The Committee on Transportation was called to order at 1:38 p.m., on Tuesday, February 9, 1999. Chairwoman Vonne Chowning presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mrs. Vonne Chowning, Chairwoman

Ms. Genie Ohrenschall, Vice Chairwoman

Mr. Douglas Bache

Mr. John Carpenter

Mrs. Barbara Cegavske

Mr. Jerry Claborn

Mr. Tom Collins

Mr. Don Gustavson

Ms. Kathy McClain

Mr. Dennis Nolan

Mr. David Parks

Ms. Bonnie Parnell

Mr. Kelly Thomas

GUEST LEGISLATORS PRESENT:

Mr. Roy Neighbors, Assembly District Number 36

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Cheryl Blomstrom, Director, State Government Affairs, Nevada

Chapter The Associated General Contractors of America, Inc.

After calling the committee to order Chairwoman Chowning called on Assemblyman Neighbors and Mr. Paul Mouritsen, Legislative Counsel Bureau (LCB) to discuss the progress of Senate Concurrent Resolution (S.C.R.) 53 of the 1997 Legislative Session.

Mr. Neighbors read from prepared testimony (Exhibit C): This past interim Mr. Neighbors served as chairman of the Legislative Commission’s Committee to Study the Construction and Maintenance of Highways and Roads. The committee was formed because of S.C.R. 53 to study if Nevada’s highway system was adequate for the state’s growing population. The tasks charged to the committee were as follows:

(1) Review findings and recommendations of a 1994 interim study on highways and road;

(2) Review revenue sources and identify possible new sources to meet shortfalls;

(3) Review federal authorization of highway funds;

(4) Examine current revenue sources to use them more efficiently;

(5) Examine revenue practices in other states and look for new funding opportunities.

Mr. Neighbors continued by explaining the eight-member committee held five meetings throughout the state and inspected projects, which were planned, under construction, or recently completed. During the meeting Mr. Tom Stephens, Director, Nevada Department of Transportation (NDOT), testified Nevada had a backlog of maintenance needs and based on current revenue projections for the next 10 years expenditures would continue to exceed revenue. In addition five new "super projects" had been planned. The committee decided against recommending any new taxes or levies, and instead recommended Assembly Bills 28, 29, 32, and 34, which were outlined in the committee report (Exhibit D) and would further be discussed by Mr. Paul Mouritsen.

Mrs. Chowning thanked Mr. Neighbors and the interim committee for their hard work and dedication between sessions.

Mr. Neighbors remarked he would make himself available to all committee members if they had any future questions on S.C.R. 53. He also expressed if the committee so decided, A.B. 28 could be changed to a resolution instead of a law.

Mrs. Chowning welcomed Mr. Mouritsen and expressed thanks to him for past service to the Assembly Committee on Transportation. She requested he discuss the LCB report from the S.C.R. 53 committee on all four bills on the agenda before the committee heard testimony from the general public.

Mr. Paul Mouritsen, Policy Analyst, Legislative Counsel Bureau, began by speaking on the intent behind A.B. 28, which addressed a particular problem in Nevada, that of special fuel. Special fuel was fuel used for off-road purposes, such as heating homes, agricultural machinery, or mining. Since the fuel did not contribute to road wear it had not been taxed. It was dyed a particular color to distinguish it from normal gas.

Mr. Mouritsen added the interim committee discovered there was no program in place to assure the dyed fuel was not finding its way onto the roads. The interim committee decided to implement a program, similar to those used in other states, in which the Nevada Highway Patrol (NHP) would be granted the authority to check tanks when conducting regular traffic stops. The Department of Motor Vehicles and Public Safety (DMV&PS) would be responsible for reporting their progress on implementation of the program to the legislature. There was federal funding available to purchase equipment and train personnel for the enforcement of the dyed program, since the Federal Government, as well as the states, depended on special fuel tax for part of their revenue.

Mr. Mouritsen explained the Nevada Department of Transportation (NDOT) was able to present to the interim committee a sophisticated program for assessing pavement conditions and need for repair or replacement. The interim committee chose rural counties with populations under 50,000 since they normally did not have access to such programs. The intent of A.B. 29 was to make better use of money the counties had available for repair and maintenance of roads by better pavement management. NDOT would be required to assist the counties in setting up the programs.

