ASSEMBLY COMMITTEE ON TAXATION

MINUTES OF THE Meeting

of the

ASSEMBLY Committee on Taxation

Seventy-First Session

May 15, 2001

The Committee on Taxationwas called to order at 1:39 p.m., on Tuesday, May 15, 2001. Chairman David Goldwater presided in Room 3142 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:

Mr. David Goldwater, Chairman

Mr. Bernie Anderson

Mr. Morse Arberry Jr.

Mr. David Brown

Mrs. Vivian Freeman

Mr. John Marvel

Mr. Harry Mortenson

Mr. Bob Price

Ms. Sandra Tiffany

COMMITTEE MEMBERS ABSENT:

Mr. Roy Neighbors, Vice Chairman - Excused

Mr. Greg Brower - Excused

Mr. David Parks - Excused

GUEST LEGISLATORS PRESENT:

Assemblyman Lynn Hettrick, Assembly District 39

STAFF MEMBERS PRESENT:

Ted Zuend, Fiscal Analyst

Cheryl O'Day, Committee Secretary

OTHERS PRESENT:

Carole Vilardo, Representing the Nevada Taxpayers Association

Warren Hardy, Representing the City of Mesquite, Nevada, and the Associated Builders and Contractors

Barbara Byington, Assessor, Douglas County

Kit Weaver, Assessor, Carson City

Jack Jeffrey, Representing the Southern Nevada Building and Construction Trades Council, Brown & Williamson Tobacco Co., and Lorillard Tobacco Co.

Samuel McMullen, Representing Philip Morris USA

Alfredo Alonso, Representing RJ Reynolds

Senate Bill 221: Authorizes City Council of City of Reno to increase tax on rental of transient lodging and levy special assessments to pay costs of certain capital improvement projects. (BDR S-916)

Chairman Goldwater opened the work session on S.B. 221. He reviewed the work session notes for the committee and, as the chairman of the relevant subcommittee, advised there had been no further testimony or inquiry on S.B. 221. He then stated that the Chair would accept a motion.

Mrs. Freeman said she was especially interested in the bill because of her area of representation. Parties on both sides had asked for more time to work towards resolution. She was aware that the committee had no further meetings scheduled before the legislative deadline, but she believed no further action would be taken if the bill was voted out of the committee without a recommendation. The bill needed immediate attention if action was to be taken and she favored a motion being presented.

In discussions with the Chair, Mr. Anderson clarified and confirmed the process by which the proposed legislation could be kept active, in light of the upcoming deadline, to allow for further resolution of the issue. Mr. Anderson stated he did not believe the proposal at hand was the best course of action for the legislature to take, nor did he believe it was the best course of action for the Reno-Sparks Convention & Visitors Authority (RSCVA). The RSCVA had an obligation to the people of the surrounding area to provide the best convention facility possible. It was wrong to have a competing and comparable facility financed at public expense. The two convention facilities could detract from the primary issue of promoting conventions in the Washoe County area. The RSCVA convention facility was placed where it was in order to provide one facility for the entire area. The effort was to avoid a solely Reno-focused facility.

Mr. Anderson felt the legislature was taking a step backwards. He informed the committee work needed to be done to promote a common interest for the Reno and Sparks communities to “heal a wound” caused by the last legislative session. It was wrong to allow the view that what Reno felt was in its best interests alone was what was important. He found that very distasteful, counterproductive to the area’s best public interests, and not good public policy. In closing Mr. Anderson stated the actions proposed by S.B. 221 were divisive to the communities.

Mrs. Freeman stated she was as uncomfortable and unhappy with the situation as Mr. Anderson in view of her own community, but the issue desperately needed resolution.

ASSEMBLYMAN ARBERRY MOVED FOR A DO PASS ON S.B. 221.

ASSEMBLYWOMAN FREEMAN SECONDED THE MOTION.

