MINUTES OF THE
SENATE COMMITTEE ON JUDICIARY
Sixty-seventh Session
June 21, 1993
The Senate Committee on Judiciary was called to order by Chairman Mark A. James, at 2:15 p.m., on Monday, June 21, 1993, in Room 224 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator Mark A. James, Chairman
Senator R. Hal Smith, Vice Chairman
Senator Lawrence E. Jacobsen
Senator Mike McGinness
Senator Dina Titus
Senator Raymond C. Shaffer
Senator Ernest E. Adler
STAFF MEMBERS PRESENT:
Dennis Neilander, Senior Research Analyst
Marilyn Hofmann, Committee Secretary
OTHERS PRESENT:
Richard Bunker, President, Nevada Resort Association
Robert Faiss, Lionel Sawyer and Collins, Counsel for Nevada Resort Association
Roger Trounday, Chief Executive Office, John Ascuaga's Nugget
Bill Bible, Chairman, State of Nevada Gaming Control Board
James J. Rankl, Deputy Attorney General, State of Nevada, Office of the Attorney General, Gaming Division
Dale Erquiaga, Chief Deputy Secretary of State, State of Nevada, Office of the Secretary of State
Edwin J. Apenbrink, Chief of Registration and Licensing, State of Nevada, Office of the Secretary of State, Securities Division
Bob Barengo, Representing Securities Industry Association
The Honorable Nancy Becker, Chief Judge, Eighth Judicial District Court, Las Vegas, Nevada
Michael H. Johaneson, Collective Bargaining Coalition and Clark County Public Employees Association
Lieutenant James Nadeau, Deputy Sheriff, Washoe County Sheriff's Department
The first bill on the agenda was Assembly Bill (A.B.) 233.
ASSEMBLY BILL 233: Clarifies provisions regarding applicability of casino entertainment tax.
The first to appear were Richard Bunker, President, Nevada Resort Association, Robert Faiss, Lionel Sawyer and Collins, Counsel for Nevada Resort Association, and Roger Trounday, Chief Executive Officer, John Ascuaga's Nugget. Mr. Faiss indicated both Mr. Bunker and Mr. Trounday were former chairmen of the Nevada State Gaming Control Board.
Mr. Faiss read from a prepared statement, which is on file in the Research Library as Exhibit C. He had previously provided materials to the committee members which thoroughly explained the casino entertainment tax. Those materials are set forth as Exhibit D. Senator James indicated that material had been reviewed, and it would not be necessary for Mr. Faiss to discuss the materials in detail.
Senator Titus asked for justification for the fact a show is not taxed if it is held outside a building, such as in a circus tent, but it is taxed when it moves inside. Mr. Faiss said that intent was not placed into the bill in its original form. He further explained:
In 1965, Nevada resorts became subject to a federal admissions tax. That meant that any entertainment anywhere on the premises of a licensed resort was subject to a 10 percent tax. There were two material sections to that federal admissions tax, which governed activities which had an admissions price. There was also a cabaret tax. The reason the cabaret tax was enacted was that cabarets generally did not charge an admissions tax. Instead, they increased the price of the food or drink and had a cover charge...What the legislature did in 1965 was to adopt only that section of the tax imposed on cabarets. When the federal admissions tax and the federal cabaret tax were repealed at the end of 1965, the resorts then began paying a tax only on cabarets and stopped paying a tax on anything outside cabarets.
Senator Titus asked why outside activities should not be assessed an entertainment tax now, and Mr. Faiss said it was a matter of legislative policy. He added, "Our purpose today is to have the legislative intent which has been in effect since 1965 clarified...as to what it should be or shouldn't be is not my purpose in appearing...." Mr. Faiss stated they were not asking for any change in the tax structure. Senator Titus asked if there have been any cases which became questionable because they were held outside instead of inside the resort; and Mr. Faiss answered, "Not to my knowledge." He added there has never been any suggestion by the legislature that anything outside a cabaret should be taxed. Mr. Faiss also indicated an attorney general's opinion, which was included in the history of entertainment taxes provided to the committee (Exhibit D), stated outdoor concerts and any other entertainment outside of showrooms and lounges, were not subject to the tax.
Mr. Faiss said in 1979 the legislature clarified that the casino entertainment tax was the federal cabaret tax, applying to admissions. He said there was no disagreement at that time between the Nevada Gaming Control Board, the Nevada Gaming Commission, the Nevada Resort Association and the legislature. Mr. Faiss said they established in 1979 that "the casino entertainment tax has as its absolute boundaries the federal cabaret tax...there has been no material amendment since that time."
Mr. Faiss said they are asking through this legislation for a clear statement that the intent is for the entertainment tax to apply only to those activities held inside the resort or casino, in order to avoid deficiency assessments.
Senator Adler stated he believed it might be better to abolish the cabaret tax and "find another way to come up with the same money." Mr. Faiss answered that possibility has been considered.
Senator James reiterated the purpose of A.B. 233 was to "make a specific declaration of legislative intent, which will leave no doubt about the interpretation the regulatory authorities must place on this."
Mr. Trounday said he agreed with Mr. Faiss's comments and indicated Senator James had clarified the intent very well.
The next to testify were Bill Bible, Chairman, State of Nevada Gaming Control Board, and James J. Rankl, Deputy Attorney General, State of Nevada, Office of the Attorney General, Gaming Division. Mr. Bible said the entertainment tax currently provides revenue to the state of approximately $22.4 million each year. He said he discussed this tax thoroughly with the Legislative Commission Subcommittee to Study Gaming in the last interim. Mr. Bible said the tax has been "a very difficult tax to interpret and apply." He said there are three areas which cause the agency which administers collection of the tax problems:
(1) Location: Where does the tax apply? Is it curb-to-curb on the licensed premises, or does it only involve the building or certain areas within the building.
(2) Types of Entertainment: There are some very specific exemptions within the law which make it difficult to interpret the types of entertainment.
(3) Value of Packages: A casino show is 'packaged' with nights spent in the room; how to attribute evaluations to each particular 'package.'
Mr. Bible said A.B. 233 will codify the taxes repealed by the federal government in 1965. He distributed to the committee copies of the 1964 Edition of the United States Code as it existed at that time. The document is set forth herein as Exhibit E. Mr. Rankl referred to Exhibit E and said its applicable language regarding the cabaret tax is set forth in section 4231(6). He said section 4232 was a definitional section, including definitions of "roof garden," "cabaret" or "suitable place." Mr. Rankl said these sections were the basis of the Nevada casino entertainment tax. He said presently, if there is a dispute regarding the applicability of the tax, it will require both the industry and the board to research federal law to make a determination of whether or not the facility would have been taxed under the federal tax. Mr. Rankl said A.B. 233 is intended to simplify that process.
Senator James asked:
Haven't you had to look to the federal cases anyway, since the Nevada attorney general opinions and the supreme court cases have directed you to those as the source of legislative intent for this law?
Mr. Rankl answered, "At times we have, and at times we haven't, depending on the specific issue." He added legislative intent does not become an issue unless the court finds the statute to be ambiguous.
Senator James continued:
We would be saying here that we want you to look to the underlying statute and the cases interpreting it in order to decide whether or not a given entertainment would be subject to the tax. Why doesn't that clarify your job?
Mr. Rankl responded:
That doesn't clarify our job. It requires us to look beyond Nevada law. It requires us to research 40 or 50 years of federal cabaret tax law and hopefully find a situation that is analogous to the situation faced in Nevada...remember again this federal tax was meant to apply to cabarets and rooftop gardens. I don't believe we have any rooftop gardens that are taxed in the state anymore. What we are taxing is licensed gaming establishments.
Mr. Bible referred to A.B. 233, at lines 5 and 6, and said, "The applicability of the tax is upon each licensed gaming establishment ...that becomes a definitional problem as to what constitutes a licensed gaming establishment." He continued, "Is it curb-to-curb in a broader sense or is it within a narrower sense...." Mr. Bible said the tax structure is "locked into some definitions that existed 29 years ago, which have not evolved as the industry as evolved...." He said he wished to have a tax that the administrative agency and the licensee as the "collecting agency" can clearly understand. He said he agreed with Senator Adler's suggestion regarding the replacement of the entertainment tax by "coming up with something else in a totally different area."
Senator James asked if there were any disputes regarding the $22.4 million in taxes collected. Mr. Bible answered there were some disputes, such as monies collected from the Moscow Circus, since in Las Vegas the circus was held in an outside tent, while in Reno it was held inside a showroom.
Senator James indicated passage of A.B. 233 is a solution which is consistent with the history of the tax and the way it was applied and interpreted during the time we have had it and would not preclude the legislature from "getting rid of it and starting over again" in an other session. Mr. Bible said he would like to see an amendment which indicates "where the tax is applicable in a casino." He asked, "Is it applicable in all areas of a casino where entertainment is offered, or is it not? Are there areas that are excluded?"
Senator Titus indicated she believes this is a question of taxation and should be heard in the taxation committee, rather than the judiciary committee. She also pointed out Mr. Bible had recommended five options to the interim study committee regarding the taxation issue, "...and not one of those five options that came from you as a recommendation as how to clean up the entertainment tax...are in this bill." Mr. Bible confirmed the bill was not the agency's bill. He said the agency was prepared to propose a draft of amendments when the bill was heard in the assembly, which would have given them "guidance and assistance in applying the tax." Mr. Bible said the assembly taxation subcommittee chose not to consider those amendments.
Senator James asked Mr. Bible if he supported the assembly amendment to A.B. 233. Mr. Bible responded the amendment was beneficial to the bill, since it was the agency's goal to have a tax that was easily explainable, since it was not beneficial "to have a series of continuing disputes."
There was no further testimony on the bill. Senator James closed the hearing on A.B. 233 and opened the hearing on Assembly Bill (A.B.) 349.
ASSEMBLY BILL 349: Makes various changes in regulation of securities.
The first to appear was Dale Erquiaga, Chief Deputy Secretary of State, State of Nevada, Office of the Secretary of State. Mr. Erquiaga read a letter from Secretary of State Cheryl A. Lau, which is attached as Exhibit F. Also appearing was Edwin J. Apenbrink, Chief of Registration and Licensing, State of Nevada, Office of the Secretary of State, Securities Division.
Senator James asked a question regarding the statute of limitations. Mr. Apenbrink stated the limitation was 1 year from the date of discovery of violations to a maximum of 5 years. He indicated if a violation was discovered 4 years and 6 months from the date it occurred, a party would only have 6 months in which to bring a suit. Senator James said he had never seen a statute of limitations drafted in that manner. Mr. Apenbrink cited an example:
If you received a monthly statement from a brokerage firm that showed your account had been plundered and you did not exercise the care of opening your monthly statement for one year, you would not be able to sue under this statute.
The last person to testify was Bob Barengo, representing the Securities Industry Association. Mr. Barengo referring to page 3 of the bill at section 2(4)(b), stated this section was a concern to the association. He said the addition of "investment advisor representative" did not appear in the statute previously, but has been added and approved by the association.
There was no further testimony on A.B. 349. Senator James opened the hearing on Assembly Bill (A.B.) 654.
ASSEMBLY BILL 654: Authorizes certain counties to establish department of family, youth and juvenile services.
The first to appear was The Honorable Nancy Becker, Chief Judge, Eighth Judicial District Court, Las Vegas, Nevada. Judge Becker indicated A.B. 654 was the product of 18 months work by the Family Court Implementation Committee in Clark County. She said currently, all juvenile services fall under the judges as administrators. Judge Becker said the new family court will have six judges instead of one judge, and the committee realized "that trying to manage all of those services by six judges instead of one judge was not a good idea." Judge Becker continued:
Over the course of time, services were put in under the judges in juvenile, when chapter 62 of the Nevada Revised Statutes (NRS) was developed about 30 years ago, for a variety of reasons...most of them dealing with mistrust between county commissioners, the judges and the state. There was a real dispute about who was going to provide these services. That is how chapter 62 [of NRS] had its beginnings ...of putting what would normally be executive branch services under the judiciary.
We have noticed a number of problems in the past 10 years. Even though the courts have agreed to treat the employees that work under these departments as county employees under the county bargaining contract...from time to time it has jumped back and forth...it has created a lot of division among the services and among the employees and management. The judiciary does not effectively deal with those things. It is not what we were trained to do, and it is something judges have been reluctant to get into.
In the last 10 years there has been a lot of confusion which has impaired the ability to go forward and develop the programs necessary to aid the families.
Judge Becker said it was felt in order to make the family court work it was necessary to "get the services out from under the judges and create a separate department of family and juvenile services in Clark County." She said the department should run like any other county department with one exception, "...the creation of a joint board...a public board open to the public meeting law...." Judge Becker indicated there would also be a citizens' advisory committee, and the board and committee would work on major policy decisions. She said they would discuss major programs and their funding, and development of facilities. Judge Becker said the creation of the board would place that board under local ordinances rather than under chapter 62 of the NRS.
Judge Becker said the creation of the department has the support of the judiciary, the county commissioners, the probation committee and the Clark County Public Employees' Association.
The next to speak was Michael H. Johaneson, Collective Bargaining Coalition and the Clark County Public Employees' Association. Mr. Johaneson stated, "It is so refreshing to see management take charge of this issue after we have wrestled with it for so long." He expressed strong support for A.B. 654. Mr. Johaneson pointed out the establishment of the department "...is not a change in practice, since all employees in juvenile and family court have been treated as county
employees." He said the bill would codify the practice and "make it permanent."
Senator Jacobsen said he was disturbed because population figures were included in the bill and the rural counties were not included. He said current trends in juvenile crime indicate it is a statewide problem. Judge Becker said the original bill draft request was written so any county could take advantage of the legislation. She added Washoe County had asked that a population count be placed into the bill, and that was done.
There was no further testimony and the hearing was closed on A.B. 654.
After a brief recess, Senator James opened a work session on the following bills: A.B. 233, A.B. 349, A.B. 654, Senate Bill (S.B.) 298, Senate Bill (S.B.) 470, Senate Bill (S.B.) 472 and Assembly Bill (A.B.) 187, Assembly Bill (A.B.) 161, Assembly Bill (A.B.) 334, Assembly Bill (A.B.) 244, and Senate Bill (S.B.) 513.
SENATOR JACOBSEN MOVED TO DO PASS A.B. 233.
SENATOR ADLER SECONDED THE MOTION.
Senator Adler restated his desire to revisit the issue in the next legislative session to determine if different forms of revenue production could be developed. Senator Titus agreed with Senator Adler, and Senator James indicated it was too late in the session to deal with that issue at this time. Senator Smith said he was disappointed the issues recommended by the interim committee in that area were not addressed at an earlier date. Senator Titus said the bill was not what they had expected to come out of the interim committee study. She added she did not believe it was good policy to "tie ourselves to a federal statute which has been out of existence for years."
Senator James called for the question.
THE MOTION CARRIED UNANIMOUSLY.
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SENATOR SMITH MOVED TO DO PASS A.B. 349.
SENATOR MCGINNESS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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SENATOR TITUS MOVED TO DO PASS A.B. 654.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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SENATE BILL 298: Revises provisions governing payments for support for children.
Senator Adler discussed the amendments developed by the subcommittee.
SENATOR SMITH MOVED TO AMEND AND DO PASS S.B. 298.
SENATOR ADLER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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SENATE BILL 470: Makes various changes relating to custody of children.
Senator James explained the bill dealt with custody in situations where the parents are not married and the spousal kidnapping of children. He indicated the amendments had not yet been returned from the bill drafter, but the bill had been improved by the amendments developed by the subcommittee. Senator Adler said "equal custody" was changed to "legal custody," and "primary physical custody" was used to describe the nature of the custody by an unmarried parent. He also said if a mother abandons a child to the father for a period of time, he can become the "primary custodial parent of the child."
Senator Adler further explained several additions and deletions to the bill. Senator James commended Senator Adler, the subcommittee and the attorney general's office for their work on the legislation, and added he believed S.B. 470 had developed into a good measure.
SENATOR ADLER MOVED TO AMEND AND DO PASS S.B. 470.
SENATOR TITUS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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SENATE BILL 472: Makes various changes in provisions relating to custody of children.
Senator James indicated they had not received amendments to the bill and it would be discussed at a later work session.
ASSEMBLY BILL 187: Limits increase in rent for mobile home lots in certain counties.
Senator James indicated there were 10 hours of testimony on the bill. He stated for the record he would not vote nor take any part in advocating passage or defeat of the measure. Senator James indicated he had received an opinion from legislative counsel stating he should abstain since his law firm represents a number of mobile home parks in Clark County.
SENATOR TITUS MOVED TO DO PASS A.B. 187.
SENATOR ADLER SECONDED THE MOTION.
Senator Jacobsen admitted "there was a problem in most areas" but indicated after listening to testimony from both sides, he had come to the conclusion passage of the bill "would hurt the very people we are trying to help." He said he felt the bill was poorly drafted and stated, "Anybody who reads the bill, line by line, will have to admit it is not going to help...it will be more of a hinderance."
Senator Titus responded, "If Senator Jacobsen has problems with the bill but will support it with changes...we can consider some amendments...I will be glad to work with him." Senator Jacobsen stated he had no amendments to offer at this time. He said he had doubt it could be amended to a point where it would be satisfactory.
Senator Adler said he shared some concerns regarding provisions of the bill regarding reimbursement for repairs and taxes. Senator Titus said she believed if there were emergency repairs needed, she "could not imagine repairs could be made in such a situation and have it turned down by the commission." She added, "These are reasonable people looking at reasonable kinds of increases."
Senator James called for the question.
THE MOTION FAILED. (SENATOR TITUS, SENATOR SHAFFER AND SENATOR ADLER VOTED YES. SENATOR MCGINNESS, SENATOR SMITH AND SENATOR JACOBSEN VOTED NO. SENATOR JAMES ABSTAINED FROM THE VOTE.)
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ASSEMBLY BILL 161: Prohibits, under certain circumstances, disclosure of information obtained pursuant to investigation of complaint alleging violation of provisions governing mobile home parks.
Senator James stated the industry and the mobile home tenants supported the legislation.
SENATOR TITUS MOVED TO DO PASS A.B. 161.
SENATOR SMITH SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR JAMES ABSTAINED FROM THE VOTE.)
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ASSEMBLY BILL 334: Prohibits harassment of tenant of mobile home park by landlord.
SENATOR TITUS MOVED TO DO PASS A.B. 334.
SENATOR ADLER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR JAMES ABSTAINED FROM THE VOTE.)
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ASSEMBLY BILl 244: Makes identifying information concerning victim of sexual assault confidential.
Senator James identified the bill as the "rape shield bill." He indicated the bill had not been reported to the floor since the amendments to the bill had not been returned to the committee. The previous motion by the committee had been to do pass the bill.
Speaking to the committee was Lieutenant (Lt.) James Nadeau, Deputy Sheriff, Washoe County Sheriff's Office. Lt. Nadeau apologized to the committee for bringing the matter to them at such a late date and indicated the department had concerns regarding section 4 of the bill, which deals with law enforcement records and case reports. He said they have discussed the matter with Assemblywoman Chris Giunchigliani and she has agreed the bill could be amended. Lt. Nadeau referred to use of pseudonyms and the language, "...substitute the pseudonym for the name of the victim on all reports...." He said this was fine if the victim decides to do this at the time of the initial report. However, he said, if somewhere during the investigation the victim decides to use a pseudonym, they have to go back and find the name on all earlier reports. Lt. Nadeau requested the language be changed to "...make a good effort to substitute...," since they may not be able to find every report. He said they would also like to be protected from liability if they have made a good faith effort to locate and change the name to a pseudonym but fail to correct all reports.
SENATOR ADLER MOVED TO RESCIND THE PREVIOUS ACTION TO DO PASS A.B. 244.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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SENATOR SHAFFER MOVED TO AMEND AND DO PASS A.B. 244.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Following the vote, Senator Adler questioned Lt. Nadeau regarding the difficulty of finding persons who used pseudonyms if they were needed to testify against someone in a later case, such as a rapist who is a repeat offender. Lt. Nadeau said "it would be a little arduous, but it could be done." He admitted it would be more difficult but repeated, "It could be done."
SENATE BILL 513: Makes various changes regarding professional corporations and limited-liability companies.
Senator James indicated he would bring the bill up before the committee again, because he had "a real problem with letting out-of-state unlicensed professionals, especially corporate entities, own Nevada professional corporations that render services here in Nevada."
Senator Jacobsen asked to speak to the committee and stated:
Over the last few days we have passed a lot of legislation which deals with children. There is hardly a day goes by you don't see something in the paper where some innocent child gave their life because of somebody's failure to obey the laws of the state. I would like to see this committee develop some kind of resolution to indicate to law enforcement and judicial areas that it is no longer going to be tolerated...I think it is time this committee developed a resolution which would indicate that this legislature, along with law enforcement and the judicial system say it isn't going to happen here, although I know it is going to happen here. We just can't go along, day by day and read it in the paper and think it will never happen to me...I think we should say to the people of Nevada that these drive-by shootings and gangs are going to cease...unless we address it, it is only going to get worse.
Senator Titus said she appreciated Senator Jacobsen's concerns and stated she believed they have addressed the situation with a stronger gang bill, with enhanced penalties for drive-by shootings and the bill relating to crimes against children. Senator James also expressed appreciation for Senator Jacobsen's sentiments and said he felt the committee has passed a great deal of legislation during the session which addresses the problems he set forth. He said the idea could be considered, although it was late in the session to approach the drafting of a resolution.
There was no further business to come before the committee, and the meeting was adjourned.
RESPECTFULLY SUBMITTED:
Marilyn Hofmann,
Committee Secretary
APPROVED BY:
Senator Mark A. James, Chairman
DATE:
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Senate Committee on Judiciary
June 21, 1993
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