MINUTES OF THE
SENATE COMMITTEE ON TAXATION
Sixty-seventh Session
June 24, 1993
The Senate Committee on Taxation was called to order by Chairman Dean A. Rhoads, at 2:35 p.m., on Thursday, June 24, 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:
Assemblyman Roy Neighbors, Assembly District No. 36
STAFF MEMBERS PRESENT:
Kevin Welsh, Deputy Fiscal Analyst
Billie Brinkman, Committee Secretary
OTHERS PRESENT:
John S. Bartlett, Deputy Attorney General, Department of Taxation
Marvin Leavitt, Lobbyist, City of Las Vegas
Samuel P. McMullen, Lobbyist, Nevada Broadcasters Association
Ande Engleman, Lobbyist, Nevada Press Association, Inc.
Perry Comeaux, Executive Director, Department of Taxation
Carole Vilardo, Lobbyist, Nevada Taxpayers Association
Les Bradshaw, Deputy District Attorney, Nye County
Joan Wright, Lobbyist, Tahoe-Ridge Time-Share Resort
Dave Purcell, Chief, Division of Assessments Standards, Department
of Taxation
Richard D. Franklin, Lobbyist, Assessors Association of Nevada
Janet Rogers, Executive Vice President, Nevada Broadcasters
Association
Chairman Rhoads called for a committee introduction of Bill Draft Request (BDR) 32-1129.
BDR 32-1129: Makes various changes relating to collection of taxes.
John S. Bartlett, Deputy Attorney General, Department of Taxation, explained this measure basically consolidates a number of provisions in Nevada Revised Statutes (NRS), Chapter 360, the general administrative chapter which refers to the revenue laws of Nevada.
SENATOR SHAFFER MOVED FOR COMMITTEE INTRODUCTION OF BDR 32-1129.
SENATOR O'CONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS COFFIN AND ADLER WERE ABSENT FOR THE VOTE.)
*****
Chairman Rhoads asked Marvin Leavitt, Lobbyist, City of Las Vegas, to come forward to impart information on the "White Pine County situation." (See minutes of June 17, 1993.) Mr. Leavitt indicated he and others have been attempting to find a mechanism to solve some of the problems of that county relative to the tax rate. He said Bob Hadfield, Executive Director, Nevada Association of Counties, and
Janice Wright, Deputy Executive Director, Nevada Taxation Department, and himself, had visited with legislative counsel, and a possible solution has been determined.
Mr. Leavitt said several admendments have been suggested to the legislation, Senate Bill (S.B.) 501.
SENATE BILL 501: Directs state board of examiners to establish maximum tax rate for certain counties.
Mr. Leavitt outlined the suggested amendments and answered questions asked by the committee members. He said the suggested amendments were forthcoming for approval by the committee.
Chairman Rhoads asked for a motion on Assembly Bill (A.B.) 103 which was on the agenda work session.
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.
SENATOR SHAFFER MOVED TO DO PASS A.B. 103.
SENATOR ADLER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS LOWDEN, O'CONNELL AND TOWNSEND VOTED NO.)
*****
Chairman Rhoads called for a motion on Assembly Bill (A.B.) 395.
ASSEMBLY BILL 395: Establishes maximum rate of ad valorem tax levied for support of jail for Washoe County and cities of Reno and Sparks.
SENATOR SHAFFER MOVED TO DO PASS A.B. 395.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS LOWDEN, O'CONNELL AND TOWNSEND VOTED NO.)
*****
Chairman Rhoads opened the hearing on Senate Bill (S.B.) 518.
SENATE BILL 518: Clarifies that transmission of radio and television signals and sale of air time are not taxable transactions.
Samuel P. McMullen, Lobbyist, Nevada Broadcasters Association, accompanied by Janet Rogers, Executive Vice President, Nevada Broadcasters Association, came forward to discuss S.B. 518.
Mr. McMullen explained this measure gives a definitive statement in Nevada Revised Statutes (NRS) of state policy relating to the taxation of very limited items such as transmission of a broadcaster radio or television signal. He said S.B. 518 clarifies that the airing or transmission of television shows or radio broadcasts is not taxable under Nevada law. He further explained that S.B. 518 clarifies existing policy, intent, interpretation and practice of taxation in the NRS. Mr. McMullen then referred to a proposed amendment to S.B. 518 with explanations of that document.
Mr. McMullen concluded his remarks by saying he knows of no one in the media industry who does not support S.B. 518.
Ande Engleman, Lobbyist, Nevada Press Association, Inc., came forward in support of S.B. 518 with the proposed amendment.
Perry Comeaux, Executive Director, Department of Taxation, stated there is no tangible property referred to in S.B. 518, therefore there is no fiscal impact.
Chairman Rhoads indicated he would accept a motion on S.B. 518.
SENATOR O'CONNELL MOVED TO AMEND AND DO PASS S.B. 518.
SENATOR ADLER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE.)
Mr. McMullen added, for the record, he wanted to thank the committee and to state also that it is his understanding that no other states tax transmission activities.
*****
Chairman Rhoads opened the hearing on Senate Bill (S.B.) 548, and turned the chair over to Senator O'Connell, Vice Chairman of the committee.
SENATE BILL 548: Revises provisions governing distribution of revenue from supplemental city-county relief tax.
There being no one present to present testimony on S.B. 548, the Vice Chairman opened the hearing on Senate Bill (S.B.) 550.
SENATE BILL 550: Provides exemptions from increases in certain taxes for labor and materials used for construction contracts executed before increase is adopted.
Mr. Bartlett came forward to testify in support of S.B. 550 and explain a proposed amendment (Exhibit C).
Vice Chairman O'Connell suggested in the matter of expediency, perhaps the suggested amendment could be proposed when the measure went to the assembly.
Carole Vilardo, Lobbyist, Nevada Taxpayers Association, said this measure is a committee introduction at her request. She urged the committee to amend and do pass S.B. 550. She said the proposed amendment as presented by Mr. Bartlett, simply tightens the language in the measure.
Vice Chairman O'Connell called for a motion on S.B. 550.
SENATOR COFFIN MOVED TO DO PASS S.B. 550.
SENATOR TOWNSEND SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS ADLER AND RHOADS WERE ABSENT FOR THE VOTE.)
*****
Vice Chairman O'Connell opened the hearing on Assembly Bill (A.B.) 423.
ASSEMBLY BILL 423: Establishes policy for administering taxes.
Ms. Vilardo explained A.B. 423 is a companion measure which was heard in the Senate Committee on Legislative Affairs and Operations that would put into the Standing Rules of the assembly and the senate, the criteria for tax policy so that when a taxation committee heard a tax bill, it would force the committee to look at the exemption question, the competition of revenue question, the ease of simplicity of administration, etc. Ms. Vilardo further explained A.B. 423 provides an extension of the Taxpayers Bill of Rights which was adopted and signed by the Governor during the Sixty-sixth Session of the Legislture. She urged passage of A.B. 423 by the committee.
Vice Chairman O'Connell called for a motion on A.B. 423.
SENATOR SHAFFER MOVED TO DO PASS A.B. 423.
SENATOR TOWNSEND SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS ADLER AND RHOADS WERE ABSENT FOR THE VOTE.)
*****
Chairman Rhoads returned to the chair and opened the hearing on Assembly Bill (A.B.) 735.
ASSEMBLY BILL 735: Provides manner of assessing value of certain possessory interests and beneficial uses for imposition of property taxes.
Les Bradshaw, Deputy District Attorney, Nye County, explained this measure clarifies the language in NRS 361.157 and NRS 361.159 which, he stated, allows the state to impose a tax on the beneficial use by a business person or a government contractor, when that business person uses otherwise exempt property in the conduct of his business for profit. He explained this statute has been implemented and imposed mostly on government contractors who are using federal property to carry out government contracts, and by use of that property a profit is derived.
Mr. Bradshaw related Nye County had been sued by the U. S. Government for imposing a tax on one of its contractors, and that Nye County ultimately lost the case. He said the U. S. Ninth Circuit Court of Appeals believed the present language in the referred to statutes was not quite precise enough in identifying and segregating out that beneficial use by government contractors when they used the government property in the conduct of their business for profit. He said A.B. 735 simply inserts new language into the existing law which allows a county assessor to better define and segregate out the beneficial use upon which he is imposing the tax. Mr. Bradshaw stressed how beneficial the imposition of this tax is to the four Nevada counties that contain large U. S. Government installations.
Assemblyman Roy Neighbors, Assembly District 36, spoke on A.B. 735 and explained a handout on assessed values and taxes for test site contractors (Exhibit D). Mr. Neighbors concluded his remarks by saying that county assessors had met with the Department of Taxation and it was agreed the courts would be satisfied with the proposed language in A.B. 735.
Joan Wright, Lobbyist, Ridge-Tahoe Time-Share Resort, came forward with proposed amendments to A.B. 735. She requested new language be added to sec. 3, subsection 3, line 23, "or exempt under the provisions of NRS 361.069." She said she supports A.B. 735 if amended.
Mr. Purcell explained through deliberations with many entities, including the Nevada Assessors Association, Nye County, Legislative Counsel Bureau and Attorney General's Office, it was agreed the issue addressed in A.B. 735 was about contractors who are contracting federal installations. He pointed out the language in this measure identifies and defines possessory interest. He said if the committee wants to make a policy decision to specifically exempt time-share furnishings, then the amendment proposed by Ms. Wright would be necessary.
Discussion followed.
Mr. Bradshaw voiced objections to the proposed amendment.
Chairman Rhoads asked that Mr. Bradshaw and Ms. Wright work on language for a proposed amendment and bring it back to the committee.
Richard D. Franklin, Lobbyist, Nevada Assessors Association, said the proposed amendment is an issue which is not related to A.B. 735. He remarked he objected to the proposed amendment. Mr. Franklin added the Nevada Assessors Association urges passage of A.B. 735 in its original form.
Chairman Rhoads closed the hearing on A.B. 735. He returned to a hearing on S.B. 548.
Mr. Leavitt came forward to explain that S.B. 548 addresses a problem which relates to the distribution of the supplemental city-county relief tax. He said a problem arises if the sales tax receipts of a rural guarantee county grow rapidly and that county can then be placed into the other category which is essentially the exporting counties. He explained the rural guarantee county cannot then go back to its original category. He noted when there is an unusal transaction in a rural guarantee county, a non-recurring transaction, it puts the rural county in another category which could be a financial devastation to that county. He pointed out S.B. 548 addresses such a situation.
Mr. Leavitt said another measure, Senate Bill (S.B.) 506, had been introduced, which specifically handles the situation referred to in S.B. 548.
SENATE BILL 506: Makes various changes relating to supplemental city-county relief tax.
Mr. Leavitt indicated if S.B. 506 is processed, then S.B. 548 would not be necessary.
Chairman Rhoads closed the hearing on S.B. 548.
Chairman Rhoads assigned various bill numbers to committee members to be explained on the senate floor when they were placed on the Second Reading File.
Chairman Rhoads announced there would be a committee meeting at 2 p.m., Saturday, June 26, 1993.
There being no further business to come before the committee, the meeting was adjourned at 3:35 p.m.
RESPECTFULLY SUBMITTED:
Billie Brinkman,
Committee Secretary
APPROVED BY:
Senator Dean A. Rhoads, Chairman
DATE:
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Senate Committee on Taxation
June 24, 1993
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