The Committee on Taxation was called to order at 6:30 p.m., on Friday, April 9, 1999. Chairman David Goldwater presided in Room 3142 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mr. David Goldwater, Chairman

Mr. Roy Neighbors, Vice Chairman

Mr. Bernie Anderson

Mr. Morse Arberry, Jr.

Mr. Greg Brower

Mrs. Vivian Freeman

Ms. Dawn Gibbons

Mr. John Jay Lee

Mr. Mark Manendo

Mr. John Marvel

Mr. Harry Mortenson

Mr. Bob Price

Ms. Sandra Tiffany

GUEST LEGISLATORS PRESENT:

Assemblyman David Parks

Assemblyman Lynn Hettrick

Assemblyman Kelly Thomas

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Neena Laxalt, representative, city of Sparks

Mary Henderson, representative, city of Reno

Carole Vilardo, representative, Nevada Taxpayer’s Association

Tom Skancke, representative, Las Vegas Convention and Visitors Authority

Ame Hill, representative, Las Vegas Chamber of Commerce

Following roll call, Chairman Goldwater opened the hearing on A.B. 526.

Assemblyman David Parks, Assembly District 41, requested the withdrawal of A.B. 526. Assemblyman Parks said he did so regretfully because of the Governor’s desire not to create any new taxes, and because A.B. 526 would create a new tax. He wished to state for the record that he was saddened that there was no dedicated effort made to preserve culture which was rapidly being lost in areas such as Rhyolite.

Assemblyman Marvel said there was a cultural resource commission in place which required an application being made by an active group. He commented there was a $2 million fund in place for those applications.

Chairman Goldwater wished to state his appreciation for the professionalism displayed by Assemblyman Parks.

MOTION SECONDED BY ASSEMBLYMAN PRICE.

MOTION CARRIED.

Chairman Goldwater closed the hearing on A.B. 526, and opened the hearing on A.B. 504.

Assemblyman Lynn Hettrick, Assembly District 39, introduced A.B. 504. Mr. Hettrick explained the bill simply struck the population level of 500,000 from existing law so smaller counties could take advantage of development of open-space lands (Exhibit B) There was no opposition to the bill, and while there was still a need for a legal opinion, it was determined A.B. 504 should be heard and any further discussion could be held when the bill went before the Senate.

Chairman Goldwater called for a motion on A.B. 504.

ASSEMBLYMAN NEIGHBORS MOVED TO DO PASS A.B. 504.

ASSEMBLYMAN PRICE SECONDED THE MOTION.

MOTION CARRIED.

Chairman Goldwater closed the hearing on A.B. 504, and opened the hearing on A.B. 471.

Chairman Goldwater explained A.B. 471 would reduce the one percent special vehicle privilege tax in Washoe County to one-half of one percent in fiscal year 2001-02 and then eliminate it in fiscal year 2002-03. The special tax was authorized by the Legislature and subsequently enacted by the Washoe County Commission to replace a portion of the supplemental city-county relief tax revenue lost by local governments in Washoe County because of the passage of the 1991 "fair-share" legislation. Washoe County estimated the revenue loss for all local governments at $3.3 million in fiscal year 2001-02 and $6.9 million in fiscal year 2002-03.

Chairman Goldwater told the committee proponents of A.B. 471 included most of the Washoe County delegation, who had received steady complaints about the tax since its enactment. Some residents apparently felt the tax should have expired after a fixed period of time because of some confusion over provisions in A.B. 401 which also authorized the additional tax in other counties for only a few years. Opponents felt the revenue was still needed as a revenue source.

Assemblyman David Humke, Assembly District 26, submitted a proposed amendment (Exhibit C) to phase out the special tax over 5 years.

Neena Laxalt, representative, city of Sparks, spoke in opposition to A.B. 471. Ms. Laxalt told the committee the city of Sparks had looked at the amendment proposed by Assemblyman Humke but continued to believe the revenue source to be permanent, and hoped if there was a phase-out of the tax, it would be replaced with another funding source.

Mary Henderson, representative, city of Reno, testified in support of A.B. 471. Ms. Henderson said the Reno City Council had seen the proposal offered by Assemblyman Humke. The view of the city was the tax had been contentious since its inception and presented many problems for the people of Washoe County. It was difficult for any government to walk away from any permanent source of revenue but Ms. Henderson felt it was important to provide some tax relief to the citizens.

