MINUTES OF THE
SENATE Committee on Taxation
Seventy-First Session
May 8, 2001
The Senate Committee on Taxationwas called to order by Chairman Mike McGinness, at 2:07 p.m., on Tuesday, May 8, 2001, in Room 2135 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Mike McGinness, Chairman
Senator Dean A. Rhoads, Vice Chairman
Senator Randolph J. Townsend
Senator Ann O’Connell
Senator Joseph M. Neal Jr.
Senator Bob Coffin
Senator Michael Schneider
STAFF MEMBERS PRESENT:
Kevin D. Welsh, Deputy Fiscal Analyst
Mavis Scarff, Committee Manager
Rochelle Trotts, Committee Secretary
OTHERS PRESENT:
Joseph W. Brown, Lobbyist, Speedway Motor Sports
Berlyn D. Miller, Lobbyist, Nevada Development Authority
Lorraine T. Hunt, Lieutenant Governor and President of the Senate
Robert E. Shriver, Executive Director, Division of Economic Development, Commission on Economic Development
Rob F. Powers, Lobbyist, Las Vegas Convention and Visitors Authority
Chris Powell, Executive Vice President, Las Vegas Motor Speedway
David A. Scott, Lobbyist, Nevada Star Motorsport Consulting, Incorporated
Kenny Bernstein, Owner and Driver, Budweiser King Top-Fuel Dragster Team
Anthony F. Sanchez III, Lobbyist, Speedway Motor Sports
Paul Pate, Dean, Applied Technology, Community College of Southern Nevada
Michele F. Richardson, Lobbyist, Assistant City Manager, City of North Las Vegas
Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association
We will open the hearing on Assembly Bill (A.B.) 657.
ASSEMBLY BILL 657: Proposes to exempt from sales and use taxes certain items used by professional racing teams or sanctioning bodies and provides exemption from certain other taxes for such items. (BDR 32‑1454).
Joseph W. Brown, Lobbyist, Speedway Motor Sports:
I am here in support of A.B. 657. Speedway Motor Sports owns six of the major car racing venues in America, one of which is the Las Vegas Motor Speedway. Two months ago, the speedway hosted the Winston Cup Races, which brought a total of more than 260,000 fans for a weekend of racing. This was the largest event of any kind ever held in Nevada.
The management believes strongly the legislation would provide incentive to the racing industry and would cause a major influx of racing teams to abandon their present domiciles in California, Arizona, Indiana, and other locations, in favor of Nevada. The gentlemen who will follow me in support of this bill today include Berlyn D. Miller of the Nevada Development Authority and the Nevada Commission on Economic Development, Robert E. Shriver of the Nevada Commission on Economic Development, Rob Powers of the Las Vegas Convention and Visitors Authority, Dean Paul Pate, Dean of the Department of Applied Technologies of the Community College of Southern Nevada, and Kenny Bernstein, the “king” of the National Hot Rod Association. He is the winner of five world championships in two different categories, and is known as the first person ever to break the 300 miles per hour sound barrier in a quarter mile.
A couple of weeks ago, before the Assembly Taxation Committee, Mr. Joe Heitzler, President and CEO of CART (Champion Auto Racing Teams), testified in support of this bill. Unfortunately, he was unable to be here today. In his Assembly Taxation Committee testimony he stated CART is one of four international groups in the world sanctioning open-wheel racing. It grants sanctions to 22 locations throughout the world, 15 of them domestic and 7 in foreign countries, such as, Japan, Australia, England, Germany, Brazil, Canada and Mexico; CART’s worldwide television audience is phenomenal. Champion Auto Racing Teams people showed up at the offices of the Nevada Development Authority about a month ago and said they were considering Nevada as one of several possible locations to relocate their headquarters, from Michigan to a warmer climate. I brought down a draft of this legislation, and when Mr. Heitzler and his associates saw it, they said, “If you pass this we would stop looking at other states.” The implication is having CART racing teams, from the National Hot Rod Association, and other racing teams, would be a tremendous thing for the Nevada economy, for job creation, and for other aspects.
Berlyn D. Miller, Lobbyist, Nevada Development Authority:
My name is Berlyn Miller, representing the Nevada Development Authority in support of A.B. 657. When we gave our testimony in the Assembly, we also heard Mr. Heitzler comment he would, if this legislation was passed, move his headquarters to Nevada. He indicated he has a total of 132 employees, and his average wage is approximately $80,000 per employee. In trying to attract industry with high paying wages, I do not think we have ever looked at an industry, which competes with CART and the wages they pay. In addition, Mr. Heitzler indicated once they move the CART headquarters to Nevada, he felt sure a lot of the racing teams would look to relocate here. The racing teams’ franchises allow them to have two cars, but most of them have four or five backup cars. They have approximately 30 employees per racecar, with an average annual salary of between $115,000 and $120,000. Also, each car requires approximately 15,000 square feet of housing space to work on the cars. You can see from those numbers the economic benefits to Nevada would be tremendous. This is reminiscent of 1984, when the Governor called a special session to consider CitiBank coming into the state of Nevada. The legislation passed, and we continue, today, to see the benefits. Assembly Bill 657 has the potential of being as important to the state of Nevada as did the previous legislation.
Mr. Heitzler also indicated, in addition, each team has an average of two private jets to move the people from race to race and around the country for promotions and research. CART probably has as many races outside the United States as they do in the United States. When they get ready to go to Europe, Japan, or South America for one of their races, CART has a partnership with FedEx where they bring in four 747s, load them up, and fly to those international race locations. The private jets, the FedEx (Federal Express Corporation) 747s, plus the materials flown in, provide a tremendous potential for McCarran Airport and southern Nevada. I would ask you to give favorable consideration to this legislation.
Senator Rhoads:
Are you aware of any other state giving an exemption for this type of action?
Berlyn Miller:
Yes, several other states, like Indiana and Michigan, offer these tax incentives.
Lorraine T. Hunt, Lieutenant Governor and President of the Senate:
I am in support of this legislation. I concur with the testimony this incentive would certainly put us in the forefront to bring this industry into the state. The economic benefits to Nevada would be great, and I think it is a great diversification, because it is a great sport, and it would bring people from all over the world to Nevada.
Robert E. Shriver, Executive Director, Division of Economic Development, Commission on Economic Development:
I would like to echo the words of my chairman about the economics of this legislation. About 4 years ago when the Las Vegas Motor Speedway first opened, we started looking at how we could do what Indiana and North Carolina have done. It is a phenomenal opportunity for us, and especially to have someone like CART imply if this type of legislation were passed they would indeed move their headquarters here. I do encourage your favorable consideration of A.B. 657.
Senator Neal:
Where is the money coming from? How much to the state of Nevada?
Mr. Shriver:
We do an econometric modeling which shows the return benefit to the communities. Most local governments are the most affected by this, and in each case we have run these models to the satisfaction of the local government. You have to remember, we are not giving away an incentive until there is a commitment by the company to come here. In essence there is no loss of revenue. I would call it a delayed investment. It provides an opportunity for these companies to relocate their corporate headquarters, and, in the case of CART, it is an international headquarters. The numbers Mr. Miller expressed about the average salaries of CART and the race teams is new money, which will be circulated, particularly in Las Vegas. It is the primary target and it will create a lot of spin-off jobs in companies that will be born. I think it is a tremendous opportunity.
Mr. Brown:
You will hear shortly from Kenny Bernstein and Dean Pate regarding jobs, which are provided in on-the-job training available to the students in the automotive program at UNLV (University of Nevada, Las Vegas). So, it not only will bring in very high-paying jobs, but will also provide training for our students in this very specialized field.
Rob F. Powers, Lobbyist, Las Vegas Convention and Visitors Authority:
I am here to state, for the record, our organization’s support of A.B. 657. As you know, our organization’s mission is to promote Nevada as a destination, domestically and throughout the world. One of the ways we do this is by emphasizing Las Vegas is a diverse destination with many special events. In fact, special events marketing has become an increasingly important part of our promotional efforts in recent years. We have found auto racing has been a vital contributor to the economy of southern Nevada in recent years. We have been involved in sponsorship of many races, because they bring tens of thousands of people to town during certain time periods, and also they provide valuable media exposure domestically and internationally. We view this legislation, besides its economic development implications, as legislation which will help us do our job, attract more races to southern Nevada, and bring in more visitors to fill the 124,000 hotel and motel rooms we have.
Senator Neal:
With respect to the championship auto racing team you call CART, how often will they be participating per year in racing activity?
Chris Powell, Executive Vice President, Las Vegas Motor Speedway:
We are in negotiations right now with a CART event starting in the year 2002 and beyond.
Senator Neal:
How many other activities do you have at the speedway now?
Mr. Powell:
We have a billboard saying we are racing every weekend, and we have some type of event almost every single weekend. With regard to CART, we have none at this time.
Senator Neal:
You do not have, at the present time, national and international teams participating?
Mr. Powell:
No, not for championship auto racing teams.
Senator Neal:
So, this would be the only international race?
Mr. Powell:
Yes, sir.
Senator Neal:
Is it international or national?
Mr. Powell:
With respect to CART, they race 15 times in the United States, and 7 times everywhere else, from Japan; Sydney; Australia; Germany; England; Monterrey, Mexico; and twice in Canada.
Senator Neal:
When you say 15 times, is that 15 times per year?
Mr. Powell:
Domestically.
Senator Neal:
How many of those races do you expect to get in the state of Nevada?
Mr. Powell:
If we are fortunate, we are only seeking one. It costs a good deal of money to have one event. We would hope it would bring upwards of 100,000 people to southern Nevada. As I say, none of these venues, which we are discussing right now, has more than one per year.
Senator Neal:
Is this a contracted type of activity?
Mr. Powell:
Yes. In our role as promoter of the event, we would pay an enormous sum of money, in this case to CART, to come in and stage the event. So, it is a contracted event.
Senator Neal:
And, you expect to have just one of these races a year?
Mr. Powell:
Yes.
Senator Neal:
I think you can house over 100,000 people at the Las Vegas Motor Speedway at the present time. Is that correct?
Mr. Powell:
Yes, we had about 125,000 people on the property on Sunday, March 4 of this year, for our Winston Cup Race. Regarding the weekend as a whole, the LVCVA (Las Vegas Convention and Visitors Authority), made a study back in 1999, which indicated that particular weekend had an effect on the Nevada economy of roughly $124 million.
Senator Neal:
And so you would expect this CART race to be equivalent?
Mr. Powell:
As a promoter, I would hope so, because we are going to do everything we can to bring every human being to Nevada for that event. I cannot sit here today and tell you we know how many people we will have, but we will promote it nationally and internationally. This is just with regard to championship auto racing teams.
Senator Neal:
The exemption being asked for here is a sales-and-use tax exemption on parts and the like. Tell me how would it work? Would you, as a promoter of the track, have a parts house on site, and would you stock these parts?
Mr. Powell:
As the promoter at the racetrack, no; it would not have a direct effect on us at the speedway.
Mr. Shriver:
The process would be like any of our tax incentives program. We would have our local development authorities . . .
Senator Neal:
This is a racetrack affair, that would be different.
Mr. Shriver:
No, actually the tax incentive belongs to the race teams, not the track itself. In this case, a CART franchise team, if they are based and headquartered in Nevada, would apply for this incentive, which is one of the criteria we would look for.
Senator Neal:
I am trying to connect the benefit to the public, and see what the public would derive from the benefit.
Mr. Shriver:
I understand the question. Our criteria, in order for these incentives to be considered, require an average wage of over $14.61 per hour, which race teams exceed by about three-fold. That type of wage, going through the economy, will buy goods and services on which we collect taxes.
Senator Neal:
As I understand the race teams, they bring in their own team, and they pay their own people, so what is the auxiliary here, which causes money to come into the economy? Where is it coming from?
Senator Townsend:
There are really two issues here, and I do not want them confused. One is the promotional issue the gentleman from the speedway is talking about. The other is the economic development issue of housing race teams in the state of Nevada. The property, in question here, is as fine a piece of design as we have seen anywhere in the country. It has two components: one is the venue where they actually race; the other is the automotive-motorcycle related development area, where teams would be housed on a permanent basis. They may race here, they may not, but they can headquarter themselves here. This is where their employees would be based, and where all of the things being considered here would actually be housed and worked on; the vehicles, the transporters, the various components of the cars, et cetera. You cannot confuse the two. It is nice to have an event, and we encourage them, and hope they do have one every weekend, but they are internal and external tourism-based issues. These are huge corporations funded at very serious levels because of the cost of technology, and the team itself would receive the actual benefit of this tax. The event is a separate issue.
Senator Neal:
You are saying the teams based here would be Nevada employees? Is that what you are saying?
Senator Townsend:
Absolutely.
Senator Neal:
The teams do not follow the cars? I understand you have about 15 of these races around the world, and are you saying these various teams do not follow the events, or what?
Senator Townsend:
They do, but whenever they are not on the road, testing, performing, or participating, they are housed here, and they come home, here, to either rebuild, do chassis testing, design new motors, or whatever. They are always home-based here, although they may not physically be here; there is usually somebody in the shop. My recollection is you are either working on a new chassis design, or you are rebuilding motors being flown in, and rotated on a regular basis from venue to venue. But, you always have permanent employees here. When the team is not actually performing they do come back and house themselves in that facility.
Senator Neal:
Now what would bring these teams here rather than go to Indiana, North Carolina, or South Carolina?
Mr. Brown:
This bill would bring them here. We have been told specifically. Mr. Heitzler, and the teams’ families, would live here; they would be domiciled residents of Nevada. They would spend their money here; buy property, homes, automobiles, and everything well-salaried individuals do.
Senator Neal:
Pardon me, but I thought I understood, in response to a question, other states have similar legislation. If they have similar legislation, what would make them come to Nevada rather than Indiana.
Mr. Brown:
The warm climate, is what Mr. Heitzler told us. There are incentives in Indianapolis, for instance, but they would rather live in Las Vegas, any day, than in Indianapolis, which has very long, cold winters. And secondly, Mr. Heitzler told us, one of the big incentives, in addition to this pending legislation, was the Governor’s Millennium Scholarship program. He thought that was a wonderful incentive to move here.
Senator Neal:
What does the Governor’s Millennium Scholarship program have to do with racing?
Mr. Brown:
Families of the race teams and the race drivers would live in Nevada.
Senator Townsend:
Any day the teams are not working on improving their performance, or the driver is not testing the vehicle, is a day lost they can never regain. Michigan, Indiana, North and South Carolina are not blessed with the weather availability we have. You are not just testing a car, you are testing motors, there are atmospheric condition issues, tires are tested on a regular basis, as well as suspension, spark plugs, and those things become absolutely vital. They are looking for any legal way to find a quarter of a second, or an eighth of a second, which is the difference between being an also-ran and being a world champion. Testing every single day is absolutely paramount to success in this world. Las Vegas is offering something, which cannot be found anywhere else.
Senator Rhoads:
If this passes, are you prepared to spend some money for advertising purposes to get it passed on the ballot? I ask, because I was successful, several years ago, in getting an exemption for the elimination of taxes on horses. It could have been a tremendous opportunity for the state of Nevada, because there are some big horse sales; horses sell for $700,000 each. But because we failed to get the information to the people, we lost at the ballot box. Are you people prepared to spend some money to get it passed?
Mr. Powers:
Our board would ultimately have to make that decision, but I can tell you in the past, when it comes to racing promotions, et cetera, we have been very active in that area. I can tell you that our board would certainly give it full consideration, given the implications of this legislation.
Mr. Brown:
I might add I believe Mr. Heitzer’s enthusiasm is sufficient he would consider but I cannot speak for him.
Senator Coffin:
Would this have an effect on any racing teams presently located in southern Nevada?
Mr. Powell:
I do not know exactly how many race teams are housed in the state of Nevada right now. I think I am correct in saying this applies to teams operating for profit. I can tell you the number of teams you can count on two hands. This is more an effort to draw teams not currently based in Nevada, to Nevada.
Senator Coffin:
Will those teams currently based here be treated equally, if the voters pass this?
Mr. Powell:
Yes, sir.
Senator Coffin:
What about “Indy racing?” Have they decided to abandon the speedway and get out while the getting is good, because it is too cold there? Would this legislation be mutually exclusive?
Mr. Brown:
No, it would not. It would certainly not favor only CART. It would be any racing team, and we are hopeful it would entice all race teams, NASCAR (National Association for Stock Car Auto Racing), IRL (Indy Racing League), and others.
Senator Coffin:
Since IRL is an association, I want to make sure we define associations.
Mr. Brown:
This bill is not just aimed at attracting CART or associations; however, the association has told us they would likely move here, including moving their museum, an IMAX theater, and their whole office staff, as well as the teams. We would hope the legislation would certainly be attractive to every race team.
Senator Coffin:
So, theoretically, any association could move here, but practically speaking most associations will not, but any racing team could. If a racing team is not CART affiliated, but say affiliated with the Indy Racing League, would they benefit from this too?
Mr. Brown:
Yes, they would.
David A. Scott, Lobbyist, Nevada Star Motorsport Consulting, Incorporated:
Senator Coffin, in response to your question, according to the 1997 economic census, there are eight professional racing teams, for profit, headquartered in the state of Nevada. We do not have any further data, and we are waiting for the 2002 economic census. I imagine that number has increased somewhat, but it seems there are ten for-profit and non-profit professional racing teams headquartered in this state.
Senator Neal:
You are asking to have this be put on the ballot, and the sales-and-use tax of 1955 be amended. As I understand it, that is the 2 percent of the sales tax. Are you just asking for the 2 percent exemption?
Mr. Brown:
No, we are asking for the total, the 5 percent plus the 2 percent.
Senator Neal:
Which in Clark County would be 7.25 percent.
Mr. Brown:
That is correct.
Senator Neal:
So you are asking for the full 7.25 percent.
Mr. Brown:
Only the 2.25 percent would be on the ballot.
Senator Neal:
I understand because the people put it on the ballot, you have to amend it on the ballot. But, let me ask the gentlemen who represents the speedway a suppositional question. If this should happen to pass, who would be providing the infrastructure for these activities? Would it be you? Would it be the racing team? And, another part, do you have sufficient land where these things could be built on site, in or near, the track?
Mr. Powell:
There are various industrial parks in North Las Vegas in and around our area of Clark County. We would certainly invite those race teams, if their headquarters are anywhere near us, to come out and test their vehicles on any of our ten different speedways.
Senator Neal:
So they would not necessarily have facilities on site at the racetrack?
Mr. Powell:
No. Not necessarily.
Mr. Brown:
Mr. Heitzler met with Mayor Oscar B. Goodman of the City of Las Vegas, to talk about potentially locating some or all of their facilities on the city’s land. They are certainly not tied to one location, and I think once they get into town, they will look for whatever is the most appropriate location for them.
Kenny Bernstein, Owner and Driver, Budweiser King Top-Fuel Dragster Team:
My team and I have two locations. One location is in Newport Beach, California, which is where I live. I have a 12,000 square-foot shop there, and a 6,000 square foot shop in Indianapolis, Indiana. A few years ago the City of Indianapolis adopted a tax structure to enhance and bring teams to live and work in Indianapolis. By doing this, it opened the door tremendously in the city, and the surrounding cities have adopted the same sales-and-use tax structure. It really opened the door for people like myself to look at Indianapolis as a location for our race team. Putting my team there means I move eight to ten employees out of California to the city of Indianapolis. They have since bought homes, rented apartments, bought cars, food, and everything to live in the city of Indianapolis or the surrounding area. Indianapolis has gone even farther by giving some tax deductions on property, if you build in the city or surrounding cities.
Race teams of all types, from the biggest ones to the smallest ones, could look at the city of Las Vegas or Carson City and say they want to be in the state of Nevada because you have a benefit there on sales-and-use tax. That is what happened to the city and the surrounding areas of Indianapolis. Three of our teams in the National Hot Rod Association are building properties there now. One of the main reasons they located there was because they got the sales-and-use tax benefit, and some help on property taxes for a period of time. I think it is a great benefit for you. It brings money to the city, to the state, and it brings salaries, which are enormous even in our sport. My average salaries are about $75,000. It has a potential for jobs for people within your city and your state. They would have the opportunity to work on a race team, because there are none here; that would open the door for people on the vocational side. Last year we hired an intern out of a vocational job and put him to work. There are a lot of great opportunities here, which can open the door. Right now you do not have such an opportunity. You are fighting against Indianapolis, other states, and other cities to get this type of opportunity. You have one thing going for you, which is tremendous, and it is the weather; also, you have the world-class facility sitting in your backyard, basically, for all forms of racing. It needs to be known these teams can house themselves anywhere they want in the state. It is the same with Indianapolis. I hope I have helped you to understand what it can bring to you.
Senator Rhoads:
I imagine Indiana has a state income tax too.
Mr. Bernstein:
Yes, they do.
Senator Rhoads:
It is another advantage of moving to Nevada.
Senator Neal:
In reference to the A.B. 657, section 6, page 3, says “if a majority of the votes cast on the question is yes,” and you also say the general election must be submitted to the registered voters. Does that language mean the result is determined by a majority of the people voting in the election, or a majority of the people who voted on the question? You could very well run into trouble where you might win or you might lose.
Anthony F. Sanchez III, Lobbyist, Speedway Motor Sports:
Section 6 was language the LCB (Legislative Counsel Bureau) included. I do understand the concern. I am just wondering how the ballot initiative would read, if it is actually in the negative?
Senator Neal:
If a majority vote was cast for the issue, then you would win it, but if you are talking about the majority of the vote was cast in the election, you might have a problem with that language.
Kevin D. Welsh, Deputy Fiscal Analyst, Legislative Counsel Bureau:
Section 6 deals only with the question. If only three people voted on the question and it was 2-to-1, the question would pass.
Paul Pate, Dean, Applied Technology, Community College of Southern Nevada:
Currently our Community College Automotive Program enjoys an enrollment of over 600 students, with minority students comprising approximately 50 percent of the student population. We are an ASE NATEF Certified Program (National Institute for Automotive Service Excellence, National Automotive Technical Education Foundation) and we are also accredited by General Motors. We serve General Motors with various programs, and our students graduate as certified technicians.
On behalf of those 600 students, I can say this is a fantastic opportunity for them, and would not be available if the racing teams were not here. These are dream jobs for aspiring automotive technicians. People who are in the automotive industry would like to be on a race team, just like pilots would like to be astronauts. This is the pinnacle of a career if you are an automotive technician. The linkages we could develop between the race teams and the college, I believe, would lead to lucrative opportunities for the college automotive program. I am sure, just as we do with General Motors, we would be able to secure equipment donations, and other donations, to offset some of the expenses of operating this rather expensive program. This is fairly easily done when you deal with large organizations. I would just like to say again, on behalf of the students, we would love the opportunity to have our students become employees of these types of organizations.
Mr. Brown:
(Presented and read “Statement from Joseph Heitzler in Support of Assembly Bill 657 before the Senate Taxation Committee May 8, 2001” [Exhibit C]. Joseph Heitzler, President and CEO of Championship Auto Racing Teams, Incorporated [CART])
Senator Rhoads:
Mr. Heitzler is in Michigan now?
Mr. Brown:
Yes, he is in Troy, Michigan.
Michele F. Richardson, Lobbyist, Assistant City Manager, City of North Las Vegas:
I would like to lend my support to the passage of this bill. I believe it would have a significant impact on our economic development efforts.
Mr. Scott:
I prepared a press release on May 1. I would like to read it into the record. (Presented and read the section “Quotes” from Exhibit D.)
Senator Rhoads:
Are there quite a few racetracks around the Carson City-Reno area?
Mr. Scott:
There are at least three decent racing facilities in the state of Nevada we would consider suitable for semi-professional or professional racing teams. In addition to the Las Vegas Motor Speedway, which is actually a motor sports complex, there is also racing done at Champion Tahoe Speedway in Carson City, and Reno-Fernley Speedway near Fernley.
Senator Neal:
You know I oppose exemptions, mainly because they tend to take money away from school children. However, I am ambivalent on this one, because you are going to take it to the vote of the people. I would tend to support this exemption, because it would go to the vote of the people, and they would make the decision as to whether or not they want to make this change.
Senator McGinness:
We will close the hearing on A.B. 657.
Let us look at A.B. 243. This is Assemblyman Dini’s exemption for farm machinery.
ASSEMBLY BILL 243: Proposes to exempt from sales and use tax sale of farm machinery and equipment, and provides such exemption from certain analogous taxes. (BDR 32-866)
Senator Rhoads:
There was previous discussion regarding an amendment to remove the $1000.
SENATOR TOWNSEND MOVED TO AMEND BY DELETING THE $1000 LIMITATION IN SECTION 10 AND DO PASS A.B. 243 AS AMENDED.
SENATOR RHOADS SECONDED THE MOTION.
Senator McGinness:
It has been moved by Senator Townsend and seconded by Senator Rhoads to amend and do pass A.B. 243. The amendment is to remove the $1000 reference on page 2, line 22.
Senator Neal:
Does this go to the vote of the people?
Senator McGinness:
No, it does not. This is everything but the 2 percent which is the state component of the sales tax.
THE MOTION CARRIED. (SENATORS NEAL AND O’CONNELL VOTED NO.)
*****
Senator McGinness:
Assembly Bill 433 is Mr. Neighbors’ bill on possessory use of real property and there was an amendment proposed (Exhibit E) by the assessors about the housing exemption for those people who are low-income eligible. We asked the Legislative Counsel Bureau and they said this amendment is germane.
ASSEMBLY BILL 433: Makes various changes relating to property taxes. (BDR 32-1140)
SENATOR NEAL MOVE TO AMEND PER EXHIBIT E AND DO PASS AS AMENDED A.B. 433.
SENATOR O’CONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator McGinness:
A.B. 455 is Mr. Goldwater’s Simplified Sales-and-Use Tax Administration Act. There were a couple of amendments previously proposed. Another proposed amendment is in your packet (Exhibit F). Mr. Welsh will explain it.
ASSEMBLY BILL 455: Enacts Simplified Sales and Use Tax Administration Act. (BDR 32-494)
Mr. Welsh:
The amendment does two things. First, it expands the section on defining what the sales tax is by including any similar tax authorized by civic statute, which was a bill-drafter change, because the current language only addresses what was enacted in 1955 and approved by the voters in 1956. Section 11, page 2, does the same thing for analogous taxes having to do with the use tax.