Mrs. Chowning asked if there were any questions for Mr. Mouritsen concerning the research of the two bills.

Assemblywoman Parnell inquired about the possible fiscal impact for counties and state. Mr. Mouritsen said he did not have that information with him, but he explained others who would testify from NDOT could respond.

Mr. Mouritsen explained A.B. 32 should be rereferred to the Assembly Committee on Taxation, but he would briefly discuss the issues because committee members would be voting on it at a later date. Currently the entire sales tax on new and used vehicles went into the state general fund. A.B. 32 would redistribute that money into the state highway fund, thus dedicating it for the use of construction and maintenance of roads. The bill would require that redistribution take place over a 10-year period.

The final bill Mr. Mouritsen discussed was A.B. 34. The intent behind A.B. 34 was to redirect the 6 percent tax assessed on rental vehicles from the general fund back to the highway fund. That tax generated over $7 million last fiscal year and should be deposited directly into the highway fund for the purpose of building and maintaining roads. There would be a one-word change in the current legislation, striking "general’ and adding "highway."

Mrs. Chowning requested Mr. Mouritsen return when the other four bills on which the interim committee worked would be heard by the Committee on Transportation.

Assemblyman Carpenter asked about the fiscal impact of A.B. 34. Mr. Mouritsen explained during the last fiscal year the numbers were between $7 to $8 million, but did not know about current figures.

Assemblywoman McClain asked about the fiscal impact of A.B. 32. Mr. Mouritsen did not know, however would get the information for her since the Department of Taxation listed the sales of motor vehicles separately.

Mrs. Chowning found the figure for Mrs. McClain in the interim committee report (Exhibit D) and stated that the according to testimony, the figure was $74 million.

Mrs. Chowning explained before public testimony was taken she had a number of Bill Draft Requests (BDRs) she wanted the committee to consider for introduction.

• BDR 35-270 - Requires Department of Transportation to conform to locally adopted road improvement standards (A.B. 182).

ASSEMBLYMAN COLLINS MOVED NOT TO INTRODUCE BDR 35-270

MOTION DIED FOR LACK OF A SECOND

ASSEMBLYMAN NOLAN MOVED TO INTRODUCE BDR 35-270

ASSEMBLYWOMAN MCCLAIN SECONDED THE MOTION

THE MOTION CARRIED UNANIMOUSLY

• BDR 43-466 - Makes various changes concerning "hit and run" (A.B. 183).

ASSEMBLYWOMAN OHRENSCHALL MOVED TO INTRODUCE

BDR 43-466

ASSEMBLYWOMAN MCCLAIN SECONDED THE MOTION

THE MOTION CARRIED UNANIMOUSLY

• BDR 43-536 - Allows officer designated by City Management other than police officer ability to have vehicles towed (A.B. 184).

ASSEMBLYWOMAN MCCLAIN MOVED TO INTRODUCED BDR 43-536

ASSEMBLYMAN CARPENTER SECONDED THE MOTION

THE MOTION CARRIED UNANIMOUSLY

• BDR 43-657 - Makes changes concerning movement of large commercial single unit and combination vehicles on certain highways (A.B. 185).

ASSEMBLYWOMAN OHRENSCHALL MOVED TO INTRODUCE

BDR 43-657

ASSEMBLYMAN PARKS SECONDED THE MOTION

THE MOTION CARRIED UNANIMOUSLY

• BDR 43-747 - Requires instructors and operators of drivers’ training schools to have FBI background investigations (A.B. 186).

ASSEMBLYMAN COLLINS MOVED TO INTRODUCE BDR 43-747

ASSEMBLYWOMAN OHRENSCHALL SECONDED THE MOTION

THE MOTION CARRIED UNANIMOUSLY

• BDR 43-750 - Makes changes concerning posted speed limit during times of inclement weather (A.B. 187).

ASSEMBLYMAN NOLAN MOVED TO INTRODUCE BDR 43-750

ASSEMBLYMAN PARKS SECONDED THE MOTION

ASSEMBLYMAN CARPENTER ASKED THE BDR TO BE RE-READ

THE MOTION CARRIED UNANIMOUSLY

• BDR 43-753 - Creates grounds under which a broker's license may be denied, suspended or revoked (A.B. 188).

ASSEMBLYWOMAN OHRENSCHALL MOVED TO INTRODUCE

BDR 43-753

ASSEMBLYMAN PARKS SECONDED THE MOTION

THE MOTION CARRIED UNANIMOUSLY

Mrs. Chowning opened the public hearing on A.B. 28 and she began by re-reading the summary of the bill.

Clay Thomas, Assistant Chief, Motor Carrier Division, DMV&PS stated the department was opposed to A.B. 28. The DMV&PS was opposed to the bill for two reasons: (1) Original intent of S.C.R. 53 was to set forth a resolution dealing with dyed fuels and not to mandate a statute requiring DMV&PS to supply a report to the legislature; and (2) the intent dealt with special fuel, i.e. diesel fuel, however the way the statute was written it covered everything under NRS Chapter 366 which went beyond diesel. Currently the DMV&PS supplied a monthly report to NDOT and a quarterly report to LCB when information was requested. It was the DMV&PS position they had always been willing to supply information on motor carrier operations to any agency that had requested it. The department would continue that policy, but did not feel the legislature should statutorily mandate it.

Mrs. Chowning asked Mr. Mouritsen to explain if DMV&PS opposed the proposal during the interim committee, or did A.B. 28 go beyond what was discussed.

Mr. Mouritsen used the recommendations mentioned in Exhibit D to show the exact form the motion took, which said,

"Recommend that the Legislature require that Nevada’s Department of Motor Vehicles and Public Safety report to the Legislature by March 1 in each legislative session year regarding the implementation of the dyed fuels program."

Mr. Mouritsen continued by stating the motion had only to do with dyed fuel, however the bill drafter did not feel comfortable drafting A.B. 28 as restrictive as stated in the recommendation, thus a broader measure was created.

Mrs. Chowning re-read the recommendation from Exhibit D. She quizzed Mr. Mouritsen about the bill drafter not feeling comfortable doing what the interim committee recommended and so expanded the wish of the committee. Mr. Mouritsen replied he questioned the bill drafter, Kim Guinasso, about it and Ms. Guinasso felt it covered the dyed fuel program and was included within the scope of what she had drafted.

Mrs. Chowning asked if DMV&PS opposed the measure in the interim study committee. Mr. Mouritsen stated there were two representatives from DMV&PS who appeared and gave facts on the measure. However, there were people from Nevada Highway Patrol (NHP) who spoke against the measure, claiming it would cost too much money to implement.

Mrs. Chowning expressed concern over the difference of opinion which occurred and asked Mr. Thomas why the DMV&PS was in favor of a resolution, but not in favor of a bill. Mr. Thomas reiterated the department was willing to supply the information to any agency that wanted it and, therefore did not believe a statute was warranted in the matter.

Mrs. Chowning confirmed the DMV&PS would be willing to supply information requested by the broad scope of the way the bill was currently written and not just regarding diesel fuel. Mr. Thomas reaffirmed his previous statement saying if someone requested something beyond diesel fuel and DMV&PS had the information, they would supply it. To his understanding the crux of the resolution was the diesel fuel issue and NRS Chapter 366 covered other special fuels.

Mr. Carpenter exclaimed the intent of the resolution went beyond a simple reporting situation for the DMV&PS and moved into the enforcement of dyed fuel.

Mr. Collins remarked on page 6 of Exhibit D there appeared to be a federal program, which offered grants for those projects. He wondered why Mr. Thomas continued to oppose A.B. 28 if grant money was available from the Federal Government.

Mr. Thomas reiterated the DMV&PS position of not wanting the reports statutorily mandated. He said the department had never refused to give information to any entity.

Daryl Capurro, Managing Director, Nevada Motor Transport Association, Inc. (hereafter referred to as the association) expressed support of the idea of a dyed fuel enforcement program. He explained he had testified during the interim committee hearings there was a federal law against on-road usage of dyed fuels and there should be money in the Transportation Equity Act for the 21^st Century (T21) for enforcement, however there might be problems securing those funds.

To his understanding, Mr. Capurro explained, the action on the part of the interim committee was to put the NHP on notice the legislature wanted them to begin a dyed fuel program. Since the last time the interim committee met, Ray Sparks, Deputy Director for Public Safety, DMV&PS, and Mike Hood, Chief of NHP, had met and were in support of implementing a dyed fuel enforcement program. They were currently looking at areas to secure funds for the necessary equipment, which would cost approximately $30,000 to begin implementation of a program. The NHP had been complying with the original intent of the interim committee, in working toward a program that would make A.B. 28 unnecessary. He agreed with Mr. Thomas, the DMV&PS currently supplied the information requested in the bill and did not feel it needed to be statutorily mandated. He continued by stating he was concerned with the lack of evidence of an evasion of the tax, although admittedly it could occur, since no one appeared to know the extent of the problem.

Peter Krueger, State Executive, Nevada Petroleum Marketers and Convenience Store Association (NPM&CSA), agreed with all who had testified for a limited resolution addressing only dyed fuel and expressed concern that what had come out of LCB was a much broader approach. He felt it would set an unnecessary precedent for departments by mandating statutes to do what they had traditionally done as a courtesy. He supported a limited resolution to get the attention of DMV&PS, and felt there was no question they had the attention of the NHP since they had been meeting. He also had meetings with the Department of Agriculture because it also played a role in fuel usage. He was confident the source of funding to purchase the necessary equipment would soon be in hand. The initial reluctance of the NHP possibly had to do with Occupational Safety and Health Administration standards, training, hazards dealing with the fuel, and the storage of the fuel. He also felt A.B. 28 was unnecessary and that a resolution would do.

Mrs. Chowning made it the intent of the Chair, individuals should submit their ideas in the form of an amendment to A.B. 28 so the committee could take them into consideration when in a work session. She agreed with some that mandating a report each and every session with no ending point would serve no purpose other than cost money to put figures together. Mrs. Chowning suggested the committee might want to require one report be given to the next legislature, which would deal with the fuel specified by the interim committee. She felt that would get everyone working together, as well as give the next session some real numbers with which to work since no one knew the true extent of the problem.

Mr. Capurro agreed with Mrs. Chowning, however he wanted her to understand the committee had agreed to change A.B. 28, and a report to the next legislature would be helpful.

Mrs. Chowning questioned whether a resolution could require an agency to submit a report. Mr. Capurro exclaimed a resolution could, by requiring an agency report to the committee by next session.

Mr. Collins asked if, under the current rules, it was possible to convert A.B. 28 into a resolution. If the committee could do that, he would recommend they do so.

Mrs. Chowning believed the committee could do so in a work session. The committee would indefinitely postpone A.B. 28 so the language could be redrafted into a resolution.

Mr. Bache explained that type of resolution could count against the committee totals for BDRs under the 120-day rules. A better solution might be to use the bill, but make it a session law bill instead of an on-going statutory, in order to conserve the allowable BDRs.

Mrs. Chowning explained they did have some room if they decided to use one of their allotted committee BDR introductions which was only three at the time. The committee could decide that later. She expressed appreciation for everyone’s views as to the intent of the recommendation of S.C.R. 53.

Assemblyman Parks, who served on the interim committee, stated he was confused about why no one knew the extent of the problem and the amount of unknown revenue out there which could be potentially generated. He remarked he did not want to adjourn session without resolving that issue.

Mrs. Chowning said they could incorporate Mr. Parks’ idea in a resolution so it would serve a broader purpose than what was originally intended. Since the issue of A.B. 28 could not be resolved Mrs. Chowning named a subcommittee to further discuss the issues. She asked Mr. Parks to serve as chair of the subcommittee. She also asked Mr. Thomas, Mr. Collins, and Mr. Claborn to serve on the committee.

Mrs. Chowning closed the hearing on A.B. 28 and opened the hearing on A.B. 29 by re-reading the summary.

Russ Law, Chief Operations Analysis Engineer, NDOT, explained NDOT currently had a program in place to assist with pavement management. The Nevada Technology Transfer Center (T2) at the University of Nevada, Reno, was funded by NDOT. The T2 program is the proper venue for assisting the locals with a pavement management system; NDOT did not have time to assist them because they were running their own pavement management system. The mission of the T2 center was to assist local highway agencies in the building and maintaining of roads (Exhibit E). About $300,000 year was spent on the program; $130,000 was to provide assistance to local highway agencies in the form of training. At that time the training calendar did not include pavement management training; however the T2 center had done training in the past and was willing to do so again.

Mr. Law was able to discuss the fiscal impact of A.B. 29 referred to earlier by Mrs. Parnell. When he worked on a fiscal note for the bill some assumptions were made:

(1) The T2 center would provide the initial training with funds already provided for local highway technology assistance;

(2) Local highway agencies would provide a personal computer and use public domain software that had been developed by the Federal Highway Administration for local government pavement management;

(3) NDOT would provide on-site training and assistance while the pavement management systems were being implemented and continued assistance once systems were operational.

During the initial fiscal year of 1999 to 2000 the cost would be $35,000, mainly for training and to begin implementing a program. During fiscal year 2000 to 2001 the cost would decrease to $25,000 for continued assistance. After that the assumption was made the counties would be able to operate by themselves and the cost of the program would be $12,500.

Mrs. Chowning summarized for the committee what Mr. Law had said as, NDOT disagreed with A.B. 29 because they felt those services were already available through the T2 center. Mr. Law agreed with Mrs. Chowning, further explaining if local counties were interested, the T2 center would add the pavement management training program to the schedule next year or, if there was enough interest, the T2 center could revise its priorities and place a training session on the 1999 calendar. Once the scheduling was completed there would be no need for NDOT’s services.

Mrs. Chowning clarified some details about the T2 center by confirming it was housed at the University of Nevada, Reno and funded by NDOT and the Federal Highway Administration.

Mrs. Chowning asked if Mr. Law gave the same testimony to the S.C.R. 53 interim committee. Mr. Law explained he had provided the same information to the interim committee. A.B. 29 came from a proposal by Carole Vilardo, because she felt the local counties needed help. He agreed local counties needed help based on past committees on which he had worked during the 1997 session. Mr. Law continued by explaining one such issue, which tied into the same field as A.B. 29, was the redistribution of the gas tax. State and local agencies had been trying to determine which roads local entities maintained so the gas tax could be redistributed evenly. The local entities were not even sure which roads belonged to them and it was necessary to determine that before the counties could be responsible for maintenance of the roads

Mr. Nolan stated he was familiar with the T2 center. He had attended a program in the past and felt it was a quality center with exceptional instructors. The T2 center was a qualified organization that could handle the responsibility.

Mr. Collins agreed with Mr. Law’s explanation about the roads. Mr. Collins continued, explaining at the time he had a resolution addressing whose roads were whose and how NDOT would be able to exchange state highways with local highways with greater ease. In Nevada, there were highways inside of cities and no one knew to whom they belonged to until it came time to fix them.

Mrs. McClain wondered how many counties would benefit from A.B. 29. Mr. Law explained there were 17 counties in the state and with Carson City now over 50,000, the number of counties would be 14. Mr. Carpenter responded when counties put in a population figure they were required to refer to the population in the last census, therefore all counties in Nevada would fit those criteria except Clark and Washoe Counties. Mrs. Chowning reiterated there would possibly be 15 counties. With no other questions for Mr. Law the public comment continued.

Carole Vilardo with Nevada Taxpayers Association (NTA), made the recommendation for A.B. 29 at one of the S.C.R. 53 interim committee meetings after hearing testimony against the lack of sophistication available, relative to some of the things which could be done to maximize dollars spent on repair and building of roads; as well as the lack of available knowledge of technology in local counties. NDOT testified how good its pavement management system was, while NTA listened to the local counties complain about spending more money because they were not doing pavement management. NTA made the recommendation NDOT try to assist those counties, not with computers, but with the availability, or possible tying in, of the software. There were indications after the hearings, the rural counties would welcome the support. NTA was not looking to mandate that, but to give them another tool which allowed them to more efficiently use tax dollars from fuel on the repair and maintenance of roads.

Ms. Vilardo continued by discussing population numbers in A.B. 29. On the 50,000 threshold, Elko County would qualify before the next decentennial census, and join Carson City, Washoe, and Clark Counties. What the committee might choose to do, if the committee were truly trying to benefit the smaller counties which had the most severe monetary deficit would be to lower the population threshold to 35,000.

Mrs. Chowning confirmed Ms. Vilardo testified in the same vein during interim committee hearings, and asked her if there just was not enough time to complete the discussion on that topic before the resolution was written. Ms. Vilardo stated there had been no discussion about the T2 center recommendation at that time. That was brought up before the last meeting and there was no time to fully discuss it. There was, however, definitely a need to help the smaller counties; there must be a way to accommodate the need with the suggestions made by Mr. Law. Ms. Vilardo reiterated if the committee was uncomfortable with the population threshold they could lower it to 35,000 since the intent was truly for those very small counties.

Mrs. Chowning questioned Mr. Law if NDOT would have the same fiscal proposal if the population numbers were dropped from 50,000 to 35,000. Mr. Law explained it would not, since the only county he had not considered being close to the threshold was Elko County. He knew Carson City was close to 50,000, however it currently had a pavement management system. In Exhibit E there was a list of public domain software available for pavement management. The first on the list was the Carson City Pavement Management System (CCPMS); that software was developed with a Federal Highway Administration grant and specifically modeled around Carson City, which was still in use today.

Mr. Carpenter remarked he felt the entities more in need of that type of assistance were the cities, since they had miles of pavement, at least in Elko County. The cities needed technological assistance and A.B. 29 only referred to the counties.

Mrs. Chowning explained A.B. 29 was developed, like many other bills, to help the smaller, rural areas of the state since they needed assistance and felt the state should provide that assistance. While the committee would like to provide assistance it did cost money, which was why the interim committee asked NDOT to extend their help. The committee would not be able to decide the fate of the bill today, but would take it up in a work session in the future. The public hearing on A.B. 29 was closed.

Mrs. Chowning opened the public hearing on A.B. 34.

Ms. Vilardo expressed her support for the third session of A.B. 34. She then testified as to the original intent of the law by explaining, before it was passed by the Senate, the original bill had car rental tax going to the highway trust fund. The wording was changed by the Senate roughly 36 hours before the end of session for the tax to go to the general fund. There were a number of legislators who had been looking for "passive revenue generation," because it had been politically unpalatable to look at raising the gas tax or vehicle registration fees. She stated since there was a natural nexus to cars and the roads they used; by transferring the money to the highway fund, the state would get the best benefits of the tax. If processed through committee, there could be an amendment attached creating an effective starting date of July 1, 2001. Delaying the effective date for 2-years would place everyone on notice so they would not be able to budget the revenue for any other program.

Mrs. Chowning expressed her thanks to Ms. Vilardo for all the good work she had done in past matters. It made more sense to have the revenue go into the highway fund, which was the original intent of the legislation. The same problem occurred with the tire tax; for every tire sold a $2 tax was imposed which should go to roads but instead goes to recycling.

Ms. Vilardo revealed a request would have come before the committee during the current session, however the tire tax only generated $1 million during the last fiscal year and the interim committee focused on issues which would generate more dollars. She further explained the car rental tax was only supposed to generate $3 to $4 million per year, and was bringing upwards of $8 to $9 million per year. If that money was going into the highway fund it would enable us to better match federal funds made available to us.

Mrs. Chowning announced to the committee the amendment proposed was regarding section 2 of the bill.

Mr. Collins recalled the committee had discussed better ways to recover money for highway use with Ms. Vilardo and other departments, but because of the differences between northern and southern Nevada, nothing had been passed. Nevada had one of the highest fuel taxes in the nation so it was hard for legislators to okay an increase in taxes, even if it occurred in the future, when the legislature had stalled in addressing other innovative ways of receiving money.

Mrs. Chowning indicated the original bill became a quick fix measure implemented during the 1993 session to help "band-aid" the general fund. That was what happened and it was now time to fix it.

Mr. Capurro echoed Ms. Vilardo’s comments. The original bill took place during a session where reconstituting government and changing agencies was occurring. The committee would recall reconstituting government split the DMV&PS at the last minute and added several other agencies to it, such as the fire marshal and emergency management. All that got tied up in the bailout, Madam Chairman indicated. The committee tried to correct that particular problem last session since there was a surplus, but it did not happen. The original intent of the legislation was for the sales tax money to go to the highway fund, which was the recommendation from the interim committee. The committee supported the original intent of the legislation and planned to keep the memory of why it was done in the first place.

Ms. Cheryl Blomstrom, Director, State Government Affairs, Nevada Chapter, The Associated General Contractors of America, Inc. (AGC), continued to echo the previous two speakers relating to A.B. 34. The AGC had been a proponent of the original intent of the bill since it was first introduced. The AGC also supported moving the funds on July 1, 2001, as Ms. Vilardo suggested.

Dino DiCianno, Deputy Executive Director, Department of Taxation explained the department took no official position on A.B. 34. His duty was to provide the committee information associated with the collection of the lease fee (Exhibit F). In fiscal year (FY) 1995 the tax generated approximately $4.9 million and had reached $7.8 million by 1998. Based upon adopted forecasts, FY 1999 was expected to generate approximately $8.4 million and $9.8 million through FY 2001. Changing the effective date removed the need for A.B. 34 to go through the Assembly Committee on Ways and Means and the Senate Committee on Finance, so the two committees could have a general discussion on the deficit that would be created in the general fund; however in 2001 the impact will still exist.

Mrs. Chowning announced A.B. 34 would go to the respective money committees anyway, simply because it would be irresponsible on the committee’s part to just pass something with a warning as to what was coming in the future.

Mrs. Cegavske suggested someone explain, for those new to the committee, the rationale of why the money was put into the general fund in the first place.

Mrs. Chowning commented Ms. Vilardo stated the Senate made the decision during the final 36 hours of the 1993 session. It was taken up in conference committee, agreed upon, and then sine die occurred.

Mrs. Cegavske asked if the money was diverted to the general fund to cover some other program in which there was a lack of funding. Mr. Capurro stated there was simply a shortfall in the general fund, not for any specific programs, that year. The legislature, and in particular the Senate, was looking for revenue, and that bill provided revenue. To change the bill to divert revenue from the highway fund to the general fund was done by striking two words and adding two other words.

Mr. Collins further explained to Mrs. Cegavske the issue was a 1½- percent tax raised to a 6- percent tax on short-term rental cars. Since most of rental cars were registered out-of-state and there was no way to determine the short/ long term registration of the vehicles, there was concern Nevada was not receiving any revenue from the rental car agencies. The agencies did not complain too much about the issue because they were going to have to pay the tax somewhere. The money was intended to go to the highway fund because of the impact of the cars on Nevada roads, as assistance to the state’s transportation funding. The reason it was taken out of the highway fund and put into the general fund was part of the trading in the 1993 session because of the shortfall; the Senate saw an opportunity for $4.5 to 5 million to help balance the general fund. The whole purpose of the passage of the bill prior to the end of session had been for the revenue to go to the highway fund. The background for the 1993 bill was because of a discrepancy on what the rental car agencies paid in Nevada verses some other options.

Mrs. Chowning requested the research staff to pull the history on the original bill in the 1993 session so the committee could have the full history, including committee minutes, then the committee would vote on A.B. 34 in a work session.

Mr. Parks told the committee he also made a request for a bill, which would make further changes to the language of the 1993 bill.

Mrs. Chowning asked for any further public comment: With none she closed discussion on A.B. 34.

ASSEMBLYMAN BACHE MOVED TO REREFER A.B. 32 TO TAXATION

ASSEMBLYWOMAN OHRENSCHALL SECONDED

THE MOTION CARRIED UNANIMOUSLY

With no further business the meeting was adjourned at 3:10 p.m.

RESPECTFULLY SUBMITTED:

Jennifer Batchelder,

Committee Secretary

APPROVED BY:

Assemblywoman Vonne Chowning, Chairwoman

DATE: