MINUTES OF THE
SENATE COMMITTEE ON TAXATION
Sixty-seventh Session
February 25, 1993
The Senate Committee on Taxation was called to order by Chairman Dean A. Rhoads, at 2:00 p.m., on February 25, 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 Dean A. Rhoads, Chairman
Senator Ann O'Connell, Vice Chairman
Senator Randolph J. Townsend
Senator Sue Lowden
Senator Bob Coffin
Senator Raymond C. Shaffer
Senator Ernest E. Adler
STAFF MEMBERS PRESENT:
Kevin Welsh, Deputy Fiscal Analyst
Billie Brinkman, Committee Secretary
OTHERS PRESENT:
Robert Crowell, Gray Line Tours of Southern Nevada
Carol Hannigan, Hannigan Sales & Leasing
Ray Sparks, Chief, Registration Division, State of Nevada, Department of Motor Vehicles and Public Safety
Carole Vilardo, Nevada Taxpayers Association
Zane Sims, Sims Auto Sales
Kurt Weinrich, Director, Regional Transportation Commission of Clark County
Daryl Capurro, Nevada Franchised Auto Dealers Assn.
Michael Lee, Lee Bros. Leesing & Sales
Dick Lee, Lee Bros. Leesing & Sales
Chairman Rhoads opened the hearing on Senate Bill (S.B.) 38.
SENATE BILL 38: Changes terms to be served by members of
regional transportation commissions in
larger counties.
Kurt Weinrich, Director, Regional Transportation Commission (RTC) of Clark County, came forward to testify in support of S.B. 38. He submitted written testimony (Exhibit C), which he read.
Chairman Rhoads closed the hearing on S.B. 38.
Chairman Rhoads opened the hearing on Senate Bill (S.B.) 39.
SENATE BILL 39: Requires regional transportation commission in
certain counties to develop transportation plans
and programs in compliance with federal law.
Mr. Weinrich came forward to speak on S.B. 39. He said he had conferred with the Regional Transportation Commission (RTC) of Washoe County and it had been determined by the commission that substantial amendments to S.B. 39 would be requested.
Chairman Rhoads asked what federal acts were in effect that would mandate S.B. 39.
Mr. Weinrich replied the Intermodel Service Transportation Efficiency Act, the Clean Air Act Amendments of 1990, and the Federal Transit Act were the edicts that created the request for S.B. 39.
Robert Crowell, Grey Line Tours of Southern Nevada, concurred with the testimony provided by Mr. Weinrich on S.B. 39.
Chairman Rhoads closed the hearing on S.B. 39.
Chairman Rhoads opened the hearing on Senate Bill (S.B.) 40.
SENATE BILL 40: Repeals provision exempting from vehicle privilege tax certain vehicles registered by dealer.
Ray Sparks, Chief, Registration Division, State of Nevada, Department of Motor Vehicles and Public Safety, testified in support of S.B. 40. He explained S.B. 40 repeals Nevada Revised Statutes (NRS) 482.321.
Mr. Sparks said the existing statute provides for the "dealer special," a vehicle registration law which entitles a vehicle dealer to register up to 12 vehicles without the payment of the vehicle privilege tax. The dealer does pay the registration fee on a vehicle under this provision, however, the privilege tax is exempted. The Department of Motor Vehicles and Public Safety, asked for this legislation because they are not aware of any significant public good served by allowing an exemption to a particular segment of the auto industry from paying the vehicle privilege tax. Mr. Sparks said the department had calculated that the state of Nevada and its counties lost approximately $220,000 a year from the exempted "dealer special" vehicle registration.
Mr. Sparks pointed out the department had encountered a number of instances where the privilege tax is being abused, especially by car rental agencies who also are licensed vehicle dealers.
In reply to Senator O'Connell's inquiry, Mr. Sparks said it is very difficult to control the abuse of this law. Mr. Sparks said this statute was enacted in 1963 and had been amended since that time. He said he did not know what the purpose was for the original legislation.
Senator Townsend asked what the primary purpose was for repealing the existing law. Mr. Sparks said it was the loss of revenue to the state. Senator Townsend continued his questioning of Mr. Sparks, asking why this existing law had just this year become an issue since it had been on the books since 1963. Mr. Sparks replied, "the economic situation being faced by the state and the nation."
Senator Coffin remarked he had not been aware of abuses of this particular statute and inquired if the Department of Motor Vehicles needed additional auditing or investigative authority to enforce this law. Mr. Sparks said the department, in his opinion, had adequate enforcement and audit authority to detect the violations and to control the problem.
Senator O'Connell stated she thought more funds would be raised by enforcing the statute in question rather than repealing it. Mr. Sparks said he did not believe penalties would offset the revenue loss which can be identified at this time.
Discussion on the question of fairness of the "dealer special" exempted license plate ensued by committee members with Mr. Sparks.
Daryl Capurro, Executive Director, Nevada Franchised Auto Dealers Association, testified in support of S.B. 40. He indicated there had been a useful purpose of NRS 482.321 at one time, but the purpose of the "dealer special" served in the past has been lost.
Discussion followed.
Michael Lee, president of Lee Bros. Leesing, testified in opposition to S.B. 40. He said it would eliminate non-franchised dealers from buying and selling a new vehicle. He pointed out in his contacts with other states, he believed most other states had a type of "dealer special" license plate. He remarked this particular license plate is useful in his business, and he testified abolishing this license plate would eliminate free enterprise.
Carol Hannigan, owner, Hannigan Sales & Leasing, testified in opposition to S.B. 40. She concurred with Mr Lee's testimony.
Dick Lee, Lee Bros. Leesing, came forward to testify in opposition to S.B. 40. He disputed testimony given by Mr. Sparks and Mr. Capurro pointing out it is not a simple matter of abuse or loss of revenue. He said eliminating the "dealer special" license plate would create a monopoly in the franchised new car dealers and do away with free enterprise.
Zane Sims, owner, Sims Auto Sales, testified in opposition to S.B. 40.
Chairman Rhoads closed the hearing on S.B. 40.
There being no further matters to come before the committee, Chairman Rhoads adjourned the meeting at 3 p.m.
RESPECTFULLY SUBMITTED:
Billie Brinkman,
Committee Secretary
APPROVED BY:
Senator Dean A. Rhoads, Chairman
DATE:
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Senate Committee on Taxation
February 25, 1993
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