Assemblywoman Tiffany stated she was surprised and pleased at a municipal government which took into consideration the needs of taxpayers. She said Assemblyman Humke had been more than fair with the phase-out portion of the bill, and again expressed pleasure at the stand taken by the city of Reno.

Chairman Goldwater asked for any further testimony, and hearing none, requested a motion on A.B. 471.

MOTION SECONDED BY ASSEMBLYWOMAN GIBBONS.

MOTION CARRIED.

Chairman Goldwater closed the hearing on A.B. 471 and opened the hearing on A.B. 581.

Chairman Goldwater told the committee A.B. 581 sought voter approval of a sales tax exemption for school supplies purchased by an eligible student during the last 7 days of August each year. Eligible students would include anyone enrolled in a public or private school, community college or university who could show acceptable proof of that enrollment. The exemption, effective in August, 2001, would result in an estimated revenue loss of $3.82 million during fiscal year 2001-02. Support for the bill was presented by the intern of the prime sponsor. She noted the bill would allow students and their parents a certain time to purchase, without tax, school supplies necessary for the student to receive a proper education.

Carole Vilardo, representative, Nevada Taxpayer’s Association, introduced an amendment to A.B. 581 which had been submitted to the committee on April 5, 1999 (Exhibit D). Ms. Vilardo commented she hoped the amendment would answer concerns relative to escalating prices. The original bill showed a $100 maximum for tax-exempt purchases. Ms. Vilardo felt that might be fine at the start but in 4 or 5 years the figure would probably need to change. The amendment would allow the legislature to specifically determine parameters of the exemption, both in terms of the dollar amount and the time to use the exemption.

Ms. Vilardo continued the second part of the amendment dealt with assuring agreement by the Department of Education and the Department of Taxation regarding the exemption and the form to be used. Retailers would then be given a three-month notice of the amnesty program dates, and educated in the proper use of forms for auditing purposes.

Chairman Goldwater asked if the amendment addressed the university system. Ms. Vilardo replied she thought it was a K-12 issue. Assemblywoman Tiffany wondered if school was out and the student had to get a list of approved supplies, when that list could be obtained. Ms. Vilardo explained in some schools the parent or student would be informed of the program during registration. In others, when a list of supplies was offered prior to school, the student would be able to purchase the general supplies needed, and for a specific class within 3 days of the time that class began.

Chairman Goldwater wondered if the amendment should refer only to grades K-12. Ms. Vilardo said while she could not answer for the prime sponsor, her personal preference was to amend only for grades K-12.

Chairman Goldwater said the issues were to amend the bill only through grades K-12, to make it enabling, and to address the issues on the amendment.

Assemblyman Anderson felt it would be burdensome for a parent to prove supplies went to a specific child and not to a child at the college or university levels. It might be better left at general language, since the college student would likely buy the majority of supplies at the university bookstore, which was already exempt.

Chairman Goldwater replied the language as it was did not limit the privilege to students at a university in Nevada, but any student from any university could receive the exemption.

Chairman Goldwater asked for further testimony, and hearing none, requested a motion on A.B. 581.

ASSEMBLYMAN MANENDO MOVED TO AMEND AND DO PASS A.B. 581.

ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.

THE MOTION CARRIED.

Chairman Goldwater closed the hearing on A.B. 581 and opened the hearing on A.B. 571.

Assemblyman Mortenson explained the bill originally would double the state-mandated room tax in Clark County from 2 to 4 percent. He explained he had been ill when A.B. 571 was first presented, and since that time he had made certain changes to the body of the bill. If the bill passed, it would provide over $20 million a year for parks and recreation in Clark County.

Chairman Goldwater called for a motion on A.B. 571. He reminded the committee the bill would not pass without a two-thirds majority. He cautioned the committee the Governor had said he would veto any tax increase. Mr. Mortenson said it was his belief the Governor meant any tax increase to the state. The tax increase in A.B. 571 would only affect Clark County. Assemblyman Anderson asked whether even though the dollar tax increase would fall within the county the Governor would veto it. Chairman Goldwater said he had not talked to the governor about the bill.

Tom Skancke, representative, Las Vegas Convention and Visitors Authority, explained while he thought the intent of the legislation was good, he was forced to oppose A.B. 571. The city of Las Vegas and Clark County had over 130,000 rooms with another 20,000 rooms coming up. Tourism was the lifeblood of Nevada, and it was the position of the visitor’s authority that their job was to fill those rooms. It was important to point out that $76 million in room taxes, nearly 47 percent of the room taxes collected, currently went to parks, infrastructure, streets, roads, and school construction in Clark County. About 52 percent went to the convention authority to market Clark County, which included Mesquite, Laughlin, and Las Vegas. The remainder went back into general funds for the county. Currently, there was a park impact fee levied against builders and developers in Clark County. There were 3 new parks under construction in ward 4 of the county, there were 2 under construction in another district, and another was just completed in that same district. When room taxes were increased and the money removed for other functions than marketing the area, it drastically affected the convention authority.

Assemblyman Mortenson commented the Fair and Recreation Bill was passed many years ago to build parks, fairgrounds, and to promote tourism. In southern Nevada, the Fair and Recreation Board changed their name to the Convention and Visitor’s Authority and decided to give a small amount of money to parks. Last year, Mr. Mortenson continued, the authority gave $1 million to a park in downtown Las Vegas called the Fremont Experience. That park was owned and run by casinos. To his knowledge, that was all the money given to parks. He felt southern Nevada had all the benefits of growth such as being able to cut the air with a knife and the citizens deserved a little compensation, like a park.

Assemblywoman Gibbons asked Mr. Skancke if a bill had passed in the Senate to raise taxes on hotel and motel rooms in Washoe County for repair of the Reno Sparks Convention Authority. Mr. Skancke replied that bill had passed. Ms. Gibbons asked by what percent the tax was raised, and Mr. Skancke replied it was between 1 and 3 percent.

Assemblyman Manendo asked how much money was in the Clark County park impact fee fund. Mr. Skancke replied he was not sure, he did know the city of Las Vegas had depleted its funds in Ward 4 because of new parks that were being built. Mr. Manendo recalled taxpayers being upset because there was money in the fund that was not being spent for parks. Ms. Vilardo said Clark County did not levy impact fees for parks. The county and each individual entity levied a residential construction tax and each entity was responsible for its own parks.

ASSEMBLYMAN PRICE MOVED TO AMEND AND DO PASS A.B. 571.

ASSEMBLYWOMAN TIFFANY SECONDED THE MOTION.

ASSEMBLYMAN MARVEL MOVED TO AMEND THE MOTION TO MOVE THE BILL TO THE FLOOR WITHOUT A RECOMMENDATION.

ASSEMBLYMAN NEIGHBORS SECONDED THE AMENDED MOTION.

THE AMENDED MOTION FAILED.

THE ORIGINAL MOTION TO DO PASS AS AMENDED FAILED.

Chairman Goldwater closed the hearing on A.B. 571 and opened the hearing on A.B. 506.

Chairman Goldwater informed the committee A.B. 506 was designed to correct a problem associated with the overpayment of net proceed taxes created by the payment requirements for larger mines, and to adjust other reporting requirements which made it difficult for local governments to properly budget their net proceeds tax revenue.

Chairman Goldwater said the bill appeared to be noncontroversial although several amendments were proposed by the various parties to ensure A.B. 506 was in conformance with the intent of the prime sponsor. Those amendments were as follows:

• Amend section 1 on line 10, page 1, by changing "45 days" to "30 days."
• Delete lines 21 to 23 on page 3 of section 4 and insert:

(a) On or before August 1 for one-half of the net proceeds extracted from January 1 through June 30 of that year; and

• Delete lines 26 to 29 on page 3 of section 4 and insert:

(a) February 16 for the remaining one-half of the net proceeds extracted from January 1 through June 30 and for the net proceeds

• Amend section 4 on line 5, page 4, by changing "February 1" to "February 16".

• Amend section 4 on line 15, page 4, by changing March 15" to "April 15".
• Amend section 4 on line 33, page 4, by changing "February 20" to "March 5".
• Amend section 5 on line 13, page 5, by inserting "or before" after "controller on".

ASSEMBLYMAN MARVEL MOVED TO AMEND AND DO PASS A.B. 506.

ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.

THE MOTION PASSED.

Chairman Goldwater closed the hearing on A.B. 506 and opened the hearing on A.B. 562.

Assemblyman Kelly Thomas, Assembly District 16, presented an amendment (Exhibit E) to A.B. 562. Assemblyman Thomas told the committee there was no opposition to the bill, but Chairman Goldwater had suggested an amendment to resolve certain issues regarding tax credits and contract arrangements.

Mr. Zuend said A.B. 562 had been brought forth as a means of providing a public benefit by creating an incentive for employers to provide childcare to their employees. The original bill suggested a credit against one-half of an employer’s personal property tax and it was suggested the figure should be changed to credit 100 percent of the business’ personal property tax up to a certain amount. The amendment placed a dollar maximum amount on the credit and changed some language to clarify contractual relationships and define the childcare as being free to the employee.

Assemblyman Anderson asked how a small employer without physical space for a childcare center on the premises would be able to take advantage of A.B. 562. Assemblyman Thomas replied he would be amenable to expanding the bill to cover that scenario.

Assemblyman Arberry wondered if the location of an off-site daycare center affected the employer’s ability to provide that care. Assemblyman Thomas said the idea was to provide on-site care to reduce vehicle trips and to foster relationships between parents and children by having the children in close proximity to the parents.

Carole Vilardo said Nevada Revised Statute 364A contained certain provisions addressed in a bill from two legislative sessions ago. An employer must provide references and a liability provision was added. Mr. Zuend added section 7 of the original version of A.B. 562 provided for the childcare provisions related to business tax. It addressed how deductions were to be made, and said that free childcare for the children of an employee had to be on an on-site childcare facility. Ms. Vilardo replied there was a liability provision addressed in the older bill. The new amendment did not refer back to the statute concerning licensed childcare. Assemblyman Thomas said he would be happy to amend that provision into A.B. 562. He had overlooked the statutory reference.

Assemblyman Neighbors asked if the Nevada Taxpayer’s Association taken a position on A.B. 562. Ms. Vilardo replied the association had opposed the bill when it concerned a business tax, since a source of state revenue was being eroded. She said if it went through on any tax basis, it should be on the personal property tax.

Assemblyman Marvel agreed with Ms. Vilardo on her stand about personal property taxes. Until there was a good definition of personal property he would vote against the bill. Assemblyman Neighbors agreed with Assemblyman Marvel.

Assemblyman Thomas said the businesses would have to provide on-site childcare to qualify for the tax break. He did not understand the objections.

Chairman Goldwater said since there was nobody present to address the liability issue, he would advise Assemblyman Thomas not to include that in A.B. 562, because it might put an otherwise good bill in jeopardy.

Assemblyman Thomas asked if he should then leave out the on-site definition.

Ame Hill, representative, Las Vegas Chamber of Commerce, stated Nevada Revised Statute 432A.0275 did not include the liability clause as had been previously thought.

Assemblyman Thomas reiterated A.B. 562 provided economic, social, and environmental benefits by allowing businesses to chip away at a personal property tax ambiguously levied upon those businesses up to a certain threshold. He saw nothing but positive benefits and hoped the committee would entertain an amend and do pass measure.

Assemblymen Mortenson and Lee indicated they would vote for A.B. 562.

ASSEMBLYMAN MARVEL SECONDED THE MOTION.

THE MOTION FAILED.

ASSEMBLYWOMAN GIBBONS MOVED TO AMEND AND REREFER TO WAYS AND MEANS A.B. 562.

ASSEMBLYMAN MANENDO SECONDED THE MOTION.

THE MOTION CARRIED.

Chairman Goldwater closed the hearing on A.B. 562 and opened the hearing on A.B. 567.

Assemblyman Thomas told the committee A.B. 567 (Exhibit F) would provide approximately a $100 rebate on a year-round mass transit pass which an employer provided an employee free of charge. That pass would cost the employer about $240.

Chairman Goldwater stated the bill was opposed by representatives of the Nevada Taxpayers Association.

Ms. Vilardo stated if the committee chose to pass A.B. 567 there would be no position from the Nevada Taxpayers Association.

Assemblywoman Gibbons stated she would oppose A.B. 567. Assemblyman Lee opposed the bill as having no value. Assemblymen Marvel and Neighbors stated because of the personal property exemption in the bill they would also oppose A.B. 567.

Assemblyman Thomas said a large statement had been issued by the Rapid Transit Commission in which they stated such a program was needed so that Nevada could possibly receive federal funds for transit opportunities, both surface and rail. He asked for the committee’s support.

ASSEMBLYMAN MANENDO MOVED TO AMEND AND REREFER A.B. 567 TO WAYS AND MEANS.

ASSEMBLYMAN PRICE SECONDED THE MOTION.

THE MOTION CARRIED.

There being no further business before the committee, Chairman Goldwater adjourned the meeting at 9:00 p.m.

RESPECTFULLY SUBMITTED:

Lois McDonald

Transcription Secretary

RESPECTFULLY SUBMITTED:

Nykki Kinsley

Committee Secretary

APPROVED BY:

Assemblyman David Goldwater, Chairman

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