THE MOTION PASSED WITH TWO NO VOTES BY ASSEMBLYMEN ANDERSON AND MARVEL, WITH ASSEMBLYMEN Neighbors, Brower, AND Parks AND ASSEMBLYWOMAN Tiffany ABSENT.

The committee engaged in review and discussion with respect to the Assembly Standing Rules. It was determined that an affirmative vote of a majority of the committee members was required to pass a motion, not just a majority of a quorum.

ASSEMBLYMAN ARBERRY MOVED FOR A DO PASS ON S.B. 221.

ASSEMBLYWOMAN FREEMAN SECONDED THE MOTION.

THE MOTION PASSED WITH TWO NO VOTES BY ASSEMBLYMEN ANDERSON AND MARVEL, AND WITH ASSEMBLYMEN Neighbors, Brower, AND Parks ABSENT.

Senate Bill 39: Expands purposes for which proceeds of certain taxes on fuel for jet or turbine-powered aircraft may be used by governmental entity. (BDR 32-789)

Chairman Goldwater opened the work session on S.B. 39 and reviewed the work session notes for the committee. The Chair stated that S.B. 39 was supported by tourism interests in the Reno area as a way to bring additional flights to the area. There was no opposition to the bill. Southwest Airlines (SWA) had offered an amendment in the form of a preamble. The purpose of the preamble was to express legislative intent that the bill was designed to expand uses for the tax, but was not intended to create any incentive to increase the jet fuel tax.

ASSEMBLYMAN PRICE MOVED FOR AN AMEND AND DO PASS ON S.B. 39.

ASSEMBLYMAN MARVEL SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, AND Parks AND ASSEMBLYWOMAN Tiffany were ABSENT.

Senate Bill 381: Makes various changes to provisions governing tax on products made from tobacco, other than cigarettes. (BDR 32-818)

Chairman Goldwater opened the work session on S.B. 381 and reviewed the work session notes for the committee. The Chair advised that S.B. 381 revised the manner in which tobacco products other than cigarettes were taxed. The tax would instead be collected upon the sale by wholesale dealers. It was foreseen that the bill would streamline the system by which the tax was collected and allow for improved compliance and enforcement. The Nevada Department of Taxation supported the bill and there was no opposition voiced. Wholesale dealers proposed an amendment that would reinstate certain language providing a specific exemption for trade show displays of those tobacco products. The Nevada Department of Taxation advised that the amendment was not necessary under existing law because display of such products was not a taxable event.

ASSEMBLYMAN MARVEL MOVED FOR AN AMEND AND DO PASS ON S.B. 381.

ASSEMBLYMAN ARBERRY SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, AND Parks AND ASSEMBLYWOMAN Tiffany were ABSENT.

Senate Bill 70: Revises provisions governing classification of manufactured homes as real property. (BDR 32-337)

Chairman Goldwater opened the work session on S.B. 70 and reviewed the work session notes for the committee. He advised S.B. 70 added the term “manufactured housing” to various provisions related to the classification of certain homes as real property; however, it provided certain exceptions to that classification. S.B. 70 required an owner to surrender the Certificate of Ownership of the personal property to the Nevada Manufactured Housing Division before obtaining a permit to place a used manufactured home on a lot as real property. There had been testimony in favor of S.B. 70, but no opposition.

ASSEMBLYMAN MARVEL MOVED FOR A DO PASS ON S.B. 70.

ASSEMBLYMAN BROWN SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, AND Parks AND ASSEMBLYWOMAN Tiffany were ABSENT.

Senate Bill 122: Makes various changes concerning tax imposed on revenues from rental of transient lodging. (BDR 32-125)

Chairman Goldwater opened the work session on S.B. 122 and reviewed the work session notes for the committee. He stated the bill consolidated various provisions related to transient lodging taxes within a single Nevada Revised Statutes (NRS) chapter. A committee studying the distribution of revenue to local governments recommended the bill. The Assembly Committee on Taxation of the Seventieth Session requested consideration of the issue. Testimony indicated that the proposed legislation would make placement of the appropriate statutes and understanding of the transient lodging tax much easier.

S.B. 122 did not compromise a local government’s ability to develop their own tax policies and there was no opposition. One speaker expressed concern over the provisions of Section 48. He wanted to ensure the language did not expand a local government’s existing authority regarding transient lodging taxes. That witness requested a statement of legislative intent be included in the floor statement. In the event the value of a room sold as part of a package could not be determined, it was important that the assigned room value not exceed the cost of the package to the guest. The Chair pointed out that the proposed amendment was attached to the work session notes before requesting clarification from Ms. Vilardo.

Carole Vilardo, representing the Nevada Taxpayers Association (NTA), advised that some previously existing language was inadvertently removed while the bill was before the Senate. Ms. Vilardo had obtained a copy of the records transcript to confirm that fact. She said there was to be a statement prepared that contained certain language that clarified there was no intent to undo any existing ordinance. The statement was of particular importance because of bonding covenants that involved, among other things, how revenue was projected out.

It was a matter of simplifying the situation where an ordinance did not address one of the issues. In that case, there would be easily identifiable guidelines. Ms. Vilardo reiterated that the language was needed for clarification purposes.

Mr. Anderson inquired how those proposals affected persons in transitory lodging where rooms were rented by the week or month.

Ms. Vilardo assured the committee the amendment (Exhibit C) ensured that applicable situations relevant to existing ordinances were handled pursuant to how those existing ordinances read. The proposed legislation was an attempt to consolidate numerous references into one chapter, while taking into consideration the fact each county had a different set of standards. She advised they needed to be careful and prepare language that would function in conjunction with each of the various local or county regulations.

Mr. Anderson requested confirmation that an issue would move from the state level to that of a local ordinance with respect to short-term properties and that the matter would be dealt with on the city/county level, rather than by the state legislature.

Ms. Vilardo stated a weekly rental in Reno did carry the applicable tax. The problem was, the number of days each jurisdiction used in its calculations varied. Most jurisdictions used 28 days, but Winnemucca continued to charge the tax for nine months. Further, there was no way possible to incorporate a length of stay because of the bond council.

Chairman Goldwater stated he believed a new class of licensure needed to be created at the local level in order to resolve the very legitimate problem addressed by Mr. Anderson and Mrs. Freeman. The Chair stated there needed to be better definition at the local level since a number of entities collected room tax, some of which might be doing so inappropriately. Classification of licenses allowed the specification of which businesses did collect the room tax and which businesses did not.

As both she and Chairman Goldwater were members of the “253 Committee,” Mrs. Freeman specifically requested that they ensure that the subject issue be put on the agenda for the “253 Committee.”

Chairman Goldwater added that there would be a number of local government officials at the interim meetings. The work that needed to take place needed to begin within those interim meetings.

ASSEMBLYWOMAN TIFFANY MOVED FOR AN AMEND AND DO PASS ON S.B. 122.

ASSEMBLYMAN MORTENSON SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, AND Parks were absent.

A revote was taken later in the meeting.

ASSEMBLYMAN MARVEL MOVED FOR AN AMEND AND DO PASS ON S.B. 122.

ASSEMBLYWOMAN FREEMAN SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, AND Parks were absent.

Senate Bill 156: Makes various changes concerning exemptions from property and vehicle privilege taxes for veterans. (BDR 32-124)

Chairman Goldwater opened the work session on S.B. 156 and reviewed the work session notes for the committee. He advised the bill would double property and vehicle privilege tax exemptions for certain war veterans and disabled veterans over a four-year period beginning in the next fiscal year. The exemptions had been adopted many years ago but, as the amounts had not changed, the exemptions had been diminished by inflation. A four-year phase-in of the bill was proposed to substantially reduce its fiscal impact. Testimony on S.B. 156 included a number of veterans who spoke in support of the bill on behalf of various organizations. One person testified in opposition to the bill.

ASSEMBLYWOMAN TIFFANY MOVED FOR A DO PASS ON S.B. 156.

ASSEMBLYWOMAN FREEMAN SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, EXCEPT FOR ASSEMBLYMAN MARVEL WHO ABSTAINED AND ASSEMBLYMEN Neighbors, Brower, AND Parks WHO were absent.

Senate Bill 222: Authorizes Nevada tax commission to exchange with certain local governmental entities information concerning businesses that are subject to business tax. (BDR 32-618)

Chairman Goldwater opened the work session on S.B. 222 and reviewed the work session notes for the committee. He pointed out that local governments were required to share business license information with the state, but nothing provided for the supplying of information from the state back to local governments. The Nevada Department of Taxation was neutral on S.B. 222. The Nevada Tax Commission would establish the necessary regulations regarding what information could be released. There had been no opposing testimony.

ASSEMBLYWOMAN FREEMAN MOVED FOR A DO PASS ON S.B. 222.

ASSEMBLYMAN MARVEL SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, AND Parks were absent.

Senate Bill 227: Revises and repeals provisions that exempt certain property from taxation. (BDR 32-892)

Chairman Goldwater opened the work session on S.B. 227 and reviewed the work session notes for the committee. He stated that the bill revised various provisions related to tax exemptions and abatements for the generation of energy from renewable resources or the conservation of energy. In part, S.B. 227 applied the same standard and conditions for those abatements as were established for most other economic development abatements by S.B. 527 of the Seventieth Session. The committee that studied the distribution of revenue among local governments recommended the conformity provisions because they were overlooked during the Seventieth Legislative Session. Little testimony was presented on S.B. 227 but a proponent believed the temporary property and sales tax abatements provided by the bill would stimulate development of energy generation facilities in rural areas. The anticipated growth would, in turn, assist in stabilizing energy prices. A representative of the Nevada Taxpayers Association proposed the sunset date for the temporary abatements be changed from June 30, 2006 to June 30, 2005. An amendment was proposed to provide for that change.

ASSEMBLYWOMAN TIFFANY MOVED FOR AN AMEND AND DO PASS ON S.B. 227.

ASSEMBLYMAN ARBERRY SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, AND Parks were absent.

At the Chair’s request for her opinion as the representative of the Nevada Taxpayers Association, Carole Vilardo stepped forward. Ms. Vilardo responded to the Chair’s next inquiry by advising the similar bill proposed by Assemblyman Mortenson was in the Senate, but had not yet been heard in work session. The two bills were very similar, but not completely parallel to each other. She felt it would be interesting to see what occurred if both bills passed due to the conflicts she foresaw between the administrative proposals.

Chairman Goldwater asked and Ms. Tiffany agreed that the committee might hold back S.B. 227 for further consideration.

ASSEMBLYWOMAN TIFFANY withdrew her motion FOR AN AMEND AND DO PASS ON S.B. 227.

Senate Bill 238: Makes various changes relating to tax on transfer of real property. (BDR 32-138)

Chairman Goldwater opened the work session on S.B. 238 and reviewed the work session notes for the committee. The bill established an audit-penalty due process with regard to the refund and lien provisions of the real property transfer tax. In essence, it created a “taxpayer’s bill of rights” for that tax. Testimony on the matter came from county recorders and there was no opposing testimony. Proponents advised that most of the provisions of S.B. 238 were duplicative of other tax collection provisions related to the Nevada Department of Taxation. The county recorders submitted three amendments to the bill, one substantive and two minor technical corrections. The substantive amendment applied to the real property transfer tax where the transfer of real property was from a governmental agency to a private party.

ASSEMBLYWOMAN TIFFANY MOVED FOR AN AMEND AND DO PASS ON S.B. 238.

ASSEMBLYMAN MARVEL SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, AND Parks were absent.

Senate Bill 317: Revises provisions governing local government finance. (BDR 31-353)

Chairman Goldwater opened the work session on S.B. 317 and reviewed the work session notes for the committee. He pointed out the bill revised and consolidated various provisions of NRS Chapter 354 relating to local government finance. The bill was introduced on behalf of the Committee on Local Government Finance (CLGF) to address certain issues related to the Government Accounting Standards Board (GASB) as Rule 34. S.B. 317 also eliminated certain obsolete or conflicting provisions of the statute. There was no opposing testimony although one speaker did suggest the bill be amended to allow the use of 2000 population figures that differed from those of the United States Census Bureau. The Nevada Department of Taxation and the Nevada Taxpayers Association both had concerns over the scope of that proposed amendment. The conceptual amendment provided appeared to satisfy those concerns.

Ms. Vilardo confirmed for the committee that the bill was conceptually acceptable as provided, but it needed to be more specific and there needed to be a mechanism developed for distributing the funds. Certified population totals were used to designate the funds to be placed in the trust account, population figures received from the United States Census Bureau were used in distributing those funds. The bill had to be absolutely clear with respect to those details.

Chairman Goldwater inquired whether the committee should hold off further consideration of S.B. 317 until a later date. Warren Hardy, representing the city of Mesquite, respectfully submitted that he believed the issues could be resolved with the bill drafters. The Chair then stated he had heard no disagreement and advised that a motion would be accepted.

ASSEMBLYMAN MARVEL MOVED FOR AN AMEND AND DO PASS ON S.B. 317.

ASSEMBLYWOMAN FREEMAN SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, AND Parks were absent.

Senate Bill 376: Makes various changes relating to taxation. (BDR 32-187)

Chairman Goldwater opened the work session on S.B. 376 and reviewed the work session notes for the committee. The bill covered many issues regarding county assessors. It improved various statutory provisions through clarification and revision. S.B. 376 claimed certain tax exemptions, included “manufactured homes” in provisions related to mobile homes, transferred the responsibility for collecting specific livestock taxes to the Nevada Department of Agriculture with an effective date of July 1, 2004, and required county recorders to provide county assessors with duplicate copies of various maps, plats, and surveys. County assessors provided most of the supporting testimony, none of which was in opposition to S.B. 376. They had stated the bill helped clean up statutes regarding the administration of property taxes. There was little fiscal effect to either the government or taxpayers. The Chair noted there was an amendment proposed (Exhibit D) and called Assemblyman Lynn Hettrick forward.

Assemblyman Hettrick, Assembly District 39, stated the amendment was proposed because it “fit as a vehicle” with respect to the issue he submitted as a joint resolution. He reminded the committee that numerous speakers had testified with regard to the property tax situation in the Lake Tahoe Basin and readdressed the various examples and explanations involved. The language drafted by the Legislative Counsel Bureau would require a court case to determine its actual constitutionality, since the bill drafters could not testify either way. That language set specifically applicable reasons and areas that limited utilization of the exemption. The 6 percent per annum tax worked out to 30 percent over 5 years, which was faster than the cost of living was going up, but which also meant the landowners could most likely afford to retain their property.

Chairman Goldwater inquired whether the proposed legislation would cap at 6 percent those increases in Clark County that had been raised by more than 6 percent.

Assemblyman Hettrick advised that Clark County would not be affected as it did not constitute an area administered by a regional planning agency that protected development rights for unique, irreplaceable ecological environments. He discussed Section 3, subsection 2, stating the exemption would not apply to an increase in tax or value directly attributable to an addition, renovation, or other improvement on properties. He reiterated his concern that if things continued as they had been, the Tahoe Basin would ultimately be public land since no one would be able to afford to own it.

Mr. Mortenson requested clarification as to what the “example” landowner’s property taxes would be. Assemblyman Hettrick stated that the taxes discussed would revert to $7,000 per year but, since taxes paid could not be rebated or refunded, the $35,000 already paid would be applied as a credit.

Barbara Byington, Assessor for Douglas County, advised that the example individual’s higher taxes had not gone out yet and time might allow for the avoidance of that tax bill.

Chairman Goldwater inquired of Ms. Byington and Kit Weaver, Assessor for Carson City, whether the proposed legislation was something their offices could implement. He confirmed he was not asking them to evaluate the constitutionality of the process, just whether it constituted a workable method.

Ms. Byington said she had spoken with Assemblyman Hettrick. The Nevada Revised Statutes, in the event of a high purchase price, did not allow a landowner to be taxed on that higher purchase price. She suggested the landowner be taxed at a rate that began with the property’s purchase price.

Assemblyman Hettrick stated the problem was the five-year assessment, and provided an example of land purchased at a high price upon which an expensive home was built. A question arose as to whom that higher tax bill belonged and at what price. He discussed the ramifications of “or upon sale” and how the proposed legislation would need to be applicable statewide. He reiterated that the language needed to be drafted very carefully to avoid its becoming unconstitutional.

Ms. Tiffany inquired about previously proposed legislation that suggested a cap on what could be charged for property values in the Lake Tahoe Basin. She was informed the previous proposal was found to be unconstitutional.

Assemblyman Hettrick informed the committee at large that he was also proposing an amendment to A.J.R. 8 to carry the matter through to the Nevada Constitution in order to amend the Nevada Constitution. If S.B. 376 was found to be unconstitutional, A.J.R. 8 would provide for such constitutionality.

Chairman Goldwater reminded everyone present that it was neither the committee’s place nor the Legislative Counsel Bureau’s place to actually interpret the constitution.

Mr. Marvel asked about how bound the counties were to the five-year assessment cycle and how that affected the ratio study. He felt the prevalence of computers should allow for annual assessment.

Ms. Byington advised that Clark County did assess each year but the other counties did not possess the computer systems to do so. She discussed options related to factoring property taxes and overall appraisals. Lake Tahoe Basin property provided a very unique tax situation because of the vast differences in property values. Those differences were even greater when compared with the rest of the state. Further, usability was another wide-ranging variable. Those considerations made assessment a big job that required additional man-hours.

Chairman Goldwater requested further details on various appraisal methods for different types of property that allowed for a true valuation of a parcel.

Ms. Byington stated that assessors looked at a property’s attributes, especially when it was undevelopable. The sample landowner’s taxes had been lowered considerably because of his situation but current legislation only allowed assessors to go so far. The problem in the sample case was the sale of a parcel of adjoining land to a government forest service. She informed the committee that assessors could not assess property upon its “highest and best use” if that property was improved. What use the land and its neighboring parcels were put to was also considered.

Assemblyman Hettrick reiterated for the committee’s clarification that the example property constituted an 800-square foot cabin on unusable, unimprovable land.

Mrs. Freeman inquired as to A.J.R. 8 and whether any other state possessed legislation that could be utilized as a model. She felt the matter needed to be addressed as a policy issue.

Assemblyman Hettrick outlined A.J.R. 8’s history for Mrs. Freeman and stated that the property owners currently in distress would lose their land before the issue could be addressed in another manner.

Mr. Weaver stated that S.B. 376 was a very simple, “noncontentious” bill. He advised that Assemblyman Hettrick’s proposal would assist more taxpayers than a few landowners caught up in an unusual position as previously discussed. S.B. 376 would assist commercial properties as well, including large casinos. He clarified that properties that could not be developed were restricted properties, and restricted properties bore a restricted value; however, if there was a house on the property, it was not deemed restricted.

Assemblyman Hettrick believed the bill would be so restrictive and specific that no one would contest it in court. Chairman Goldwater voiced the committee’s openness to Assemblyman Hettrick’s ultimate goal, but felt that Mr. Weaver pointed out a very specific group of taxpayers who would be creative enough to address the opportunity of paying less taxes. Assemblyman Hettrick allowed there might be another option and discussed other bills before the legislature. The Chair ultimately advised that he was not certain S.B. 376 was the way to achieve Assemblyman Hettrick’s goal.

ASSEMBLYMAN MARVEL MOVED FOR A DO PASS ON S.B. 376.

ASSEMBLYMAN ANDERSON SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, Parks, AND BROWN were absent.

Senate Bill 380: Revises provisions relating to contractors. (BDR 32-944)

Chairman Goldwater opened the work session on S.B. 380 and reviewed the work session notes for the committee. The Chair advised that S.B. 380 eliminated a contractor’s duty to require proof of payment of business tax by subcontractors, as well as the contractor’s liability for “unemployment UI contributions” owed by subcontractors. Proponents felt those requirements were particularly burdensome and it was the duty of state agencies to collect taxes from subcontractors. Opponents, including labor representatives and an Employment Security Division representative, believed that unemployment claims could be delayed by several weeks and that other employers across the state could be required to pay a higher contribution rate. An amendment that satisfied all parties by deleting Section 3 was proposed by the proponents. By deleting Section 3, the requirement that contractors withhold money from subcontractors to ensure payment of “UI contributions” was reinstated. Jack Jeffrey, representing the Southern Nevada Building and Construction Trades Council, and Warren Hardy, representing the Associated Builders and Contractors, both confirmed that they had no opposition to the bill as amended.

So as not to leave any employee unprotected, Mr. Anderson obtained Mr. Jeffrey’s confirmation that the bill as amended “cleared up” his problem since the unemployment provisions were removed from the bill.

ASSEMBLYMAN MARVEL MOVED FOR AN AMEND AND DO PASS ON S.B. 380.

ASSEMBLYMAN BROWER SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, Parks, and BROWN and assemblywomen freeman and tiffany were absent.

Senate Bill 389: Revises provision concerning amount paid to Civil Air Patrol account. (BDR 32-1157)

Chairman Goldwater opened the work session on S.B. 389 and reviewed the work session notes for the committee. Proponents testified that the Civil Air Patrol (CAP) provided a vital service with respect to search and rescue efforts. S.B. 389 would increase the amount of revenue from the state aviation fuel tax that could be transferred to the Civil Air Patrol’s account from $85,000 to $130,000 annually. The increase was needed to maintain the Civil Air Patrol’s current efforts. It was acknowledged that the state aviation fuel tax barely raised $85,000 each year and, consequently, the bill alone provided little if any additional funding. There was no testimony in opposition to S.B. 389.

ASSEMBLYMAN ANDERSON MOVED FOR A DO PASS ON S.B. 389.

ASSEMBLYMAN MORTENSON SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, Parks, and BROWN and assemblywomen freeman and tiffany were absent.

Senate Bill 468: Authorizes board of county commissioners to impose additional tax on transfer of real property for certain purposes. (BDR 32-1473)

Chairman Goldwater opened the work session on S.B. 468 and reviewed the work session notes for the committee. He pointed out that the bill allowed counties to impose an additional 5-cent tax per $500 declared value on real property transfers. The revenue from the tax would be transferred to the Nevada Department of Agriculture for use in detecting and controlling invasive species. Proponents stated the tax would provide a steady stream of revenue for those maintenance purposes. The revenue would provide limited funds in rural areas where such problems were most evident. Two opponents of the bill “as it was written” suggested amending the language to remove Clark and Washoe Counties from imposing the additional tax. Testimony indicated it was the intent of the bill that the additional tax be utilized in and by the collecting county. There was an amendment needed, however, to ensure that interpretation.

Mr. Mortenson stated his belief that the issue of invasive species was a statewide concern. He was not pleased that the two largest counties in the state wished to be excluded from the program.

Chairman Goldwater disagreed, stating the state currently provided assistance with invasive species issues.

ASSEMBLYMAN MARVEL MOVED FOR AN AMEND AND DO PASS ON S.B. 468.

ASSEMBLYMAN ARBERRY SECONDED THE MOTION.

THE MOTION FAILED WITHOUT A MAJORITY VOTE OF THE COMMITTEE, PURSUANT TO A NO VOTE BY ASSEMBLYMEN ANDERSON AND MORTENSON WITH ASSEMBLYMEN Neighbors, Brower, Parks, and BROWN and assemblywomen freeman and tiffany absent.

Senate Bill 499: Eliminates parks marina development fund and expands permissible uses of money received from tax on motor vehicle fuel used in watercraft for recreational purposes. (BDR 32-1316)

Chairman Goldwater opened the work session on S.B. 499 and reviewed the work session notes for the committee. The bill intended to clarify how revenues from boating fuel tax was to be allocated and used by the Nevada Division of Wildlife and the Nevada Division of State Parks. S.B. 499 also expanded permissible use of the tax proceeds to include other recreational activities near bodies of water. The Nevada Division of State Parks supported the bill and there was no opposing testimony. The proposed legislation, and the existing statute it amended, contained several technical problems. An amendment was provided that would correct those discrepancies.

Ted Zuend, the committee’s fiscal analyst, reviewed S.B. 499 and the proposed amendments in detail for the committee. Mr. Zuend stated the amendment did away with the Parks Marina Development fund completely, as that fund was never utilized. There was a technical correction as to funds the state treasurer allocated, and paid at the state treasurer’s convenience, whether quarterly or more often. The language regarding such allocation was in conflict with an earlier section specifying the state treasurer was to allocate the funds immediately upon their receipt from the Nevada Department of Taxation. A third amendment dealt with a bill draft oversight and corrected certain language so it was identical at the two places it was quoted. The fourth amendment repealed a section previously amended.

ASSEMBLYMAN ANDERSON MOVED FOR AN AMEND AND DO PASS ON S.B. 499 WITH THE TECHNICAL AMENDMENTS.

ASSEMBLYMAN MARVEL SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, Parks, and BROWN and assemblywomen freeman and tiffany were absent.

Senate Bill 527: Revises provisions governing contraband cigarettes, cigarette dealers and enforcement of statutes regarding cigarettes. (BDR 32-1326)

Chairman Goldwater opened the work session on S.B. 527 and reviewed the work session notes for the committee. The proposed legislation intended to strengthen various provisions for the purpose of reducing the sale of contraband cigarettes in Nevada. Proponents stated the bill combated the sale of “gray market” reimported cigarettes, which were outlawed by the Seventieth Legislative Session. S.B. 527 authorized the use of duty-free cigarettes for personal consumption. The bill also allowed injured parties to sue manufacturers who did not participate in the master settlement agreement and who were not making the escrow payments required of nonparticipating manufacturers. There was no opposing testimony to the bill. Proponents of S.B. 527 submitted amendments that resulted in a few substantive changes to the bill as it was heard by the committee. Samuel McMullen, representing Philip Morris USA, provided an additional proposed amendment (Exhibit E).

ASSEMBLYMAN MARVEL MOVED FOR AN AMEND AND DO PASS ON S.B. 527.

ASSEMBLYMAN BROWER SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, Parks, and BROWN and assemblywomen freeman and tiffany were absent.

Senate Bill 528: Clarifies provisions relating to taxation of medical devices sold to governmental entities. (BDR 32-1134)

Chairman Goldwater opened the work session on S.B. 528 and reviewed the work session notes for the committee. The bill specified certain instances where an exemption on sales tax for medical devices prescribed by health care providers would apply. The criteria called for the devices to be purchased for persons covered by either Medicaid or Medicare and for the devices to be purchased by a contract between a governmental entity and the supplier. Testimony was unanimously in support of the bill.

ASSEMBLYMAN MARVEL MOVED FOR A DO PASS ON S.B. 528.

ASSEMBLYMAN ANDERSON SECONDED THE MOTION.

THE MOTION WAS PASSED UNANIMOUSLY BY THOSE PRESENT, AS ASSEMBLYMEN Neighbors, Brower, Parks, and BROWN and assemblywomen freeman and tiffany were absent.

Chairman Goldwater adjourned the meeting at 3:12 p.m.

RESPECTFULLY SUBMITTED:

Cheryl O'Day

Committee Secretary

APPROVED BY:

Assemblyman David Goldwater, Chairman

DATE: