MINUTES OF THE
SENATE COMMITTEE ON TAXATION
Sixty-seventh Session
April 15, 1993
The Senate Committee on Taxation was called to order by Chairman Dean A. Rhoads, at 2:05 p.m., on Tuesday, April 15, 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:
Bob Hadfield, Executive Director, Nevada Association of Counties
Lisa G. Reck, Auditor/Recorder, White Pine County
John Sherman, Management Analyst, Washoe County
Tom Grady, Executive Director, Nevada League of Cities
Carole Vilardo, Lobbyist, Nevada Taxpayer's Association
Mark Brown, Lobbyist, MGM Grand Hotel, Inc.
Patrick R. Cruzen, Senior Vice President, MGM Grand Hotel, Inc.
Thomas A. Peterman, Vice President and General Counsel,
MGM Grand Hotel, Inc.
Richard A. Murray, President, Ramshead Brewery & Restaurant, Inc.
Tom Wiesner, Proprietor, Big Dog's and Holy Cow
Tom Young, General Manager, Great Basin Brewing Co.
Tony Alamo, Senior Vice President and General Manager,
MGM Grand Hotel, Inc.
Stephanie Tyler, Lobbyist, Regional Transportation Commission
Granville M. "Bow" Bowman, Executive Director, Regional
Transportation Commission
John Mayer, Councilman, City of Sparks
Kathryn Wishart, Council Member, City of Reno, and RTC Chairperson
Dave Howard, Lobbyist, Reno/Sparks Chamber of Commerce
Mary Henderson, Lobbyist, Washoe County
Janice Wright, Deputy Executive Director, Deparment of Taxation
Donna Wadey, Assistant Chief, Registration Division, Department of
Motor Vehicles & Public Safety
Barbara Byington, Assessor, Douglas County
Chairman Rhoads opened the hearing on Senate Bill (S.B.) 326.
SENATE BILL 326:Provides exceptions to statutory limit on tax rate ad valorem.
Bob Hadfield, Executive Director, Nevada Association of Counties, and Lisa G. Reck, Auditor/Recorder, White Pine County, came forward to testify in support of S.B. 326.
Mr. Hadfield explained this measure deals with the statutory tax rate that was adopted by the Nevada Legislature to replace the Constitutional $5 per hundred assessed valuation limitation. S.B. 326 would provide that the current statutory limit of $3.64 would be allowed to go higher for voter-approved bonded indebtedness and voter-approved capital projects, as well as placing any tax rate imposed by the state of Nevada above the $3.64 cap. Mr. Hadfield explained that essentially, what is being proposed by S.B. 326 is the voter-approved levy for capital projects be allowed to go between the $3.64 and the $5 as would the levy imposed by the Nevada Legislature. This proposal tends to deal with Nevada's counties in particular, and Nevada cities, that have found themselves in a very difficult situation due to the great population growth since the 1981 tax shift.
Mr. Hadfield went into greater detail of the needs of the counties. He said there are 4 counties now bumping the $3.64 cap. They are Elko, Nye, Lander and White Pine counties. And he said Washoe County also is getting close to the cap.
He said the way the present law is structured, when the $3.64 cap is achieved and exceeded, a negotiating process kicks in to keep the cap at $3.64. But he said when you look at overlapping tax rates, the only people that can really negotiate are cities and counties. The counties and hospital districts that have county-wide tax rates are the ones that usually end up having to buy out some other entity's tax rate, such as a smaller community in the respective county.
Ms. Reck referred to a handout, "White Pine County Tax Rate Comparison" (Exhibit C). She expounded on White Pine County having to operate with minimum budgets the past several years. She said it would be difficult to even free up .55 to fund the school bond issue which the voters passed at the 1992 general election. She indicated the county would have to find $600,000 out of their budget for that bond issue, and then the budget would not have room to provide the services which are mandated by law.
She pointed out the White Pine County property assessed value had dropped $5 million between the present year and the upcoming year, which was solely due to the oil and gas leases that are no longer held by major oil companies in White Pine County.
Mr. Hadfield explained that 14 percent of White Pine County's budget will be lost if a way is not found to maneuver within the tax cap.
Senator O'Connell said she thought it would be very helpful to have a list of all the bonding from the counties which will come to fruition during the next two years. She requested that information be provided to the committee by each of the counties.
Discussion ensued.
Mr. Hadfield pointed out that all counties support the mechanism provided in S.B. 326. However, he said S.B. 326 does not take care of the current urgency of the White Pine County financial problem.
John Sherman, Management Analyst, Washoe County, testified in support of S.B. 326. He passed out a handout (Exhibit D) to demonstrate how close Washoe County is getting to the $3.64 cap, and discussed the figures presented to the committee.
Discussion ensued.
John Grady, Executive Director, Nevada League of Cities, made remarks in support of S.B. 326.
Carole Vilardo, Lobbyist, Nevada Taxpayer's Association, came forward to oppose S.B. 326 and she explained a handout (Exhibit E).
Chairman Rhoads ask Kevin Walsh, Deputy Fiscal Analyst, to meet with Mr. Hadfield and Ms. Reck and work on a possible solution to the financial problems of White Pine County.
Chairman Rhoads closed the hearing on S.B. 326.
Chairman Rhoads opened the hearing on Senate Bill (S.B.) 365.
SENATE BILL 365:Authorizes operation of brew pubs in permanent theme parks.
Chairman Rhoads announced he had ask proponents of S.B. 365 to speak this date and that the opposition would have an opportunity to speak on S.B. 365 at a later date.
Mark Brown, Lobbyist, MGM Grand Hotel, Inc., came forward and introduced the following officers of the MGM Grand Hotel, Inc.: Thomas A. Peterman, Vice President and General Counsel; Patrick P. Cruzen, Senior Vice President, Finance and Administration; and Tony Alamo, Senior Vice President and General Manager.
Mr. Cruzen gave a brief overview of the MGM Grand Hotel project as he referred to a brochure (Exhibit F on file in the Research Library.) He talked of the proposed location of a micro brewery within the theme park of the MGM Grand Hotel and pointed out it would be used for a market tool as well as a tourist attraction.
Senator O'Connell said it amazed her that any limitation would be placed on the business of a micro brewery. She said it will bring more tax dollars to Nevada and she felt the business should be welcomed.
Senator Adler said he introduced the original brew pub bill during the Sixty-sixth Session and it was done specifically to help out historic and redevelopmnent districts in Nevada. He said the barrel limit in S.B. 365 may be valid, but the locational aspects may need to be revisited and a general rule adopted.
Richard A. "Dick" Murray, President, Ramshead Brewery & Restaurant, presented written testimony (Exhibit G) in support of S.B. 365.
Tom Wiesner, Proprietor, Holy Cow Casino, Cafe, Brewery, came forward to comment on S.B. 365. He said he is in favor of the measure in principle, however, he thought the zoning and definition of a theme park should be specific.
Tom Young, General Manager, Great Basin Brewing Co., read a prepared statement (Exhibit H) in support of S.B. 365.
Mr. Alamo came forward to explain the beer made in the micro brewery in the theme park of the MGM Grand Hotel would be sold only on the premises of the complex, which encompassed 112 acres.
Chairman Rhoads closed the hearing on S.B. 365.
Chairman Rhoads opened the hearing on Assembly Bill (A.B.) 103.
ASSEMBLY BILL 103: Authorizes counties to increase rate of tax imposed for public mass transportation and construction of public roads upon approval by registered voters of county.
Stephanie Tyler, Lobbyist, Regional Transportation Commission (RTC) of Washoe County, came forward to speak on A.B. 103. She was accompanied by John Mayer, Chairman, RTC of Washoe County, and Councilman for the City of Sparks; Kathryn Wishart, Council Member, City of Reno and RTC Chairperson; and Granville "Bow" Bowman, Executive Director, RTC.
Ms. Tyler made a few explanatory remarks on A.B. 103 and then asked Mr. Mayer to speak. He presented written testimony (Exhibit I) in support of the measure.
Senator O'Connell questioned how much subsidy the county provides for the Citifare bus system. Mr. Bowman fielded the question, replying the fare box recovery rate is about 34 cents of each $1, and the rest of the money comes from 1/4 percent of 1 percent sales tax in existence, and from federal funds through capital improvements, etc.
A discussion followed concerning the costly provision for handicap riders mandated by the American Disability Act (ADA).
Kathryn Wishart, Council Member, City of Reno, and RTC Chairperson, read prepared testimony (Exhibit J), in support of A.B. 103.
Dave Howard, spokesman for Reno/Sparks Chamber of Commerce, indicated that organization endorsed A.B. 103. He also testified as a former chairman of the RTC. He said in 1981, the legislature approved a measure to allow RTC to ask for a vote of the people for the first 1/4 percent of 1 cent to support the transportation system in Washoe County. In 1984, the American Public Transportation Association cited the Reno system as the No. 1 small system in the United States. He pointed out that A.B. 103 was not breaking new ground, but was a repeat.
Discussion ensued on the inclusion of A.B. 103 and a question was posed in reference to line 8 Sec. 2. (b)......construction of public roads, one-half of 1 percent. The committee questioned the definition of "construction." Chairman Rhoads said he would ask Mr. Walsh to investigate the meaning of the word "construction" as used in A.B. 103.
Discussion followed.
Ms. Tyler informed the committee that before the RTC Board would bring the tax raise to the vote of the people of Washoe County, the process would include a public poll in order to gain information to ascertain the needs, and would give the local governments, both Washoe County, Reno and Sparks, the opportunity to address those issues.
Mary Henderson, Lobbyist, Washoe County, read a statement (Exhibit K) prepared by Jim Shaw, Washoe County Commissioner, who was unable to attend the meeting.
Granville M. "Bow" Bowman, Executive Director, Regional Transportation Commission, presented prepared remarks (Exhibit L) and discussed prepared charts (Exhibit M) showing the history and records of the RTC.
Chairman Rhoads closed the hearing on A.B. 103.
Chairman Rhoads opened a work session on bills previously heard by the Senate Committee on Taxation.
Chairman Rhoads called for a motion on Senate Bill (S.B.) 35.
SENATE BILL 35: Authorizes acquisition of certain property by local government for open-space use without paying delinquent taxes on property.
SENATOR O'CONNELL MOVED TO INDEFINITELY POSTPONE S.B. 35.
SENATOR LOWDEN SECONDED THE MOTION.
THE MOTION CARRIED. (Senators Adler and Coffin were absent
for the vote.)
*****
Chairman Rhoads called for discussion on Senate (S.B.) Bill 41.
SENATE BILL 41: Makes various changes in assistance to older persons.
Janice Wright, Deputy Executive Director, Department of Taxation, came forward to explain Amendment No. 263 to S.B. 41. She outlined the five changes amended into the measure.
Chairman Rhoads called for a motion on S.B. 41.
SENATOR O'CONNELL MOVED TO AMEND AND DO PASS S.B. 41.
SENATOR TOWNSEND SECONDED THE MOTION.
THE MOTION CARRIED. (Senator Coffin was absent for the vote.)
*****
Chairman Rhoads opened a discussion on Senate Bill (S.B.) 46.
SENATE BILL 46: Requires vehicle to be registered in county where owner of vehicle resides.
Chairman Rhoads announced there is a Fiscal Note on S.B. 46. And he read into the record, a letter from Senator Lawrence E. Jacobsen (Exhibit N ).
Donna Wadey, Assistant Chief, Registration Division, Department of Motor Vehicles and Public Safety, came forward to point out the Fiscal Note attached to S.B. 46 was prepared prior to a proposed amendment (Exhibit O) to S.B. 46.
Mr. Hadfield remarked he did not see how the smaller counties could make up the lost funds indicated in the Fiscal Note.
Senator Adler remarked he had severe reservations concerning S.B. 46.
Barbara Byington, Assessor, Douglas County, explained the figures quoted in Exhibit N were pulled from the several cities
which spill over into Douglas County, therefor, the figures are not true.
Chairman Rhoads said another Fiscal Note will be requested on S.B. 46.
Chairman Rhoads closed the hearing on S.B. 46.
Chairman Rhoads opened a work session on Assembly Bill (A.B.) 136.
ASSEMBLY BILL 136: Revises provisions governing assessment of agricultural and open space land for property taxation.
Chairman Rhoads announced A.B. 136 has a Conflict Amendment No. 264.
Chairman Rhoads called for a motion on A. B. 136.
SENATOR O'CONNELL MOVED TO AMEND AND DO PASS A.B. 136.
SENATOR TOWNSEND SECONDED THE MOTION.
THE MOTION CARRIED. (Senator Coffin was absent for the vote.)
There being no further business to come before the committee, Chairman Rhoads adjourned the meeting at 4 p.m.
RESPECTFULLY SUBMITTED:
Billie Brinkman
Committee Secretary
APPROVED BY:
Senator Dean A. Rhoads, Chairman
DATE:
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Senate Committee on Taxation
April 15, 1993
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