MINUTES OF THE

      SENATE COMMITTEE ON TAXATION

 

      Sixty-seventh Session

      March 2, 1993

 

 

 

The Senate Committee on Taxation was called to order by Chairman Dean A. Rhoads, at 2:00 p.m., on Tuesday, March 2, 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

 

GUEST LEGISLATORS PRESENT:

 

Senator R. Hal Smith, Clark Senate District No. 1

Assemblyman Roy Neighbors, Assembly District No. 36

 

STAFF MEMBERS PRESENT:

 

Kevin Welsh, Deputy Fiscal Analyst

Billie Brinkman, Committee Secretary

Caren Jenkins, Senior Research Analyst

 

OTHERS PRESENT:

 

Dave W. Parkhurst, Makoil, Inc.

E. C. Kozlowski, Makoil, Inc.

Russ Fields, Executive Director, Nevada Department of Minerals

Ted Flanigan, Quest Petroleum Corp., Reno

Paul Stieger, Veterans of Foreign Wars

Kathie Milone-Levenberg, Veterans Advisory Committee

Ralph Levenberg, Disabled American Veterans

Randy Day, Committee for Veteran's Affairs

Barbara Byington, Nevada Assessors Association

Dick Franklin, Office of Washoe County Assessor

Janice Wright, Deputy Executive Director, State of Nevada,

      Department of Taxation

William Offutt, Nye County Manager

 

Chairman Rhoads opened the hearing on Senate Bill (S.B.) 41.

.

 

SENATE BILL 41:   Makes various changes in assistance to older persons.

 

Janice Wright, Deputy Executive Director, State of Nevada, Department of Taxation, explained the amendments (five in all) the taxation department would like to see incorporated in S.B. 41 to clarify the language.  She requested permission to work with the legislative bill drafter's office on these amendments.  Chairman Rhoads agreed.

 

Dick Franklin, representing the Assessor's Association, came forward to speak on S.B. 41.  He submitted written testimony (Exhibit C) proposing amendments to S.B. 41.

 

Ms. Wright said she had discussed the above-proposed amendments with Mr. Franklin, and concurred on them.  She said they would be incorporated with other proposed amendments.

 

Chairman Rhoads closed the hearing on S.B. 41.

 

Chairman Rhoads opened the hearing on Senate Bill (S.B.) 95.

 

SENATE BILL 95:   Authorizes certain persons to waive their exemptions from motor vehicle privilege tax and designate additional amount paid to be credited to fund for veterans' homes.

 

Senator R. Hal Smith, Clark Senate District 1, came forward in his capacity as chairman of the Legislative Commission Subcommittee, appointed to study the feasibility of establishing veterans' homes, veterans' centers and motor pools for veterans as mandated by the 1991 Legislature in the form of Senate Concurrent Resolution (S.C.R) No. 54 of the Sixty-sixth Session, 1991.

 

SENATE CONCURRENT RESOLUTION NO. 54:    Directs Legislative Commission

of the Sixty-sixth Session              to conduct interim study of

                                        feasibility of establishing

                                        veterans' homes, veterans'

                                        centers and motor vehicle  

                                        pools for veterans.

                                      

The senator's opening remarks were submitted in writing (Exhibit D).

 

Senator Smith introduced Caren Jenkins, Senior Research Analyst, Legislative Counsel Bureau, Research Division, who served as primary staff to the interim study.  He referred to the Legislative Counsel Bureau, Bulletin No. 93-13 (Exhibit E, the original is on file in the Research Library), which he said details the deliberations of the subcommittee. However, Senator Smith said the greatest interest is in one recommendation which comes to the committee in the form of S.B. 95.

 

Senator Smith called attention to a memorandum (Exhibit F) which outlines the estimated impact of S.B. 95.  He explained, basically, this measure allows any veteran who is currently eligible for an exemption to  motor vehicle privilege tax, to chose to pay the exempt amount and direct the state to designate that money to a fund for constructing and operating veterans' homes in Nevada.

 

Chairman Rhoads inquired if a dollar amount is budgeted to operate a veterans' home, and is there a guarantee the funds would be available.  Senator Smith said that subject was not discussed.

 

Senator Townsend called attention to page 4, line 29 of S.B. 95, "Money in the fund may be used for:  (c) The solicitation of other sources of money for funding veterans' homes;".  He said he felt that line is important and perhaps the committee could be enlightened by Senator Smith as to how to better structure the subject of raising funds.  Senator Smith said that subject had been addressed.

 

Discussion ensued with Senator Smith and Miss Jenkins outlining many subjects covered in Exhibit E.

 

Randy Day, Commissioner for Veteran's Affairs, State of Nevada, testified in support of S.B. 95.

 

Chairman Rhoads read a note into the record from Mr. Orland Outland, representative of the Washoe Chapter, Nevada Council for Senior Citizens, stating support for S.B. 95.

 

Paul Stieger, member of the War Veterans' Memorial Association, an association which conducts funerals for deceased veterans, came forward in support of S.B. 95.

 

Ralph Levenberg, representative of the State of Nevada, Disabled American Veterans, testified in support of S.B. 95.

 

Chairman Rhoads requested Mr. Welsh prepare a fiscal note on S.B. 95.

 

Barbara Byington, Douglas County Assessor, testified Nevada would lose 5 percent of the money in question and the cities and counties would lose 95 percent of the funds designated to the veterans' home.  She did not know a definite dollar amount.

 

Chairman Rhoads closed the hearing on S.B. 95.

 

Chairman Rhoads opened the hearing on Senate Bill 129.

 

SENATE BILL 129:  Increases fee for oil and natural gas produced and marketed in this state and requires one-half of fees collected to be transferred to county where oil or natural gas was produced.

 

Assemblyman Roy Neighbors, Assembly District 36, and Bill Offutt, Nye County Manager, came forward to testify in support of S.B. 129.

 

Assemblyman Neighbors summarized S.B. 129 stating it increased the fee for oil and natural gas produced and marketed in this state and required 1/2 of the fees collected to be transferred to the county where oil or natural gas was produced.  Assemblyman Neighbors referred to a handout entitled Nevada Oil Production (Exhibit G).

 

Assemblyman Neighbors pointed out a big issue to Nye County is that county provides all the services (roads, public safety, schools, fire protection) for the oil field operations in Nye County, but it does not receive any of the revenue back from that oil production.  He said there is 18.3 miles of road leading to the oil fields which is maintained by Nye County. 

 

Assemblyman Neighbors noted that since fiscal 1975-1976 through 1991-1992, approximately $125 million has been generated under the Federal Oil and Gas Royalty Management Act of 1982, along with the rentals of public lands under the provisions of Chapter 191 of the Geothermal Steam Act (Exhibit H).  He said at the present time all of that money, on the average of between $8 million and $10 million a year, has been distributed under Nevada Revised Statutes (NRS) 328.450, Disposition of Revenue Received by State From Lease of Federal Lands (Exhibit I).

He posed, that from the 50 percent of funds going to the counties of which 25 percent must be distributed to the school district in that county, that 25 percent should go into a discretionary fund to help with the issue at the oil fields, the subject of the discussion before this committee this date.

 

Assemblyman Neighbors drew attention to his final handout, Federal Disbursement By Product (Exhibit J), and pointed out the royalty value for each Nevada county.

 

Assemblyman Neighbors summed up his testimony by reiterating the services Nye County provides for the oil field operations, yet Nye County received very little revenue back from this source.

 

Chairman Rhoads asked if the intention of the bill was to continue to provide funds for Nye County upon the completion of building the 18.3 miles of road referred to earlier by Assemblyman Neighbors.  Assemblyman Neighbors indicated that was the intent of S.B. 129.

 

Discussion ensued.

 

At this time, Chairman Rhoads sadly announced the death of Jim Joyce, of Las Vegas, a long-time lobbyist and friend of the Nevada Legislature.

 

William Offutt, Nye County Manager, said over $200,000 is being spent annually out of the Nye County General Funds to maintain the road discussed for the purpose of transportation of petroleum products.

Mr. Offutt said Nye County was asking the legislature to look beyond technicalities and assist the county out of this particular problem.

 

Mr. Offutt remarked, "It seemed unreasonable that we have provided $52 million worth of revenue out of that oil field and we have not gotten one nickel of it."

 

Discussion followed.

 

Senator O'Connell inquired if Nye County officials had approached the oil field operators concerning their participation in the road maintenance.  Assemblyman Neighbors said there had been some conversation, but no results.

 

Senator Townsend asked why the road had not been abandoned.  To which Assemblyman Neighbors replied the road was also used by school buses and farmers in the area.  Mr. Offutt said the Board of County Commissioners  had determined as a matter of policy, the road could not be closed because of other public uses.

 

Ted Flanigan, Senior Petroleum Geologist, Quest Petroleum Corporation, read his statement (Exhibit  K) in opposition to S.B. 129.

 

Mr. Flanigan read a letter written by Jerome P. Walker, President, Nevada Petroleum Society (Exhibit L), in opposition to S.B. 129.

 

Eugene C. Kozlowski, owner of Makoil, Inc., presented a written statement (Exhibit M) in opposition to S.B. 129.  He said S.B. 129 is not the correct instrument with which to acquire funds for dirt road maintenance for use by  petroleum companies.  He said the money to be collected through S.B. 129 is not significant and certainly not enough to handle the road situation, before the committee through S.B. 129.  He said he thought it was a state issue in view of the fact $70 million has gone to the state from petroleum products during the last 10 years.

 

Dave Parkhurst, Makoil, Inc., read written testimony (Exhibit N) in opposition to S.B. 129.

 

Russ Fields, Executive Director, Nevada Department of Minerals, came forward to oppose S.B. 129, (Exhibit O).  He urged the industry, the  Nye County officials and the Taxation Committee to work together to come up with a solution to solve the problem at hand.

 

Chairman Rhoads suggested Mr. Welsh look into the constitutionality of S.B. 129 and review revenue from the petroleum industry in other states.  He also suggested that Assemblyman Neighbors and Mr. Fields discuss possible solutions for the problem at hand.

 

Chairman Rhoads closed the hearing on S.B. 129.

 

There being no further business to come before the committee, Chairman Rhoads adjourned the meeting  at 3:37 p.m. in memory of Jim Joyce.

 

 

 

                             RESPECTFULLY SUBMITTED:

 

 

 

                                                            

                             Billie Brinkman,

                             Committee Secretary

 

 

 

APPROVED BY:

 

 

 

 

                                 

Senator Dean A. Rhoads, Chairman

 

 

DATE:                           

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Senate Committee on Taxation

March 2, 1993

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