If you recall, the contract administrator and purchasing person from Douglas County asked for two different amendments. The first amendment had to do with NRS 325.125. He wanted to remove what would apply to these contracts, and the amendment would include a reminder we expect the county purchasing and contract administrators to comply with it. The bill drafter says if they do not have to comply, they do not have to comply, and without that section it does not apply to them. Therefore, we cannot go along with that amendment.
However, there was a second amendment where the county purchasing and contract administrators wanted to make sure everyone knew this applied just to the sales-and-use tax. This is accomplished in section 19, page 5 for the sales tax, and in section 21, page 6 for the use tax.
SENATOR TOWNSEND TO MOVED AMEND PER EXHIBIT F AND DO PASS A.B. 455 AS AMENDED.
Senator Neal:
Is this the tax on Internet sales?
Senator McGinness:
Right, this is the proposed tax on Internet sales.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator McGinness:
Assembly Bill 639 was the dyed fuel bill.
ASSEMBLY BILL 639: Revises provisions governing taxation, distribution and use of special fuel. (BDR 32-1331)
Mr. Krueger proposed two amendments (Exhibit G). The opinion we received indicated one of them was not germane, and the other was barely germane. It would be the chair’s opinion we do not look at those.
The other proposed amendment (Exhibit H) was from AGC (Associated General Contractors), which was to add back in the AGC language.
Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association:
We have not seen this proposed amendment (Exhibit H), but the indication, from the testimony, was to add back in the special mobile equipment exemption. There is a definition of it already in the chapter. The exemption was to leave it to the Department of Motor Vehicles and Public Safety to adopt regulations defining what “incidentally operated on highway” is. Recall, we had asked you to consider removing the 20-mile restriction on page 2, lines 9 and 10. The situation is with Mr. Peri in Mason Valley who may have fields from one end of the valley to the other, and the total distance is about 38 miles. The 20 miles simply does not make any difference, because this is not a commercial enterprise. It is growing onions and moving them from his fields to his processing center. Any movement from the processing center would be a commercial enterprise, and would be taxed. We would ask you to consider removing the mileage restriction.
The other problem is with the way it is written. The language starting at line 16 on page 1 gives the farm equipment operator the right to operate with dyed fuel in the tank, but it does not specifically exempt him from paying the tax. It was certainly the intent it be exempted; otherwise there would be no good reason for having this language in there. I would like to suggest if you incorporate the amendment, then line 12, of page 1 really needs to read, “A person who, pursuant to subsections 2, 3, 4, or 5, and subsection 4 of this section,” which takes in the farm equipment exemption would complete the surgery on this bill.
SENATOR O’CONNELL MOVED TO AMEND, PER EXHIBIT H, INCLUDING THE MILEAGE RESTRICTION, AND WITH THE ADDITIONAL LANGUAGE IN SECTION 1, ON LINE 12 PROPOSED BY DARYL CAPURRO, AND DO PASS A.B. 639 AS AMENDED.
SENATOR COFFIN SECONDED THE MOTION.
Senator McGinness:
Do you want to put the AGC's language back in?
Senator O’Connell:
That was the amendment I was referring to, and the additional language Mr. Capurro just added.
Senator McGinness:
Did you want to include eliminating the mileage restriction?
Senator O’Connell:
Yes.
THE MOTION CARRIED. (SENATOR NEAL VOTED NO.)
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Senator McGinness:
Assembly Bill 657 is the bill we just heard. There was no opposition.
SENATOR TOWNSEND MOVED TO AMEND TO INCLUDE TRANSPORT VEHICLES AND DO PASS A.B. 657 AS AMENDED.
SENATOR O’CONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Senator McGinness:
The meeting adjourned at 3:17 p.m.
RESPECTFULLY SUBMITTED:
Mavis Scarff,
Committee Secretary
APPROVED BY:
Senator Mike McGinness, Chairman
DATE: