MINUTES OF THE
SENATE COMMITTEE ON TAXATION
Sixty-seventh Session
July 1, 1993
The Senate Committee on Taxation was called to order by Chairman Dean A. Rhoads, at 7:20 p.m., on Thursday, July 1, 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 Scott Scherer, Assembly District No. 2
STAFF MEMBERS PRESENT:
Kevin Welsh, Deputy Fiscal Analyst
Billie Brinkman, Committee Secretary
OTHERS PRESENT:
Perry Comeaux, Executive Director, Department of Taxation
Richard D. Franklin, Lobbyist, Assessors Association of Nevada
Bobbie Gang, Lobbyist, Nevada Women's Lobby
Lucille K. Lusk, Lobbyist, Nevada Coalition of Concerned Citizens
Mark Brown, Lobbyist, CMS Generation Co.
Jack Roberts, Vice President, CMS Generation Co.
Tom Shelton, Project Manager, CMS Generation Co.
Chairman Rhoads opened the hearing on Assembly Bill (A.B.) 456.
ASSEMBLY BILL 456: Makes various changes to provisions governing business tax.
Assemblyman Scott Scherer, Assembly District No. 2, sponsor of A.B. 456, explained the measure, as amended, attempts to deal with the calculation of wages for part-time employees and defines a part-time employee. He said A.B. 456 provides a very simple calculation for wages for part-time employees. Assemblyman Scherer discussed the calculation which is based on a full-time equivalency of 36-hours a week. He pointed out A.B. 456 would be beneficial to small business people who do use a lot of part-time employees. Assemblyman Scherer further explained the measure deals with the situation of people who are temporarily located in the state, such as convention exhibitors and movie filming companies.
Perry Comeaux, Executive Director, Department of Taxation, explained the fiscal impact of A.B. 456 should be approximately revenue neutral.
Mr. Comeaux said an amendment to A.B. 456 was forthcoming.
Chairman Rhoads called for a motion to amend and do pass A.B. 456.
SENATOR TOWNSEND MOVED TO AMEND AND DO PASS A.B. 456.
SENATOR O'CONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR COFFIN WAS ABSENT FOR THE VOTE)
*****
Chairman Rhoads opened the hearing on Assembly Bill (A.B.) 640.
ASSEMBLY BILL 640: Makes various changes relating to assessments and liens concerning property owned by Nature Conservancy.
Richard D. Franklin, Lobbyist, Assessors Association of Nevada, explained the purpose of A.B. 640 was simply to clarify how agricultural liens should be handled when they were purchased by the Nature Conservancy. Mr. Franklin said it would reduce the tax exemptions for the Nature Conservancy.
Chairman Rhoads called for a motion on A.B. 640.
SENATOR TOWNSEND MOVED TO DO PASS A.B. 640.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Rhoads opened the hearing on Assembly Bill (A.B.) 699.
ASSEMBLY BILL 699: Makes various changes regarding libraries.
There being no one present to testify on A.B. 699, Chairman Rhoads opened the hearing on Assembly Bill (A.B.) 731.
ASSEMBLY BILL 731: Proposes to revise provisions governing exemption of gross receipts from sales of tangible personal property to and by specified governmental entities and certain charitable, eleemosynary or religious organizations from certain taxes on retail sales.
Bobbie Gang, Lobbyist, Nevada Women's Lobby, and Lucille K. Lusk, Lobbyist, Nevada Coalition of Concerned Citizens, came forward to remark briefly on A.B. 731. Ms. Gang pointed out this measure did not require a fiscal note. She said A.B. 731 provided that a practice which has been in effect for nonprofit organizations as being considered nontaxable, would remain status quo. She indicated an opinion from the Office of the Attorney General had turned that status around, thus the necessity of this measure. Ms. Lusk stated she understood the bill was proposed by the Department of Taxation.
Chairman Rhoads requested a motion on A.B. 731.
SENATOR COFFIN MOVED TO DO PASS A.B. 731.
SENATOR LOWDEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Rhoads opened the hearing on Assembly Bill (A.B.) 768.
ASSEMBLY BILL 768: Provides exemption from property tax for property used for facility for production of electrical energy from recycled material.
Mark Brown, Lobbyist, CMS Generation Co., accompanied by Jack Roberts, Vice President, CMS Generation Co., and Tom Shelton, Project Manager, CMS Generation Co., came forward to discuss A.B. 768.
Mr. Brown gave a brief background of the CMS Generation Co. and its proposed project planned for location in Moapa Valley, Nevada. He said it is a "tire-to" fuel power plant that will burn waste tires to produce power. All the electricity produced by the plant will, in turn, be sold to Nevada Power Company under terms of a 30-year contract. He explained the technology and informed the committee two similar plants are presently in operation, one in Modesto, California, and one in Sterling, Connecticut.
Mr. Roberts outlined statistics and environmental benefits of the project from a prepared handout (Exhibit C). He said the proposed plant will meet some of the needed power for southern Nevada. The plant should be on-line in time for the 1996 summer season.
Mr. Brown stated testimony on the assembly side indicated the proposed project would not have a negative effect on consumers of the Nevada Power Company.
Discussion ensued.
Mr. Roberts said funding for the project had been commenced about 4 years ago and that, to date, they had spent about $6 million. He indicated that about a year ago, it became obvious the tax exemption was needed in order go give a rate relief to the ratepayers of Nevada. He said over the life of the plant, the savings to the ratepayers would be approximately $288 million. Mr. Roberts commented the developers were attracted to Nevada due to the need for power in this state.
Mr. Brown referred to the agreement between the Town of Moapa and CMS Generation Co. and stated the company would reimburse any negative impact the tax exemption created on Moapa. He said that Clark County had also signed off in support of A.B. 768.
Further questions were asked by committee members.
Mr. Roberts stressed the environmental aspects of the project have been well investigated and that the plant has been approved by the Environmental Protection Agency (EPA). He emphasized the best available control technology has been designed within the plant.
Mr. Roberts noted the CMS Generation Co. has the support of the Nevada Department of Transportation because disposal of scrap tires has become a solid waste problem within the state, adding it is a major issue. He said for that reason, federal regulations require that 20 percent of road asphalt be ground-up tires. He added Nevada should qualify for federal exemptions in the range of $4 million to $6 million annually. He indicated the cost of grinding up tires is roughly 20 percent to 60 percent higher than normal asphalt production. Reference was made to Exhibit C which contains a letter from Garth F. Dull, Director, Department of Transportation.
Mr. Brown remarked that Nevada produces about 1.5 million waste tires annually which, from the prospective of CMS Generation Co., is a fuel source.
Further conversation occurred among the committee members, Mr. Roberts and Mr. Brown.
Tom Shelton, Project Manager, CMS Generation Co., discussed the prevailing winds at Moapa and the studies by the EPA.
Mr. Roberts replied to a question by Senator Lowden, saying that A.B. 768 is a very important part of financing for the proposed project.
Mr. Brown stated that the Nevada Constitution provides that the legislature may exempt projects such as the one proposed by CMS Generation Co., and legislation, which is already on the books, Nevada Revised Statutes (NRS) 361, addresses that part of the Nevada Constitution. He added the language in A.B. 768 allows for a facility for the production of electrical energy from recycled material, once again consistent with the Constitution. Mr. Brown said discussion had arisen on the assembly floor concerning CMS Generation Co. "taking away." He stressed they were not "taking away" because the local government entities "do not have yet." He said, "before one cent is granted to this company in the form of an exemption, $150 million will be invested in the State of Nevada, and additionally, there will be approximately $8 million to $10 million annually given back to the state."
Chairman Rhoads pointed out the infrastructure needs for the next 25 years in Moapa would be very demanding.
Perry Comeaux, Executive Director, Department of Taxation, said a fiscal note had been prepared for A.B. 768; however he did not have a copy available at this time.
Senator Adler and Mr. Comeaux discussed the possibility of real property around the facility being taxable.
Mr. Shelton informed the committee there is a buffer zoning of about 30 to 40 acres which is not included in the project area. He said Janice Wright, Deputy Executive Director, Department of Taxation, had testified in the Assembly Committee on Taxation, that the value of the proposed exemption would be approximately $600,000 annually. He said taxes would be paid on the buffer zoning property.
Chairman Rhoads closed the hearing on A.B. 768.
There being no further business to come before the committee, the meeting was adjourned at 8:25 p.m.
RESPECTFULLY SUBMITTED:
Billie Brinkman,
Committee Secretary
APPROVED BY:
Senator Dean A. Rhoads, Chairman
DATE:
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Senate Committee on Taxation
July 1, 1993
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