MINUTES OF THE

      SENATE COMMITTEE ON LEGISLATIVE AFFAIRS AND OPERATIONS

 

      Sixty-seventh Session

      June 15, 1993

 

 

 

The Senate Committee on Legislative Affairs and Operations was called to order by Chairman Mike McGinness, at 3:15 p.m., on Tuesday, June 15, 1993, in Room 227 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda.  Exhibit B is the Attendance Roster.

 

 

COMMITTEE MEMBERS PRESENT:

 

Senator Mike McGinness, Chairman

Senator William J. Raggio, Vice Chairman

Senator Raymond D. Rawson

Senator R. Hal Smith

Senator Dina Titus

Senator Diana M. Glomb

 

COMMITTEE MEMBERS ABSENT:

 

Senator Matthew Q. Callister   (Excused)

 

GUEST LEGISLATORS PRESENT:

 

Ms. Chris Giunchigliani, Assembly District 9

Mr. Bob Price, Assembly District 17

 

STAFF MEMBERS PRESENT:

 

John Crossley,  Director, Legislative Counsel Bureau

Bob Erickson, Research Director, Legislative Counsel Bureau

Gary Crews, Chief Deputy, Legislative Auditor

Mavis Scarff, Committee Secretary

 

OTHERS PRESENT:

 

Carole Vilardo, Lobbyist, Nevada Taxpayers Association

Dr. Glen Atkinson, Professor, University of Nevada, Reno

Bonnie James, Director, Government Affairs,

     Las Vegas Chamber of  Commerce

Roberta Gang, Lobbyist, Nevada Women's Lobby

Nancy Howard, Lobbyist, Nevada League of Cities

Mary Henderson, Lobbyist, Washoe County and the Nevada

     Association of Counties

Gene McKenna, Lobbyist, Common Cause, Nevada

Andrea Engleman, Lobbyist, Nevada Press Association

Janet Gilbert, Lobbyist, League of Women Voters

Paula Berthane, Private Citizen

Teresa Froneck-Rankin, Commissioner, Department of Insurance

 

 

Chairman McGinness opened the hearing on Senate Concurrent Resolution (S.C.R.) 43.

 

Senate Concurrent

Resolution 43:    Directs legislative commission to conduct interim study on taxation. 

      (BDR R-1301)

 

Assemblyman Toomin submitted a proposed amendment to S.C.R. 43  (Exhibit C).

 

Senator Glomb, Washoe District 1, indicated she had a proposed amendment to S.C.R. 43.  She emphasized that her constituents, community groups, and others have indicated the need to do something about the tax structure of the state of Nevada.  She cited the half million dollars the legislature spent on the  Price Waterhouse study because there was an identified need for the legislature to take a look at Nevada's tax structure.  The committee was reminded that the legislature never took any action based on any of the recommendations that were brought out in that study.  She stated this legislative session has brought home to all legislators the need to find a stable source of revenue on which to base the state's budgets, and to make revenue projections on which the state can count.  This particular resolution is an attempt for the legislature to have a study to examine the tax structure, and to bring proposals to the next legislative session.  She stated she has tried to craft a resolution that would give some guiding principles, and would provide a committee composed of folks who could de-politicize this as much as possible.  She said she hoped, that should this resolution pass, that those legislators that are appointed will put aside political differences and look at what is best for the state as a whole. 

 

Senator Glomb described the resolution stating the first part sets the foundation, or identifies the need, for legislators to take a look at the tax structure, how it interfaces with local government, and how their tax structure is set up.  It directs the  commission to conduct an interim study of the tax structure and make recommendations for legislation to improve that structure.  The composition of the membership includes:

 

      1.)   Two members of the senate, one from each political party.

      2.)   Two members of the assembly, one from each political party.     

      3.)   One member from local government.

      4.)   One member with expertise in the area of economic development.

      5.)   One member who is a representative of the taxpayers in the state. 

 

She stated that the principles guiding the committee, as they look at and formulate proposals to be presented in the 1995 session, should be based on the basic principles of taxation contained in Adam Smith's The Wealth of Nations.  She noted the committee is also charged with looking at the effect of competition between the state and local governments using the same sources of revenue. 

 

Senator Smith suggested that one member of the committee have municipal financial experience as debt structure is an extremely important part of the process. 

 

Carole Vilardo, Nevada Taxpayers Association, said they did not support the original bill, however, they do support this one with the amendments before the committee.  She emphasized that there are some things that really need to be done that have never been done and will take a period of time to complete.  She cited the example of the cigarette tax which was originally a state revenue source, then it was turned over to local government, and finally taken back by the state.  She noted that sources competing for the same revenue is happening again with the property tax.  She said, "The property tax and the shift that was made in 1981 was,in effect, to put the state out of property tax with the local governments and into a property tax-sales tax combination.  Since 1983 the state has usurped $.40 of the $3.64 amount which is capped, thereby having $.40 less for local governments to use."   Ms. Vilardo indicated that she disagreed with Senator Smith on his suggestion for a financing person, because they are the people who are doing debt obligations.  She felt the amendment was for the legislators to view this in context of taxes being used to fund government expenditures.  She stated that having the person from the local government advisory committee provides the committee with that person who is in a position to address distribution formulas.  She noted that having a person who is involved with economic development for the state becomes critical, because so far this session there have been three bills dealing with economic development.  Ms. Vilardo emphasized that the legislature needs to know what the state and local governments are willing to do to attract economic development, and what they are willing to give to create the level playing field.  She said that when an economic development plan is formulated, the state should be able to sell that plan, identifying what Nevada will do, and the legislature should not have to have bills every legislative session that involve taxes.  Summarizing, she said they do support the interim study as they feel it has a long range benefit to give the state the stability, the revenue adequacy, and to have the residents, and the businesses, know what their obligation is going to be, relative to taxes.

 

Senator Smith said he feels the word tax should be addressed as revenues which provide a broader basis as he feels the taxpayers do not understand how they are supporting government. 

 

Ms. Vilardo concurred totally and urged the addition of fees to the bill.

 

Senator Glomb thanked Senator Smith and agreed that revenue would probably be a better term.  She noted that all the statutes need to be looked at in terms of how the legislature is funding things. 

 

Senator Rawson asked the committee to consider a study on the structure and funding of the state's educational system with a committee makeup similar to the resolution under consideration.  He requested that a bill be drafted.

 

      SENATOR RAWSON MOVED THAT A BILL BE DRAFTED TO CONSIDER A STUDY ON THE STRUCTURE AND FUNDING OF NEVADA'S EDUCATIONAL SYSTEM.

 

      SENATOR RAGGIO SECONDED THE MOTION.

 

Senator Raggio reminded the committee that they will eventually have to decide on a specific number of studies, as will the assembly, and then the committee will be able to process the study bills.  

 

      THE MOTION CARRIED.  (SENATOR CALLISTER WAS ABSENT FOR THE VOTE.)

 

      * * * * *

 

Dr. Glen Atkinson, Professor, University of Nevada, Reno, stated that the Price Waterhouse study was an excellent piece of research and that their advice was well grounded.  He said that Nevada should look at its evolving tax structure as the economy evolves, and that Nevada ought to involve local governments in any revenue restructuring.  One idea of study he looked at was the relationship between economic diversification and the tax system, which indicated that if the economy is diversified, and if Nevada moves away from gaming, then Nevada does not have a tax system that would tap that growth.  He said the tax structure in most states is not keeping up with the economic changes going on, and there is a need to sort out responsibilities and revenue functions between state and local government. 

 

Senator McGinness asked Dr. Atkinson if he believes that this study could build on the Price Waterhouse study, and not be a duplicate.

 

Dr. Atkinson replied that he thinks there would be some additional updating required on the work from previous sessions, and a commission could build on the Price Waterhouse study. 

 

Senator Smith asked if Dr. Atkinson thinks the legislature should bring in the past studies that have been done.

 

Dr. Atkinson indicated he thinks it would serve a good purpose, indicating it would be a matter of taking what is known, involving knowledgeable people, such as local government officials, legislators and staff, and developing something from what is currently known. 

 

Senator Glomb agreeing, noted that the intent of the resolution is to use the information previously gathered to bring proposals to the legislators so they could make sound suggestions for revising and revamping Nevada's tax structure. 

 

Bonnie James, Las Vegas Chamber of Commerce, indicated their support of S.C.R. 43 to provide a stable tax policy that will work for everyone. 

 

Senator Raggio indicated that he did not see anybody on the list who would represent the business interest of the state and asked Ms. James to comment.

 

Ms. James said she thought the committee could be expanded to include some people with very strong expertise in taxation. 

 

Senator Raggio said her comment was similar to the one made by Senator Smith.  He stated that though he favors a study, he thinks it is essential that the participants in the study not be dominated by legislators who pass tax laws, or by those who benefit by tax laws, indicating that there has be to an equal participation among those who provide the revenue and those who share the revenue. 

 

Ms. James agreed, noting that the people who are knowledgeable are the recipients of the tax monies as well as those that pay. 

Senator Raggio noted that was part of the process that went into the Price Waterhouse study, and in order to conduct as objective a study as possible, the legislature created a distance between the contractors who performed the study and the legislative body. 

 

Bobbie Gang, Nevada Women's Lobby, indicated they support S.C.R. 43 as amended stating they feel it is important for the legislature, and the state as a whole, to begin to talk about where future revenues will come from.  She said they are unhappy that the current budget is not being adequately funded.

Ms. Gang noted further that they feel the dialogue or discussion in the public arena must begin before the beginning of the next legislative session. 

 

Nancy Howard, Nevada League of Cities, indicated their support of S.C.R. 43 as amended and concurred with the previous statements.

 

Senator Smith reminded the committee that the way they distribute or appropriate certain of Nevada's taxes forces local governments to compete with each other in growth.

 

Mary Henderson, representing Bob Hadfield and the Nevada Association of Counties (NACO), read from a letter from Bob Hadfield, Executive Director of the Nevada Association of Counties (Exhibit D).  She added that Washoe County is supporting NACO in this effort.

 

Senator McGinness closed the hearing on S.C.R. 43 and opened the hearing on Assembly Bill (A.B.) 4.

 

Assembly Bill 4:  Required lobbyists to provide additional information in registration statements and monthly reports.  (BDR 17-13)

 

Assemblyman Price, distributed a Lobbyist Report Summary of Activity (Exhibit E), a packet of information (Exhibit F), and indicated that Assembly Bill 4 provides that lobbyists would disclose the amount of money in value and/or gifts by each legislator each month, and provides that the Legislative Commission could direct the legislative auditor to audit accounts if it was felt necessary.  Mr. Price explained the type of forms lobbyists could use.   He said the trend across the country is toward more disclosure and he described lobbying activity in California. 

 

Senator Smith asked about factors other than money that are used to influence legislation and asked if it is appropriate to address the subject.

 

Mr. Price replied that legislators are helped by organizations with in-kind contributions that might be construed by the public as influencing legislators.  He indicated that much of that is being addressed in the campaign reform bills. 

 

Senator Smith said he was addressing promises of support in the future.  He continued, saying local governments are prohibited from using public money to advertise a position on a bond issue and yet the legislature is using public money to maintain lobbyists here to influence legislation. 

 

Mr. Price noted that Reno is now using the cable ad-net to educate the public about their operations, budget matters, etc. 

 

Senator Titus indicated there are things that go on that are not covered in this bill that have just as much influence and just as much money spent, such as, the fact that some legislators are roommates with some lobbyists.  She noted that this will put quite a burden on legislators because every month a legislator will have to get the report of every lobbyist to see if they are accurately reporting.  She asked if the Legislative Counsel Bureau is prepared to supply all legislators with all reports monthly? 

 

Mr. Price noted he was pleased with the example of a report that Mr. Crossley developed. 

 

Senator McGinness asked how assessment would be made in the instance of a reception where less than 10 legislators attended due to conflicting activities.

 

Mr Price indicated that when a function was planned, for example, for 100 people and only six legislators attended, the six legislators would each be assessed 1/100 of the cost.  He also express his opinion that when a legislator brings his family with him, they should be counted against the legislator.

 

Gene McKenna, Lobbyist, Common Cause, Nevada, read from prepared text (Exhibit G)

 

Andrea Engleman, Lobbyist, Nevada Press Association indicated that her organization supports this bill, but they have a concern on page 2, lines 22-30.  She said that they oppose the language that says lobbyists must disclose those names of legislators in groups of 10 and under, because if a lobbyist takes out a senate committee he has to write down all of their names, but if he takes out an assembly committee he would not have to report any names.  She suggested that the number be removed and that all the names be put down.  Ms. Engleman expressed her concern about agency heads entertaining, who do not have to report anything. 

 

Senator Rawson asked if the real worry is bigger sums of money against small groups because that is where more improper influence is possible.

 

Ms. Engleman explained that she has great concern with one lobbyist taking out an entire committee, because it is out of the view of the public, that actions could be taken, and decisions made, and that is not what open government is all about.

 

Senator Titus asked again about other expenditures that have just as much influence, such as a roommate with a lobbyist, or an intern who works for a legislator, but is paid by an independent group. 

 

Ms. Engleman noted there is a miscellaneous category on the current form. 

 

Senator Titus asked if there was any way to amend the bill to include these items.

 

Ms. Engleman suggested words as "benefitted a legislator" or "accrues to their benefit."

 

Janet Gilbert, Lobbyist, League of Women Voters, indicated that they support this legislation, noting that unfortunately the public's opinion of the lobbyist is negative, because they do not know what goes on here.  She stated that lobbyists are here to serve a purpose, and to help the legislator.

 

Paula Berthane, Private Citizen, concurred with Ms. Gilbert that most lobbyists would be happy to provide any information requested, and would like to make the profession more responsible.

 

Gary Crews, Legislative Auditor, indicated he knows of no fiscal note because they do not anticipate any impact on their budget.

 

Senator Titus asked if providing legislators with these reports would increase the Legislative Council Bureau's budget.

 

Mr. Crews replied that there would be some impact on the Administrative Division's budget.

 

Senator Raggio asked if the language on page 1, subsection 4 had been addressed.

 

Senator McGinness indicated it had not. 

 

Senator Raggio indicated concern for the words "for compensation."  He said if the state is going to have lobbyists here involved as consultants or providing professional service, then they should be identified whether they were paid or not.  He asked if someone would address that.

 

Andrea Engleman indicated that was part of the original language of the bill, and concern was expressed by groups that they did want to expose, for the public, those people that had worked on campaigns and then subsequently became a lobbyist.  She said the original language included unpaid services, but was amended out.

 

Senator Raggio cited some examples and stated that if there is going to be a disclosure of that kind then it has to be even.

 

Ms. Engleman agreed, and added that it is already required that lobbyists disclose any business relationship with a legislator prior to the session. 

 

Chairman McGinness closed the hearing on A.B. 4 and opened the hearing on Senate Concurrent Resolution (S.C.R.) 8.

 

Senate Concurrent

Resolution 8:     Directs Legislative Commission to conduct interim study to review certain benefits required by state to be provided by policies of health insurance.  (BDR R-247)

 

Teresa Froneck-Rankin, Insurance Commissioner, testified that the intent of the bill is to show the next mandated benefits that would be reviewed.  She explained how the interim study system was set up, of which this is part 2. 

 

Senator Raggio asked if this would be a viable study once the national health insurance measure is enacted?

 

Ms. Rankin indicated that this study would be heavily impacted by their determination.  She said her understanding is that the federal proposal will rely heavily on state programs, initiatives and reforms so the direction Nevada decides to go will be important, but that does not mean this study is not needed.

 

Senator Raggio asked Ms. Rankin if she had a recommendation  as to the six mandates that should be examined.

 

Ms. Rankin indicated that the ones identified are the "big ones."

 

Chairman McGinness closed the hearing on S.C.R. 8 and opened the hearing on Assembly Concurrent Resolution (A.C.R.) 33.

 

Assembly Concurrent

Resolution 33     Amends joint rules to establish tax policy for State of Nevada.  (BDR R-1759)

 

Assemblywoman Giunchigliani, Assembly District 9, indicated that A.C.R. 33 is an attempt to focus on establishing a tax policy for the state of Nevada.  She explained how she developed this bill, noting that she feels the public will support taxes as long as they know what it is for, why it is being spent, and that there is some form of measurement or accountability. 

 

Carole Vilardo, Nevada Taxpayers Association, indicated that they support this bill. 

 

Chairman McGinnes closed the hearing on A.C.R. 33. 

 

Bob Erickson, Research Director, Legislative Counsel Bureau, explained the materials on resolutions that he and John Crossley, Director, Legislative Counsel Bureau, had developed, which provide arbitrary figures for numbers of legislators, numbers of meetings, and a possible budget.

 

Senator McGinness asked for a motion for a committee introduction for Bill Draft Request (BDR) 2-114.

 

Bill Draft Request 2-114:     Directs Legislative Commission to conduct interim study on problems related to fetal alcohol and drug syndrome in Nevada.

 

Senator Titus asked who requested that.

 

Senator McGinness indicated that it came from Dr. Earl Nissen, Fallon, chairman of the Perinatal Substance Abuse Subcommittee of the Governor's Commission on Substance Abuse Education, Prevention, Enforcement and Treatment.

 

      SENATOR RAGGIO MOVED TO INTRODUCE BDR 2-114.

 

      SENATOR GLOMB SECONDED THE MOTION.

 

      THE MOTION CARRIED.  (SENATOR CALLISTER WAS ABSENT FOR THE VOTE.)

 

There being no further business, the meeting adjourned at 4:49 p.m.

 

 

 

 

      RESPECTFULLY SUBMITTED:

 

 

 

                              

      Mavis Scarff,

      Committee Secretary

 

 

 

APPROVED BY:

 

 

 

 

                                

Senator Mike McGinness, Chairman

 

 

DATE:                           

??

 

 

 

 

 

 

 

Senate Committee on Legislative Affairs and Operations

June 15, 1993

Page 1