MINUTES OF THE SUBCOMMITTEE OF THE
SENATE COMMITTEE on Taxation
Seventy-First Session
April 10, 2001
The subcommittee of the Senate Committee on Taxationwas called to order by Chairman Dean Rhoads, at 3:31 p.m., on Tuesday, April 10, 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 Dean A. Rhoads, Chairman
Senator Randolph J. Townsend
Senator Michael Schneider
STAFF MEMBERS PRESENT:
Kevin D. Welsh, Deputy Fiscal Analyst
Rochelle Trotts, Committee Secretary
OTHERS PRESENT:
Gaylyn J. Spriggs, Lobbyist, Nevada Taxpayers Association
Alan D. Caldwell, Lobbyist, Green Energy Business Council of Nevada
Dino DiCianno, Deputy Executive Director, Department of Taxation
Chairman Rhoads:
I will open the hearing on Senate Bill (S.B.) 273.
SENATE BILL 273: Proposes to exempt from sales and use taxes certain products that use renewable energy resource to generate electricity. (BDR 32-641)
The first page of the amendments you have before you (Exhibit C and Exhibit D) provides a tax exemption for certain products designed or adapted to use a renewable energy resource to generate electricity. Specifically, it exempts purchase of the renewable product.
Gaylyn J. Spriggs, Lobbyist, Nevada Taxpayers Association:
There are two draft proposals (No. 1 [Exhibit C] and No. 2 [Exhibit D]) because we did not know whether the committee wanted to exempt a specific product or a system. There are systems designed to do this and one proposal covers the system and the product, and the other proposal covers just the product.
Alan D. Caldwell, Lobbyist, Green Energy Business Council of Nevada:
We spent some time yesterday discussing this issue and whether the product itself, or the system which makes the product viable, should be covered. We decided it was a policy issue, and the committee should determine whether to limit application to the actual solar, wind or renewable product which first took in the renewable resource, or to include the whole system. An example is, if you were to buy a solar panel, a solar panel by itself is ineffective, so you would have to add a charge controller, an inverter, batteries, and a generator to have a complete system, which is then an independent power system. The solar panels, in and of themselves, do take in the renewable resources, but do not come with other products. I do not think this bill is intended to cover batteries or similar items, and if someone buys a system, the whole system should be exempt.
Chairman Rhoads:
How would it be easier to track, with a whole system or product-by-product?
Dino DiCianno, Deputy Executive Director, Department of Taxation:
Either way, administratively, it does not make any difference for the department. The onus would be on retailers selling either the individual product or the system.
Chairman Rhoads:
It would probably be a bigger hit on the system rather than on the product?
Mr. DiCianno:
Yes.
Ms. Spriggs:
One draft proposal is for the product and the system (Exhibit D) and the other draft proposal is just for the product (Exhibit C). With the product, the only two things we could think of were windmills and solar panels as far as specific products to fit under the product category.
Chairman Rhoads:
Systems include geothermal, hydro, and biomass?
Ms. Spriggs:
And it includes some of the other products which go into those types of systems.
Mr. Caldwell:
I would prefer the systems. When you get to solar panels, you have solar photovoltaic (PV) panels, but you also have solar thermal panels. Solar thermal panels produce British thermal units (BTUs); they do not produce electricity immediately, but they can convert BTUs to electricity and offset other things for which you would use electricity. So, under the solar panel section there should be solar panels, PV panels, and also solar thermal panels.
Chairman Rhoads:
Should that be listed in the bill?
Mr. Caldwell:
I would think so, because there is a discrepancy and people tend just to think of the PV panels, but thermal panels are just as viable. One of our companies in southern Nevada is planning to introduce a solar thermal product to convert BTUs to electricity.
Chairman Rhoads:
Where should that go, on the last page?
Mr. Caldwell:
That should go on the last page of either of the proposed amendments, under item page 3, line 14, (Exhibit C). Solar PV panels and solar thermal panels could be listed on the same line.
Senator Townsend:
I must have missed the reasoning to be specific with regard to page 3, line 14, paragraph (b), (Exhibit C) solar. The reason I am saying this is if you start to get specific and you name photovoltaics, solar thermal, whatever you do not put in will be precluded if it is invented after the fact. If you leave it at solar, it includes anything which uses solar, whether it is invented now or in the future.
Mr. DiCianno:
What we tried to do in page 3, line 12, in both proposals (Exhibit C and Exhibit D) was to say it includes, but is not limited to such items. But, Senator Townsend’s comment is more specific when you define solar versus wind, versus geothermal, versus biomass. It is helpful to the department when we administer it to have specifics and criteria.
Senator Townsend:
Solar is meant to be anything which uses the energy from the sun to produce electricity. If we start to narrow that, then there are going to be issues about wind, geothermal, hydro, and the type of biomass you use.
Chairman Rhoads:
We will leave it like it is.
Ms. Spriggs:
For a system to qualify, it has to produce at least 75 percent of its power from the renewable resource.
SENATOR TOWNSEND MOVED TO AMEND S.B. 273 WITH DRAFT PROPOSAL NO. 2.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Rhoads adjourned the meeting at 3:41 p.m.
RESPECTFULLY SUBMITTED:
Rochelle Trotts,
Committee Secretary
APPROVED BY:
Senator Dean A. Rhoads, Chairman
DATE: