NEVADA LEGISLATURE

Twentieth Special Session, 2003

ASSEMBLY DAILY JOURNAL

THE THIRD DAY

Carson City (Friday), June 27, 2003

Assembly called to order at 2:14 p.m.

Mr. Speaker presiding.

Roll called.

All present.

Prayer by the Chaplain, Terry Sullivan.

Let us pray. Dear Lord, in these very difficult times we need your blessings more than ever. So please, Lord, bless us all.

Amen.

Pledge of allegiance to the Flag.

Assemblyman Oceguera moved that further reading of the Journal be dispensed with, and the Speaker and Chief Clerk be authorized to make the necessary corrections and additions.

Motion carried.

REPORTS OF COMMITTEES

Mr. Speaker:

Your Committee of the Whole, to which was referred Senate Bill No. 6, has had the same under consideration, and begs leave to report the same back with the recommendation: Amend, and do pass as amended.

Richard Perkins, Chairman

MOTIONS, RESOLUTIONS AND NOTICES

Assemblywoman Buckley moved that Senate Bill No. 6 just reported out of committee, be place on the Second Reading File.

Motion carried.

SECOND READING AND AMENDMENT

Senate Bill No. 6.

Bill read second time.

The following amendment was proposed by the Committee of the Whole:

Amendment No. 3.

Amend sec. 4, page 2, by deleting lines 14 and 15 and inserting:

“2. “Nonprofit organization” means a nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C. § 501(c).”.

Amend sec. 11, page 4, line 22, by deleting “1” and inserting “0.6”.

Amend sec. 27, page 17, by deleting line 43 and inserting: “seats that are permanently mounted and cannot be, or are not intended to be, removed temporarily for any single performance of live entertainment.”.

Amend sec. 30, page 18, by deleting lines 10 and 11 and inserting:

“(a) A corporation, partnership, proprietorship, limited-liability company, business association, joint venture, limited-liability partnership, business trust and their equivalents organized under the laws of this state or another jurisdiction and any other type of entity that engages in business.”.

Amend sec. 34, page 18, by deleting lines 29 through 32 and inserting: “Business Form, or its equivalent or successor form, or a Schedule E (Form 1040), Supplemental Income and Loss Form, or its equivalent or successor form, for the”.

Amend sec. 36, page 19, by deleting lines 17 and 18 and inserting: “or entirely for the benefit of a nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C. §”.

Amend sec. 36, page 19, between lines 23 and 24 by inserting:

“(f) Any boxing contest or exhibition governed by the provisions of chapter 467 of NRS.”.

Amend the bill as a whole by adding new sections designated sections 58.10 through 58.80, following sec. 58, to read as follows:

“Sec. 58.10. Title 32 of NRS is hereby amended by adding thereto a new chapter to consist of the provisions set forth as sections 58.12 to 58.80, inclusive, of this act.

Sec. 58.12. As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 58.14 to 58.28, inclusive, of this act have the meanings ascribed to them in those sections.

Sec. 58.14. “Business” means any activity engaged in or caused to be engaged in with the object of gain, benefit or advantage, either direct or indirect, to any person or governmental entity.

Sec. 58.16. 1. “Business entity” includes:

(a) A corporation, partnership, proprietorship, limited-liability company, business association, joint venture, limited-liability partnership, business trust and their equivalents organized under the laws of this state or another jurisdiction and any other type of entity that engages in business; and

(b) A natural person engaging in business if he is deemed to be a business entity pursuant to section 58.42 of this act.

2. The term does not include:

(a) A governmental entity;

(b) A nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C. § 501(c), unless the organization has any taxable income for the purposes of federal income taxation from any unrelated trade or business, as defined in 26 U.S.C. § 513; or

(c) A person who operates a business from his home and earns from that business not more than 66 2/3 percent of the average annual wage, as computed for the preceding calendar year pursuant to chapter 612 of NRS and rounded to the nearest hundred dollars.

Sec. 58.18. “Commission” means the Nevada Tax Commission.

Sec. 58.20. “Engaging in business” means commencing, conducting or continuing a business, the exercise of corporate or franchise powers regarding a business, and the liquidation of a business entity which is or was engaging in a business when the liquidator holds itself out to the public as conducting that business.

Sec. 58.22. “Gross revenue” means the total amount received or receivable on the use, sale or exchange of property or capital or for the performance of services, from any transaction involving a business entity, without any reduction for the basis of property sold, the cost of goods or services sold, or any other expense of the business entity.

Sec. 58.24. 1. “Pass-through revenue” means revenue received by a business entity solely on behalf of another in a disclosed agency capacity, including revenue received as a broker, bailee, consignee or auctioneer, notwithstanding that the business entity may incur liability, primarily or secondarily, in a transaction in its capacity as an agent.

2. “Pass-through revenue” includes reimbursement for advances made by a business entity on behalf of a customer or client, other than with respect to services rendered or with respect to purchases of goods by the business entity in carrying out the business in which it engages.

Sec. 58.26. “Total amount received or receivable” means the total sum of any money and the fair market value of any other property or services received or receivable, including, without limitation, rents, royalties, interest and dividends, and aggregate net gains realized from the sale or exchange of stocks, bonds, asset-backed securities, investment and trading assets and other evidence of indebtedness.

Sec. 58.28. “Total revenue” means gross revenue minus:

1. Any revenue which this state is prohibited from taxing pursuant to the Constitution, laws or treaties of the United States or the Nevada Constitution.

2. Any revenue received by a natural person from the rental of not more than four residential units.

3. Any revenue from the sale of agricultural products at wholesale.

4. If a business entity pays a tax on premiums pursuant to title 57 of NRS, the gross revenue of the business entity derived from direct premiums written.

5. If a business entity pays a license fee pursuant to NRS 463.370, the total sum of all amounts specifically included by statute in and all amounts specifically excluded by statute from the calculation of that fee for the business entity.

6. If a business entity pays a tax on the net proceeds of minerals pursuant to chapter 362 of NRS, the gross yield of the business entity from which those net proceeds are determined.

7. Any operating revenue of a public utility for the provision of electric, gas, water or sewer service which is operated or regulated by a governmental entity.

8. Any revenue of a nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C. § 501(c), except the gross revenue of the organization from an unrelated trade or business, as defined in 26 U.S.C. § 513.

9. Any revenue from the operation of a vending stand pursuant to NRS 426.640.

10. Any revenue received by a certified disadvantaged business enterprise.

Sec. 58.30. The Legislature hereby finds and declares that the fee imposed by this chapter on a business entity must not be construed as a fee or tax upon the customers of the business entity, but as a fee which is imposed upon and collectible from the business entity and which constitutes part of the operating overhead of the business entity.

Sec. 58.32. The Department shall:

1. Administer and enforce the provisions of this chapter, and may adopt such regulations as it deems appropriate for that purpose.

2. Deposit all fees, interest and penalties it receives pursuant to this chapter in the State Treasury for credit to the State General Fund.

Sec. 58.34. 1. Each person responsible for maintaining the records of a business entity shall:

(a) Keep such records as may be necessary to determine the amount of its liability pursuant to the provisions of this chapter;

(b) Preserve those records for 4 years or until any litigation or prosecution pursuant to this chapter is finally determined, whichever is longer; and

(c) Make the records available for inspection by the Department upon demand at reasonable times during regular business hours.

2. For the purposes of this section, “record” includes any federal income tax return filed by a business entity with the Internal Revenue Service.

3. Any person who violates the provisions of subsection 1 is guilty of a misdemeanor.

Sec. 58.36. 1. To verify the accuracy of any return filed or, if no return is filed by a business entity, to determine the amount required to be paid, the Department, or any person authorized in writing by the Department, may examine the books, papers and records of any person or business entity that may be liable for the fee imposed by this chapter.

2. Any person or business entity which may be liable for the fee imposed by this chapter and which keeps outside of this state its books, papers and records relating thereto shall pay to the Department an amount equal to the allowance provided for state officers and employees generally while traveling outside of the State for each day or fraction thereof during which an employee of the Department is engaged in examining those documents, plus any other actual expenses incurred by the employee while he is absent from his regular place of employment to examine those documents.

Sec. 58.38. The Executive Director may request from any other governmental agency or officer such information as he deems necessary to carry out the provisions of this chapter. If the Executive Director obtains any confidential information pursuant to such a request, he shall maintain the confidentiality of that information in the same manner and to the same extent as provided by law for the agency or officer from whom the information was obtained.

Sec. 58.40. 1. Except as otherwise provided in this section and NRS 360.250, the records and files of the Department concerning the administration of this chapter are confidential and privileged. The Department, and any employee engaged in the administration of this chapter or charged with the custody of any such records or files, shall not disclose any information obtained from the Department’s records or files or from any examination, investigation or hearing authorized by the provisions of this chapter. Neither the Department nor any employee of the Department may be required to produce any of the records, files and information for the inspection of any person or for use in any action or proceeding.

2. The records and files of the Department concerning the administration of this chapter are not confidential and privileged in the following cases:

(a) Testimony by a member or employee of the Department and production of records, files and information on behalf of the Department or the business entity that paid the fee in any action or proceeding pursuant to the provisions of this chapter if that testimony or the records, files or information, or the facts shown thereby, are directly involved in the action or proceeding.

(b) Delivery to the person who paid the fee or his authorized representative of a copy of any return or other document filed by him pursuant to this chapter.

(c) Publication of statistics so classified as to prevent the identification of a particular business entity or document.

(d) Exchanges of information with the Internal Revenue Service in accordance with compacts made and provided for in such cases.

(e) Disclosure in confidence to the Governor or his agent in the exercise of the Governor’s general supervisory powers, or to any person authorized to audit the accounts of the Department in pursuance of an audit, or to the Attorney General or other legal representative of the State in connection with an action or proceeding pursuant to this chapter, or to any agency of this or any other state charged with the administration or enforcement of laws relating to taxation.

(f) Exchanges of information pursuant to subsection 3.

3. The Commission may agree with any county fair and recreation board or the governing body of any county, city or town for the continuing exchange of information concerning taxpayers.

Sec. 58.42. A natural person engaging in business shall be deemed to be a business entity that is subject to the provisions of this chapter if the person files with the Internal Revenue Service a Schedule C (Form 1040), Profit or Loss From Business Form, or its equivalent or successor form, a Schedule E (Form 1040), Supplemental Income and Loss Form, or its equivalent or successor form, or a Schedule F (Form 1040), Profit or Loss From Farming Form, or its equivalent or successor form, for the business.

Sec. 58.44. 1. A quarterly franchise fee is hereby imposed upon each business entity for the privilege of engaging in business in this state at the rate of:

Annual Total Revenue Franchise Fee per

of Business Entity Calendar Quarter

More than $0 but less than $100,000 $0

$100,000 or more but less than $200,000 $30

$200,000 or more but less than $300,000 $60

$300,000 or more but less than $400,000 $90

$400,000 or more but less than $500,000 $120

$500,000 or more but less than $750,000 $175

$750,000 or more but less than $1,000,000 $240

$1,000,000 or more but less than $1,500,000 $350

$1,500,000 or more but less than $2,000,000 $480

$2,000,000 or more but less than $2,500,000 $620

$2,500,000 or more but less than $3,000,000 $750

$3,000,000 or more but less than $4,000,000 $950

$4,000,000 or more but less than $5,000,000 $1,200

$5,000,000 or more but less than $7,500,000 $1,700

$7,500,000 or more but less than $10,000,000 $2,400

$10,000,000 or more but less than $20,000,000 $3,500

$20,000,000 or more $7,000

plus $3,500 for each additional $10,000,000

2. The fee for each calendar quarter is due on the last day of the quarter and must be paid on or before the last day of the month immediately following the quarter. The business entity shall estimate its annual total revenue for the fiscal year in which the franchise fee is being paid for the purposes of determining the amount of the franchise fee that is due.

3. Upon determination of the actual annual total revenue of the business entity for that fiscal year, the business entity shall reconcile the amount due from franchise fees for the year. If the amount of franchise fees paid exceeds the amount actually due from the business entity, the excess fees must be credited against future franchise fees payable by the business entity. If the amount of franchise fees paid was less than the amount due, the amount due remaining unpaid shall be deemed, for the purposes of NRS 360.417, to constitute a failure to pay the fee within the time required pursuant to this section.

4. Each business entity engaging in business in this state shall file with the Department a return on a form prescribed by the Department, together with the remittance of any fee due pursuant to this chapter, on or before the last day of the month immediately following the calendar quarter for which the payment is being made. The form must provide each business entity with an opportunity for account reconciliation.

Sec. 58.46. 1. Except as otherwise provided in this section, the total revenue of a business entity in this state must be computed for each fiscal year based upon the accounting method used by the business entity to compute its income for the purposes of federal income taxation. If a business entity does not regularly use a single accounting method, or if the Department determines that the accounting method used by the business entity does not clearly reflect the total revenue of the business entity in this state, the calculation of that revenue must be made on the basis of such an accounting method as, in the opinion of the Department, clearly reflects the total revenue of the business entity in this state.

2. If a business entity is engaged in more than one type of business, the business entity:

(a) May, in computing its total revenue in this state, use a different accounting method for each of those types of business; and

(b) Shall compute its total revenue in this state for each of those types of business based upon the accounting method used by the business entity to compute its income for that type of business for the purposes of federal income taxation.

3. If a business entity changes the accounting method upon which it computes its income for the purposes of federal income taxation, the business entity shall, before using that method to compute its total revenue in this state, provide the Department with written notification of the change in its accounting method. If:

(a) The business entity or any of its owners, officers, employees, agents or representatives are required, on behalf of the business entity, to obtain the consent of the Internal Revenue Service to the change in its accounting method, the business entity shall include a notarized copy of that consent in its written notification to the Department; or

(b) The business entity is not required to obtain the consent of the Internal Revenue Service to the change in its accounting method, the business entity shall obtain the consent of the Department to the change in its accounting method before using that method to compute its total revenue in this state.

4. If a business entity fails to comply with the provisions of subsections 1 and 2, any required change in the accounting method does not affect the imposition and calculation of any penalty, or the calculation of any additional amount of franchise fees due, pursuant to this chapter.

Sec. 58.48. In calculating the franchise fee of a business entity pursuant to this chapter, the business entity is entitled to deduct from its total revenue:

1. Any revenue upon which this state is prohibited from imposing a franchise fee pursuant to the Constitution or laws of the United States or the Nevada Constitution.

2. The amount of any federal, state or local governmental fuel taxes collected by the business entity.

3. Any revenue of the business entity attributable to interest upon any bonds or securities of the Federal Government, the State of Nevada or a political subdivision of this state.

4. Any pass-through revenue of the business entity.

5. Any revenue received as dividends or distributions by a parent organization from the capital account of a subsidiary entity of the parent organization.

6. Any revenue received by a hospital or provider of health care from a governmental entity.

7. Any cash discounts the business entity allows a purchaser of property, rights or services.

8. Any indebtedness to the business entity that is impossible or impracticable to collect and which is written off by the business entity as a bad debt for purposes of federal income taxation.

9. Any counterfeit currency received by the business entity for which the business entity is not reimbursed.

10. The amount of any payments received by the business entity upon claims for health, casualty or life insurance.

11. The cost of all payments made to contractors and subcontractors by a business entity that is in the business of developing improved real property and who sells that improved real property to a person who is not in the business of developing real property. The amount of the deduction must not exceed the gross revenue for the transaction.

12. Any promotional allowances by the business entity.

13. The gross revenue attributable to damaged or returned merchandise.

Sec. 58.50. 1. The Department shall adopt regulations providing for the allocation or apportionment of the liability for franchise fees pursuant to this chapter of business entities engaging in a business both within and outside of this state. The regulations must:

(a) Except as otherwise provided in this section, be consistent with the methods of dividing income contained in the Uniform Division of Income for Tax Purposes Act.

(b) If the business consists of financial activity, as defined in the Uniform Division of Income for Tax Purposes Act, be consistent with the Recommended Formula for the Apportionment and Allocation of Net Income of Financial Institutions.

2. As used in this section:

(a) “Recommended Formula for the Apportionment and Allocation of Net Income of Financial Institutions” means the provisions of the Recommended Formula for the Apportionment and Allocation of Net Income of Financial Institutions adopted by the Multistate Tax Commission, as those provisions existed on July 1, 2003.

(b) “Uniform Division of Income for Tax Purposes Act” means the provisions of the Uniform Division of Income for Tax Purposes Act approved by the National Conference of Commissioners on Uniform State Laws, as those provisions existed on July 1, 2003.

Sec. 58.52. The Department shall, upon application by a business entity engaging in a business both within and outside of this state, reduce the liability of the business entity for franchise fees pursuant to this chapter to the extent required by the Constitution or laws of the United States or the Nevada Constitution, as a result of the tax liability of the business entity to other states and their political subdivisions.

Sec. 58.54. 1. If the Department determines, after notice and hearing, that:

(a) A business entity and one or more of its affiliated business entities are engaged in the same or a similar type of business; and

(b) The primary or a substantial purpose for engaging in that type of business through affiliated business entities is to avoid or to reduce liability for the franchise fees imposed by this chapter,

the Department shall require the business entity and one or more of its affiliated business entities to file a consolidated return for the purposes of this chapter.

2. For the purposes of this section:

(a) “Affiliated business entity” means a business entity that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, another specified business entity.

(b) “Control,” as used in the terms “controls,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a business entity, whether through the ownership of voting securities, by contract or otherwise.

Sec. 58.56. Upon written application made before the date on which payment must be made, the Department may for good cause extend by 30 days the time within which a business entity is required to pay the franchise fee imposed by this chapter. If the franchise fee is paid during the period of extension, no penalty or late charge may be imposed for failure to pay at the time required, but the business entity shall pay interest at the rate of 1 percent per month from the date on which the amount would have been due without the extension until the date of payment, unless otherwise provided in NRS 360.232 or 360.320.

Sec. 58.58. The remedies of the State provided for in this chapter are cumulative, and no action taken by the Department or the Attorney General constitutes an election by the State to pursue any remedy to the exclusion of any other remedy for which provision is made in this chapter.

Sec. 58.60. If the Department determines that any franchise fee, penalty or interest has been paid more than once or has been erroneously or illegally collected or computed, the Department shall set forth that fact in the records of the Department and certify to the State Board of Examiners the amount collected in excess of the amount legally due and the business entity or person from which it was collected or by whom it was paid. If approved by the State Board of Examiners, the excess amount collected or paid must be credited on any amounts then due from the person or business entity under this chapter, and the balance refunded to the person or business entity, or its successors, administrators or executors.

Sec. 58.62. 1. Except as otherwise provided in NRS 360.235 and 360.395:

(a) No refund may be allowed unless a claim for it is filed with the Department within 3 years after the last day of the month immediately following the calendar quarter for which the overpayment was made.

(b) No credit may be allowed after the expiration of the period specified for filing claims for refund unless a claim for credit is filed with the Department within that period.

2. Each claim must be in writing and must state the specific grounds upon which the claim is founded.

3. Failure to file a claim within the time prescribed in this chapter constitutes a waiver of any demand against the State on account of overpayment.

4. Within 30 days after rejecting any claim in whole or in part, the Department shall serve notice of its action on the claimant in the manner prescribed for service of notice of a deficiency determination.

Sec. 58.64. 1. Except as otherwise provided in this section and NRS 360.320, interest must be paid upon any overpayment of any amount of the franchise fee imposed by this chapter at the rate of 0.5 percent per month, or fraction thereof, from the last day of the month immediately following the calendar quarter for which the overpayment was made. No refund or credit may be made of any interest imposed upon the person or business entity making the overpayment with respect to the amount being refunded or credited.

2. The interest must be paid:

(a) In the case of a refund, to the last day of the calendar month following the date upon which the person making the overpayment, if he has not already filed a claim, is notified by the Department that a claim may be filed or the date upon which the claim is certified to the State Board of Examiners, whichever is earlier.

(b) In the case of a credit, to the same date as that to which interest is computed on the franchise fee or the amount against which the credit is applied.

3. If the Department determines that any overpayment has been made intentionally or by reason of carelessness, it shall not allow any interest on the overpayment.

Sec. 58.66. 1. No injunction, writ of mandate or other legal or equitable process may issue in any suit, action or proceeding in any court against this state or against any officer of the State to prevent or enjoin the collection under this chapter of the franchise fee imposed by this chapter or any amount of the franchise fee, penalty or interest required to be collected.

2. No suit or proceeding may be maintained in any court for the recovery of any amount alleged to have been erroneously or illegally determined or collected unless a claim for refund or credit has been filed.

Sec. 58.68. 1. Within 90 days after a final decision upon a claim filed pursuant to this chapter is rendered by the Commission, the claimant may bring an action against the Department on the grounds set forth in the claim in a court of competent jurisdiction in Carson City, the county of this state where the claimant resides or maintains his principal place of business or a county in which any relevant proceedings were conducted by the Department, for the recovery of the whole or any part of the amount with respect to which the claim has been disallowed.

2. Failure to bring an action within the time specified constitutes a waiver of any demand against the State on account of alleged overpayments.

Sec. 58.70. 1. If the Department fails to mail notice of action on a claim within 6 months after the claim is filed, the claimant may consider the claim disallowed and file an appeal with the Commission within 30 days after the last day of the 6-month period. If the claimant is aggrieved by the decision of the Commission rendered on appeal, the claimant may, within 90 days after the decision is rendered, bring an action against the Department on the grounds set forth in the claim for the recovery of the whole or any part of the amount claimed as an overpayment.

2. If judgment is rendered for the plaintiff, the amount of the judgment must first be credited towards any franchise fees due from the plaintiff.

3. The balance of the judgment must be refunded to the plaintiff.

Sec. 58.72. In any judgment, interest must be allowed at the rate of 6 percent per annum upon the amount found to have been illegally collected from the date of payment of the amount to the date of allowance of credit on account of the judgment, or to a date preceding the date of the refund warrant by not more than 30 days. The date must be determined by the Department.

Sec. 58.74. A judgment may not be rendered in favor of the plaintiff in any action brought against the Department to recover any amount paid when the action is brought by or in the name of an assignee of the business entity paying the amount or by any person other than the person or business entity which paid the amount.

Sec. 58.76. 1. The Department may recover a refund or any part thereof which is erroneously made and any credit or part thereof which is erroneously allowed in an action brought in a court of competent jurisdiction in Carson City or Clark County in the name of the State of Nevada.

2. The action must be tried in Carson City or Clark County unless the court, with the consent of the Attorney General, orders a change of place of trial.

3. The Attorney General shall prosecute the action, and the provisions of NRS, the Nevada Rules of Civil Procedure and the Nevada Rules of Appellate Procedure relating to service of summons, pleadings, proofs, trials and appeals are applicable to the proceedings.

Sec. 58.78. 1. If any amount in excess of $25 has been illegally determined, either by the Department or by the person filing the return, the Department shall certify this fact to the State Board of Examiners, and the latter shall authorize the cancellation of the amount upon the records of the Department.

2. If an amount not exceeding $25 has been illegally determined, either by the Department or by the person or business entity filing the return, the Department, without certifying this fact to the State Board of Examiners, shall authorize the cancellation of the amount upon the records of the Department.

Sec. 58.80. 1. A person shall not:

(a) Make, cause to be made or permit to be made any false or fraudulent return or declaration or false statement in any return or declaration with intent to defraud the State or to evade payment of the franchise fee or any part of the franchise fee imposed by this chapter.

(b) Make, cause to be made or permit to be made any false entry in books, records or accounts with intent to defraud the State or to evade the payment of the franchise fee or any part of the franchise fee imposed by this chapter.

(c) Keep, cause to be kept or permit to be kept more than one set of books, records or accounts with intent to defraud the State or to evade the payment of the franchise fee or any part of the franchise fee imposed by this chapter.

2. Any person who violates the provisions of subsection 1 is guilty of a gross misdemeanor.”.

Amend sec. 62, page 28, by deleting lines 29 and 30 and inserting: “partnership, business trust and their equivalents organized under the laws of this state or another jurisdiction and any other person that”.

Amend sec. 62, page 28, by deleting lines 38 and 39 and inserting: “to 26 U.S.C. § 501(c), unless the organization has any taxable income for the purposes of federal income taxation from any unrelated trade or business, as”.

Amend sec. 62, page 28, by deleting lines 43 through 45 and inserting: “annual wage, as computed for the preceding calendar year pursuant to chapter 612 of NRS and rounded to the nearest hundred dollars.”.

Amend sec. 62, page 29, by deleting line 1 and inserting:

“(d) A business whose primary purpose is to create or produce motion pictures. As”.

Amend sec. 65, page 29, line 43, by deleting “Business,” and inserting “Business Form,”.

Amend sec. 65, page 29, line 45, by deleting “Loss,” and inserting “Loss Form,”.

Amend sec. 65, page 30, line 1, by deleting “Farming,” and inserting “Farming Form,”.

Amend sec. 70, page 32, by deleting lines 16 through 45 and inserting:

“Sec. 70. NRS 360.300 is hereby amended to read as follows:

360.300 1. If a person fails to file a return or the Department is not satisfied with the return or returns of any tax, franchise fee, contribution or premium or amount of tax, franchise fee, contribution or premium required to be paid to the State by any person, in accordance with the applicable provisions of this chapter, chapter 362, 364A, 369, 370, 372, 372A, 374, 377, 377A or 444A of NRS, NRS 482.313, or chapter 585 or 680B of NRS , or sections 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act, as administered or audited by the Department, it may compute and determine the amount required to be paid upon the basis of:

(a) The facts contained in the return;

(b) Any information within its possession or that may come into its possession; or

2. One or more deficiency determinations may be made with respect to the amount due for one or for more than one period.

3. In making its determination of the amount required to be paid, the Department shall impose interest on the amount of tax determined to be due, calculated at the rate and in the manner set forth in NRS 360.417, unless a different rate of interest is specifically provided by statute.

4. The Department shall impose a penalty of 10 percent in addition to the amount of a determination that is made in the case of the failure of a person to file a return with the Department.

5. When a business is discontinued, a determination may be made at any time thereafter within the time prescribed in NRS 360.355 as to liability arising out of that business, irrespective of whether the determination is issued before the due date of the liability.”.

Amend the bill as a whole by adding a new section designated sec. 70.5, following sec. 70, to read as follows:

“Sec. 70.5. NRS 360.300 is hereby amended to read as follows:

360.300 1. If a person fails to file a return or the Department is not satisfied with the return or returns of any tax, franchise fee, contribution or premium or amount of tax, franchise fee, contribution or premium required to be paid to the State by any person, in accordance with the applicable provisions of this chapter, chapter 362, ~~[364A,]~~ 369, 370, 372, 372A, 374, 377, 377A or 444A of NRS, NRS 482.313, or chapter 585 or 680B of NRS, or sections 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act, as administered or audited by the Department, it may compute and determine the amount required to be paid upon the basis of:

(a) The facts contained in the return;

(b) Any information within its possession or that may come into its possession; or

2. One or more deficiency determinations may be made with respect to the amount due for one or for more than one period.

4. The Department shall impose a penalty of 10 percent in addition to the amount of a determination that is made in the case of the failure of a person to file a return with the Department.

Amend sec. 71, page 33, by deleting lines 1 through 17 and inserting:

“Sec. 71. NRS 360.417 is hereby amended to read as follows:

360.417 Except as otherwise provided in NRS 360.232 and 360.320, and unless a different penalty or rate of interest is specifically provided by statute, any person who fails to pay any tax or franchise fee provided for in chapter 362, 364A, 369, 370, 372, 374, 377, 377A, 444A or 585 of NRS, or sections 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act, or the fee provided for in NRS 482.313, to the State or a county within the time required, shall pay a penalty of not more than 10 percent of the amount of the tax or fee which is owed, as determined by the Department, in addition to the tax or fee, plus interest at the rate of 1 percent per month, or fraction of a month, from the last day of the month following the period for which the amount or any portion of the amount should have been reported until the date of payment. The amount of any penalty imposed must be based on a graduated schedule adopted by the Nevada Tax Commission which takes into consideration the length of time the tax or fee remained unpaid.”.

Amend the bill as a whole by adding a new section designated sec. 71.5, following sec. 71, to read as follows:

“Sec. 71.5. NRS 360.417 is hereby amended to read as follows:

360.417 Except as otherwise provided in NRS 360.232 and 360.320, and unless a different penalty or rate of interest is specifically provided by statute, any person who fails to pay any tax or franchise fee provided for in chapter 362, ~~[364A,]~~ 369, 370, 372, 374, 377, 377A, 444A or 585 of NRS, or sections 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act, or the fee provided for in NRS 482.313, to the State or a county within the time required, shall pay a penalty of not more than 10 percent of the amount of the tax or fee which is owed, as determined by the Department, in addition to the tax or fee, plus interest at the rate of 1 percent per month, or fraction of a month, from the last day of the month following the period for which the amount or any portion of the amount should have been reported until the date of payment. The amount of any penalty imposed must be based on a graduated schedule adopted by the Nevada Tax Commission which takes into consideration the length of time the tax or fee remained unpaid.”.

Amend sec. 72, page 33, by deleting lines 18 through 37 and inserting:

“Sec. 72. NRS 360.419 is hereby amended to read as follows:

360.419 1. If the Executive Director or a designated hearing officer finds that the failure of a person to make a timely return or payment of a tax or franchise fee imposed pursuant to NRS 361.320 or ~~[chapter 361A, 376A, 377 or 377A of NRS, or by]~~ chapter 361A, 362, 364A, 369, 370, 372, 372A, 374, 375A , ~~[or]~~ 375B , 376A, 377 or 377A of NRS, or sections 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act, is the result of circumstances beyond his control and occurred despite the exercise of ordinary care and without intent, the Department may relieve him of all or part of any interest or penalty , or both.

2. A person seeking this relief must file with the Department a statement under oath setting forth the facts upon which he bases his claim.

3. The Department shall disclose, upon the request of any person:

(a) The name of the person to whom relief was granted; and

(b) The amount of the relief.

4. The Executive Director or a designated hearing officer shall act upon the request of a taxpayer seeking relief pursuant to NRS 361.4835 which is deferred by a county treasurer or county assessor.”.

Amend the bill as a whole by adding a new section designated sec. 72.5, following sec. 72, to read as follows:

“Sec. 72.5. NRS 360.419 is hereby amended to read as follows:

360.419 1. If the Executive Director or a designated hearing officer finds that the failure of a person to make a timely return or payment of a tax or franchise fee imposed pursuant to NRS 361.320 or chapter 361A, 362, ~~[364A,]~~ 369, 370, 372, 372A, 374, 375A, 375B, 376A, 377 or 377A of NRS, or sections 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act is the result of circumstances beyond his control and occurred despite the exercise of ordinary care and without intent, the Department may relieve him of all or part of any interest or penalty , or both.

2. A person seeking this relief must file with the Department a statement under oath setting forth the facts upon which he bases his claim.

3. The Department shall disclose, upon the request of any person:

(a) The name of the person to whom relief was granted; and

(b) The amount of the relief.

Amend sec. 73, page 35, by deleting lines 6 through 8 and inserting: “or chapter 362, 364A, 369, 370, 372, 372A, 374, 377, 377A or 444A of NRS, NRS 482.313, or chapter 585 or 680B of NRS , or sections 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act”.

Amend the bill as a whole by adding a new section designated sec. 73.5, following sec. 73, to read as follows:

“Sec. 73.5. NRS 360.510 is hereby amended to read as follows:

360.510 1. If any person is delinquent in the payment of any tax or fee administered by the Department or if a determination has been made against him which remains unpaid, the Department may:

(a) Not later than 3 years after the payment became delinquent or the determination became final; or

(b) Not later than 6 years after the last recording of an abstract of judgment or of a certificate constituting a lien for tax owed, give a notice of the delinquency and a demand to transmit personally or by registered or certified mail to any person, including, without limitation, any officer or department of this state or any political subdivision or agency of this state, who has in his possession or under his control any credits or other personal property belonging to the delinquent, or owing any debts to the delinquent or person against whom a determination has been made which remains unpaid, or owing any debts to the delinquent or that person. In the case of any state officer, department or agency, the notice must be given to the officer, department or agency before the Department presents the claim of the delinquent taxpayer to the State Controller.

2. A state officer, department or agency which receives such a notice may satisfy any debt owed to it by that person before it honors the notice of the Department.

3. After receiving the demand to transmit, the person notified by the demand may not transfer or otherwise dispose of the credits, other personal property, or debts in his possession or under his control at the time he received the notice until the Department consents to a transfer or other disposition.

4. Every person notified by a demand to transmit shall, within 10 days after receipt of the demand to transmit, inform the Department of and transmit to the Department all such credits, other personal property or debts in his possession, under his control or owing by him within the time and in the manner requested by the Department. Except as otherwise provided in subsection 5, no further notice is required to be served to that person.

5. If the property of the delinquent taxpayer consists of a series of payments owed to him, the person who owes or controls the payments shall transmit the payments to the Department until otherwise notified by the Department. If the debt of the delinquent taxpayer is not paid within 1 year after the Department issued the original demand to transmit, the Department shall issue another demand to transmit to the person responsible for making the payments informing him to continue to transmit payments to the Department or that his duty to transmit the payments to the Department has ceased.

6. If the notice of the delinquency seeks to prevent the transfer or other disposition of a deposit in a bank or credit union or other credits or personal property in the possession or under the control of a bank, credit union or other depository institution, the notice must be delivered or mailed to any branch or office of the bank, credit union or other depository institution at which the deposit is carried or at which the credits or personal property is held.

7. If any person notified by the notice of the delinquency makes any transfer or other disposition of the property or debts required to be withheld or transmitted, to the extent of the value of the property or the amount of the debts thus transferred or paid, he is liable to the State for any indebtedness due pursuant to this chapter, or chapter 362, ~~[364A,]~~ 369, 370, 372, 372A, 374, 377, 377A or 444A of NRS, NRS 482.313, or chapter 585 or 680B of NRS, or sections 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act from the person with respect to whose obligation the notice was given if solely by reason of the transfer or other disposition the State is unable to recover the indebtedness of the person with respect to whose obligation the notice was given.”.

Amend sec. 75.7, page 40, by deleting lines 10 through 13 and inserting: “Business Form, or its equivalent or successor form, a Schedule E (Form 1040), Supplemental Income and Loss Form, or its equivalent or successor form, or a Schedule F (Form 1040), Farm Income and Expenses Form, or its equivalent or successor form, for the”.

Amend sec. 77, page 41, line 21, by deleting “$3.72” and inserting “$3.45”.

Amend sec. 78, page 41, line 28, by deleting “$3.87” and inserting “$3.60”.

Amend sec. 78, page 41, line 30, by deleting “$1.42” and inserting “$1.30”.

Amend sec. 78, page 41, line 33, by deleting “76” and inserting “70”.

Amend sec. 78, page 41, line 36, by deleting “17” and inserting “16”.

Amend sec. 80, page 42, line 22, by deleting “45” and inserting “40”.

Amend the bill as a whole by adding a new section designated sec. 80.5, following sec. 80, to read as follows:

“Sec. 80.5. NRS 370.165 is hereby amended to read as follows:

370.165 There is hereby levied a tax upon the purchase or possession of cigarettes by a consumer in the State of Nevada at the rate of ~~[40]~~ 45 mills per cigarette. The tax may be represented and precollected by the affixing of a revenue stamp or other approved evidence of payment to each package, packet or container in which cigarettes are sold. The tax must be precollected by the wholesale or retail dealer, and must be recovered from the consumer by adding the amount of the tax to the selling price. Each person who sells cigarettes at retail shall prominently display on his premises a notice that the tax is included in the selling price and is payable under the provisions of this chapter.”.

Amend sec. 82, page 43, line 8, by deleting “40” and inserting “35”.

Amend the bill as a whole by adding a new section designated sec. 82.5, following sec. 82, to read as follows:

“Sec. 82.5. NRS 370.260 is hereby amended to read as follows:

370.260 1. All taxes and license fees imposed by the provisions of NRS 370.001 to 370.430, inclusive, less any refunds granted as provided by law, must be paid to the Department in the form of remittances payable to the Department.

2. The Department shall:

(a) As compensation to the State for the costs of collecting the taxes and license fees, transmit each month the sum the Legislature specifies from the remittances made to it pursuant to subsection 1 during the preceding month to the State Treasurer for deposit to the credit of the Department. The deposited money must be expended by the Department in accordance with its work program.

(b) From the remittances made to it pursuant to subsection 1 during the preceding month, less the amount transmitted pursuant to paragraph (a), transmit each month the portion of the tax which is equivalent to ~~[35]~~ 40 mills per cigarette to the State Treasurer for deposit to the credit of the Account for the Tax on Cigarettes in the State General Fund.

(c) Transmit the balance of the payments each month to the State Treasurer for deposit in the Local Government Tax Distribution Account created by NRS 360.660.

(d) Report to the State Controller monthly the amount of collections.

3. The money deposited pursuant to paragraph (c) of subsection 2 in the Local Government Tax Distribution account is hereby appropriated to Carson City and to each of the counties in proportion to their respective populations and must be credited to the respective accounts of Carson City and each county.”.

Amend sec. 83, page 43, line 25, by deleting “45” and inserting “40”.

Amend the bill as a whole by adding a new section designated sec. 83.5, following sec. 83, to read as follows:

“Sec. 83.5. NRS 370.350 is hereby amended to read as follows:

370.350 1. Except as otherwise provided in subsection 3, a tax is hereby levied and imposed upon the use of cigarettes in this state.

2. The amount of the use tax is ~~[40]~~ 45 mills per cigarette.

3. The use tax does not apply where:

(a) Nevada cigarette revenue stamps have been affixed to cigarette packages as required by law.

(b) Tax exemption is provided for in this chapter.”.

Amend sec. 95, page 46, by deleting lines 9 through 15 and inserting:

“4. The county recorder of a county may deduct and withhold from the taxes collected 0.2 percent of those taxes to reimburse the county for the cost of collecting the tax.”.

Amend the bill as a whole by deleting sec. 102 and inserting:

“Sec. 102. NRS 375.090 is hereby amended to read as follows:

375.090 The ~~[tax]~~ taxes imposed by NRS 375.020 ~~[does]~~ and section 95 this act do not apply to:

1. A mere change in [identity, form or place of organization, such as a transfer between a corporation and its parent corporation, a subsidiary or an affiliated corporation if the affiliated corporation has identical common ownership.] the name of the owner of the property without a change in the ownership interest of the property.

2. A transfer of title to the United States, any territory or state or any agency, department, instrumentality or political subdivision thereof.

3. A transfer of title recognizing the true status of ownership of the real property.

4. A transfer of title without consideration from one joint tenant or tenant in common to one or more remaining joint tenants or tenants in common.

5. ~~[A transfer of title to community property without consideration when held in the name of one spouse to both spouses as joint tenants or tenants in common, or as community property.~~

~~6.]~~ A transfer of title between spouses, including gifts [.

~~7. A transfer of title between spouses]~~ , or to effect a property settlement agreement or between former spouses in compliance with a decree of divorce.

~~[8.]~~ 6. A transfer of title to or from a trust ~~[, if the transfer is made]~~ without consideration ~~[, and is made to or from:~~

~~(a) The trustor of the trust;~~

~~(b) The trustor’s legal representative; or~~

~~(c) A person related to the trustor in the first degree of consanguinity.~~

~~As used in this subsection, “legal representative” has the meaning ascribed to it in NRS 167.020.~~

~~9.]~~ if a certificate of trust is presented at the time of transfer.

7. Transfers, assignments or conveyances of unpatented mines or mining claims.

[10. A transfer, assignment or other conveyance of real property to a corporation or other business organization if the person conveying the property owns 100 percent of the corporation or organization to which the conveyance is made.

~~11.]~~ 8. A transfer, assignment or other conveyance of real property if the owner of the property is related to the person to whom it is conveyed within the first degree of consanguinity.

~~[12.]~~ 9. The making, delivery or filing of conveyances of real property to make effective any plan of reorganization or adjustment:

(a) Confirmed under the Bankruptcy Act, as amended, 11 U.S.C. §§ 101 et seq.;

(b) Approved in an equity receivership proceeding involving a railroad, as defined in the Bankruptcy Act; or

if the making, delivery or filing of instruments of transfer or conveyance occurs within 5 years after the date of the confirmation, approval or change.

~~[13.]~~ 10. The making or delivery of conveyances of real property to make effective any order of the Securities and Exchange Commission if:

(a) The order of the Securities and Exchange Commission in obedience to which the transfer or conveyance is made recites that the transfer or conveyance is necessary or appropriate to effectuate the provisions of section 11 of the Public Utility Holding Company Act of 1935, 15 U.S.C. § 79k;

(b) The order specifies and itemizes the property which is ordered to be transferred or conveyed; and

~~[14.]~~ 11. A transfer to an educational foundation. As used in this subsection, “educational foundation” has the meaning ascribed to it in subsection 3 of NRS 388.750.

~~[15.]~~ 12. A transfer to a university foundation. As used in this subsection, “university foundation” has the meaning ascribed to it in subsection 3 of NRS 396.405.

[16. A transfer, assignment or other conveyance of real property to a corporation sole from another corporation sole. As used in this subsection, “corporation sole” means a corporation which is organized pursuant to the provisions of chapter 84 of NRS.]”.

Amend the bill as a whole by deleting sections 126 through 131 and adding new sections designated sections 126 through 131, following sec. 125, to read as follows:

“Sec. 126. As used in sections 126 to 131, inclusive, of this act, “Committee” means the Legislative Committee on Taxation, Public Revenue and Tax Policy.

Sec. 127. 1. There is hereby established a Legislative Committee on Taxation, Public Revenue and Tax Policy consisting of:

(a) The Speaker of the Assembly, or a member of the Assembly designated by the Speaker of the Assembly;

(b) The Minority Leader of the Assembly, or a member of the Assembly designated by the Minority Leader of the Assembly;

(c) The Majority Leader of the Senate, or a member of the Senate designated by the Majority Leader of the Senate;

(d) The Minority Leader of the Senate, or a member of the Senate designated by the Minority Leader of the Senate;

(e) Two members appointed by the Speaker of the Assembly who were members of the Assembly Committee on Taxation during the immediately preceding legislative session; and

(f) Two members appointed by the Majority Leader of the Senate who were members of the Senate Committee on Taxation during the immediately preceding legislative session.

2. The members of the Committee shall elect a Chairman and Vice Chairman from among their members. The Chairman must be elected from one house of the Legislature and the Vice Chairman from the other house. After the initial election of a Chairman and Vice Chairman, each of those officers holds office for a term of 2 years commencing on July 1 of each odd-numbered year. If a vacancy occurs in the Chairmanship or Vice Chairmanship, the members of the Committee shall elect a replacement for the remainder of the unexpired term.

3. Any member of the Committee who is not a candidate for reelection or who is defeated for reelection continues to serve until the convening of the next session of the Legislature.

4. Vacancies on the Committee must be filled in the same manner as the original appointments.

Sec. 128. 1. The members of the Committee shall meet throughout each year at the times and places specified by a call of the Chairman or a majority of the Committee.

2. The Director of the Legislative Counsel Bureau or his designee shall act as the nonvoting recording Secretary.

3. The Committee shall prescribe regulations for its own management and government.

4. Except as otherwise provided in subsection 5, five voting members of the Committee constitute a quorum.

5. Any recommended legislation proposed by the Committee must be approved by a majority of the members of the Senate and by a majority of the members of the Assembly serving on the Committee.

6. Except during a regular or special session of the Legislature, the members of the Committee are entitled to receive the compensation provided for a majority of the members of the Legislature during the first 60 days of the preceding regular session, the per diem allowance provided for state officers and employees generally and the travel expenses provided pursuant to NRS 218.2207 for each day or portion of a day of attendance at a meeting of the Committee and while engaged in the business of the Committee. The salaries and expenses paid pursuant to this subsection and the expenses of the Committee must be paid from the Legislative Fund.

Sec. 129. The Committee may:

1. Review and study:

(a) The specific taxes collected in this state;

(b) The implementation of any taxes, fees and other methods for generating public revenue in this state;

(c) The impact of any changes to taxes, fees and other methods for generating public revenue that result from legislation enacted by the Legislature on the residents of this state and on the businesses located in this state, doing business in this state or considering locating in this state;

(d) The fiscal effects of any taxes, fees and other methods for generating public revenue;

(e) Broad issues of tax policy and fiscal policy relevant to the future of the State of Nevada; and

(f) Any other issues related to taxation, the generation of public revenue, tax policy or fiscal policy which affect this state.

2. Conduct investigations and hold hearings in connection with its powers pursuant to this section.

3. Contract with one or more consultants to obtain technical advice concerning its review and study.

4. Apply for any available grants and accept any gifts, grants or donations and use any such gifts, grants or donations to aid the Committee in exercising its powers pursuant to this section.

5. Request that the Legislative Counsel Bureau assist in the research, investigations, hearings, studies and reviews of the Committee.

6. Recommend to the Legislature, as a result of its review and study, any appropriate legislation.

Sec. 130. 1. If the Committee conducts investigations or holds hearings pursuant to subsection 2 of section 129 of this act:

(a) The Secretary of the Committee or, in his absence, a member designated by the Committee may administer oaths;

(b) The Secretary or Chairman of the Committee may cause the deposition of witnesses, residing either within or outside of this state, to be taken in the manner prescribed by rule of court for taking depositions in civil actions in the district courts; and

(c) The Chairman of the Committee may issue subpoenas to compel the attendance of witnesses and the production of books and papers.

2. If a witness refuses to attend or testify or produce books or papers as required by the subpoena, the Chairman of the Committee may report to the district court by a petition which sets forth that:

(a) Due notice has been given of the time and place of attendance of the witness or the production of the books or papers;

(b) The witness has been subpoenaed by the Committee pursuant to this section; and

(c) The witness has failed or refused to attend or produce the books or papers required by the subpoena before the Committee that is named in the subpoena, or has refused to answer questions propounded to him.

The petition may request an order of the court compelling the witness to attend and testify or produce the books and papers before the Committee.

3. Upon such a petition, the court shall enter an order directing the witness to appear before the court at a time and place to be fixed by the court in its order, the time to be not more than 10 days after the date of the order, and to show cause why he has not attended or testified or produced the books or papers before the Committee. A certified copy of the order must be served upon the witness.

4. If it appears to the court that the subpoena was regularly issued by the Committee, the court shall enter an order that the witness appear before the Committee at the time and place fixed in the order and testify or produce the required books or papers. Failure to obey the order constitutes contempt of court.

Sec. 131. Each witness who appears before the Committee by its order, except a state officer or employee, is entitled to receive for his attendance the fees and mileage provided for witnesses in civil cases in the courts of record of this state. The fees and mileage must be audited and paid upon the presentation of proper claims sworn to by the witness and approved by the Secretary and Chairman of the Committee.”.

Amend the bill as a whole by deleting sec. 134 and adding:

“Sec. 134. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sections 136 through 140 and adding:

“Secs. 136-140. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sections 142 and 143 and adding:

“Secs. 142 and 143. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sec. 148 and inserting:

“Sec. 148. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sec. 160 and inserting:

“Sec. 160. NRS 353.288 is hereby amended to read as follows:

353.288 1. The Fund to Stabilize the Operation of the State Government is hereby created as a special revenue fund. Except as otherwise provided in subsections 2 and 3, ~~[each year after the close of the fiscal year and before the issuance of the Controller’s annual report the State Controller shall deposit to the credit of the Fund 40 percent of]~~ if the unrestricted balance of the State General Fund, as of the close of the fiscal year, ~~[which remains after subtracting an amount]~~ is equal to ~~[10]~~ 5 percent or more of all appropriations made from the State Government and for the funding of schools ~~[.]~~ , the Chief of the Budget Division of the Department of Administration shall recommend to the State Board of Examiners an amount of money that should be transferred from the State General Fund to the Fund to Stabilize the Operation of the State Government. The State Board of Examiners shall consider the recommendation and shall, if it finds that such a transfer should be made, recommend an amount to be transferred to the Interim Finance Committee. If the Interim Finance Committee, after independent determination, finds that such a transfer should and may lawfully be made, the Committee shall by resolution establish the amount and direct the State Controller to transfer that amount from the State General Fund to the Fund to Stabilize the Operation of the State Government. The State Controller shall thereupon make the transfer.

2. The balance in the Fund must not exceed ~~[10]~~ 15 percent of the total of all appropriations from the State General Fund for the operation of all departments, institutions and agencies of the State Government and for the funding of schools and authorized expenditures from the State General Fund for the regulation of gaming for the fiscal year in which that revenue will be deposited in the Fund.

3. Except as otherwise provided in this subsection and NRS 353.2735, beginning with the fiscal year that begins on July 1, ~~[1999,]~~ 2003, the State Controller shall, at the end of each quarter of a fiscal year, transfer from the State General Fund to the Disaster Relief ~~[Fund]~~ Account created pursuant to NRS 353.2735 an amount equal to ~~[one-half of the interest earned on money]~~ not more than 10 percent of the aggregate balance in the Fund to Stabilize the Operation of the State Government during the previous quarter. The State Controller shall not transfer more than $500,000 for any quarter pursuant to this subsection.

4. Money from the Fund to Stabilize the Operation of the State Government may be appropriated only:

(a) If the total actual revenue of the State falls short by 5 percent or more of the total anticipated revenue for the biennium in which the appropriation is made; or

(b) If the Legislature and the Governor declare that a fiscal emergency exists.”.

Amend the bill as a whole by deleting sections 161 through 165 and adding:

“Secs. 161-165. (Deleted by amendment.)”.

Amend the bill as a whole by adding new sections designated sections 165.2, 165.4 and 165.6, following sec. 165, to read as follows:

“Sec. 165.2. Chapter 387 of NRS is hereby amended by adding thereto a new section to read as follows:

1. On or before July 1 of each year, the Department, in consultation with the Budget Division of the Department of Administration and the Fiscal Analysis Division of the Legislative Counsel Bureau, shall develop or revise, as applicable, a formula for determining the minimum amount of money that each school district is required to expend each fiscal year for textbooks, instructional supplies and instructional hardware. The formula must be used only to develop expenditure requirements and must not be used to alter the distribution of money for basic support to school districts.

2. Upon approval of the formula pursuant to subsection 1, the Department shall provide written notice to each school district within the first 30 days of each fiscal year that sets forth the required minimum combined amount of money that the school district must expend for textbooks, instructional supplies and instructional hardware for that fiscal year.

3. On or before January 1 of each year, the Department shall determine whether each school district has expended, during the immediately preceding fiscal year, the required minimum amount of money set forth in the notice provided pursuant to subsection 2. In making this determination, the Department shall use the report submitted by the school district pursuant to NRS 387.303.

4. Except as otherwise provided in subsection 5, if the Department determines that a school district has not expended the required minimum amount of money set forth in the notice provided pursuant to subsection 2, a reduction must be made from the basic support allocation otherwise payable to that school district in an amount that is equal to the difference between the actual combined expenditure for textbooks, instructional supplies and instructional hardware and the minimum required combined expenditure set forth in the notice provided pursuant to subsection 2. A reduction in the amount of the basic support allocation pursuant to this subsection:

(a) Does not reduce the amount that the school district is required to expend on textbooks, instructional supplies and instructional hardware in the current fiscal year; and

(b) Must not exceed the amount of basic support that was provided to the school district for the fiscal year in which the minimum expenditure amount was not satisfied.

5. If the actual enrollment of pupils in a school district is less than the enrollment included in the projections used in the school district’s biennial budget submitted pursuant to NRS 387.303, the required expenditure for textbooks, instructional supplies and instructional hardware pursuant to this section must be reduced proportionately.

Sec. 165.4. NRS 387.205 is hereby amended to read as follows:

387.205 1. Subject to the limitations set forth in NRS 387.207 ~~[,]~~ and section 165.2 of this act, money on deposit in the county school district fund or in a separate account, if the board of trustees of a school district has elected to establish such an account pursuant to the provisions of NRS 354.603, must be used for:

(a) Maintenance and operation of the public schools controlled by the county school district.

(b) Payment of premiums for Nevada industrial insurance.

(d) Construction, furnishing or rental of teacherages, when approved by the Superintendent of Public Instruction.

(e) Transportation of pupils, including the purchase of new buses.

(f) Programs of nutrition, if such expenditures do not curtail the established school program or make it necessary to shorten the school term, and each pupil furnished lunch whose parent or guardian is financially able so to do pays at least the actual cost of the lunch.

(g) Membership fees, dues and contributions to an interscholastic activities association.

(h) Repayment of a loan made from the State Permanent School Fund pursuant to NRS 387.526.

2. Subject to the limitations set forth in NRS 387.207 ~~[,]~~ and section 165.2 of this act, money on deposit in the county school district fund, or in a separate account, if the board of trustees of a school district has elected to establish such an account pursuant to the provisions of NRS 354.603, when available, may be used for:

(a) Purchase of sites for school facilities.

(b) Purchase of buildings for school use.

Sec. 165.6. NRS 387.207 is hereby amended to read as follows:

387.207 1. Except as otherwise provided in this section, in each school year a school district shall spend for ~~[textbooks,]~~ library books and ~~[supplies and materials relating to instruction, including, without limitation,]~~ software for computers ~~[,]~~ an amount of money, expressed as an amount per pupil, that is at least equal to the average of the total amount of money that was expended per year by the school district for those items in the immediately preceding 3 years.

2. Except as otherwise provided in this section, in each school year a school district shall spend for the purchase of equipment relating to instruction, including, without limitation, equipment for telecommunications and for the purchase of equipment relating to the transportation of pupils, an amount of money, expressed as an amount per pupil, that is at least equal to the average of the total amount of money that was expended per year by the school district for those items in the immediately preceding 3 years.

3. Except as otherwise provided in this section, in each school year a school district shall spend for the maintenance and repair of equipment, vehicles, and buildings and facilities an amount of money, expressed as an amount per pupil, that is at least equal to the average of the total amount of money that was expended per year by the school district for those items in the immediately preceding 3 years, excluding any amount of money derived from the proceeds of bonds.

4. A school district may satisfy the expenditures required by subsections 1, 2 and 3 if the school district spends an aggregate amount of money for all the items identified in those subsections that is at least equal to the average of the total amount of money expended by the school district per year for all those items in the immediately preceding 3 years.

5. A school district is not required to satisfy the expenditures required by this section for a school year in which:

(a) The total number of pupils who are enrolled in public schools within the school district has declined from the immediately preceding school year; or

(b) The total revenue available in the general fund of the school district has declined from the immediately preceding school year.”.

Amend sec. 166, page 98, line 20, by deleting “and”.

Amend sec. 166, page 98, by deleting lines 22 through 25 and inserting:

“records public and open to inspection pursuant to NRS 239.010; and

Amend the bill as a whole by adding new sections designated sections 166.2 and 166.4, following sec. 166, to read as follows:

“Sec. 166.2. NRS 391.165 is hereby amended to read as follows:

391.165 1. Except as otherwise provided in subsection 3 ~~[of this section]~~ and except as otherwise required as a result of NRS 286.537, the board of trustees of a school district shall pay the cost for a licensed teacher to purchase one-fifth of a year of service pursuant to subsection 2 of NRS 286.300 if:

(a) The teacher is a member of the Public Employees’ Retirement System and has at least 5 years of service;

(b) The teacher has been employed as a licensed teacher in this state for at least 5 consecutive school years, regardless of whether the employment was with one or more school districts in this state;

(c) Each evaluation of the teacher conducted pursuant to NRS 391.3125 is at least satisfactory for the years of employment required by paragraph (b); and

(d) In addition to the years of employment required by paragraph (b), the teacher has been employed as a licensed teacher for ~~[1 school year]~~ 2 school years at a school within the school district ~~[which, for that school year, carries]~~ during his employment at the school:

(1) Which carried the designation of demonstrating need for improvement ~~[pursuant to NRS 385.367.]~~ ; or

(2) At which at least 65 percent of the pupils who are enrolled in the school are children who are at risk.

The provisions of this paragraph do not require consecutive years of employment or employment at the same school within the school district.

2. Except as otherwise provided in subsection 3, the board of trustees of a school district shall pay the cost for a licensed teacher to purchase one-fifth of a year of service for each year that a teacher ~~[is employed as a teacher at a school within the school district that is described in paragraph (d)]~~ satisfies the requirements of subsection 1.

3. In no event may the years of service purchased by a licensed teacher as a result of subsection 2 of NRS 286.300 exceed 5 years.

4. The board of trustees of a school district shall not:

(a) Assign or reassign a licensed teacher to circumvent the requirements of this section.

(b) Include ~~[,]~~ as part of a teacher’s salary ~~[,]~~ the costs of paying the teacher to purchase service pursuant to this section.

5. As used in this section ~~[, “service”]~~ :

(a) A child is “at risk” if he is eligible for free or reduced-price lunches pursuant to 42 U.S.C. §§ 1751 et seq.

(b) “Service” has the meaning ascribed to it in NRS 286.078.

Sec. 166.4. NRS 391.165 is hereby amended to read as follows:

391.165 1. Except as otherwise provided in subsection 3 and except as otherwise required as a result of NRS 286.537, the board of trustees of a school district shall pay the cost for a licensed teacher or licensed school psychologist to purchase one-fifth of a year of service pursuant to subsection 2 of NRS 286.300 if:

(a) The teacher or school psychologist is a member of the Public Employees’ Retirement System and has at least 5 years of service;

(b) The teacher or school psychologist has been employed as a licensed teacher or licensed school psychologist in this state for at least 5 consecutive school years, regardless of whether the employment was with one or more school districts in this state;

(c) Each evaluation of the teacher or school psychologist conducted pursuant to NRS 391.3125 is at least satisfactory for the years of employment required by paragraph (b); and

(d) In addition to the years of employment required by paragraph (b) ~~[, the]~~ :

(1) The teacher has been employed as a licensed teacher for 2 school years at a school within the school district during his employment at the school:

~~[(1)]~~ (I) Which carried the designation of demonstrating need for improvement; or

~~[(2)]~~ (II) At which at least 65 percent of the pupils who are enrolled in the school are children who are at risk ~~[.]~~ ;

(2) The teacher holds an endorsement in the field of mathematics, science, special education or English as a second language and has been employed for at least 1 school year to teach in the subject area for which he holds an endorsement; or

(3) The school psychologist has been employed as a licensed school psychologist for at least 1 school year.

The provisions of this paragraph do not require consecutive years of employment or employment at the same school within the school district.

2. Except as otherwise provided in subsection 3, the board of trustees of a school district shall pay the cost for a licensed teacher or school psychologist to purchase one-fifth of a year of service for each year that a teacher or school psychologist satisfies the requirements of subsection 1. If, in 1 school year, a teacher satisfies the criteria set forth in both subparagraphs (1) and (2) of paragraph (d) of subsection 1, the school district in which the teacher is employed is not required to pay for more than one-fifth of a year of service pursuant to subsection 2 of NRS 286.300 for that school year.

3. In no event may the years of service purchased by a licensed teacher or school psychologist as a result of subsection 2 of NRS 286.300 exceed 5 years.

4. The board of trustees of a school district shall not:

(a) Assign or reassign a licensed teacher or school psychologist to circumvent the requirements of this section.

(b) Include ~~[,]~~ as part of a teacher’s or school psychologist’s salary ~~[,]~~ the costs of paying the teacher or school psychologist to purchase service pursuant to this section.

5. As used in this section:

(a) A child is “at risk” if he is eligible for free or reduced-price lunches pursuant to 42 U.S.C. §§ 1751 et seq.

(b) “Service” has the meaning ascribed to it in NRS 286.078.”.

Amend sec. 167, page 99, by deleting lines 1 through 3 and inserting:

“(c) Is exempt from the tax on transfers of real property pursuant to subsection ~~[14]~~ 12 of NRS 379.090; and

(d) May allow a president or an administrator of the university”.

Amend the bill as a whole by deleting sec. 178 and adding:

“Sec. 178. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sec. 180 and adding:

“Sec. 180. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sections 184 and 185 and adding:

“Secs. 184 and 185. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sec. 186 and adding:

“Sec. 186. (Deleted by amendment.)”.

Amend sec. 186.3, page 128, by deleting lines 15 through 17 and inserting:

“2. The provisions of subsection 1 do not apply to a franchise fee imposed pursuant to the provisions of sections 58.12 to 58.80, inclusive, of this act.”.

Amend the bill as a whole by adding a new section designated sec. 186.4, following sec. 186.3, to read as follows:

“Sec. 186.4. NRS 680B.037 is hereby amended to read as follows:

680B.037 1. Except as otherwise provided in subsection 2, payment by an insurer of the tax imposed by NRS 680B.027 is in lieu of all taxes imposed by the State or any city, town or county upon premiums or upon income of insurers and of franchise, privilege or other taxes measured by income of the insurer.

2. The provisions of subsection 1 do not apply to a franchise tax or franchise fee imposed pursuant to the provisions of sections 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act.”.

Amend sec. 186.5, page 128, by deleting lines 24 and 25 and inserting:

“2. A franchise fee imposed pursuant to sections 58.12 to 58.80, inclusive, of this act.”.

Amend the bill as a whole by adding a new section designated sec. 186.6, following sec. 186.5, to read as follows:

“Sec. 186.6. NRS 687A.130 is hereby amended to read as follows:

687A.130 The Association is exempt from payment of all fees and all taxes levied by this state or any of its subdivisions, except:

1. Taxes levied on real or personal property.

2. A franchise tax or franchise fee imposed pursuant to sections 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act.”.

Amend sec. 186.7, page 129, by deleting lines 24 and 25 and inserting:

“for a franchise fee imposed pursuant to the provisions of sections 58.12 to 58.80, inclusive, of this act and ad valorem taxes”.

Amend the bill as a whole by adding new sections designated sections 186.8 and 186.9, following sec. 186.7, to read as follows:

“Sec. 186.8. NRS 694C.450 is hereby amended to read as follows:

694C.450 1. Except as otherwise provided in this section, a captive insurer shall pay to the Division, not later than March 1 of each year, a tax at the rate of:

(a) Two-fifths of 1 percent on the first $20,000,000 of its net direct premiums;

(b) One-fifth of 1 percent on the next $20,000,000 of its net direct premiums; and

2. Except as otherwise provided in this section, a captive insurer shall pay to the Division, not later than March 1 of each year, a tax at a rate of:

(a) Two hundred twenty-five thousandths of 1 percent on the first $20,000,000 of revenue from assumed reinsurance premiums;

(b) One hundred fifty thousandths of 1 percent on the next $20,000,000 of revenue from assumed reinsurance premiums; and

(c) Twenty-five thousandths of 1 percent on each additional dollar of revenue from assumed reinsurance premiums. The tax on reinsurance premiums pursuant to this subsection must not be levied on premiums for risks or portions of risks which are subject to taxation on a direct basis pursuant to subsection 1. A captive insurer is not required to pay any reinsurance premium tax pursuant to this subsection on revenue related to the receipt of assets by the captive insurer in exchange for the assumption of loss reserves and other liabilities of another insurer that is under common ownership and control with the captive insurer, if the transaction is part of a plan to discontinue the operation of the other insurer and the intent of the parties to the transaction is to renew or maintain such business with the captive insurer.

3. If the sum of the taxes to be paid by a captive insurer calculated pursuant to subsections 1 and 2 is less than $5,000 in any given year, the captive insurer shall pay a tax of $5,000 for that year.

4. Two or more captive insurers under common ownership and control must be taxed as if they were a single captive insurer.

5. Notwithstanding any specific statute to the contrary, except as otherwise provided in this subsection, the tax provided for by this section constitutes all the taxes collectible pursuant to the laws of this state from a captive insurer, and no occupation tax or other taxes may be levied or collected from a captive insurer by this state or by any county, city or municipality within this state, except for a franchise tax or franchise fee imposed pursuant to the provisions of sections 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act and ad valorem taxes on real or personal property located in this state used in the production of income by the captive insurer.

6. Ten percent of the revenues collected from the tax imposed pursuant to this section must be deposited with the State Treasurer for credit to the Account for the Regulation and Supervision of Captive Insurers created pursuant to NRS 694C.460. The remaining 90 percent of the revenues collected must be deposited with the State Treasurer for credit to the State General Fund.

7. As used in this section, unless the context otherwise requires:

(a) “Common ownership and control” means:

(1) In the case of a stock insurer, the direct or indirect ownership of 80 percent or more of the outstanding voting stock of two or more corporations by the same member or members.

(2) In the case of a mutual insurer, the direct or indirect ownership of 80 percent or more of the surplus and the voting power of two or more corporations by the same member or members.

(b) “Net direct premiums” means the direct premiums collected or contracted for on policies or contracts of insurance written by a captive insurer during the preceding calendar year, less the amounts paid to policyholders as return premiums, including dividends on unabsorbed premiums or premium deposits returned or credited to policyholders.

Sec. 186.9. Section 58.16 of this act is hereby amended to read as follows:

Sec. 58.16. 1. “Business entity” includes:

(b) A natural person engaging in business if he is deemed to be a business entity pursuant to section 58.42 of this act.

2. The term does not include:

(a) A governmental entity;

(d) A financial institution that is required to pay a franchise tax pursuant to section 24.38 of this act.”.

Amend sec. 189, page 131, line 19, after “353.272,” by inserting “364A.160,”.

Amend sec. 189, page 131, line 25, by deleting “364A.160,”.

Amend the bill as a whole by adding new sections designated sections 191.3 and 191.5, following sec. 191, to read as follows:

“Sec. 191.3. 1. The Legislative Auditor shall conduct a performance audit of the school districts in this state with more than 5,000 enrolled students. The performance audit must include issues relating to operational accountability, including, without limitation:

(a) Financial management;

(b) Facilities management;

(d) District organization;

(e) Employee health plans;

(f) Transportation;

(g) Alignment of the organization with the needs and expectations of the public;

(h) Training and development of management staff;

(i) Establishment of benchmarks for productivity and performance; and

(j) Examination of unusual or dramatic changes in specific budgetary line items, including, without limitation, legal expenses.

2. The Legislative Auditor shall prepare a final written report for the audit conducted pursuant to subsection 1 and present the report to the Audit Subcommittee of the Legislative Commission not later than February 7, 2005.

3. To the extent that the provisions of NRS 218.737 to 218.890, inclusive, are consistent with the requirements of this section, those provisions apply to the audit conducted pursuant to this section. For the purposes of this subsection, the Clark County School District, Washoe County School District, Carson City School District, Douglas County School District, Elko County School District, Lyon County School District and Nye County School District shall be deemed to be agencies of the State.

4. Upon the request of the Legislative Auditor or his authorized representative, the officers and employees of the Clark County School District, Washoe County School District, Carson City School District, Douglas County School District, Elko County School District, Lyon County School District and Nye County School District shall make available to the Legislative Auditor any of their books, accounts, claims, reports, vouchers or other records of information, confidential or otherwise and irrespective of their form or location, which the Legislative Auditor deems necessary to conduct the audits required by this section.

Sec. 191.5. 1. The Board of Trustees of the Clark County School District, Washoe County School District, Carson City School District, Douglas County School District, Elko County School District, Lyon County School District and Nye County School District shall, on or before February 15, 2005, give public notice of its intention to form a Business Advisory Council on or before May 15, 2005. Each Board of Trustees shall accept nominations and applications for membership on the Business Advisory Council during the period from March 1 to March 31, 2005.

2. On or before May 15, 2005, each Board of Trustees shall, form a Business Advisory Council. The Board of Trustees shall, from the nominations and applications received, select the members of its Business Advisory Council, appoint the members to terms of 2 years, designate a Chairman and Vice-Chairman from among the members, and designate an employee of the school district to serve as secretary for the Business Advisory Council. The members of the Council shall serve without salary or reimbursement for per diem or travel expenses.

3. The Council shall comply with the provisions of chapter 241 of NRS.

4. The meetings of each such Business Advisory Council must be held at a location within the respective school district and at the date and time determined by the Chairman. In no event may the Chairman set a meeting of the Council during regular school hours within the school district. Each such Business Advisory Council shall:

(a) Review the results of the performance audit conducted by the Legislative Auditor pursuant to section 191.3 of this act, particularly in regards to the school district for which the Council has been appointed.

(b) Work with the appropriate fiscal and administrative staff of the school district to form recommendations based upon the findings of the Legislative Auditor.

(c) On or before January 9, 2007, submit a written report of its findings and recommendations to the Board of Trustees of the school district, and to the Director of the Legislative Counsel Bureau for compilation and transmittal to the Legislature.

5. On or before May 15, 2007, the Board of Trustees of the Clark County School District, Washoe County School District, Carson City School District, Douglas County School District, Elko County School District, Lyon County School District and Nye County School District shall, if appropriate, provide for the continuation of the activities of its Business Advisory Council. The Board of Trustees may thereafter revise the duties of the Council and provide for its membership as it deems appropriate.”.

Amend sec. 193, page 132, line 41, by deleting “19th” and inserting “20th”.

Amend the bill as a whole by deleting sec. 194 and inserting:

“Sec. 194. 1. There is hereby appropriated from the State General Fund to the Interim Finance Committee for allocation to the Legislative Committee on Taxation, Public Revenue and Tax Policy to exercise its powers pursuant to section 129 of this act, including, without limitation, to hire a consultant:

For the Fiscal Year 2003-2004 $125,000

For the Fiscal Year 2004-2005 $125,000

2. The Interim Finance Committee may allocate to the Legislative Committee on Taxation, Public Revenue and Tax Policy all or any portion of the money appropriated by subsection 1.

3. The sums appropriated by subsection 1 are available for either fiscal year. Any balance of those sums must not be committed for expenditure after June 30, 2005, and reverts to the State General Fund as soon as all payments of money committed have been made.”.

Amend the bill as a whole by adding new sections designated sections 194.10 to 194.66, following sec. 194, to read as follows:

“Sec. 194.10. 1. There is hereby appropriated from the State General Fund to the State Distributive School Account the sum of $108,937,389 for distribution by the Superintendent of Public Instruction to the county school districts for Fiscal Year 2003-2004 which must, except as otherwise provided in sections 194.14 and 194.18 of this act, be used to employ teachers to comply with the required ratio of pupils to teachers, as set forth in NRS 388.700, in grades 1 and 2 and in selected kindergartens with pupils who are considered at risk of failure by the Superintendent of Public Instruction and to maintain the current ratio of pupils per teacher in grade 3. Expenditures for the class-size reduction program must be accounted for in a separate category of expenditure in the State Distributive School Account.

2. Except as otherwise provided in sections 194.14 and 194.18 of this act, the money appropriated by subsection 1 must be used to pay the salaries and benefits of not less than 1,887 teachers employed by school districts to meet the required pupil-teacher ratios in the 2003-2004 school year.

3. Any remaining balance of the sum appropriated by subsection 1 must not be committed for expenditure after June 30, 2004, and must be transferred and added to the money appropriated to the State Distributive School Account pursuant to section 194.12 of this act for the 2004-2005 fiscal year, and may be expended as that money is expended.

Sec. 194.12. 1. There is hereby appropriated from the State General Fund to the State Distributive School Account the sum of $117,142,553 for distribution by the Superintendent of Public Instruction to the county school districts for Fiscal Year 2004-2005 which must, except as otherwise provided in sections 194.14 and 194.18 of this act, be used to employ teachers to comply with the required ratio of pupils to teachers, as set forth in NRS 388.700, in grades 1 and 2 and in selected kindergartens with pupils who are considered at risk of failure by the Superintendent of Public Instruction and to maintain the current ratio of pupils per teacher in grade 3. Expenditures for the class-size reduction program must be accounted for in a separate category of expenditure in the State Distributive School Account.

2. Except as otherwise provided in sections 194.14 and 194.18 of this act, the money appropriated by subsection 1 must be used to pay the salaries and benefits of not less than 1,953 teachers employed by school districts to meet the required pupil-teacher ratios in the 2004-2005 school year.

3. Any remaining balance of the sum appropriated by subsection 1, including any money added thereto pursuant to section 194.10 of this act, must not be committed for expenditure after June 30, 2005, and reverts to the State General Fund as soon as all payments of money committed have been made.

Sec. 194.14. 1. Except as otherwise provided in subsection 2, the board of trustees of each county school district:

(a) Shall file a plan with the Superintendent of Public Instruction describing how the money appropriated by sections 194.10 and 194.12 of this act will be used to comply with the required ratio of pupils to teachers in kindergarten and grades 1, 2 and 3; or

(b) May, after receiving approval of the plan from the Superintendent of Public Instruction, use the money appropriated by sections 194.10 and 194.12 of this act to carry out an alternative program for reducing the ratio of pupils per teacher or to carry out programs of remedial education that have been found to be effective in improving pupil achievement in grades 1, 2 and 3, so long as the combined ratio of pupils per teacher in the aggregate of kindergarten and grades 1, 2 and 3 of the school district does not exceed the combined ratio of pupils per teacher in the aggregate of kindergarten and grades 1, 2 and 3 of the school district in the 2000-2001 school year. The plan approved by the Superintendent of Public Instruction must describe the method to be used by the school district to evaluate the effectiveness of the alternative program or remedial programs in improving pupil achievement.

2. In lieu of complying with subsection 1, the board of trustees of a school district that is located in a county whose population is less than 100,000 may, after receiving approval of the plan from the Superintendent of Public Instruction, use the money appropriated by sections 194.10 and 194.12 of this act to carry out a program in which alternative pupil-teacher ratios are carried out in grades 1 through 5 or grades 1 through 6, as applicable. Alternative ratios for grade 6 may only be approved for those school districts that include grade 6 in elementary school. The alternative pupil-teacher ratios shall not:

(a) Exceed 22 to 1 in grades 1, 2 and 3; and

(b) Exceed 25 to 1 in grades 4 and 5 or grades 4, 5 and 6, as applicable.

3. If a school district receives approval to carry out programs of remedial education pursuant to paragraph (b) of subsection 1 or to carry out alternative pupil-teacher ratios pursuant to subsection 2, the school district shall evaluate the effectiveness of the alternative program. The evaluation must include, without limitation, the effect of the alternative program on:

(a) Team-teaching;

(b) Pupil discipline; and

4. A school district shall submit a written report of the results of the evaluation to the Superintendent of Public Instruction on or before December 1 of each year for the immediately preceding school year. The Superintendent of Public Instruction shall summarize the results of the evaluations and report the findings in an interim report to the Legislative Committee on Education on or before February 16, 2004.

5. On or before February 1, 2005, the Superintendent of Public Instruction shall submit a final written report of the results of the evaluations of alternative class-size reduction programs to the Legislative Bureau of Educational Accountability and Program Evaluation. On or before February 15, 2005, the Legislative Bureau of Educational Accountability and Program Evaluation shall submit a copy of the written report to the Director of the Legislative Counsel Bureau for transmission to the 73rd Session of the Nevada Legislature.

6. The interim report required pursuant to subsection 4 and the final written report required pursuant to subsection 5 must include, without limitation:

(a) The number of school districts for which an alternative class-size reduction program was approved;

(b) A description of the approved alternative class-size reduction programs; and

(1) Team teaching;

(2) Pupil discipline; and

(3) The academic achievement of pupils.

Sec. 194.16. 1. During the 2003-2005 biennium, a school district that is located in a county whose population is 100,000 or more shall study the current class sizes in the school district for grades 1 to 5, inclusive, to determine whether alternative pupil-teacher ratios may:

(a) Improve the academic achievement of pupils;

(b) Decrease pupil discipline; or

2. In conducting the study, the school district shall consider the costs that would be associated with carrying out the alternative pupil-teacher ratios, including, without limitation, the:

(a) Number of additional classrooms needed; and

(b) Number of additional teachers needed.

3. On or before February 15, 2005, each school district that conducts a study of alternative pupil-teacher ratios pursuant to this section shall submit a written report of its findings concerning alternative pupil-teacher ratios to the:

(a) Director of the Legislative Counsel Bureau for transmission to the 73rd Session of the Nevada Legislature;

(b) Legislative Bureau of Educational Accountability and Program Evaluation; and

Sec. 194.18. 1. The money appropriated for class-size reduction pursuant to sections 194.10 and 194.12 of this act:

(a) May be applied first to pupils considered most at risk of failure.

(b) Must not be used to settle or arbitrate disputes between a recognized organization representing employees of a school district and the school district, or to settle any negotiations.

(c) Must not be used to adjust the district-wide schedules of salaries and benefits of the employees of a school district.

2. The money appropriated for class-size reduction pursuant to sections 194.10 and 194.12 of this act must not be distributed to a school district unless that school district has:

(a) Filed with the Department of Education a plan for achieving the required ratio set forth in NRS 388.700; and

(b) Demonstrated that, from resources of the school district other than allocations received from the State Distributive School Account for class-size reduction, a sufficient number of classroom teachers have been employed to maintain the average pupil-teacher ratio that existed for each grade for grades 1, 2 and 3, in that school district for the 3 school years immediately preceding the start of the class-size reduction program in the 1990-1991 school year. In addition, if a school district uses the allocations received from the State Distributive School Account for class-size reduction to carry out an alternative class-size reduction program as set forth in subsection 2 of section 194.14 of this act, a sufficient number of teachers must have been employed to maintain the average pupil-teacher ratio that existed in each grade so reduced, in that school district for the 3 years immediately preceding the implementation of the alternative program.

Sec. 194.20. In no event may the alternative pupil-teacher ratios authorized pursuant to subsection 2 of section 194.14 of this act be carried out beyond the 2003-2005 biennium unless the 73rd Session of the Nevada Legislature determines that the alternative pupil-teacher ratios may be carried out after June 30, 2005.

Sec. 194.22. The basic support guarantee for school districts for operating purposes for the 2003-2004 Fiscal Year is an estimated weighted average of $4,295 per pupil. For each respective school district, the basic support guarantee per pupil for the 2003-2004 Fiscal Year is:

Carson City $4,923

Churchill County $5,418

Clark County $4,127

Douglas County $4,541

Elko County $5,307

Esmeralda County $9,169

Eureka County $3,495

Humboldt County $5,362

Lander County $4,836

Lincoln County $7,943

Lyon County $5,553

Mineral County $6,012

Nye County $5,561

Pershing County $6,385

Storey County $7,082

Washoe County $4,161

White Pine County $6,164

Sec. 194.24. 1. The basic support guarantee for school districts for operating purposes for the 2004-2005 Fiscal Year is an estimated weighted average of $4,424 per pupil.

2. On or before April 1, 2004, the Department of Taxation shall provide a certified estimate of the assessed valuation for each school district for the 2004-2005 Fiscal Year. The assessed valuation for each school district must be that which is taxable for purposes of providing revenue to school districts, including any assessed valuation attributable to the net proceeds of minerals derived from within the boundaries of the district.

3. Pursuant to NRS 362.115, on or before April 25 of each year, the Department of Taxation shall provide an estimate of the net proceeds of minerals based upon statements required of mine operators.

4. For purposes of establishing the basic support guarantee, the estimated basic support guarantees for each school district for the 2004-2005 Fiscal Year for operating purposes are:

Basic Estimated

Support Basic

Guarantee Estimated Support

Before Ad Valorem Guarantee

School District Adjustment Adjustment as Adjusted

Carson City $4,462 $643 $5,105

Churchill County $5,094 $514 $5,608

Clark County $3,328 $921 $4,249

Douglas County $3,196 $1,451 $4,647

Elko County $5,004 $508 $5,512

Esmeralda County $6,596 $2,987 $9,583

Eureka County $(5,236) $9,304 $4,068

Humboldt County $5,006 $642 $5,648

Lander County $3,741 $1,328 $5,069

Lincoln County $7,519 $664 $8,183

Lyon County $5,149 $593 $5,742

Mineral County $5,792 $473 $6,265

Nye County $4,888 $877 $5,765

Pershing County $5,714 $949 $6,663

Storey County $5,559 $1,848 $7,407

Washoe County $3,393 $908 $4,301

White Pine County $5,915 $482 $6,397

5. The ad valorem adjustment may be made only to take into account the difference in the assessed valuation and the estimated enrollment of the school district between the amount estimated as of April 1, 2003, and the amount estimated as of April 1, 2004, for the 2004-2005 Fiscal Year. Estimates of net proceeds of minerals received from the Department of Taxation on or before April 25 pursuant to subsection 3 must be taken into consideration in determining the adjustment.

6. Upon receipt of the certified estimates of assessed valuations as of April 1, 2004, from the Department of Taxation, the Department of Education shall recalculate the amount of ad valorem adjustment and the tentative basic support guarantee for operating purposes for the 2004-2005 Fiscal Year by April 15, 2004. The final basic support guarantee for each school district for the 2004-2005 Fiscal Year is the amount, which is recalculated for the 2004-2005 Fiscal Year pursuant to this section, taking into consideration estimates of net proceeds of minerals received from the Department of Taxation on or before April 25, 2004. The basic support guarantee recalculated pursuant to this section must be calculated before May 31, 2004.

Sec. 194.26. 1. The basic support guarantee for each special education program unit that is maintained and operated for at least 9 months of a school year is $31,811 in the 2003-2004 Fiscal Year and $32,447 in the 2004-2005 Fiscal Year, except as limited by subsection 2.

2. The maximum number of units and amount of basic support for special education program units within each of the school districts, before any reallocation pursuant to NRS 387.1221, for the Fiscal Years 2003-2004 and 2004-2005 are:

Allocation of Special Education Units

2003-2004 2004-2005

DISTRICT Units Amount Units Amount

Carson City 82 $2,608,502 84 $2,725,548

Churchill County 45 $1,431,495 46 $1,492,562

Clark County 1,594 $50,706,734 1,661 $53,894,467

Douglas County 64 $2,035,904 65 $2,109,055

Elko County 80 $2,544,880 80 $2,595,760

Esmeralda County 2 $63,622 2 $64,894

Eureka County 4 $127,244 4 $129,788

Humboldt County 30 $954,330 30 $973,410

Lander County 12 $381,732 12 $389,364

Lincoln County 17 $540,787 17 $551,599

Lyon County 56 $1,781,416 57 $1,849,479

Mineral County 12 $381,732 12 $389,364

Nye County 47 $1,495,117 50 $1,622,350

Pershing County 14 $445,354 14 $454,258

Storey County 8 $254,488 8 $259,576

Washoe County 491 $15,619,201 510 $16,547,970

White Pine County 17 $540,787 16 $519,152

Subtotal 2,575 $81,913,325 2,668 $86,568,596

Reserved by State

Board of Education 40 $1,272,440 40 $1,297,880

TOTAL 2,615 $83,185,765 2,708 $87,866,476

3. The State Board of Education shall reserve 40 special education program units in each fiscal year of the 2003-2005 biennium, to be allocated to school districts by the State Board of Education to meet additional needs that cannot be met by the allocations provided in subsection 2 to school districts for that fiscal year. In addition, charter schools in this state are authorized to apply directly to the Department of Education for the reserved special education program units, which may be allocated upon approval of the State Board of Education.

4. Notwithstanding the provisions of subsections 2 and 3, the State Board of Education is authorized to spend from the State Distributive School Account up to $181,067 in the Fiscal Year 2003-2004 for 5.69 special education program units and $190,877 in the Fiscal Year 2004-2005 for 5.88 special education program units for instructional programs incorporating educational technology for gifted and talented pupils. Any school district may submit a written application to the Department of Education requesting one or more of the units for gifted and talented pupils. For each fiscal year of the 2003-2005 biennium, the Department will award the units for gifted and talented pupils based on a review of applications received from school districts.

Sec. 194.28. 1. There is hereby appropriated from the State General Fund to the State Distributive School Account in the State General Fund created pursuant to NRS 387.030:

For the 2003-2004 Fiscal Year $637,789,627

For the 2004-2005 Fiscal Year $767,086,697

2. The money appropriated by subsection 1 must be:

(a) Expended in accordance with NRS 353.150 to 353.245, inclusive, concerning the allotment, transfer, work program and budget; and

(b) Work-programmed for the 2 separate Fiscal Years 2003-2004 and 2004-2005, as required by NRS 353.215. Work programs may be revised with the approval of the Governor upon the recommendation of the Chief of the Budget Division of the Department of Administration.

3. Transfers to and from allotments must be allowed and made in accordance with NRS 353.215 to 353.225, inclusive, after separate considerations of the merits of each request.

4. The sums appropriated by subsection 1 are available for either fiscal year or may be transferred to Fiscal Year 2002-2003. Money may be transferred from one fiscal year to another with the approval of the Governor upon the recommendation of the Chief of the Budget Division of the Department of Administration. If funds appropriated by subsection 1 are transferred to Fiscal Year 2002-2003, any remaining funds in the State Distributive School Account after all obligations have been met that are not subject to reversion to the State General Fund must be transferred back to Fiscal Year 2003-2004. Any amount transferred back to Fiscal Year 2003-2004 must not exceed the amount originally transferred to Fiscal Year 2002-2003.

5. Any remaining balance of the appropriation made by subsection 1 for the 2003-2004 Fiscal Year must be transferred and added to the money appropriated for the 2004-2005 Fiscal Year and may be expended as that money is expended.

6. Any remaining balance of the appropriation made by subsection 1 for the 2004-2005 Fiscal Year, including any money added thereto pursuant to the provisions of subsections 3 and 5, must not be committed for expenditure after June 30, 2005, and reverts to the State General Fund as soon as all payments of money committed have been made.

Sec. 194.30. 1. Expenditure of $203,448,548 by the Department of Education from money in the State Distributive School Account that was not appropriated from the State General Fund is hereby authorized during the fiscal year beginning July 1, 2003.

2. Expenditure of $142,024,404 by the Department of Education from money in the State Distributive School Account that was not appropriated from the State General Fund is hereby authorized during the fiscal year beginning July 1, 2004.

3. For purposes of accounting and reporting, the sums authorized for expenditure by subsections 1 and 2 are considered to be expended before any appropriation is made to the State Distributive School Account from the State General Fund.

4. The money authorized to be expended by subsections 1 and 2 must be expended in accordance with NRS 353.150 to 353.245, inclusive, concerning the allotment, transfer, work program and budget. Transfers to and from allotments must be allowed and made in accordance with NRS 353.215 to 353.225, inclusive, after separate consideration of the merits of each request.

5. The Chief of the Budget Division of the Department of Administration may, with the approval of the Governor, authorize the augmentation of the amounts authorized for expenditure by the Department of Education, in subsections 1 and 2, for the purpose of meeting obligations of the State incurred under chapter 387 of NRS with amounts from any other state agency, from any agency of local government, from any agency of the Federal Government or from any other source that he determines is in excess of the amount taken into consideration by this act. The Chief of the Budget Division of the Department of Administration shall reduce any authorization whenever he determines that money to be received will be less than the amount authorized in subsections 1 and 2.

Sec. 194.32. During each of the Fiscal Years 2003-2004 and 2004-2005, whenever the State Controller finds that current claims against the State Distributive School Account in the State General Fund exceed the amount available in the Account to pay those claims, he may advance temporarily from the State General Fund to the State Distributive School Account the amount required to pay the claims, but not more than the amount expected to be received in the current fiscal year from any source authorized for the State Distributive School Account. No amount may be transferred unless requested by the Chief of the Budget Division of the Department of Administration.

Sec. 194.34. The Department of Education is hereby authorized to spend from the State Distributive School Account the sums of $16,926,569 for the 2003-2004 Fiscal Year and $17,843,596 for the 2004-2005 Fiscal Year for the support of courses which are approved by the Department of Education as meeting the course of study for an adult standard high school diploma as approved by the State Board of Education. In each fiscal year of the 2003-2005 biennium, the sum authorized must be allocated among the various school districts in accordance with a plan or formula developed by the Department of Education to ensure the money is distributed equitably and in a manner that permits accounting for the expenditures of school districts.

Sec. 194.36. The Department of Education is hereby authorized to provide from the State Distributive School Account the sum of $50,000 to each of the 17 school districts in each fiscal year of the 2003-2005 biennium to support special counseling services for elementary school pupils at risk of failure.

Sec. 194.38. The amounts of the guarantees set forth in sections 194.22 and 194.24 of this act may be reduced to effectuate a reserve required pursuant to NRS 353.225.

Sec. 194.40. 1. The Department of Education shall transfer from the State Distributive School Account to the school districts specified in this section the following sums for Fiscal Years 2003-2004 and 2004-2005:

School District 2003-2004 2004-2005

Clark County School District $4,532,532 $4,552,361

Douglas County School District $1,146,374 $1,175,848

Elko County School District $1,291,907 $1,295,158

Washoe County School District $1,847,128 $1,913,468

$8,817,941 $8,936,835

2. A school district that receives an allocation pursuant to subsection 1 shall:

(a) Use the money to maintain and continue the operation of a regional training program for the professional development of teachers and administrators established by the school district pursuant to NRS 391.512; and

(b) Use the money to maintain and continue the operation of the Nevada Early Literacy Intervention Program through the regional training program established pursuant to paragraph (a).

3. Any remaining balance of the transfers made by subsection 1 for the 2003-2004 Fiscal Year must be added to the money received by the school districts for the 2004-2005 Fiscal Year and may be expended as that money is expended. Any remaining balance of the transfers made by subsection 1 for the 2004-2005 Fiscal Year, including any money added from the transfer for the previous fiscal year, must not be committed for expenditure after June 30, 2005, and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.42. 1. The Legislative Bureau of Educational Accountability and Program Evaluation is hereby authorized to receive from the State Distributive School Account to spend for an evaluation of the regional training programs for the professional development of teachers and administrators established pursuant to NRS 391.512:

For Fiscal Year 2003-2004 $100,000

For Fiscal Year 2004-2005 $100,000

2. Any remaining balance of the sums authorized for expenditure by subsection 1 for the 2003-2004 Fiscal Year must be added to the money authorized for expenditure for the 2004-2005 Fiscal Year and may be expended as that money is expended. Any remaining balance of the sums authorized for expenditure pursuant to subsection 1 for the 2004-2005 Fiscal Year, including any money added from the authorization for the previous fiscal year, must not be committed for expenditure after June 30, 2005, and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.44. 1. The Department of Education shall transfer from the State Distributive School Account to the Statewide Council for the Coordination of the Regional Training Programs created by NRS 391.516 the sum of $80,000 in each Fiscal Year 2003-2004 and 2004-2005 for additional training opportunities for educational administrators in Nevada.

2. The Statewide Council shall use the money:

(a) To support the goals of Nevada Project LEAD (Leadership in Educational Administration Development), as established through the Department of Educational Leadership in the College of Education, located at the University of Nevada, Reno. In supporting the goals of Nevada Project LEAD, the Statewide Council shall:

(1) Disseminate research-based knowledge related to effective educational leadership behaviors and skills; and

(2) Develop, support and maintain on-going activities, programs, training and networking opportunities.

(b) For purposes of providing additional training for educational administrators, including, without limitation, paying:

(1) Travel expenses of administrators who attend the training program;

(2) Travel and per-diem expenses for any consultants contracted to provide additional training; and

(3) Any charges to obtain a conference room for the provision of the additional training.

(c) To supplement and not replace the money that the school district, Nevada Project LEAD or the regional training program would otherwise expend for training for administrators as described in this section.

3. Any remaining balance of the transfers made by subsection 1 for the 2003-2004 Fiscal Year must be added to the money received by the Statewide Council for the 2004-2005 Fiscal Year and may be expended as that money is expended. Any remaining balance of the transfers made by subsection 1 for the 2004-2005 Fiscal Year, including any money added from the transfer for the previous fiscal year, must not be committed for expenditure after June 30, 2005, and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.46. 1. The Department of Education shall transfer from the State Distributive School Account the following sums for remedial education programs for certain schools:

For Fiscal Year 2003-2004 $5,179,109

For Fiscal Year 2004-2005 $5,013,874

The money allocated must be used to provide remedial education programs that have been approved by the Department as being effective in improving pupil achievement.

2. A school may submit an application to the Department of Education on or before November 1 of each fiscal year for transmission to the State Board of Examiners for an allocation from the amount authorized by subsection 1 if the school:

(a) Receives a designation as demonstrating need for improvement.

(b) Did not receive a designation as demonstrating need for improvement, but the school failed to meet adequate yearly progress; or

(c) Did not receive a designation as demonstrating need for improvement, but more than 40 percent of the pupils enrolled in the school received an average score below the 26th percentile on all four subjects tested pursuant to NRS 389.015.

3. The Department of Education shall, in consultation with the Budget Division of the Department of Administration and the Legislative Bureau of Educational Accountability and Program Evaluation, develop a form for such applications. The form must include, without limitation, a notice that money received by a school to implement or continue remedial education programs that have been approved by the Department as being effective in improving pupil achievement will be used to implement or continue the programs in a manner that has been approved by the vendor of the remedial program.

4. Upon receipt of an application submitted pursuant to subsection 2, the Department of Education shall review the application jointly with the Budget Division of the Department of Administration and the Legislative Bureau of Educational Accountability and Program Evaluation. The Department of Education shall transmit the application to the State Board of Examiners with the recommendation of the Department of Education concerning the allocation of money based upon each application so received. The State Board of Examiners, or the Clerk of the Board if authorized by the Board to act on its behalf, shall consider each such application and, if it finds that an allocation should be made, recommend the amount of the allocation to the Interim Finance Committee. The Interim Finance Committee shall consider each such recommendation, but is not bound to follow the recommendation of the State Board of Examiners when determining the allocation to be received by a school. In determining the amount of the allocation, the State Board of Examiners and the Interim Finance Committee shall consider:

(a) The total number of pupils enrolled in the school who failed to meet adequate yearly progress;

(b) The percentage of pupils enrolled in the school who failed to meet adequate yearly progress;

(c) The total number of subgroups of pupils, as prescribed by the No Child Left Behind Act of 2001, 20 U.S.C. §§ 6301 et seq., enrolled in the school who failed to meet adequate yearly progress; and

(d) The financial need of the particular school.

5. In addition to the considerations set forth in subsection 4, in determining whether to approve an application for a school that has received an allocation in the immediately preceding year and in determining the amount of the allocation for such a school, the State Board of Examiners and the Interim Finance Committee shall consider whether the school has carried out the program of remedial study for which it received an allocation in a manner that has been approved by the vendor of the remedial program and whether the program has been successful, as measured by the academic achievement of the pupils enrolled in the school on the examinations administered pursuant to NRS 389.015 or 389.550 and any assessments related to the program of remedial study.

6. A school that receives an allocation of money pursuant to this section shall use the money to:

(a) Pay the costs incurred by the school in providing the program of remedial study required by NRS 385.389. The money must first be applied to those pupils who failed to meet adequate yearly progress.

(b) Pay for the salaries, training or other compensation of teachers and other educational personnel to provide the program of remedial study, instructional materials required for the program of remedial study, equipment necessary to offer the program of remedial study and all other additional operating costs attributable to the program of remedial study, to the extent that the training, materials and equipment are those that are approved by the vendor of the remedial program.

7. Before a school amends a plan for expenditure of an allocation of money received pursuant to this section, the school district in which the school is located must submit the proposed amendment to the Department of Education to receive approval from the Department of Education, the Budget Division of the Department of Administration and the Legislative Bureau of Educational Accountability and Program Evaluation, or the Interim Finance Committee.

8. The sums authorized for expenditure in subsection 1 are available for either fiscal year. Any remaining balance of those sums must not be committed for expenditure after June 30, 2005, and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.48. 1. The Department of Education shall transfer from the State Distributive School Account the following sums for supplemental services or tutoring for pupils in non-Title I schools that failed to meet adequate yearly progress on the examinations administered pursuant to NRS 389.550:

For the Fiscal Year 2003-2004 $1,000,000

For the Fiscal Year 2004-2005 $1,500,000

2. The supplemental services or tutoring for which money is provided pursuant to this section must:

(a) Be conducted before or after school, on weekends, during the summer or between sessions in schools with year-round school calendars; and

(b) Be selected by the Department as an approved provider in accordance with the No Child Left Behind Act of 2001, 20 U.S.C. §§ 6301 et seq.

3. A school may submit an application to the Department of Education on or before November 1 of each fiscal year for transmission to the State Board of Examiners for an allocation from the amount authorized by subsection 1 if the school:

(a) Receives a designation as demonstrating need for improvement; and

(b) Is not receiving money from Title I, 20 U.S.C. §§ 6301 et seq.

4. The Department of Education shall, in consultation with the Budget Division of the Department of Administration and the Legislative Bureau of Educational Accountability and Program Evaluation, develop a form for such applications.

5. Upon receipt of an application submitted pursuant to subsection 3, the Department of Education shall review the application jointly with the Budget Division of the Department of Administration and the Legislative Bureau of Educational Accountability and Program Evaluation. The Department of Education shall transmit the application to the State Board of Examiners with the recommendation of the Department of Education concerning the allocation of money based upon each application so received. The State Board of Examiners, or the Clerk of the Board if authorized by the Board to act on its behalf, shall consider each such application and, if it finds that an allocation should be made, recommend the amount of the allocation to the Interim Finance Committee. The Interim Finance Committee shall consider each such recommendation, but is not bound to follow the recommendation of the State Board of Examiners when determining the allocation to be received by a school district.

6. A school that receives an allocation of money pursuant to this section shall use the money to:

(a) Provide supplemental services or tutoring that has been selected and approved by the Department of Education.

(b) Pay the costs incurred by the school in providing the supplemental services or tutoring. The money must be applied to those pupils who failed to meet adequate yearly progress.

(c) Pay for the salaries, training or other compensation of teachers and other educational personnel to provide the supplemental services or tutoring, instructional materials required for the program, equipment necessary to offer the program and all other additional operating costs attributable to the program.

(d) Supplement and not replace the money the school district would otherwise expend for supplemental services or tutoring.

8. The sums transferred pursuant to subsection 1 are available for either fiscal year. Any remaining balance of those sums must not be committed for expenditure after June 30, 2005, and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.50. 1. The Department of Education shall transfer from the State Distributive School Account the following sums for early childhood education:

For the Fiscal Year 2003-2004 $2,896,583

For the Fiscal Year 2004-2005 $2,896,583

2. Of the sums transferred pursuant to subsection 1, $301,000 in each fiscal year of the 2003-2005 biennium must be used for the Classroom on Wheels Program.

3. The remaining money transferred by subsection 1 must be used by the Department of Education for competitive state grants to school districts and community-based organizations for early childhood education programs.

4. To receive a grant of money pursuant to subsections 2 and 3, school districts, community-based organizations and the Classroom on Wheels Program must submit a comprehensive plan to the Department of Education that includes, without limitation:

(a) A detailed description of the proposed early childhood education program;

(b) A description of the manner in which the money will be used, which must supplement and not replace the money that would otherwise be expended for early childhood education programs; and

(c) A plan for the longitudinal evaluation of the program to determine the effectiveness of the program on the academic achievement of children who participate in the program.

5. A school district, community-based organization or Classroom on Wheels Program that receives a grant of money shall:

(a) Use the money to initiate or expand prekindergarten education programs that meet the criteria set forth in the publication of the Department of Education, entitled “August 2000 Public Support for Prekindergarten Education For School Readiness in Nevada.”

(b) Use the money to supplement and not replace the money that the school district, community-based organization or Classroom on Wheels Program would otherwise expend for early childhood education programs, as described in this section.

(c) Use the money to pay for the salaries and other items directly related to the instruction of pupils in the classroom.

(d) Submit a longitudinal evaluation of the program in accordance with the plan submitted pursuant to paragraph (c) of subsection 4.

The money must not be used to remodel classrooms or facilities or for playground equipment.

6. The Department of Education shall develop statewide performance and outcome indicators to measure the effectiveness of the early childhood education programs for which grants of money were awarded pursuant to this section. The indicators must include, without limitation:

(a) Longitudinal measures of the developmental progress of children before and after their completion of the program;

(b) Longitudinal measures of parental involvement in the program before and after completion of the program; and

7. The Department of Education shall review the evaluations of the early childhood education programs submitted by each school district, community-based organization and the Classroom on Wheels Program pursuant to paragraph (d) of subsection 5 and prepare a compilation of the evaluations for inclusion in the report submitted pursuant to subsection 8.

8. The Department of Education shall, on an annual basis, provide a written report to the Governor, Legislative Committee on Education and the Legislative Bureau of Educational Accountability and Program Evaluation regarding the effectiveness of the early childhood programs for which grants of money were received. The report must include, without limitation:

(a) The number of grants awarded;

(b) An identification of each school district, community-based organization and the Classroom on Wheels Program that received a grant of money and the amount of each grant awarded;

(c) For each school district, community based-organization and the Classroom on Wheels Program that received a grant of money:

(1) The number of children who received services through a program funded by the grant for each year that the program received funding from the State for early childhood programs; and

(2) The average per child expenditure for the program for each year the program received funding from the State for early childhood programs;

(d) A compilation of the evaluations reviewed pursuant to subsection 7 that includes, without limitation:

(1) A longitudinal comparison of the data showing the effectiveness of the different programs; and

(2) A description of the programs in this state that are the most effective; and

(e) Any recommendations for legislation.

9. Any balance of the sums transferred pursuant to subsection 1 remaining at the end of the respective fiscal years must not be committed for expenditure after June 30 of the respective fiscal years and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.52. 1. The Department of Education shall transfer from the State Distributive School Account the following sums to purchase one-fifth of a year of service for certain teachers in accordance with NRS 391.165:

For the Fiscal Year 2003-2004 $2,689,206

For the Fiscal Year 2004-2005 $7,045,056

2. The Department of Education shall distribute the money appropriated by subsection 1 to the school districts to assist the school districts with paying for the retirement credit for certain teachers in accordance with NRS 391.165. The amount of money distributed to each school district must be proportionate to the total costs of paying for the retirement credit pursuant to NRS 391.165 for each fiscal year. If insufficient money is available from the appropriation to pay the total costs necessary to pay the retirement credit for each fiscal year, the school district shall pay the difference to comply with NRS 391.165.

3. Any balance of the sums appropriated by subsection 1 remaining at the end of the respective fiscal years must not be committed for expenditure after June 30 of the respective fiscal years and reverts to the State General Fund as soon as all payments of money committed have been made.

Sec. 194.54. 1. The Department of Education shall transfer from the State Distributive School Account the following sum to purchase one-fifth of a year of service for certain licensed educational personnel in accordance with NRS 391.165:

For the Fiscal Year 2004-2005 $5,732,643

2. The Department of Education shall distribute the money appropriated by subsection 1 to the school districts to assist the school districts with paying for the retirement credit for certain licensed educational personnel in accordance with NRS 391.165. The amount of money distributed to each school district must be proportionate to the total costs of paying for the retirement credit pursuant to NRS 391.165 for each fiscal year. If insufficient money is available to pay the total costs necessary to pay the retirement credit for each fiscal year, the school district shall pay the difference to comply with NRS 391.165.

3. Any remaining balance of the appropriation made by subsection 1 must not be committed for expenditure after June 30, 2005, and reverts to the State General Fund as soon as all payments of money committed have been made.

Sec. 194.56. Of the amounts included in the basic support guarantee amounts enumerated in sections 194.22 and 194.24 of this act, $64,425,447 for Fiscal Year 2003-2004 and $66,721,434 for Fiscal Year 2004-2005 must be expended for the purchase of textbooks, instructional supplies and instructional hardware as prescribed in section 194.2 of this act.

Sec. 194.58. All funding remaining in the Fund for School Improvement at the close of Fiscal Year 2002-2003 shall be transferred to the budget for the State Distributive School Account and shall be authorized for expenditure in that account.

Sec. 194.60. The sums appropriated or authorized in sections 194.40 to 194.54, inclusive, of this act:

1. Must be accounted for separately from any other money received by the school districts of this state and used only for the purposes specified in the applicable section of this act.

2. May not be used to settle or arbitrate disputes between a recognized organization representing employees of a school district and the school district, or to settle any negotiations.

3. May not be used to adjust the district-wide schedules of salaries and benefits of the employees of a school district.

Sec. 194.62. 1. The Department of Education shall transfer from the State Distributive School Account the following sums for special transportation costs to school districts:

For the 2003-2004 school year $47,715

For the 2004-2005 school year $47,715

2. Pursuant to NRS 392.015, the Department of Education shall use the money transferred in subsection 1 to reimburse school districts for the additional costs of transportation for any pupil to a school outside the school district in which his residence is located.

Sec. 194.64. There is hereby appropriated from the State General Fund to the State Distributive School Account created by NRS 387.030 in the State General Fund the sum of $3,152,559 for an unanticipated shortfall in money in Fiscal Year 2002-2003. This appropriation is supplemental to that made by section 4 of chapter 565, Statutes of Nevada 2001, at page 2832 and to that made pursuant to Assembly Bill No. 253 of the 72nd Legislative Session.

Sec. 194.66. Each school district shall expend the revenue made available through this act, as well as other revenue from state, local and federal sources, in a manner that is consistent with NRS 288.150 and that is designed to attain the goals of the Legislature regarding educational reform in this state, especially with regard to assisting pupils in need of remediation and pupils who are not proficient in the English language. Materials and supplies for classrooms are subject to negotiation by employers with recognized employee organizations.”.

Amend sec. 195, page 133, line 13, by deleting: “82, 83 and 89” and inserting: “82 and 83”.

Amend sec. 195, page 133, between lines 20 and 21 by adding:

“5. Sections 80.5, 82.5 and 83.5 of this act do not apply to any taxes precollected pursuant to chapter 370 of NRS on or before June 30, 2004.”.

Amend the bill as a whole by deleting sec. 196.3 and adding a new section designated sec. 196.3, following sec. 196, to read as follows:

“Sec. 196.3. 1. Notwithstanding the provisions of sections 58.12 to 58.80, inclusive, of this act, a financial institution is exempt from the franchise fee imposed pursuant to section 58.44 of this act for the calendar quarter ending on December 31, 2003.

2. As used in this section, “financial institution” means an institution licensed, registered or otherwise authorized to do business in this state pursuant to the provisions of chapter 604, 645B, 645E or 649 of NRS or title 55 or 56 of NRS, a similar institution chartered or licensed pursuant to federal law and doing business in this state or a person conducting loan or credit card processing activities in this state. The term does not include:

(a) A nonprofit organization that is recognized as exempt from taxation pursuant to 26 U.S.C. § 501(c).

(b) A credit union organized under the provisions of chapter 678 of NRS or the Federal Credit Union Act.”.

Amend sec. 198, pages 134 and 135, by deleting lines 33 through 44 on page 134 and lines 1 through 23 on page 135, and inserting:

“Sec. 198. 1. This section and sections 190, 191, 191.3, 191.5, 194.58, 194.64, 194.66 and 196 of this act become effective upon passage and approval.

2. Sections 59, 60, 67, 69, 75 to 80, 81, 82, 83, 84 to 88, inclusive, 90 to 93, inclusive, 98, 101, 112, 114, 116, 125 to 132, inclusive, 144 to 165, inclusive, 168, 172 to 175, inclusive, 177, 178, 180, 184, 185, 186, 188 and 192 to 194, inclusive, 195 and 197 of this act and subsection 1 of section 189 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On July 1, 2003, for all other purposes.

3. Sections 58.10 to 58.80, inclusive, 70, 71, 72, 73, 186.3, 186.5, 186.7 and 196.3 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On October 1, 2003, for all other purposes.

4. Sections 1 to 58, inclusive, 61 to 66, inclusive, 68, 70.5, 71.5, 72.5, 73.5, 74, 89, 118 to 124, inclusive, 133, 135, 141, 169, 170, 171, 176, 179, 181, 182, 183, 185.30 to 185.50, inclusive, 186.4, 186.6, 186.8, 186.9 and 196.5 of this act and subsection 2 of section 189 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On January 1, 2004, for all other purposes.

5. Sections 94 to 97, inclusive, 99, 100, 102 to 111, inclusive, 166, 167 and 187 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On July 1, 2004, for all other purposes.

6. Sections 165.2, 165.4, 165.6, 166.2, 194.10, 194.14 to 194.56, inclusive, 194.60 and 194.62 of this act become effective on July 1, 2003.

7. Sections 134, 136 to 140, inclusive, 142 and 143 of this act become effective on August 1, 2003.

8. Sections 80.5, 82.5, 83.5, 166.4 and 194.12 of this act become effective on July 1, 2004.

9. Sections 113, 115 and 117 of this act become effective at 12:01 a.m. on October 1, 2029.

10. Sections 126 to 131, inclusive, of this act expire by limitation on June 30, 2005.

11. Sections 112, 114 and 116 of this act expire by limitation on September 30, 2029.”.

Amend the title of the bill to read as follows:

“AN ACT relating to state financial administration; providing for the imposition and administration of an excise tax on employers based on wages paid to their employees; providing for the imposition and administration of a tax on financial institutions for the privilege of doing business in this state; replacing the casino entertainment tax with a tax on all live entertainment; providing for the imposition and administration of a franchise fee on business entities for the privilege of doing business in this state; eliminating the tax imposed on the privilege of conducting business in this state; revising the taxes on liquor and cigarettes; imposing a state tax on the transfer of real property and revising the provisions governing the existing tax; revising the fees charged for certain gaming licenses; establishing the Legislative Committee on Taxation, Public Revenue and Tax Policy; requiring the Legislative Auditor to conduct performance audits of certain school districts; providing for the formation of Business Advisory Councils; requiring the Department of Education to prescribe a minimum amount of money that each school district must expend each year for textbooks, instructional supplies and instructional hardware; revising provisions governing the purchase of retirement credit for certain educational personnel; apportioning the State Distributive School Account in the State General Fund for the 2003-2005 biennium; making appropriations to the State Distributive School Account for purposes relating to class-size reduction; making various other changes relating to state financial administration; authorizing certain expenditures; making an additional appropriation; providing penalties; and providing other matters properly relating thereto.”.

Assemblywoman Buckley moved the adoption of the amendment.

Remarks by Assemblywoman Buckley.

Amendment adopted.

Bill ordered reprinted, engrossed and to third reading.

Assemblywoman Buckley moved that the Assembly recess until 5:00 p.m.

Motion carried.

Assembly in recess at 2:20 p.m.

ASSEMBLY IN SESSION

At 6:49 p.m.

Mr. Speaker presiding.

Quorum present.

MOTIONS, RESOLUTIONS AND NOTICES

Assemblywoman Buckley moved that the Assembly resolve itself into a Committee of the Whole for the purpose of considering Senate Bill No. 6, with Assemblyman Perkins as Chairman of the Committee of the Whole.

Motion carried.

IN COMMITTEE OF THE WHOLE

Assemblyman Perkins presiding.

Quorum present.

Senate Bill No. 6 considered.

Chairman Perkins:

There were a number of concerns in this bill that were raised last night in the late hour that we worked. A couple of those issues are what the amendment that is being passed out to you is addressing. I will ask the Majority Leader to explain to you what is in the proposed amendment.

Assemblywoman Buckley:

Thank you, Mr. Chairman. In regards to the issue of insuring that a franchise tax did not unfairly, or doubly, effect any industry, we had during our entire tax debate put in measures to insure there were not cascading or pyramiding. These would occur in two areas. One area is where a contractor received funds, which were then passed to subcontractors, where developers would pay taxes on real property transfer tax and on the revenue received. As well, is the issue where real estate brokers would receive money but only in trust to pass on to someone else. What the amendment does is, in its prepared final form, for purposes of saving some time, is to insure the original intent is clarified. That is the sum and total of this entire amendment and I would urge that the committee support its passage.

Chairman Perkins:

That is a motion by Ms. Buckley. Do I have a second? I have a second by Mr. Oceguera. Are there further remarks to the amendment? All those in favor of Amendment No. 4 to Senate Bill 6 please indicate by saying aye. Are there any opposed?

Motion carried and the amendment is adopted. We will now need to rise from the Committee of the Whole.

On motion of Assemblywoman Buckley, the committee did rise and report back to the Assembly.

ASSEMBLY IN SESSION

At 6:52 p.m.

Mr. Speaker presiding.

Quorum present.

MOTIONS, RESOLUTIONS AND NOTICES

Assemblywoman Buckley moved that all rules be suspended and that Senate Bill No. 6 be declared an emergency measure under the Constitution and placed on third reading and final passage.

Motion carried unanimously.

general file and third reading

Senate Bill No. 6.

Bill read third time.

The following amendment was proposed by the Committee on Committee of the Whole:

Amendment No. 4.

Amend sec. 58.24, page 29, line 41, by deleting “includes reimbursement” and inserting: “includes:

(a) Revenue that a real estate broker receives pursuant to NRS 645.280 and is required by contract to pay to a licensed real estate broker, broker-salesman or salesman who performed services for that revenue.

(b) Reimbursement”.

Amend sec. 58.48, page 35, by deleting lines 35 through 39 and inserting: “subcontractors for the portion of any materials or services provided in the development of improved real property, made by a business entity who is:

(a) A contractor or subcontractor; or

(b) In the business of developing improved real property.

The amount of the deduction must not exceed the gross revenue of the business entity from the transaction.”.

Amend sec. 58.48, page 35, between lines 42 and 43 by adding:

“14. Any revenue of the business entity upon which the business entity paid the tax imposed pursuant to section 95 of this act.”.

Amend sec. 80, page 58, line 4, by deleting “40” and inserting “42.5”.

Amend sec. 80.5, page 58, line 16, by deleting “~~[40]~~ 45” and inserting “~~[42.5]~~ 47.5”.

Amend sec. 82, page 59, line 2, by deleting “35” and inserting “37.5”.

Amend sec. 82.5, page 59, line 30, by deleting “~~[35]~~ 40” and inserting “~~[37.5]~~ 42.5”.

Amend sec. 83, page 60, line 5, by deleting “40” and inserting “42.5”.

Amend sec. 83.5, page 60, line 14, by deleting “~~[40]~~ 45” and inserting “~~[42.5]~~ 47.5”.

Assemblywoman Buckley moved the adoption of the amendment.

Remarks by Assemblywomen Buckley and Chowning.

Potential conflict of interest declared by Assemblywoman Chowning.

Amendment adopted.

Bill ordered reprinted, re-engrossed and to third reading.

Assemblywoman Buckley moved that the Assembly recess until 8:30 p.m.

Motion carried.

Assembly in recess at 6:57 p.m.

ASSEMBLY IN SESSION

At 8:41 p.m.

Mr. Speaker presiding.

Quorum present.

MOTIONS, RESOLUTIONS AND NOTICES

Assemblywoman Buckley moved that Senate Bill No. 6 just returned from the printer, be placed on the General File.

Motion carried.

general file and third reading

Senate Bill No. 6.

Bill read third time.

Remarks by Assemblymen Oceguera, Hardy, Chowning, Brown, Buckley, Giunchigliani, Geddes, Anderson, Griffin, Mortenson, Collins, Knecht, Parks, Goldwater, Carpenter, Hettrick, Williams, McClain, Angle, Horne, Grady, and Leslie.

Assemblyman Oceguera requested that the following remarks be entered in the Journal.

Assemblyman Oceguera:

Thank you Mr. Speaker. Before we begin the debate on the merits of this bill, I think it is appropriate to comment on our obligations as Legislators. When we arrived here in February, we all stood and raised our right hand, swearing to uphold the Constitution of the State of Nevada. I would like to speak to that obligation. Our Legislative Counsel Bureau offered an opinion that was pretty clear. It said that we needed to pass a balanced budget. As if that wasn’t clear enough though, we brought in our own state’s Attorney General, and he sat before us and said the same thing, that it was very clear that we needed to pass a balanced budget. He said that if we do not pass a tax package by July 1, the Nevada Legislature will have failed in its Constitutional duty to pass a balance budget.

Mr. Speaker I believe it’s our goal to pass something here. We may have ideological differences. We may have theoretical differences, but if you believe in this process, if you believe that we need to make progress, I think that is really what’s important; to get this process going. However imperfect this bill is, we need to get it out of this house, the people’s house, for the citizens of this state, so that we can find some common ground and work together. I think if we do that, we can honor the constitutional obligation that we have, and we can go home and pass this budget, whatever that may be. Whether it’s what we have here, or what we have seen in the other house, we can honor that constitutional obligation today by voting in the affirmative for this bill. Thank you Mr. Speaker.

Assemblyman Hardy:

Thank you Mr. Speaker. I would like to share the reasons why I would not vote for this bill, SB 6. It is not a clean Senate Bill. It lacks continuity of definition of non-profit businesses. It doesn’t exempt one of the most critical and tenuous industries, long-term nursing care. It adds to the burden of the hospital, thus being a further driver of increasing health care costs in contracts for medical care. It doesn’t rely mainly on what I consider the better tax, the business employee tax. It includes too many school districts in the K-12 audit. It sets up an unfounded mandate, in the same school district for a business advisory council. It has been hastily done in the crush of time. It funds the rainy day fund without an easy way, such as a two thirds vote, to get at the money. It taxes businesses that can quickly leave Nevada. It raises taxes, and I am a Republican, and I want to be re-elected.

The reasons I will be voting for this bill, SB 6, are as follows: I believe we have a need to fund K-12 and higher education. I believe we need to care for the poor. I believe we are not currently sound in our state fiscal situation. I believe we are not funding pork, but we need more beans. I believe that we need to balance the budget, although I believe that parts of the budget can be delayed or postponed. I believe that we have included a spending cap that will come into play if the proposed taxes bring in too much. I believe that we have protected, with fences, areas of education so that our children will have a better chance of having books and supplies. I believe that, however onerous the franchise tax may be in my estimation, this particular iteration appropriately protects the small business owner and the sole proprietor. I believe that my democratic colleagues don’t like some aspects of this tax program as well. I believe that this tax avoids the double taxation for construction industry and developers. It taxes cigarettes, alcohol and strip clubs. It taxes growth with real property transfers. It will meet our constitutional duty to fund education on time. I am a Republican who wants to be re-elected. Thank you Mr. Speaker.

Assemblywoman Chowning:

Thank you, Mr. Speaker. I stand in support of SB 6. As my colleague from Boulder City stated, there are some parts of the bill that I’m not happy with either, but I want to tell you why I’m going to vote for SB 6. I represent a district that has a lot of working families. I represent a district that has some schools in which 90 percent of the population is limited English proficient. I represent Luisa, who wants to be a doctor. I’m voting for this for José, who wants to be a carpenter. Both Luisa and José desperately need the literacy specialists. The literacy specialists who are right now being told that they probably would not be able to help Luisa and José, because they have to go back into the classroom and not do what they do best.

I’m also voting for this even though this is going to tax my husband and me in our business in dollars that we’ve never been taxed before. But you know what, we’re going to step up to the plate and we’re going to pay these taxes because were proud to be business citizens that will be supporting folks like Luisa and José.

I’m also voting for this for Daniel Joseph Beasley. Daniel Joseph Beasley, whose birth I proudly proclaimed right here during the 1995 session, is one of my grandchildren. Daniel has speech problems. He is in school in Clark County. No one could understand him, because he had such speech problems when he started school in kindergarten. Now, however, people can understand him better. Do you know why? It is because of his speech teacher, who has miraculously helped Daniel. I proudly stand in support of this for all the Daniels, for all of the Luisas, and for all of the Josés. If we do not step up to the plate and make this historical step, for years to come, Daniel, Luisa and José will not have the literacy specialists, the speech pathologists, or the wonderful teachers to help them. They need these people. Thank you.

Assemblyman Brown:

Thank you, Mr. Speaker. Actually, I have a question as it pertains to one small section of the bill. I was asked for my opinion on a particular portion, and I apologize Mr. Speaker, but this deals with Amendment Number 4 that we previously approved. I was asked about some of the language. Somebody asked me about some of the construction cascading language, perhaps because I do some legal work in that area. I will disclose to this body that I do represent contractors. For that person, I’m trying to get a little clarification.

On page 35, Mr. Speaker, the concern was about the following being deductible: “the cost of all payments made to contractors and sub-contractors for the portion of any materials or services provided, the development of improved real property.” That was the language that this person was asking about. I tried to convey that I thought that meant any work of improvement, meaning tenant improvement work, or any horizontal or vertical construction. I think there was some concern that by using the word development, it meant only a project that goes from raw dirt to full construction and maybe that wouldn’t include tenant improvement. I would appreciate if we could establish for the record that it does include all forms of work of improvement to any real property. I would appreciate an opinion if anyone has that information.

Assemblywoman Buckley:

Thank you, Mr. Speaker. The words would be given their plain meaning. I would concur with my colleague from Henderson that it would not just be raw land to development. It would be the development, meaning the building of improvements, regardless of the stage.

Assemblyman Brown:

Thank you. That was my opinion. Thank you, Mr. Speaker.

Assemblywoman Giunchigliani:

Thank you, Mr. Speaker. I thought I would just go through the Distributive School Account and remind everybody what’s contained within the bill and the class size reduction. Included in this now, towards the back of the bill near section 198, is the performance audit of kindergarten through twelfth grade. We’ve funded textbook increases at fifty dollars per textbook. In addition to that, there is the per pupil funding of $4,295 in the first year, and $4,424 in the second year. We funded special education units at $31,811 for the first year and $32,447 in the second year. I would remind the body that this is still under-funded by approximately $20,000 for each unit. In order to keep teachers at the At Risk schools, or at a school in a teacher shortage area, they would earn a retirement credit of one-fifth credit. There is a minor teacher’s salary increase of two percent for each year, and that’s because they only got two percent over the last four years, which didn’t even keep pace with inflation. There is funding for teacher training centers, tutoring people in Title I, early childhood education, and programs including “Classrooms on Wheels”. There are remediation dollars for students, as well as programs for non-English language learners. There is hold harmless funding for the rural counties, and the PERS offset that’s required for the increase for this year. In addition to that, we have the class size reduction contained within the bill. The bill maintains the one to sixteen teacher-student ratio for first and second grade in the urban areas, and the one to nineteen ratio in third grade. It allows for flexibility in the rural areas to go to a one to twenty-two ratio. The bill requires a study for the purpose of eliminating team teaching, which is the whole goal of the class size reduction.

I want to remind you of some things that are not contained in this education budget. There is not one penny for inflation for textbooks, for instructional supplies, or materials. The only thing we funded for inflation was for utilities. I don’t know about you, but I know at home the price of everything has gone up, and is predicted to go up higher, yet we did not bother to fund for that. Therefore, districts will already be under-funded when they deal with the inflation cost. The bill includes an under-funded health care plan. We funded it at ten percent each year, but we had testimony that said right now there increases are actually eighteen percent. Consequently, there is already an eight percent budget shortfall for health care coverage. We did not include kindergarten class size reduction. I’ll be back next time for that issue, if I’m re-elected. Also, there were no additional days added to the school year calendar, yet we’ve added more standards over the past fifteen to twenty years. Although we wanted to add minutes to the workday, additional time did not get included. Finally, increasing the beginning salary to $30,000 also was not funded.

Those were just some of the things that we grappled with in the first session that we did not include in here, not because they weren’t good ideas, but out of respect in argument and compromise, we didn’t have the funding at this time to do it.

So, I think that all through this process, and contained within the bill, is what we have attempted to do all along, which is to compromise. But, now we have to act. We have an obligation to fund education. I used this saying when I was coming here years ago, “Education, we want what’s right, not what’s left.” Unfortunately, it seems to be one of the last budgets. As I indicated earlier, if I wasn’t still arguing with the Senate, maybe we would have gotten this budget out sooner, but it’s always the most difficult, because so many people are concerned with it and we have so many different philosophical debates on this matter. However, this evening we have an opportunity to move forward to make sure that our schools are funded beginning July first.

You’ve seen the articles, you’ve heard from your districts, you’ve heard from the parents and the students. We have an obligation to act. I don’t like everything in this bill. I don’t like all the taxes that are in here. Some taxes are too high, some are too low, but I agree with my colleague from Boulder City. There are things you need to wrap your arms around at some point and say, “You know what, I can embrace that, I can live with that.” We have an opportunity tonight to make sure that we fund our budget, fund education, and make sure that we take care of the future citizens, the future politicians, and the future leaders of this state.

Nothing that you hear is going to be new this evening. I just hope that everybody has the courage and the leadership to do the right thing. We don’t need to stay here any longer. We need to fund our schools. We have year-round schools that are in jeopardy of going to four days. We have summer programs that are going to be cut. GATE is at risk for those parents and students. Music programs are at risk. I don’t think that people realize how much goes on in education in the, so-called, summer breaks. The world has changed out there, and we have an obligation to make sure that those young men and women have an opportunity to learn through the whole year. This budget and this tax plan, while imperfect, need to move forward. We had testimony yesterday from a business community that has said all along, Tax us. We listened to them, or at least we attempted to. We’ve made modifications, we’ve made compromises, but now it’s time to show the leadership. It’s not a perfect world. For those of you, whom it’s your first time up here, I think the one lesson we all found our first time is that there’s not two sides to an issue. You’re lucky if there are only ten sides to an issue. Our responsibility is to sit down and listen, to talk and be passionate, but to also build compromise. Compromise is a strength, not a weakness. This bill represents strength. It represents compromise, and I would urge your consideration no matter if you don’t like everything in the bill. You can’t like everything in every bill. You’ve seen that in the previous sessions. Find some of the good things that you can embrace, and make the right decision. Thank you Mr. Speaker.

Assemblyman Geddes:

Thank you, Mr. Speaker. I rise in support of this bill. It’s not the perfect bill. It’s not the bill I would love to support. I was born in this state, raised in this state, and educated in this state and I think this is a step in the right direction.

Upon receiving my doctorate, my father was so kind to point out that I’m not a real doctor. I could not say it as well as a real doctor, and I thank my colleague from Boulder City for saying everything that I wanted to say. I’ll just add, ditto.

Assemblyman Anderson:

Thank you, Mr. Speaker. Obviously, I rise in support of the bill, not that it comes to anybody’s great surprise. I know that it’s easy to talk of courage. On Monday I had the opportunity, along with several of the other members from the Washoe County delegation and my esteemed colleague from Douglas County, to attend the Washoe County School Board meeting. They talked about what their concerns were. I know that we think of our job as being the most difficult in the political world when we’re caught in a situation like we are right now, where every vote is at the lion’s throat. I’m sure that we see it that way, but I know from having watched school boards in action for well over thirty years that they have the most difficult of all jobs. They have to know what’s for lunch, what time kids are going to have recess, and what’s happening in every class, because the parents who ask them those questions are talking about their children. I know from talking to parents when they ask me about their child, they are concerned about what their child is doing in my room and not about what the other thirty are doing. When the newsprint focuses on the Distributive School Fund, it focuses on a very real problem for children and for parents who want to make sure that their children are receiving the very best.

We’ve heard some rhetoric of late about Nevada bashing and about where we are in terms of the raw numbers. I’m reminded of the story that we all probably heard as children about not comparing yourselves to others because there will always be greater and lesser people than you in any situation. So I’m not talking about what’s happening on the other side of this mountain. I’m not talking about where Utah is, where Montana is, or where Oregon and Washington States are. I’m talking about what the needs are for our school districts, for our children, for our people in this state, right here and now. I’m not talking about the political ideology that we would like to hide behind, but about the real needs, the real people, and the real world in which they live. They need to have the assurance of what is going to happen now so that the school districts can operate. I’m supporting this because they need that certainty.

My colleagues need to prepare now for their lesson plans in October and November, because they think two or three months down the road. They need to be thinking about where the children are going to be a year from now. We are long-range planners. That’s what teachers do. We want to make sure that your child gets the very best education, and we will make every dollar count, because they’re are kids too. I beseech you, please, have the courage to do the right thing and support this.

Assemblyman Griffin:

Thank you, Mr. Speaker. Yesterday, when this budget was being discussed in the other house, my very good friend and our colleague the Senator from District 12 had what I thought was a very interesting comment. He said that when he started this process he knew there was no such thing as a perfect tax bill. Having gone through this process for the last 150 days, he determined that there is no such thing as a good tax bill. I thought that was an interesting comment and I guess, to a certain level, we probably all agree with that. I do think this is a good bill, but I sure wish that I didn’t have to vote for it. When we heard this in committee I, without placing blame on anybody, came up and said, “I didn’t create this problem but this problem exists.” This problem is not going to go away in two years if the economy improves. This problem exists right now and it has existed for years. It is my responsibility and my opinion to do what I can, despite the political consequences, to fix the problem that we have seen.

I do think it’s a good bill. There are elements of it that I don’t like. We’ve discussed them. I just want to say that I appreciate the opportunity to work with the Majority Leader, the Speaker and others. I appreciate the opportunity to work with Minority Leader as well, to make this a better bill. Again, I appreciate just in the last few days, being able to come down and put my two cents worth in and I think this is better bill because of it, in my opinion. There are still things, at some level, to change. If the opportunity presents itself, I hope to be at that table and help change them. Some of the things that we get out of this bill have never really happened before, such as spending caps. We have all talked about trying to make sure that we can control this to an extent. It is not onerous but there are some spending controls. There are audits of the University System, not in this budget, but that came out of this legislative session. Also, hopefully audits of our schools will make sure that there is some accountability that the money is being spent well. We were able to fence off some money. Again, these are reforms, principled reforms that we can take back home and show that we changed the way this state does business. I think that, at some level, we are all very proud of this.

I think that this is a lean budget. I actually think that this is a very conservative budget. This is a budget that is $130 million less than our Governor had suggested. If you go back to the last several sessions of this legislature, and I have been able to see it as an observer, this is one of the most fiscally conservative Governors in the history of this state. He has looked at every penny in state spending and figured out ways to reduce, to cut, to become more efficient. This budget contains $130 million less that he originally requested.

As you all know, I am from Henderson. As you also probably know I grew up in Reno. Not to date myself, or the Senate Majority Leader, but he has been my senator since I was five years old. There is no stronger fiscal conservative in this state. He is constantly, from what I can remember since I was in elementary school, not that I was observing state budgets when I was in elementary school, but you all get the point, has been, I believe and would default to anybody here who has observed this process, as fiscally conservative as has existed. He supports this budget.

Again, I think this is a good budget. I think that the taxes still leave Nevada as one of the lowest taxed states in the nation. It certainly leaves Nevada’s businesses, specifically its non-gaming businesses, as the lowest taxed in the nation. We all have different things that motivate us. The Bible said, I think it’s from Matthew, “When thou makes a feast, invite the poor, the blind, and the maimed.” I think a feast has been made in this state. This budget doesn’t do anything onerous to those feasts, but feasts have been made in this state.

I think we have an obligation to fund this budget. I think this budget is responsible. I think this budget is conservative, and one of the most important things it does is start to address our structural deficit. The first thing I did when I was elected was to call our Fiscal Analyst. I wanted to find out how we got this huge deficit to the tune of hundreds of millions of dollars. How’d we get here? He e-mailed me a spreadsheet of Nevada’s revenue numbers over the last ten years. The revenues that were coming into this state since 1991 have declined by about one and a half percent per year on a per capita basis. I think at some level the USA Today article that came out a couple of days ago showing us as one of the few states over the last several years as actually having our expenditures not exceed our growth plus inflation is indicative of that. Again, in the last ten years we have lost one and a half percent per year. So this budget is being mistakenly identified as a thirty-five percent increase from the last biennium. This budget really only gets us to 1991 levels, but it does start to address the non-gaming business element of this state and the growth of this state as contributing more to this state’s general fund. As we continue to grow as a state beyond our primary industry, under the current tax structure, the decline will continue. Does this fix all the problems? No, but it does a pretty good job of starting that correction. Therefore, I believe that this is a good responsible budget and I’m proud to support it. Thank you Mr. Speaker.

Assemblyman Mortensen:

Thank you Mr. Speaker. Our state consistently, in polls of business environment, ranks number one, maybe number two in a bad year, maybe number three, but we’re always up in the top. That’s the business environment, but when you look at social environment and when you look at people environment, we are always at the bottom of the barrel. I have some statistics here, which are going to be disputed, but I received them from the Legislative Counsel Bureau and I trust what I get from LCB. Nevada raked 50^th in the nation in the amount per capita that the state spent on Medicaid in the year 2000. We raked 49^th in the nation in local welfare spending in the year 2000. Regarding the percentage of people employed by government, and this is surprising to me, Nevada ranks 50^th in the nation. We rank 36^th in the funding of state arts agencies. We ranked 43^rd in the nation for per pupil spending, and one of the consequences of that, we raked 49^th in high school completion rates.

What is the reason for the dismal ratio of our business environment versus our people environment? It’s because we don’t have the money in government to spend on people. The reason we have the high rating for business is because business pays so little tax here and that’s the reason we have so little money to spend for these social amenities for our people. We really need this bill. We need to let business do what they said they want to do. We need business to be the engine that pulls us out of this deep abyss of social ratings where we are always on the bottom. We need to get at least up into the middle, hopefully. We might pull business down a little bit, but it will pull the social ratings up a little bit. Let’s balance the business and the social. Thank you Mr. Speaker.

Assemblyman Collins:

Thank you, Mr. Speaker. I want to share some more history and some more current events. “The problem of educating Nevada’s children has been emphasized in the last three sessions and considerable public support has been built up for a more adequate state program. Thus, nearly every lawmaker in the 1955 session realizes that unless he wants his constituents to stage a full-scale revolt, the school problem must be tackled head on and funds must be supplied for some kind of a build up.” Forty-eight years ago we were in this problem and we are in it again today.

I would like to share some more current numbers concerning the increased budgets. From when we left last session to this session, we’ve had to cut about 294 million dollars because of the shortfall in our budget according to a document I received. There is a hiring freeze of 1,600 positions. We’ve had people complain. Two days ago a guy was here in the balcony booing the last time we were speaking on this. He went back home and called me. I spoke to him, my own constituent. He had spent three hours waiting in line at DMV down on Donovan Way in Clark County. We have a responsibility to the citizens of this state to provide for the opportunity to get a driver’s license or a license plate, to get welfare or food stamps, to adopt a child, to drive on a decent road, to get a decent education, and have a book and desk and chair to sit in. That is an obligation we have to our constituents and that is one of the reasons they elect us. For those of you who are worried about elections, this is not the time to worry about elections. I’m a Nevadan right now. Democrat, Republican, and Independent American are all out the window right now folks. We’re being Nevadans right now. That’s what we should be. That’s where our hearts should be at as a Nevadan.

With the hiring freeze of the last few years of up to 1,600 employees, we have, so called, saved the state $620 million in wages at the average of $40,000 per person. Having to cut budgets, add money to Medicaid, dip into reserves to provide for people that were in need after 911, losing nearly a years worth of normal tax gains and revenue gains because of 911 throughout this state, we have already set ourselves back nearly $300 million. In addition, we’ve suffered the hiring freezes that have delayed us in providing adequate services. Just a few years ago we closed a mental health facility in Clark County. I can name a ton of things we have not done, not been responsible for, and this is a day that we can rectify that. This, what some people consider to be a huge tax increase, doesn’t even get us back to even, as our colleague from Henderson told you. We’re not even getting back to even. We’re still in the hole. We’re not even getting back to even. It astounds me

The 2004-2005 Governor’s recommended budget, that has been mentioned, cuts out 497 jobs next year and 511 the year after. Some of the biggest cuts include 160 people, and then 174 people, in Human Resources. Those are the folks who take care of children, youth and family administrations. The Nevada Mental Health Institute is yet another thing that we have big cuts in. We’re not taking care of our constituents. We’re good to the guy who sends the campaign check, if you want to be political, but lets forget the politics. It’s obvious, we’re driving a broken down car and we need to fix it. It needs a major overhaul. We just need to make ourselves whole here.

Going back to history again from the Reno Evening Gazette back in 1955. “The one sound state”, it said of Nevada, and on the surface this was true. We were one sound state because we had very powerful federal congressional people that sent lots of federal dollars to Nevada. This was before World War II. Then we got in a bind and all of a sudden we were broke. Nevada has been working deeper into the financial quick sands. The phenomenal population growth of the state brought a host of new problems.

I’ve got some more research here. In Clark County, since January, 18,600 electric meters were set. That’s new growth. That is adults and children. Not all of those adults are going to have health care, so there is going to be more of a burden on our health needs. There is going to be more schools needing to be built, more books to buy and more teachers to hire. I don’t think that this proposal, Senate Bill 6, keeps up with that growth. Just imagine if there is just 18,600 new meters. Families are going to move in. If only twenty-seven or thirty percent of those households have kids, that’s a bunch of kids. Folks, we’re behind the eight ball and I don’t know what other way to ask you to be honest with yourself and to ask yourself. Reach into your heart. Think about the folks that live in Nevada: the ones that live in Ely, or Winnemucca, or Hawthorne. Don’t just think about the folks down the street from you, or up in the new neighborhoods, if you live in Clark County where twenty-nine of us live. Think about this whole state. Think about the folks in Pahranagat High School. Look at those kids. The effort that they go through to get their kids to a ball game, or to school is extreme. A family moved out of Alamo last year and they lost a teacher because the numbers went down. These are some examples of the needs in our state. The brand new high school in Lund is another example. We paid for that. The folks over there in White Pine couldn’t afford it.

We have got to get on the ball folks. I would encourage you to search your soul, think about Nevada, be a Nevadan and support it please. Thank you.

Mr. Speaker requested the privilege of the Chair for the purpose of making the following remarks.

I’m obviously allowing quite a bit of latitude on Senate Bill 6, and as long as the debate stays at this level, I think that it’s very healthy for this discussion. Therefore, this is sort of a perpetual Order of Business fifteen.

Assemblyman Knecht:

Thank you, Mr. Speaker. I rise first to repeat and re-invoke my disclosure and declaration that I am a state employee and when we’re done here I will be returning to state service. I don’t think this bill effects me any differently than any other state employee, and therefore, I will be voting on the bill.

As I said in the Committee of the Whole, I support reasonable spending and tax increases and I’ve been on record doing so throughout this session. Senate Bill 6 includes excessive spending and taxes. It includes particularly, unnecessarily destructive taxes, and so it’s contrary to the public interest. Our total growth is fifteen percent. SB 6 includes thirty-three percent, or more than twice the real growth of all factors. It’s not a reasonable compromise. SB 6 is profoundly wrong. It does not come close to the balance point, so I will vote against it as a matter of principle. There is no politics, no concern about elections here. I will vote against it as matter of fidelity to my constituents, two of whom are sitting with me tonight, and to the well being of everyone in Nevada and my district. Finally, I will vote against it for three generations of my family, my mother-in-law Christina Jensen who is in her eighties, my lovely wife Kathy whom I love dearly and care about her welfare, and finally my daughter Karen who is almost two years old and who is the future of our family and the future of Nevada. I will be voting for her future and voting against this. It’s the right thing to do for her. Thank you Mr. Speaker.

Assemblyman Parks:

Thank you, Mr. Speaker. I rise in support of this measure. I believe that it is, first of all, both fair and balanced. As we have often heard, no one wants to vote for a tax increase if they don’t have to. We have worked on this for five months. We have had a lot of input into this long before this. We are all well aware of the ACR 1 task force and the work they have done. These are individuals who put relentless effort into this. They put out a tremendous amount of data, and I certainly hope most of my colleagues have had an opportunity to at least view some of it. It is an extremely impressive amount of work. Prior to that, in the interim of 1999 and 2000, our Governor established the Governor’s Fundamental Review. He asked for a lot of people to work on it and a lot of people did come forward. They all gave their efforts, and they attended more than twenty hearings. I know that I served on it, and for those of us who did serve on it, we did so without pay. We found out, just as all of you are well aware, that we are not keeping up with the needs of this community. My colleague from District 42 commented on where we were deficient; where we were from 45 to 50 in rankings. Those are deplorable, especially in a state where we are ranked somewhere between 10 and 17 as far as income. It is just shameful that we should be so low in those other ratings.

No one wanted to impose heavy taxes, and we didn’t want to impose taxes that would adversely affect individuals worse than anyone else. That is why we looked for something that was fair and balanced. We struck a medium on that. I know that my colleague from Henderson commented on the fact there were recent ratings and rankings. The other day USA Today had a major article that stated Nevada’s fiscal management was good. There was poor, fair, good, and excellent and Nevada was ranked “good.” It also stated that state spending grew slower than the population and inflation in the past five years. What were those numbers? Those numbers showed we had inflation and population change of 43%, while our spending only grew by 37.1%. As my colleague from Henderson stated, I believe that was a 1.2% slippage each year. The Tax Foundation Report, that everyone got a copy of, is a nonprofit, nonpartisan research public education organization that monitors taxes and fiscal activities at all levels of government since 1937. Go into that report, check the State Business Climate Index. Where is Nevada? Nevada is ranked No. 3. Go to another chart called Corporate Income Tax Index and Ranking, and Nevada is ranked No. 1.

We have heard, and we have all received tremendous numbers of e-mails about how Nevada is going to fall apart if we so much as implement any kind of a tax. I can tell you from all the ranks I gave you yesterday on the tax rates for banks in adjoining states, we are not even approaching anything that is the average of what these banks are paying. It is just absolutely unbelievable how we are looking at this, and we are just afraid to take any action. Finally, one of the other items that I know that everyone had, and my colleague from District 4 commented on the other day, was also from the Tax Foundation regarding State tax burden. The combined state and local tax burden ranked Nevada as 41^st and gave us an 8.9%. When we hear about our extreme expenses that are costing us, these are just absolutely not true.

Mr. Speaker, I would like to read just one paragraph out of a letter that I know everyone got today. It is dated today and is written by three individuals, Mr. Kenneth Lad, Chairman of the Nevada Development Authority and also the president of U.S. Bank, Mr. Donald Snyder who is the president-elect, Summer Hollingsworth, who is the president and CEO of Nevada Development Authority. In that letter they state, “as we testified before the Governor’s Task Force on Tax Policy last fall and before the Senate Taxation Committee early in the 2003 Legislature, the Nevada Development Authority strongly endorses passage of a broad-based business tax provided two critical concepts are incorporated into the State’s tax policy. First, Nevada must remain competitive with our neighboring states with whom we compete for new business development. Although we understand we cannot retain our “no business” tax environment, we must be able to promote a low tax environment. We believe the broad-based business tax proposals being considered would achieve this goal. Second, our state’s education system K-12 and Nevada’s higher education system must be properly funded.” Ladies and Gentlemen, that is what SB 6 is trying to do. Thank you Mr. Speaker.

Assemblyman Goldwater:

Mr. Speaker, thank you. I appreciate the remarks, and I have to say that I made an offer here a few nights ago. I had the budget ready to go, to open it up for those folks who wanted to open it up. I received one visitor who suggested to me that he was good for $500 million in taxes, but not $800 million in taxes. That was the only visit I got, Mr. Speaker. Not a suggestion of what we need to cut, what tax might be added or subtracted or pushed or pulled, or where we can get a vote to make this worthwhile, to say lets make the compromise. Not one of you, when those red lights come on and we know they will, came to me in the spirit of compromise. That silence, Mr. Speaker, was deafening to me. It spoke a lot about what you think this state is. I think we have three options. We can be a state that provides social services to our citizens at the expense of capitalistic principles. We can be a state that exists to preserve only business interests and simply serve as guardians of the real estate and business infrastructure for businesses, or we can be a combination of the two. Now, if you are a legislator who believes that this state should only exist as a caretaker for our borders and the infrastructure just for business to exist, don’t be silent. Stand up and say it. Say it loud and say it proud. You don’t care about the social infrastructure of this state? You want it to be only a business friendly environment? We need to know that, because I can’t compromise. I can’t work to be both a state that cares for people and for business when the entire motive is simply as a business caretaker.

I said before, and I will repeat again, we cannot let the perfect become an enemy of the good. Secretly, I knew nobody would come to me with any suggested budget cuts or any suggested alternative tax plans or tweaking of this bill. I sat on committees with people who have long supported spending this state’s money. Even when we suggested cuts in certain programs, those same people, who now want the budget opened and want a more fiscally conservative budget, voted to put that money right back in. The same people before our committee asking for the State’s resources are the same people who are going to push the red button. That is shameful. It is very difficult to deal with that, and in a majority situation, it wouldn’t make a difference. I wouldn’t have to deal with those kinds of issues. We are not in that situation. We are in a super-majority situation. We are in a situation where the chairman of the Senate Finance Committee for 30 years says we need $800 plus million dollars worth of taxes, and people who have a cumulative 30 days of budget experience say you don’t know what you are talking about. They say, “Those are too many taxes, we need less.” Does that make sense to you? It doesn’t make sense to me. Where do we go from here? I just hope the words, the feelings, the harm that we could do to this state, sinks in a little bit. If nothing else, we can leave with you standing up and saying we don’t want anything for the people of this state, we want to just be a business state. We want to take care of our business infrastructure. Say it so we can work around that, so those of us who do care about the social infrastructure of this state, can find a way to provide for that. We will do it, but we need you to say that you are not interested in that. Say that you are only here to protect corporations that make a ton of money.

I was very interested to hear our representative from Carson City talk about his constituency. I think a lot about his constituency, too. I have a cup of coffee every morning at Comma Coffee, which by the way is excellent coffee. When we came up and tried to put this tax plan together, we thought about the options we had. We could tax many different things. There are certainly no new ideas in taxation, but you certainly have some options. Think about it. Here is a single mother working at a business. Her gross revenue is not even anywhere near $500,000, where the exemption exists. We crafted this tax package so we could avoid a sales tax on her services, a special excise tax on her things, taxing her profits, taxing her gross if it didn’t meet a certain criteria. We avoided those small businesses that exist in that constituency. We went for different options. We went for the option to say, “Hey we want to get large corporations involved in investing in this state because in the end it is okay.” The end products are great employees, good road infrastructure, people who buy services. It didn’t just happen that these corporations make good money. A lot of people provided an opportunity for them to do so. I think this is our opportunity to provide a good balance between human services and the role of the state in providing for its citizens, as well as keeping a very positive business environment. I challenge each of you to rise to that and to provide for that as well. Thank you, Mr. Speaker.

Assemblyman Carpenter:

Thank you, Mr. Speaker. I have to rise in reluctant opposition to Senate Bill 6. I have been in public service for many years. I believe that I have always taken into consideration the people that needed help. I have to oppose this tax plan and this budget because I believe it to be too extreme. The people in my area, and I agree with them, believe that we are already paying too much tax. In our area we talk about education, but we have stepped up to the plate. We have the highest ad valorem tax rate of any county in Nevada to provide schools for our children. You talk about big business paying taxes. To me, big businesses don’t pay taxes, the consumer pays taxes. The customers pay taxes. I believe that any tax that we increase in such a degree is going to be passed onto those least able to pay, that is the people on fixed incomes and the elderly. People on fixed incomes tell me they can’t afford to pay any more taxes. I think that in this tax bill, in order to get the big boys, Wal-Mart and the banks. What we have done is put a terrific tax burden on the small businessman, which I am. It has been very tough to maintain a business in my community of Elko. The gold prices went down, miners were laid off, services that were supplying the miners had to lay off workers. In my business we had to layoff. My wife and I have to live on the savings that we were able to save many years ago. Our business does not make money because we try to provide the best we can for our employees. Our employees stay with us for years and years. We try to treat them right. I just have to say that I think this tax burden is too great on the ordinary citizen and the small businessman. I believe that we can provide for those social services and those people that we need to take care of, and the kids that we need to educate. We can cut this budget, cut this tax down to where it is not so extreme. We will then provide for a better Nevada. Thank you, Mr. Speaker.

Assemblyman Hettrick:

Thank you, Mr. Speaker. First I want to thank the Speaker, the Majority Floor Leader, and other members of the majority party in this house for meeting with others and me today. We did explore the opportunity to make adjustments that both parties in this house could agree to in an attempt to reach some kind of a compromise that would allow us to support Senate Bill 6. We discussed a list of reductions to the enhancements in this budget that we hoped a majority of the people in here could tolerate to make a package that was acceptable, a package that wouldn’t hurt the small businesses like that of my colleague from Elko. One that wouldn’t hurt the working people in the State of Nevada because they will ultimately pay these taxes. We can say that big business will pay, but the reality is in the end consumers pay all taxes.

I, too, could quote a lot of numbers. We all choose numbers that make our arguments sound good. I could do that as well as the rest. I will only pick a couple. Think about a billion-dollar tax increase. Think about a gross receipts tax. Before a business makes a profit, before they pay their employees, before they pay the federal tax or their employees’ health insurance that we all are so worried about taking care of, they would have to pay gross receipts tax. I don’t think that is beneficial to getting companies to provide health insurance and hire more people. All of us here support funding for education. Who does not support funding for education? It is unfortunate that this tax bill is tied to education funding, but it is a reality. We all know why it is, and we are not going to complain about it. It is just unfortunate that it has to come to that.

We heard about the oath that we all took when we came in here. We took an oath to support the Constitution of the State of Nevada, and I believe the United States of America, if I am not mistaken. That oath requires that this legislature pass a balanced budget, not that any one of us must give up our right to do what we believe is right for the people of this state. It says the legislature must pass a balanced budget. That means a compromise. That means we must work together to get this job done. Not those of us who think this plan is too much are in anyway obligated to have to vote for anything. We have a right to bring our belief to this body just as every one of you sitting in these chairs does, and vote our belief. We intend to do that. We are all here to do our duty. That could be accomplished today by a three percent cut in this proposed budget that has a billion dollar increase, and is a five billion dollar total. A simple three percent and a few reasonable taxes and we would be walking out of here tonight with a balanced budget, with schools funded, with class-size reduction funded, with all the services that everyone cares about funded, for three percent of five billion dollars.

We are here to do the right thing. I heard that we are here to support corporate America. I have to admit I resent that a little bit. I have six grandkids growing up in this state. Some are already in public school, the others will be. I care, I assure you, as much about those kids and their education as any of you do about the kids you care about. To imply that I am in any way trying to hurt them is wrong. With that, Mr. Speaker, I simply say that we all tried; you tried; the Majority Leader tried; everyone has tried to do what is right and to imply that anyone who is voting against this for his or her beliefs is wrong. I can’t support this because it is too much, and I believe it will ultimately hurt Nevada. I will not mortgage my grandkids future.

Assemblyman Williams:

Thank you, Mr. Speaker. I rise in strong, absolute, and unwavering support of Senate Bill 6. We can talk about what we could have done in February, March, April, and May in making cuts, but it is too late for that. Quite frankly, Mr. Speaker, we are up against a wall. There is no more time for drafting another bill or doing anything differently. What we are faced with is the rate of change we have done in this body. If the rate of change on the outside exceeds the rate of change on the inside, the end is near. To my colleagues, Mr. Speaker, I want to say to them that the end is very near. The education that we received in this state should be questioned as well. I have always been taught that education of the head with no sensitivity of the heart makes for a very, very singular dimensional individual. The kind of individual that once they get to where we are, will look back on others and say why don’t those people get themselves together. The kinds of individuals that say why don’t those children read better. The kinds of individuals that say why don’t those children act better. The kinds of individuals that say why don’t those teachers teach better. The kinds of individuals that say why don’t parents come around the school and participate better, and why aren’t those test scores better. Quite frankly, Mr. Speaker, my mother used to say if you know better, you will do better. I think all of us at this point, regardless of what happens, think about the time that is left in this special session. It is time for us to do better.

To all those people that are talking about leadership in their campaigns and leadership on this floor I say, blessed is the leader who seeks the best for those he serves. Leadership is not about your position; leadership is about action. The children and the parents in this state don’t care about your position. What they care about, Mr. Speaker is our action. A real leader will face the music regardless of what tune is played. Quite frankly, the real dance starts when the music stops. The music, my colleagues, has now stopped. It is easy to talk about statistics where Nevada ranks third in the drop out rate, and how poorly our children are doing in test scores. Children need love especially when they don’t deserve it. You can talk about where we need to go or how our children are not doing well, but those are the children who really need our love tonight. Here we are sitting very comfortably in these $700 chairs, as my colleague from District 7 said. We are like ships sitting in a harbor. Go out to the lake and you will see them sitting out there, safe and pretty. Pretty names, colors, and slogans are on them. But that is not what ships are built for. Ships are not built to sit in harbors. Ships are built to go out and sail on sunny days, stormy days, in tough turbulent weather and smooth weather. Ships are built to go out and do what ships do, sail. We are sitting here as ships in the harbor. It is time for us to take those cute slogans off, take those cute words off our chairs and go out and sail and lift our anchor to save the children of Nevada.

Mr. Speaker, the children of Nevada need us at this hour. You can talk about one percent, two percent, three percent, ten percent being cut, now is the opportunity to save what we know needs to be saved in our state. I urge my colleagues to vote for this bill. Push the green button to make a child in Nevada smile. Push the red button to make a child in Nevada cry. I urge you to vote for Senate Bill 6.

Assemblywoman McClain:

Thank you, Mr. Speaker. I wasn’t going to get up and speak on this, but I feel compelled because I work with a lot of seniors. I don’t know if people realize but the senior population is going to out-strip the K-12 population in the next couple of years. We have seniors moving in from every state of the union. They move here without family support, and they need the safety net that we don’t provide. Let me give you a couple of examples of what we managed to squeak through in the budget this year. We managed to get some money to raise the Senior RX program from 7,500 to 12,000 seniors. We have 350,000 seniors in this state, and we are going to have more. We have almost 200,000 veterans. We managed to get 108 additional slots in the Community Home-based Initiative Program in allowing for assisted living models. We do not provide any caregiver support whatsoever. I hear from seniors all the time asking what we offer seniors in Nevada. Well, I am sorry we don’t offer much in Nevada. What I am trying to say is there are lots and lots of issues. Our senior population is growing, we have the aging in place, and we have our newcomers. We also have that huge population in the senior growth between the 75 and the 90 years old that is not going to go down in the next few years. Those are the people we need to have a safety net for. This budget provides minimal help for seniors. This tax package will provide a stable tax base from this point. We can, hopefully, be able to improve these programs, take care of our seniors of which we are all going to be some day. I understand our K-12 education program, and I support it fully. I support the entire budget that we worked on for months and months. I just want people to realize we have a crisis in our senior population. This tax package will provide a stable tax base, so we can address those problems as they arise in the next decade.

Assemblywoman Angle:

Thank you, Mr. Speaker. I feel that we are standing on the precipice of a historical time in the history of our state. Senate Bill 6 represents the largest expansion of state government in the history of our state. Tonight, I have sitting with me a teacher from Las Vegas. He came this afternoon to tell me to hold on tight. This isn’t about education. This isn’t about kids and school. This is about the largest expansion of government in this state’s history. This is about taxes that are going to cost a family of four $1,000 dollars extra per year. I have families in my district that don’t want government services worth a $1,000 a year. They want the $1,000 in their pocket to take care of their children, their family, so that mom doesn’t have to go to work. I rise in opposition to this bill not because I don’t support children; I love children. I spent 25 years as an educator in this state. I have told you some of the problems I have with the bill. One of them is that we are still promoting a gross-receipts tax. This is very hard on businesses. We are giving a pay raise to our teachers, but we are also giving it to administrators and everybody else. We say we need to put money into the classroom, well let’s do that. We say we don’t want to micromanage other government entities and yet with class-size reduction that is exactly what we do. We are saying to school districts and their elected boards, “We don’t think you can do a good job. We think we can do your job better.” So reluctantly, I rise in opposition once more to a bill that I think we saw in the first special session, Assembly Bill 1. Here it is again in Senate Bill 6. Thank you Mr. Speaker.

Assemblyman Horne:

Thank you, Mr. Speaker. I rise in support of Senate Bill 6 and as you all heard me say the other night I believe that Nevada sits poised for a very, very bright future. It bothers me that many people here don’t see this as an investment in Nevada’s future. It is an investment in our future. We choose now that we are moving toward a better Nevada. We hear things from my colleague, the Minority Whip, about $1,000 per family, and how they don’t want that in government services. Unfortunately, many people probably don’t want those in government services until it is time that they need those services. You don’t get to pick and choose when you are going to lose your job unless you are self-employed. Even then it is questionable because the services you provide may all dry up. You may need services one day. Your heart might go bad right after that, and you might need Medicaid. Let’s hope that the services are there when you need them. I can tell you now, a lot of times it is a struggle for those who need it now. They can’t get it. They have to jump through all kinds of hoops to do it. Government services have to rob Peter to pay Paul to take care of the people of the state. We shouldn’t be there.

Everyone on both sides is thinking about our future. I challenge you to be a steward of our future. If you are so worried about becoming the next California or being taxed beyond oblivion, then be a steward. Take the step now, because everyone knows we have to. It is not in question. It is hard but you have to take it. Take the step then stick around. Whether or not you are elected, stick around to make sure we heading in the direction we’re supposed to be heading. I can tell you now that doing nothing, pushing this red button, doesn’t get us there. It doesn’t get us there. Even those of you who have concerns that this is too big, it doesn’t get us there. You still know we have to move and pushing the red button keeps us right here. We can’t be here anymore. We just can’t be here anymore. Sometimes you have to run through the fire. You get burned, but you will die in the burning house if you do not get out. We have to move forward. The time is now. Be a steward of our future.

There are many of you here that know that I have been studying for the bar exam. To tell you the sacrifices that I have made, leaving a comfortable career with the airlines to make that jump to go back to school was very tough. But I did it. While my wife will beat me upon the head and shoulders when she hears this, if I have to take the bar again in February I will be okay with that if we are moving in the right direction. I heard some of you say that you have multiple generations in this state. Mr. Minority Leader, I have all the respect for you, I really do, but all I have heard in the area of compromise is, “if you only do it our way we can get beyond this.” What I have seen is there has been compromise throughout this whole session and including this special session, and we have made these compromises. If we are fortunate enough to pass this tonight we know that there will still be more compromises to be made. There will be. But we have to move on, and we have to do it now. I can take the bar again in February or next July or the year after that, but the children of this state cannot wait until next year. They cannot. The people who need the services that the state provides, they can no longer wait until next year. We have to act now. That is why we are here, and I urge your support in passing this bill. Thank you.

Assemblyman Grady:

Thank you, Mr. Speaker. I had not intended to speak tonight, but looking around this hall, I first want to say that I am extremely proud to be part of the freshman class that we have this year. I guess at my age, I consider myself a seasoned freshman because I had the honor and privilege to kick around these halls for five sessions wearing the blue badge. I think I learned quite a bit. Part of the problem that we are facing tonight has not been created in the last two years. It has probably been created in the last ten or twelve years, or longer. I am really sorry to say that in prior sessions I sat in on the Taxation Committee with the chairman being very proud to call it a “non-taxation committee.” I hate to say it, but I think we are paying somewhat for that this year because we are trying to make up a deficit that has been accumulating over many years. That is unfortunate, but it is true. That is why we are here. That is why we are trying to fill this big black hole. I, like the Minority Leader, have grandchildren. I would rather be in Winnemucca tonight at my granddaughter’s fifth birthday, but I am here. I have seven grandkids, and I want every one of them to have the best education that they can possibly have. Maybe we can not correct everything in one or two years, but I think we made the start. I, too, am sorry that we did not come to the compromise that we had all hoped to come to, so we could go home. I do not know a person in here that would like to stay here tomorrow. I think we would all like to go home, but unfortunately some of us have to vote for our constituents, our conscience, and what we feel we need to do. I am sad to say that I will be one of those that will press the red button. Thank you Mr. Speaker.

Assemblywoman Leslie:

Thank you, Mr. Speaker. I rise in support of Senate Bill 6. Over the last few days I have talked to many of the colleagues, who have indicated they’re going to be voting “no” tonight, to ask them what is it that we can do to make them vote “yes.” Many said, “Well, for me the bottom line is $705 million. I cannot go above that. That is the number the Governor threw out. I just can not vote for a tax above $705 million.” Some people said, “My number is $636 million.” Somebody said, “I can not go above $500 million.” Somebody said, “Well, maybe if we get to $790 million I could do it.” Since we heard a lot of testimony the other night about the cuts that had been proposed, and I don’t have the list of the new cuts the Minority Leader has been working on, I went back to his March 27 plan, and I pulled up the notes on my computer that I had made when that plan was presented in a press conference and later to the Senate. I took a look at some of those things again to see if they had been discussed in committee and what we had done about them. Of course, the notes that I personally made were mostly about education and human services because those are the two areas that I think have been under funded in our budget for many, many, many years.

It was an interesting list. The Minority Leader suggested we delete $68 million dollars in university funding. We fund the university funding formula at 80.29%. We chose not to do that after a lot of debate in the money committees, and we went with the Governor’s budget of 86%. The Minority Leader’s plan suggested that we cut almost $43 million out of class-size flexibility. We would have no funding for student growth. We would have more kids in classrooms, and we chose not to do that. The Minority Leader’s plan also suggested millions of dollars in cuts in the DSA, including things like cutting the textbook money that the Governor put in at $50 per child to $25 per child. We decided not to cut the textbook money in half. He suggested we cut full-day kindergarten. We did. Many of us reluctantly agreed to that compromise in the money committees. He suggested we cut stipends for high impact teachers and teachers at at-risk schools. We worked very hard to find another way. The Senate Majority Leader was actually on the Senate Human Resources subcommittee that I chaired, which was very scary for me all session, having to chair that committee with him in the room. We did work hard, and we came up with another way to do stipends that actually saved the state some money. In terms of human services, the Minority Leader suggested $28.8 million cuts in welfare, not Medicaid, welfare. This would have given us a flat welfare projection with no growth. What we ended up doing, as I mentioned the other night was actually cutting caseloads by over 25 percent after we did the new welfare projections. Also, saving the state $18.5 million net, after we fixed a $13 million mistake in the Governor’s budget where they had over allocated the welfare funds. So, actually we did more than the Minority Leader suggested. We ended up, if you add in that over allocation figure, of cutting welfare $31.5 million.

The Minority Leader suggested in his March cut plan that we eliminate Family-to-Family. That is a program that serves all newborns. We chose not to do that. We did roll it into the Family Resource budget and saved some administration dollars. The Minority Leader’s spending cut plan suggested that we not expand Senior Rx. We chose not to do that which would have saved $5 million. We chose not do that. We did not want to have a longer waiting list for seniors who need prescription care. It was suggested that we cut one million dollars in the personal attendant care services. As my colleague from Las Vegas talked about, we agreed not to do that. We thought longer waiting lists for the most severely disabled in our state was simply not acceptable. A suggestion was made that we cut $1.8 million in funding for personal assistance services for seniors. We decided not to do that because that would have left more seniors in long-term care. A suggestion was made that we cut $307,000 for a program called Family Preservation that actually gives small cash payments to families who keep their mentally retarded relatives in their home and take care of them instead of costing the state a whole lot more by putting those people into long term care. We chose not to do that. It was suggested that we save $4.5 million by leaving our mentally retarded citizens on waiting lists or in out-of-state programs. We chose not to do that. That was the Ohmstead Supreme Court decision to try and bring those people back home. We chose to take care of them. It was suggested $228,000 in cuts at Rural Mental Health clinics where there would be more waiting lists. We chose not to do that either. We have one of the highest rural suicide rates in the nation. We think it is high time that we spend more money treating mental health needs in rural Nevada.

I am almost done; I won’t go on and on. I just have a couple more. A suggestion was made to cut $1.6 million in early intervention programs for children 0 to 3 years of age. We chose not to do that because this would affect children with developmental delays such as autism, who would have to wait even longer for services. The federal law says we have 45 days to do an initial evaluation for these kids. At the time I wrote this in March, we were at 138 days. We are going to get sanctioned by the feds if we do not improve those services, so we chose not to do that either. And finally, the suggestion was made to cap enrollment in Nevada Check-Up, our program that helps provide insurance to low-income kids who do not have insurance. We could have saved $5 million there, but what would that have done. It would mean that more kids would have to go to hospital emergency rooms and get the most expensive health care on the planet. Finally, there were two suggestions in the tax plan that I wrote down as enhancements. One was to add $4 million to privatize Summit View Youth Correctional Center, our prison in southern Nevada for the most chronic youth offenders. We chose not to privatize and instead eliminated that enhancement and went with the state run facility. Finally there was one enhancement we did agree to in the public safety subcommittee. We did add, as the Minority Leader requested. $3.9 million to restore the Indiana Program so we can help keep methamphetamine under control in rural Nevada.

This budget that 65% of us passed in both houses does not do justice to the needs of our citizens. I know that. It was a very good compromise with the Senate. We fought long and hard over it. We came to the compromise that you all know very well now. It is heading Nevada down the path that we need to go to get us out of 51st, 50th, 49th place. We did not agree with many of the budget cuts that the Minority Leader suggested because we felt that it hurt the very people that we were sent here to represent, so we did not do that. Finally Mr. Speaker, my colleague to the right of me, and I have been sharing e-mails all day from some of the people in our district. A few people actually live in our districts and sent us, “Don’t raise taxes,” messages and we have a little thing going where we respond to them and explain our position. Both of us by the end of today have had people that we’ve actually converted to our cause. Who, after they understand some of the things I have outlined here tonight, have e-mailed us back at the end and said, “You know what, you convinced me. We do need to raise taxes for our state. We want you to tax big business and banks to help Nevada get on the road that it needs to be, and we support you.” Thank you Mr. Speaker.

Assemblyman Hettrick:

Thank you, Mr. Speaker for recognizing me a second time. One of the reasons I chose not to use numbers was, as I told you, because you can use the numbers to say whatever you want. The reality of the situation was the budget that I proposed included the Governor’s current budget and all of the maintenance, which means estimated or projected caseload growth all funded in the maintenance, every bit of it. Every cut that you just heard mentioned was a reduction of an enhancement of a program that was not yet funded or in existence, or people caseloads not yet being funded in any way. So these were merely reductions of enhancements that were proposed in this budget. They were not cuts of anybody. All of the maintenance was included in everything that I proposed. Thank you again, Mr. Speaker, for the second recognition.

Assemblywoman Buckley:

Thank you, Mr. Speaker. My colleague from Elko, who I enjoy so much working with over the years, talked about his constituents having to pay too much and the ad valorem rates in the Elko area are too high. He did not want to do anything to hurt the mines that are so important to that area. All are valid concerns and all are reasons to support this bill. This bill does not raise property taxes. This bill does not hurt our constituents who are paying too much. It does not raise their sales taxes. It is supported by mines, construction, and by major industries. It does not have so many of the taxes that were rejected because they hurt people: taxes levied every time someone gets their hair cut, every time they get their lawn mowed. It creates for the first time a business tax on big business, banks, and raises a tax on gaming. That is what this bill does.

My colleagues have made numerous arguments tonight that taxes are passed on. There are certain taxes that can be guaranteed to be passed on. Those are sales taxes, things we didn’t put in this budget because we do not want them passed on to the average person whose already paying them in this state. We have heard evidence throughout these last five months that businesses pay taxes in every other state but they do not pay them here. We are not getting price breaks based on the break they are getting here, and the bottom line is we have known for two decades that we are too big now to just rely on gaming. We do not want to tax at a high rate. We want to still have one of the lowest tax rates around, and that is what this bill does. It creates a business tax for the first time at a low rate that will ensure all the needs of our state are met. There were complaints about the franchise tax that is paid regardless of profits. Well, so is payroll. Do you get a break on your payroll tax because you do not make a profit? Do you get a break when you pay for gas if you did not make a profit that year? No, taxes do not work that way. The reason a franchise tax was placed in this bill along with payroll was to create a fair and balanced tax plan. It’s called horizontal equity. It means that you do not want to tax businesses that have high labor costs. You do not want to penalize them just because they employ people. We want businesses to employ people. We want to attract those kinds of businesses, and it makes no sense to hit a business harder just because they employ people. That is why you have both. You have a tax that is going to get at businesses that are doing very well and do not employ many people, as well as, a complimentary tax to make it fair to all. That is why you have both. Having a balanced bill with both payroll and franchise hits every part of the economy, which makes it fairer.

My colleagues also argue this is the biggest expansion, the biggest tax increase in Nevada’s history. Well, they are right. But, that is because we never taxed business before. We have never had a broad-based business tax. It is no clue as to why people now will have to start paying and why it is a large number because no one had to pay anything before. My colleague, the Minority Leader, talked about how we have to be reasonable; we have to compromise. All he is seeking is reduction of enhancements. Well, you know, what is a reduction of an enhancement? That means seniors who are on the waiting list for Senior RX do not get help with prescription drugs. It means one of the most successful programs in recent history for health care, Nevada Check-Up (which helps children of the working poor whose parents are working and willing to pay their co-pays and enrollment fee) even though we estimate that there are 80,000, we can’t help any more of them. Reduction of enhancement sounds like a great budget term, but what it means is that people can’t get medications at our mental health clinics because we are still at a level that was less than 1991 when Governor Miller had to cut the budget because we did not have a business tax. These reductions of enhancements hurt people in our state.

We are here at a unique time. We all received a letter from the superintendent of schools. Some school districts have placed a hold a hiring teachers; more than 1,800 teaching vacancies that exist across the state. School districts are unable to extend these offers because of our budget impasse. Highly qualified teachers can not be hired, which puts us out of compliance with No Child Left Behind; disruptions for multi-track schools that are in session now; schools being forced to use long term substitutes; and Gifted And Talented Education (GATE), the only thing that gets my child’s interest in fourth and fifth grades, is being cut. I get calls asking, “What about literacy? It’s a shame that our best kids aren’t being stimulated.” But, what about kids that won’t even get the help to be able to read? We want higher standards for test scores, but we are going to cut back on literacy specialists because we can’t reach a decision. That is unacceptable.

My colleague, the Minority Leader, said, “We are willing to compromise; we want to be reasonable, but the number has to be lower.” You know, we have a process here where we bring bills to committees. We may lose, but that is the process. To have a press conference forty-five days into session is not enough. I believe that we have to keep going and that is why, this afternoon, I went to the Minority Leader’s office to say, “Does anybody want to talk about a compromise?” We had a good discussion, and I was not told to go away. We had a discussion. We threw things out on the table, and at times, I felt we were right there because what we were saying is, “This is too important not to agree.” What can we do? What can we give you? But, if the answer is, “The only way we are going to agree is if we cut kids off health insurance and do not expand Senior RX,” I am sorry, that is just not going to do it. My colleague, the Minority Leader, said, “I won’t mortgage my grandchildren’s future to support this bill.” Well, I won’t balance the budget on the backs of children and seniors, so I can shield some businesses from finally beginning to pay one of the lowest taxes in the country. I won’t do it.

We have to act. We have to act, tonight. I think that the outcome is predetermined, but I implore any of you to step forward and do the right thing and get us 28 votes to continue this process. My door will remain open to anyone who votes for this bill or who does not vote for this bill that is willing to solve this impasse right now. Otherwise, we are in court on Tuesday, and schools continue to be in disarray. You have an option right now to prevent that from happening. That is the way this should be solved. You know, I am sorry that the ultimate number came out being a little higher than you wanted it to be. I have lost battles in this legislative body before and when you lose you do not shut down schools. You do not shut down government. You try to do your best to the very last minute to improve that bill and you come back the next time and you fight even harder. You make that first bill draft request an effort to change things the way you believe Nevada should be run. You do not take your ball and go home, and you do not shut down schools.

Potential conflict of interest declared by Assemblymen Knecht and Brown.

Roll call on Senate Bill No. 6:

Yeas—27.

Nays—Andonov, Angle, Beers, Brown, Carpenter, Christensen, Goicoechea, Grady, Gustavson, Hettrick, Knecht, Mabey, Marvel, Sherer, Weber—15.

Senate Bill No. 6 having failed to receive a two-thirds majority, Mr. Speaker declared it lost.

MOTIONS, RESOLUTIONS AND NOTICES

Assemblywoman Buckley moved that the vote whereby Senate Bill No. 6 was lost be rescinded.

Remarks by Assemblywoman Buckley.

Motion carried.

Assemblywoman Buckley moved that Senate Bill No. 6 be taken from the General File and placed on the Chief Clerk’s desk.

Motion carried.

UNFINISHED BUSINESS

Signing of Bills and Resolutions

There being no objections, the Speaker and Chief Clerk signed Senate Bills Nos. 1 and 3.

GUESTS EXTENDED PRIVILEGE OF ASSEMBLY FLOOR

On request of Assemblywoman Angle, the privilege of the floor of the Assembly Chamber for this day was extended to Robert A. Yeary.

On request of Assemblyman Knecht, the privilege of the floor of the Assembly Chamber for this day was extended to Tom Keeton and Kaye Keeton.

Assemblywoman Buckley moved that the Assembly adjourn until Saturday, June 28, 2003 at 11 a.m.

Motion carried.

Assembly adjourned at 10:37 p.m.

Approved: Richard D. Perkins

Speaker of the Assembly

Attest: Jacqueline Sneddon

Speaker of the Assembly

Chief Clerk of the Assembly