MINUTES OF THE
ASSEMBLY COMMITTEE ON TAXATION
Sixty-seventh Session
June 24, 1993
The Assembly Committee on Taxation was called to order by Chairman Robert E. Price, at 5:20 p.m., on Thursday, June 24, 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
Ms. Myrna T. Williams, Vice Chairman
Mr. Rick C. Bennett
Mr. Peter G. Ernaut
Mr. Ken L. Haller Absent/Excused
Ms. Joan A. Lambert
Mr. John W. Marvel
Mr. Roy Neighbors
Mr. John B. Regan
Mr. Michael A. Schneider
Mr. Larry L. Spitler
OTHERS PRESENT:
Harvey Whittemore, RJ Reynolds Tobacco USA
C.O. Watson, Tobacco and Candy Wholesalers
Following roll call, Chairman Price opened the hearing on AB 752.
ASSEMBLY BILL 752 - Provides revenue to mitigate adverse effects from opening or closing mines.
Assemblyman John Marvel, Assembly District 34, informed the committee the bill had been requested by the Eureka County Commissioners, because of the county's highly volatile mining industry. However, Mr. Marvel did not believe the language of the bill reflected the original intent. What was sought, he said, was language which would permit the counties to set aside in some sort of trust fund, monies which would be used when mines went out of production. Thus, Mr. Marvel submitted Exhibit C and requested an amendment beginning on line 5, to delete the language, "The board of county commissioners may also levy a tax of 10 cents on each $100 of assessed value of all taxable property in the county for the additional support of this fund."
Mr. Marvel introduced Charlie Joerg, representing Eureka County, to continue with the comments. Mr. Joerg offered background information prompting the request for the bill, and assured the committee members the language Mr. Marvel asked to be deleted did not reflect a tax increase requested by the Eureka County Commissioners. The fund being requested was merely to deal with the "rainy day" situations arising in a community when a major mining interest payed out.
ASSEMBLYMAN SCHNEIDER MOVED TO AMEND AND DO PASS AB 752.
ASSEMBLYMAN ERNAUT SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.
SENATE BILL 454 -Makes various changes related to motor carriers.
The Chief of the Registration Division for the Department of Motor Vehicles and Public Safety, Ray Sparks, came forward to explain SB 454. This bill had been requested by the Department, Mr. Sparks said, to make a number of changes in the statutes affecting motor carrier licensing and special fuel taxes. Some of these changes had been sought in order to comply with the provisions of the International Registration Plan. Mr. Sparks then submitted Exhibit D, and reviewed the bill section by section.
Mr. Neighbors asked Mr. Sparks if other states allowed the counties to collect a diesel tax. In response, Mr. Sparks said he was not aware of any, however, he had not specifically researched this.
Daryl Capurro, Managing Director of the Nevada Motor Transport Association, told the committee he had worked with the Department of Motor Vehicles on the legislation prior to the session, and supported SB 454 wholeheartedly.
ASSEMBLYMAN MARVEL MOVED TO DO PASS SB 454.
ASSEMBLYMAN REGAN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.
Chairman Price noted the committee had completed the bills shown on the agenda. However, he said he had received a request for discussion on the proposed amendment 1082 to AB 295.
ASSEMBLY BILL 295 - Revises provisions regarding sale of cigarettes by wholesale and retail dealers.
AB 295 had already been passed out of committee, Chairman Price remarked, and was currently on the Chief Clerk's desk for a proposed amendment, at Mr. Ernaut's request. The Chairman clarified the bill was not subject to a motion and the discussion was only to make certain the committee understood the amendment when it was presented on the floor the following day.
Coming forward to explain the amendment, Harvey Whittemore, representing RJ Reynolds Tobacco USA, pointed out amendment 1082 would:
1. Define and require that certain predatory pricing activity would be illegal;
2. Enforcement activities would be conducted through the Attorney General's Office;
3. Restrict a wholesale dealer from engaging in predatory pricing with intent to injure competitors or destroy or lessen competition;
4. Require a retail dealer to refrain from engaging in predatory pricing with the intent to injure competitors or destroy or lessen competition;
5. Transfer the obligations of the Department of Taxation in dispute adjudication to the Attorney General's Office who would, in turn, enforce the provisions of the pertinent section of the NRS as well as the Trade Practice Act under NRS 598(a).
The whole intent, Mr. Whittemore concluded, was if, in fact, certain people in the industry were engaged in predatory pricing, those activities would be prohibited under the Trade Practice Act. He said they should not use that law, which was a price support mechanism, as a way to "limit competition." The amendment would prohibit the activities which Mr. Watson (C.O. Watson) suggested were the reason for the law.
Mr. Marvel asked if the amendment had been shown to the Department of Taxation. In response, Mr. Whittemore said the amendment had just been drafted, but he would immediately share it with the Director of the Department of Taxation.
Discussion followed regarding the definition of "predatory pricing."
In rebuttal, C.O. Watson, Nevada Association of Tobacco and Candy Wholesalers, told the committee "predatory" was not defined. Mr. Watson maintained the whole issue came down to "basic price," not "predatory pricing." As drafted, AB 295 had been introduced to clarify NRS 370.005, the basic cost of cigarettes. The proposed amendment to the bill did not even address the basic cost of cigarettes, he stated. It did not speak to where "predatory pricing" began. What it did do was repeal all present statutes and permit McLean Company in McLean, Texas, to dictate to the cigarette wholesalers and distributors in Nevada. Based on historical evidence, Mr. Watson said, Nevada distributors could not survive in competition with such businesses as McLean Company. The purpose of the Legislature was to protect Nevada businesses.
Mr. Ernaut and Mr. Watson discussed and compared competitive practices in the beer industry.
Discussion continued concerning the basic philosophy of cost control and price control, with Chairman Price finally reminding all parties the theme of the discussion was merely to inform committee members of the gist of amendment 1082 to AB 295.
There being no further business, the meeting was adjourned at 5:50 p.m.
RESPECTFULLY SUBMITTED:
Iris Bellinger
Committee Secretary
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Assembly Committee on Taxation
Date: June 24, 1993
Page: 1