authority to enter into contracts; it had operated under a temporary agreement since 1984. He speculated there were political activities going on in Fallon, through the irrigation district, which would only cost the people in Churchill County, who did not have an agricultural assessment exemption, a lot of money.
Mr. Weishaupt stated, in reply to Mr. Regan, the WRID water right acres were within Lyon County and there were parts of the irrigation district within Douglas County, near Topaz. Therefore, the tax rate would be applied to the taxpayers of both counties across the board, so long as the real property was located within the boundaries of the irrigation district.
In answer to a question from Mr. Austin, Mr. Weishaupt stated the individual owner owned the water rights, not the irrigation district. Mr. Austin said the same circumstance existed in his district. Therefore, the responsibility of and for his water was on him; the operation of the district was on TCID. Chairman Price added the state, in the bigger picture, had the responsibility for protecting the water within the state for its citizens use. The water was a resource of the state of Nevada and defending water cases intra- or interstate was the obligation of the state, not to be left up to the individual citizen.
Responding to Mr. Spitler, Mr. Weishaupt stated the WRID's board of directors approved the district's budget, not subject to further oversight by any other entity. Mr. Spitler was concerned with the inclusion of the language on section 1, line 9, "and other costs." He felt the language was an open door for the district to do whatever it deemed necessary. He felt the bill was too broadly written. Mr. Weishaupt responded the district would not object to a reasonable limitation being placed within the language of AB 305. He added he felt the committee saw the intent and the need for the bill.
Chairman Price thanked Mr. Austin for his attendance and participation at the hearing.
Mr. Spitler asked Janice Wright, Department of Taxation, to clarify what would result if AB 305 passed. Ms. Wright responded the only question was whether the committee intended to put the districts covered by AB 305 under NRS 354, the Local Government Budget Act, which would have revenue limitations, budget review and audit requirements. Or, was it the committee's intention to exempt the districts from those requirements. She stated the department would request clarifying language to be included within the bill. Vice Chairman Myrna Williams noted the intent was not clear and a decision would have to be made at a later date.
Vice Chairman Williams closed testimony on AB 305. She then called for testimony on AB 282. See bill explanation attached as Exhibit J.
ASSEMBLY BILL 282 - Authorizes local governments to impose property tax for "pay as you go" financing of public works upon approval of voters.
Assemblyman Marvel, Assembly District 34, stated he had requested the bill draft for this legislation as a result of the successes experienced with similar programs used by local school districts, especially in Lander County. He testified the concept might be used successfully in financing, on a more sound business principle basis, other local government and governmental subdivision projects on a pay-as-you-go basis. He introduced Dr. Leon Hensley, Superintendent of Schools for Lander County, and Gerald LaMiaux, past president of the State Board of School Trustees. He told the committee Mr. LaMiaux was the major architect of local school pay-as-you-go financing.
Mr. Marvel informed the committee he realized the bill would, perhaps, need amendments and he was not opposed to whatever suggestions its members might have to make it workable for local governments.
Dr. Leon Hensley was first to address the committee in favor of AB 282. As superintendent of schools in Lander County, he stated he and Mr. LaMiaux had been instrumental statewide in promoting this as a vehicle for funding. He explained he and Mr. LaMiaux had been approached by the Lander County commissioners to help convince this committee and the legislature as a whole of the value of this plan as a funding vehicle. He indicated there was potential for great savings for the taxpayers.
Mr. Hensley proposed additional language which could be added to the current bill. See Exhibit K attached for the proposed amendment language. He elaborated the amendment would expand the law in order to make it resemble more closely the language of NRS 387 which covers school districts. That was to say, to be able to have a pay-as-you-go question and a bond question together and united as one question on the ballot. It would also establish a long-term replacement fund at the discretion of the public entity involved. He affirmed several county school districts, namely Elko, Lander, Clark, and Humboldt, had successfully used this vehicle. He augmented by saying one of the residual effects of a pay-as-you-go plan being implemented was the fact the pool of money which was available to the private sector was left untouched for use by the private sector in business. When all governmental entities were tapping the investment reservoir, most economists agreed it resulted in increased interest rates for the borrower. Given a little patience and a little time local governments would be able to complete their capital projects without borrowing all or at least a percentage of the funds by funding through pay as you go. He then introduced Mr. LaMiaux to address the particulars of the presentation.
Mr. Gerald LaMiaux explained there were three types of pay as you go, as he understood them. First was the standard "save to spend" type under which money was saved into a fund in order to spend it on future projects. Then there was a combination plan which some schools were using whereby an immediate need to build was addressed by the entity beginning a pay-as-you-go collection (after popular approval) and only bonding the project for the minimal amount of money over the shortest period of time (when large payments were required and cash requirements were in excess of quarterly receipts from allocated tax revenues). Even for small counties this resulted in tens of millions of dollars in savings and could be many times that amount in large counties. Finally, there was a long-term-replacement fund which was, to date, untried but had significant potential.
Mr. LaMiaux's first exhibit, Financing Public Schools in Nevada, is attached as Exhibit L. He said the exhibit was a study which he had done in 1988 to justify pay as you go for schools. He reviewed the study by reading in summary therefrom. He then presented comparative financing information based on a chart/guide format. Mr. LaMiaux's Guide to Charts Packette and reduced copies of his presentation charts entitled Washoe County School Replacement Schedule, Washoe School Facility Finance Schedule,Washoe County School Finance Comparisons, and Douglas County Replacement Fund (with Nye and Lander Counties), are attached as Exhibit M and Exhibit N, respectively. Mr. LaMiaux reviewed the charts and statistics from which the charts were prepared in detail for the committee. He reinforced how many tens of millions of dollars the districts could have saved on recent projects had they been participating in pay-as-you-go financing, either exclusively or in combination, over straight bonding programs.
Mr. LaMiaux reiterated to Mr. Marvel proposed changes to the bill were set forth in Exhibit K. He explained the amendments as presented would take language out of the school statutes and add them to AB 282, modified to reflect its use for various local governmental entities other than school districts. Dr. Hensley also added the one other change recommended to the original AB 282 was on page 1, at line 10, (as shown on Section 2, paragraph 2, of the exhibit) which required approval of the majority of the registered voters in the county to transfer funds from the money fund to the debt service fund to pay costs of debt service of local governments.
Also submitted in Mr. LaMiaux's package was Public School Financing in Nevada, attached as Exhibit O.
Mrs. Lambert, Mr. Neighbors and Mr. Marvel discussed how this type of plan would affect the various counties' ability to stay within the tax rate caps. Mr. Marvel concluded the county commission would have to authorize the pay-as-you-go tax levy prior to it going to a vote of the people. Mr. Neighbors asked if the proposal would have to go to a bonding consultant. Dr. Hensley said it would not have to go to bond counsel. But, he explained, a governmental entity would have to initiate the request for the tax levy and it would necessitate some action by the county commission to approve it for the ballot. Such language had not been drafted into the bill according to Mr. Marvel. He suggested there should be an amendment drafted to provide specifically for the commission's involvement.
In answer to a question posed by Mr. Schneider, Mr. Marvel stated any surpluses which accumulated in the funds could only be used for designated projects, as approved by the voters. It could not revert to the general fund and be used for increased salaries or other operating expenditures, he added. Mr. Spitler suggested the language on page 1, section 4, line 19, be should be tightened up to add more security for those excess funds.
Dr. Hensley in closing said he and Mr. LaMiaux had no vested interest in AB 282. Their concern had been to bring this option to the legislature for use with other governmental entities, as it had been such a benefit to the Lander County school district. He underscored the importance of informing and demonstrating to the voters the significant benefits of the pay-as-you-go plan as an alternate funding vehicle compared to total costs attendant to traditional bonding.
In conclusion, Dr. Hensley stated the value of the pay-as-you-go funding system had been dramatically demonstrated in Elko, Humboldt, and Lander Counties as it applied to the schools. He restated it was an excellent option to have available to other governmental entities, if they wanted to use it. It was easily demonstrated to the voters how much they could have and how much they could save by being patient and providing for future projects with this type of levy where there was fund specificity. It could be shown to the voters they had the final say in use of those dollars.
Mr. Marvel responded to a question from Mr. Neighbors by stating the tax rate limit shown on page 1, line 6, could be amended to any reduced level the committee deemed necessary. Dr. Hensley added the rate was currently 75 cents in small counties and 50 cents in larger counties.
Mr. Marvel thanked Dr. Hensley and Mr. LaMiaux for coming from Battle Mountain to make their presentation.
Mr. Bill M. Welch, Executive Director, Nevada Rural Hospital Project, was next to testify. His written comments are attached as Exhibit P. He concluded by stating, properly presented, this method of financing projects was far more fiscally responsible and would allow the county to move away from total reliance on debt as a means of meeting the local needs.
Mr. Welch added the members of the Nevada Rural Hospital Project voted to support Lander County's efforts to pass the concept proposed in AB 282. He stated he felt passage would allow the counties to do a better job in their strategic planning process, be more fiscally responsible and provide for the capital expenditures which were pressing in many counties.
Greg Betts, Nevada Rural School Districts and Nevada Association of School Boards, stated both entities supported passage of some form of AB 282. The organizations wanted to do anything and everything they could to persuade the legislature to encourage and expand the potential use of the pay-as-you-go concept. As had been said before, it had already been demonstrated there were millions of dollars of savings for the taxpayers by use of such a vehicle, as opposed to traditional bonding. He provided an amendment to the committee which would exclude school districts from inclusion under AB 282 because they were already dealt with under NRS 387. See Exhibit Q attached.
Bob Hadfield explained he was, in one capacity, representing Lander County which could not be present due to budget hearings. He indicated support of AB 282 on their behalf. Also see Lander County Exhibit R attached attesting to Lander County's position.
Additionally, in his capacity with the Association of Counties, Mr. Hadfield elaborated, although a properly run pay-as-you-go program saved the taxpayers money in the long run, this bill might have come too late for some. He discussed the serious problem which existed within the state, i.e. protection of the local government operating tax rate while at the same time providing for debt service or pay as you go. He confirmed there were two counties currently at the $3.64 legislatively mandated cap, Elko and Nye County. It was his opinion several other counties could conceivably hit the cap this year or in 1994.
Another problem he saw was, if pay as you go was initiated in some areas, there could be circumstances under which a segment of the county population would specifically benefit from a project which had been levied against the entire county population.
A discussion of these points followed. Mr. Marvel asked Mr. Hadfield if he had amendments to address those concerns. Mr. Hadfield replied there was currently a bill draft request pending which addressed those points and it might be out of the bill drafter's office within a week or so. He informed the committee the wording in the referenced BDR would essentially provide voted upon debt, including state debt, would be placed between $3.64 and $5. He pointed out it would handle funding across the board, not just pay as you go, and also required a vote of the people.
Carole Vilardo, Executive Director, Nevada Taxpayers Association, spoke in opposition to AB 282 but noted she was not speaking against pay-as-you-go financing, per se, as it was obviously a much better vehicle from the taxpayer's perspective. She objected to the policy she felt was emerging which she felt needed to be investigated, perhaps from a different perspective.
Ms. Vilardo said Carlin was, additionally, at $3.64 now. Further, the state would probably have to increase the debt retirement cost from 14 cents to 17 cents within this biennium, without selling any other bonds. She pointed to the metro and park override bond issues pending and added those things were going to be forthcoming due to the influx of population and the existence of old buildings which needed repair and/or replacement.
She insisted there had to be a policy set to determine how all the needs which were being shunted onto property tax, including double-barrelled revenue bonds and operating costs, could be provided for; otherwise, the problem being faced now would continue. Ms. Vilardo indicated some form of consolidation had to be studied and funding mechanisms which had been made available needed to be examined. Until then, the bill had to be held in abeyance. She explained her position in opposing AB 282 was unfortunate, but if the bill forthcoming from the Nevada Association of Counties was presented and included provisions for removing all voter approved debt from the $3.64 cap, the cap might have to be raised to accommodate what would come before the committee this session.
Relative to AB 282, pay as you go was fine. She said the local governments should have the ability to do pay-as-you-go financing. But the other issues she had mentioned needed to be addressed and reconciled first. She had suggested to other committees there was a need for a very specific interim study to conciliate the following issues: impact fees relative to property tax; various other property tax mechanisms; debt retirement, possibly placing them outside the debt limitation. Her concern was as to assessments and levels of property tax. Even if the voters had approved of the individual ballot measures, without some understandable rhyme or reason the voters might become absolutely livid at the total tax rate. The issues had become so complex and sophisticated, language might be unclear.
She also commented the bond or pay-as-you-go funding comparison should be totally disclosed to the voters prior to the election and the vote should not be by special election. It was also important to make the voters aware of how long a project would have to be delayed in order to take advantage of a pay-as-you-go plan, once it was passed by the voters.
Because of the long-term, cumulative nature of pay as you go, it was to be used for capital replacement projects. In most counties she felt it would not be a mechanism by which sufficient revenues could be generated to provide growth responsiveness in the short term.
In response to Mr. Marvel, Ms. Vilardo said the obstacle to generating sufficient funds for projected construction would be most apparent in the small counties when high-end sums were needed. Discussion followed regarding the state tax cap and sales tax rate influences. Ms. Vilardo responded it would be important to recognize both the requirements for capital improvements as well as what funds would have to be reserved for operational purposes. Mr. Marvel concluded perhaps pay-as-you-go funding should have been implemented ten years ago in order to have taken advantage of it fully. But, he added, the tool was necessary and it should be taken advantage of wherever it could be used when needed. Ms. Vilardo said she agreed. She stated if the bill was passed the election time frame and ballot language requirement and whether any other condition or ballot issues would be affected if the measure passed, should be specified.
Mr. Neighbors interjected any time a county found room between a county's existing tax rate and the cap, the voters could vote to put it into its capital projects fund, in order to get started on a pay-as-you-go program. He also suggested as bond indebtedness was retired it might be possible to have the voters convert the resultant surplus rate to a future projects fund using this vehicle.
Mr. LaMiaux, Lander County, responded briefly to the preceding discussion. He stated there was validity in the points and concerns which had been raised. He commented it might be appropriate to set limits within the levels of rate share which existed to eliminate some of the potential conflicts. He again pointed out capital funding costs would be reduced under the pay-as-you-go plan, over the long term. The voters would get more for their money. Eventually, over a three- or four-year period, the situation would ease. He compared the psychology of initiating the program to the process individuals went through when they began a savings plan. It was important it be stressed to the voters the plan would allow them to move toward being debt free and not obligated passed the time of construction.
Marvin Leavitt, City of Las Vegas, testified he was not opposed to AB 282, because the financing technique was a valid one. But he, too, felt there were many concerns being faced today by various governmental entities. He referred to the regular tax fights which had occurred in the 1970's, when the combined rate went above the $5 limit. He added, since the rate was reduced in 1981 to about the $2.20 level with $3.64 as the maximum the fights had all but stopped. This was due to the counties which had a rate problem buying down the entity which had caused the rate to go over the statutory limitation.
He continued the situation facing the governments now was very different from the situation which existed prior to 1979. He explained the current rate was made up of several factors: the normal operating rate, governed by the six percent formula; special legislatively approved overrides; special voter approved overrides for operating purposes; special voter approved overrides for capital purposes; special voter approved debt service; and now voter approved pay as you go. He asked, "Now, if you ended up in a tax fight, what would get preeminence. As a practical matter, what would get preeminence? Obviously, you would have to pay for the debt, but what would get decreased to comply with the maximum rate"? He implored the committee to give the governmental subdivision some guidance on how the conflict in the rate structure would be administered. He elucidated the problems which could issue forth if those matters were not addressed in this or some similar bill.
Mr. Leavitt commented on Clark County's situation and stated if all the pending bond issues and special override assessments for Metro did pass, Clark County would also rapidly move toward the $3.64 limitation. He stated this issue was the result of the obvious growth in the state, especially Clark County. He also contended had the state not substituted sales tax revenue for property tax revenue in 1981, there would have been no way to fund the debt which had been assumed to provide for growth of infrastructure over the last 10 to 12 years.
He concluded by saying he felt pay as you go was an important subject and needed to be considered in light of the larger picture.
Chairman Price stated there would be no action taken on either AB 305 or AB 282.
There being no further business to come before committee, the meeting was adjourned at 3:15 p.m.
RESPECTFULLY SUBMITTED:
LINDA CHANDLER LAW
Committee Secretary
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Assembly Committee on Taxation
Tuesday, March 23, 1993
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