NEVADA LEGISLATURE

Twentieth Special Session, 2003

ASSEMBLY DAILY JOURNAL

THE NINETEENTH DAY

Carson City (Sunday), July 13, 2003

    Assembly called to order at 2:47 p.m.

    Mr. Speaker presiding.

    Roll called.

    All present.

    Prayer by the Chaplain, Assemblyman Bernie Anderson.

Excerpted from the poem “One” by Cheryl Sawyer, 2001.

    “As the soot and dirt and ash rained down, we became one color. As we carried each other down the stairs of the burning building, we became one class. As we lit candles of waiting and hope, we became on generation. As the firefighters and police officers fought their way into the inferno, we became one gender. As we fell to our knees in prayer for strength, we became one faith. As we whispered or shouted words of encouragement, we spoke one language. As we gave our blood in lines a mile long, we became one body. As we mourned together the great loss, we became one family. As we cried tears of grief and loss, we became one soul. As we retell with pride of the sacrifice of our heroes, we became one people. We are one color, one class, one generation, one gender, one faith, one language, one body, one family, one soul, one people, we are the power of one. We are united.” We are Nevadans. We are Americans. Let us then pray for peace and guidance in the days ahead.

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.

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.

    Senate Bill No. 6 considered.

    Chairman Perkins:

    Just as a point of information for the members of the committee, over the past week, the Minority Leader, others and myself have had several meetings with the other house to talk about ways to resolve the situation we find ourselves in and find resolution to this issue in terms of funding education and having a balanced budget. At this point, we will offer further amendment to SB 6.

    Assemblywoman Buckley:

    Mr. Chairman, may we have a one minute recess so we can distribute summaries of the proposed amendments.

    Chairman Perkins announced if there were no objections, the Committee of the Whole would recess subject to the call of the Chair.

    Committee of the Whole in recess at 2:52 p.m.

IN COMMITTEE OF THE WHOLE

    At 3:05 p.m.

    Assemblyman Perkins presiding.

    Quorum present.

Chairman Perkins:

    The Committee will come back to order. I want to make sure everyone has the summary and revenue sheet that goes with the proposed amendment. Will the Majority Leader please walk us through the summary?

    Assemblywoman Buckley:

    Thank you, Mr. Chairman. The summary is fairly self-explanatory, and Mark Stevens is here to add any elaboration or to assist with any questions. I will run through it briefly. What the proposed amendment to SB 6 would do is first, decrease the rate of the payroll tax to .5 per cent of capped wages. It would increase the banking franchise tax to 4 per cent. It would make various changes with regard to the live entertainment tax. This section has received the most collaboration over the past week and one half. There were a number of concerns about the live entertainment tax which intend to be remedied these suggestions. First, like many of the other changes on here, it changes the effective date because obviously, we cannot change it effective July 1, 2003. Additionally, it lowers the proposed live entertainment tax for facilities with seats over 7,500 not affiliated with a gaming establishment. In the previous iteration it was at 10 percent including food and drink and that was thought to be just too high after further comparison of comparable arenas. This lowers it to 5 per cent while still expanding the casino entertainment tax to increase the seat capacity there from 2,750 up to 7,500. It would still capture Celine Dion, for example, but it would reduce the tax on events that say Thomas and Mack, a rodeo, and the like. Additionally, there were changes made to the non-gaming establishment live entertainment venues. What those would do is try to hit the higher admission change for those entertainment facilities, but keep it lower for facilities of less than 300. An example would be if a small bar wants to offer a live band with a cover charge, they would not be taxed at the higher end. But, if you had a strip club for example, like some of the new strip clubs in Las Vegas, it would be taxed at the higher amount.

    The business franchise tax fee would be changed to ensure that non-profits were not included. This is clarification to ensure that the revenue from unrelated trades was included. This was requested by the non-profit credit unions that thought the language was not clear enough. This would be remedied in the amendment. Additionally, it protects the smallest business whose total revenue is less than $500,000. Now, they would be excluded all together from any sort of fee. Again, on the business license fee it would eliminate the proposed extension of the fee to a non-profit that has taxable income from an unrelated trade. The liquor tax is reduced to 50. The cigarette tax reduced to 45 per cent. It authorizes the county recorder to retain a higher collection allowance for the real property transfer tax. Legal and staff have suggested a number of clean-up amendments which are included in number 10, eliminating some miscellaneous obsolete references to actions taken in previous legislative sessions. For example, there is a provision about the status of newspaper carriers/delivery people. They no longer collect revenue in Nevada. It is all done through centralized billing.

    There were some other obsolete references that they felt necessary to clarify. Additionally, the other item of significance is the overall number of the package has been reduced in response to requests, negotiations, and collaborations between members. The $30 million put in the Rainy-Day Fund has been eliminated. Additionally, the compliance audit has been re-projected and with those changes and eliminating the Secretary of State fees, which are contained in SB 2 and not SB 6, the total value of this revenue package, as contained in SB 6, is $788,800,000. That is the sum and substance of the changes being recommended, and I urge your support.

    Assemblyman Hettrick:

    Thank you, Mr. Chairman. I have a couple of questions, if I may, please, on clarification for the members on SB 2’s resident agent fees. I believe what the Majority Leader told us was that AB 536’s resident agent fees are going to be contained separately, but would be included in the total revenue package. Is that correct?

    Chairman Perkins:

    Mr. Hettrick, it was said, that should that bill pass, then certainly the revenues would be up, but there is no certainty that the bill will pass.

    Assemblyman Hettrick:

    I wanted to clarify that the intention was to pass that bill in the fees, but it’s in a separate bill and would obviously have to be voted out, so the intent is that bill would be included in the total funding.

Chairman Perkins:

    That would be the intention. If that bill fails to pass then we will have to find some differences in the budget to arrive at $788,800,000.

Assemblyman Hettrick:

    A second question if I may, on two points of the banking franchise fees. First, it is raised to 4 per cent and then in 2C, is it now applying to the gross revenue of the financial institution from its entire operations as a financial institution?

    Chairman Perkins:

    I asked that question myself this morning of Legal and basically I was told that is the way to come up with an apportionment percentage. It’s not on a gross revenue tax basis. That is how the percentage for apportionment is determined, based upon total revenues throughout other states as well, if they operate in multi-states. That question concerned me also.

    Assemblyman Hettrick:

    I understand Mr. Chairman. I wanted to clarify that indeed this is still only on Nevada revenue and not on all of their operations. Thank you for clarifying that, Thank you.

Assemblywoman Angle:

    Thank you, Mr. Chairman. My first question, in SB 6 we included the Distributive School Account and also class-size reduction, and I am wondering of those are still contained within SB 6 as we are amending it, now?

Chairman Perkins:

    That’s correct. This amendment does not remove the Distributive School Account or class-size reduction from SB 6.

Assemblywoman Angle:

    Then, I have a point of clarification in our Constitution, Article 4, section 17, says we can only deal with one subject per bill. I’m wondering how we reconcile the combining of Distributive School Account education and class-size reduction funding with taxation? How do those two things go together in the same bill? Do we not need two separate bills as the Senate has passed over to us?

    Assemblywoman Buckley:

    Thank you, Mr. Chairman. While that has nothing to do with the amendment that we are considering, may I point out again this special session, our legal division has found that it clearly met the one subject rule, or else they would not have allowed us to combine them. Secondly, the Attorney General came right here in our chambers and told us that it would be impermissible to pass school funding, the appropriations for it, without the revenue to support it. It would be like writing a check when you know there is no money in the back to pay for it. That’s why it was combined.

    Assemblyman Hardy:

    Thank you, Mr. Chairman. On section 190, the 107 per cent spending cap, I am trying to understand what that would mean vis-à-vis, and I ask the Majority Leader to clarify. The intent was to have monies that exceeded 107 per cent of what was asked for, if more monies came in, then those monies would revert from a special fund back into the general fund to supplant or replace taxation. The wording is not clear to me as to what really happens, or if we are able to use or spend that money in a different way.

    Chairman Perkins:

    Actually, Mr. Hardy, we had that discussion last Saturday with the Minority Leader and others, and there was concern about a potential future hole.

    Assemblyman Hettrick:

    Thank you, Mr. Chairman. This was brought up at some of the meetings we had, and there was a concern that if we directed anything over 7 per cent immediately to the Rainy Day Fund, there was no way to get it out. Therefore, knowing that we have some non-recurring revenue that is included within the existing budget, we would be putting money into the Rainy Day Fund and could create a hole in the next legislative session that could have been filled should there be excess revenue by using some of this money to fill it. After some discussion, we felt it was prudent to offer the opportunity to fill the hole for the non-recurring funds before we move to put money into a savings account that we could not touch, so that is why we decided to change this language.

    Assemblyman Beers:

    Thank you, Mr. Chairman. If I could draw everyone’s attention to page 13 of the bill, we’re amending lines 41and 42. This goes back to apportionment of a multiple-state entity’s national income to Nevada.

    Chairman Perkins:

    SB 6?

    Assemblyman Beers:

    Yes, SB 6 page 13, lines 41 and 42, is being amended on page 2 of the amendment, mid-page. This is where we are changing it so the apportionment method is going to be the amount of revenue derived from Nevada customers of that organization, divided by that organization’s national revenue. My question is that one of those companies sitting on the fence watching what we do, is going to bring 250 jobs to Henderson and that is John Deere Tractors, a lending operation. That would be an operation that would presumably have very little income generated from Nevada customers, but would still have 250 people in Nevada servicing customers from out-of-state. As I understand, they would pay very little of this income tax because their income is derived by Nevada employees servicing customers that are out-of-state. Do I understand this correctly?

    Chairman Perkins:

    I believe you do. We will have legal counsel answer your questions specifically. It is the same question I asked this morning. In essence, they are trying to find an apportion formula for Nevada-based revenues. This formula is better phased than the formula used before. We will have that question answered for you. While we’re waiting, are there other comments or questions from the committee?

    To recap what is in the proposed amendment, there is a reduction in the employer payroll tax; an increase in the banking franchise tax; clarification language in the live entertainment tax; further exemption for small businesses on the business franchise fee so no business entity whose revenue is less than $500,000 would pay that; the business license fee is clarified because of obsolete language; the liquor tax is at 50 per cent; cigarette tax is 45 cents down from what is currently in the bill; the real property transfer tax has a definite date of implementation; the non-restricted gaming license fee the implementation date has been moved back one month because of the timing of this meeting; removes $30 million in the Rainy Day Fund; restates the 7 per cent cap; if we receive more revenues than projected, it can be used for non-recurring revenue; and additional technical corrections.

    Assemblywoman Gibbons:

    Thank you, Mr. Chairman. Just for clarification, is the $500,000 for every business not included as part of the tax.

Chairman Perkins:

    Just the businesses making under $500,000 are excluded from the tax.

    Assemblywoman Gibbons:

    So if the business made $505,000, then they would pay the tax?

    Chairman Perkins:

    That’s correct. Previous iterations of the bill started taxation as low as $100,000 and we have exempted businesses that make up to $500,000.

    Assemblywoman Buckley:

    Thank you, Mr. Chairman. Back to the question of my colleague to my left, we have some clarification from Legal that your statement was correct. That is the model utilized by most states in apportioning income and also the one that was viewed as the most fair by those representing our own Nevada banks, and that is why that formula was being utilized.

    Chairman Perkins:

    Mr. Beers, does that answer your question?

    Assemblyman Carpenter:

    Thank you, Mr. Chairman. Do we have any idea on raising the banking fee by 4 percent, what that might do to the financial institutions coming to Nevada or leaving? Were banking people part of this discussion, or what happens?

    Chairman Perkins:

    My recollection of the discussions for most of this session, and certainly I am not an authority on financial institutions, is if this was not the lowest, then it is one of the lowest in the country. If that’s a consideration for financial institutions, then we won’t have “priced” ourselves out of the market. It is certainly an institution-by-institution decision that’s always a decision point when someone decides to locate a business to the state. I think it is one of the reasons why we have tried to keep all the rates, as it relates to business in this bill, as low as possible, particularly with surrounding states, but be competitive with virtually any state. So, the short answer is “no” I don’t specifically, but we held those numbers as low as possible.

    Assemblywoman Giunchigliani:

    Thank you, Mr. Chairman. Maybe I’ll just remind people that Arizona has a 6.9 per cent franchise fee, California 10.8, Idaho 7.6, Oregon 6.6, and

Utah 5.0. This 4 per cent recommendation should have no impact and, in fact, it will prevent Nevadans currently paying to subsidize other states keep their money here, and it still will be one of the lowest. A recent newspaper stated Bank of America is expanding in Las Vegas and, in fact, unveiling a new branch design. In Business Week, there was an article on June 13, 2003, that quoted one of their chairs saying, “In 2002, we deemed it an awful year because Bank of America earnings only leapt 36 per cent to $9.25 billion, ranking it number five among the world’s corporations.” I don’t think we have any problem with having Bank of America and some of these larger banks that aren’t paying a dime in Nevada start paying under this piece of legislation.

    Assemblyman Brown:

    Thank you, Mr. Chairman. In that regard, if I may, I had an interesting conversation on the airplane, and I haven’t had the chance to verify this with a gentleman from the State of Utah. We were discussing taxes, and he stated in query to a financial-institution industry-specific tax, “Was there such a franchise tax or industry specific tax?” The gentleman commented, “There was no such tax in Utah.” I have not had the chance to verify that. I would like to look at that. I am wondering, perhaps, if there is a response from somebody who has looked at whether that is a general business tax of 5 per cent in the State of Utah or if that is an industry-specific tax. For those other states cited, are those general business taxes at those rates or are they industry-specific to financial institutions? Thank you, Mr. Chairman.

    Assemblyman Parks:

    Thank you, Mr. Chairman. In response to my colleague from Henderson, in the State of Utah it is a general business tax that is applied to all businesses and corporations including financial institutions. Thank you.

    Assemblyman Knecht:

    Thank you, Mr. Chairman. I have discussed this matter with the executive in charge of Harley Davidson Finance here in Carson City, the largest private employer in our town. I am informed that first, because of what we’re doing here, they have put any expansion on hold; and second, they are reconsidering whether they will remain here. Third, because of the nature of their business, it is very easy to move anywhere. It doesn’t have to go to Utah, doesn’t have to go to California. That’s why it’s not there because California, Arizona, etc. have unduly high taxes on this industry. Nevada attracts these institutions, these employers, these jobs precisely because we don’t have these onerous taxes. They can go to Wyoming. They can go to South Dakota. They can go to Delaware. They can go anywhere. They can even go off shore if we want to chase them away with this kind of tax. Thank you, Mr. Chairman.

    Assemblyman Beers:

    Thank you, Mr. Chairman. Following up on the discussion with Mr. Brown and Ms. Giunchigliani, the 4 per cent in this bill, as I understand it, is being applied against gross. All the other general business taxes like Utah’s 6 per cent is applied against net income. In a tight banking business with a 3 per cent profit margin a 4 per cent of gross would conceivably drive them actually in a loss position. I want to make sure that we’re not comparing net income tax rates with rates on gross receipts.

Assemblywoman Buckley:

    It is on net. I will have legal explain further.

    Brenda Erdoes, Legislative Counsel:

    Section 24, 3a, will tell you that the tax itself is on the net income. It’s actually on the Nevada net income of the bank. The gross revenue information that you see there in the definition applies only for the apportionment formula. It does not apply to the imposition of the tax itself.

    Assemblyman Beers:

    So, we are apportioning based on the gross revenue but taxing the net income?

    Chairman Perkins:

    That’s correct.

    Brenda Erdoes:

    The actual rate of the tax of 4 per cent is against the Nevada taxable income. That is the net income. You find the numerator and the denominator based on gross revenue and that fraction is applied to the total taxes to come to the Nevada share of that.

    Assemblyman Beers:

    So we apply that percentage to the net income on that corporation’s 1120 for it’s national operations?

    Brenda Erdoes:

    Yes, once it has been apportioned to Nevada. Only the portion of the net income that is apportioned to Nevada based on the formula, based on the gross.

    Assemblyman Beers:

    For a corporation, the 1120 comes down to a taxable net income figure, then we take the Nevada business divided by the national business as the percentage, times the 1120’s net income?

    Brenda Erdoes:

    Basically, that’s the way it works. There is a little bit of room built in for the Department of Taxation to make sure that the apportionment works correctly, but that’s the way it would work.

    Assemblyman Brown:

    Thank you, Mr. Chairman for recognizing me a second time. Perhaps to the Chairman of Taxation, I was wondering about the comparisons recited to the State of Utah, California, Arizona, Oregon, and Idaho, and frankly I am bothered by the fact that Utah was represented as a franchise tax. It wasn’t a franchise tax. I am very interested in the comparison between the states cited here. Does California have a franchise tax? Does Arizona have a banking franchise tax? Does Oregon have a banking franchise tax? Does Idaho have a banking franchise tax? If we’re going to get comparisons I would like to see “apples-to-apples,” so if we have a response to that I would very much appreciate it.

    Assemblyman Parks:

    Thank you, Mr. Chairman. In response to my colleague from Henderson, I would say the states of Arizona, California, Idaho, and Oregon the rates explained by our colleague from District 9 all have specific financial institution franchise taxes. With regard to Utah, as it was explained to me, they are included in the 5 per cent calculations that corporate taxes paid by a general corporation. So it is not specifically identified, and looking at the 2003 State Tax Handbook for the State of Utah shows it being a corporate franchise and corporate gross receipts type tax. It is listed as a franchise tax and it is listed as 5 per cent of Utah taxable income with a minimum of $100. If I might also comment, we constantly hear about South Dakota and why South Dakota is popular for having financial institutions. I might indicate that banks and financial corporations pay a 6 per cent net income tax on the first $100,000,000 of revenue. Thank you.

    Assemblyman Christensen:

    Thank you, Mr. Chairman. A moment ago, we were referring to Secretary of State fees, and we bring in anywhere from $100,000,000 to $150,000,000 depending on the passage of AB 536. In the Secretary of State fees, 80 per cent are foreign corporations that register here or through resident agents registering their businesses in Nevada. I’m just wondering what do we have in the form of exemptions, or do we exempt parts of that particular industry or those organizations that want to register their patents or copyrights in Nevada?

Chairman Perkins:

    Is your question, “Are there exemptions in the Secretary of State fees for those businesses?” I don’t know the answer to that, but that is not in the bill that is before us right now. That will be in Senate Bill 2.

    Assemblyman Hardy:

    Thank you, Mr. Chairman. I’m looking at the health care industry in as much as the long-term care units are defacto, non-profit organizations, and one third of which have been in bankruptcy or getting close to one those chapters leading there. I am looking at the long-term care and do not see any protection for them. That may be an oversight. I do see the school audits still in place full-force and wondered if there was discussion to decrease those, as well as the unfunded mandate that I consider in the business advisory council, section 191, likewise on the non-profits, on their definitions, sections 60 and 58, page 30, SB 6, second reprint. Have we changed all of those non-profit clauses throughout the bill, or are we still at the same language in SB 6 second reprint? Thank you whoever would like to help me.

    Assemblywoman Buckley:

    Thank you, Mr. Chairman. First, with regard to the non-profit corporations and their treatment, the legal division worked diligently to insure that 501(c) non-profits were not going to be subject to payroll and franchise taxes, and we would not change our long-standing Nevada tradition of not taxing non-profit organizations. With regard to nursing homes, they did not receive a special exemption. With your comment last time, we double checked and it is interesting that of all the long-term entities now operating in Nevada, only two in the entire State of Nevada are owned by Nevada businesses. The rest have now been taken over by the large out-of-state corporations. Because of all the difficulties in the field, we are hoping that through the passage of the bill of my colleague from Assembly District 10, that we will be able to achieve some funding and get an additional 50 per cent federal match by that industry solution and by his sponsoring of that bill be able to help out the nursing home industry. I think that was all the questions I followed.

    Assemblyman Hardy:

    School audits in section 191.5, do we really want to include all of those school districts and the Business Advisory Council in section 191, as well, which will create an unfunded mandate. If we were going to suggest something, I would suggest looking at a population cap that would get at least a county that we’re close to and a county where I live and try to limit the audits necessary in the school districts.

    Chairman Perkins:

    They are still in the bill. Mr. Goldwater, do you want to address one of those points?

    Assemblyman Goldwater:

    Thank you, Mr. Chairman. Dr. Hardy, that was Assembly Bill 162 and I think this has passed, unanimously. It is not an unfunded mandate. It is going to be done by the legislative auditor. There was discussion on whether or not there would be an audit firm hired outside of either the school district, or the legislature, and that was too high a price tag. The legislative auditor, with an additional appropriation, represented to this legislature that he could handle it. It is not as comprehensive as in other school districts, as it will be in probably two of the major ones, but there are certain issues in those school districts that I think are legislative auditor will focus on, so it is worth including them in this mandate to pick up on some of the facilities issues in some of the districts as well as some of the transportation issues in some of the other districts. Including the business advisory counsel was something that proponents of the measure felt was very important to connect what was happening in Taxation and what was happening at the district. For a great many people there was a chasm between understanding what was happening administratively, the needs of the education system in this state, and the people who are going to end up paying for it, which are the big businesses in this state. If somehow, we could have these people meet on a regular basis and understand some of the issues, hopefully, that communication process and that understanding and the chasm will be breached.

    Assemblyman Hardy:

    Thank you, Mr. Chairman. I guess I have a philosophic difference in the business advisory counsel for all of the school districts that are targeted. I think that some of the smaller school districts eat, live, and breath with the people who are involved with the school districts and I do not see the need to have a business advisory counsel for, perhaps, fifteen out of the seventeen school districts. I think that creates another meeting, another group, and another set of time frames for someone to go to and takes away from their duties that would be better spent in the school. I would leave it at that, thank you.

    Assemblywoman Gibbons:

    Thank you, Mr. Chairman. On page seven of the amendment, would the live entertainment charge apply to grocery stores that have slot machines and, if for example, they were doing a promotion for the Fourth of July and had a live Dixie band out front and they were selling ribs and hot dogs, or whatever, would they be responsible for paying an entertainment tax? 

    Chairman Perkins:

    Only if they do ribs and hot dogs.

    Assemblywoman Buckley:

    Thank you, Mr. Chairman. I was thinking I have been going to the wrong grocery store. On the top of page 7, the first paragraph, you can see our staff drafted wording to specifically not apply to those more limited gaming establishments, such as grocery stores, which are limited in their number of slot machines. It indicates that, as used by the section, it’s licensed for less than fifty-one slots, less than six games, or any combination within those limits. It was to exempt the small folks such as a grocery store, or other places, with a smaller number of slots, but staff advises me not under 300, so that we could be specific in our application.

    Assemblywoman Gibbons:

    Thank you, Mr. Chairman. Does the bill still include mortgage brokers under financial institutions?

    Assemblywoman Buckley:

    That is not being changed in this amendment.

    Assemblyman Marvel:

    Thank you, Mr. Chairman. I would like to follow-up my colleague from District 22’s question to the chairman of the Committee on Taxation. I was satisfied with the answer regarding Utah, but regarding the franchise taxes, do the other surrounding states have a general franchise fee, or an industry specific for banks?

    Assemblyman Parks:

    Thank you, Mr. Chairman. In response to Mr. Marvel, the individual states, with the exception of Utah, surrounding Nevada, all have industry specific bank franchise taxes. Utah is the only one that has a tax that is included in its general business tax.

    Assemblyman Marvel:              

    Do they have a general franchise taxes otherwise, in other states, or just the industry specific for banking?

    Assemblyman Parks:

    Yes, Mr. Marvel, they do have specific business or franchise type taxes in addition to their financial franchise taxes. It is only that the other four states specifically enumerate them separately. Utah does not. It is included in the other statutes in the State of Utah.

    Assemblyman Marvel:

    But there are franchise taxes spread among the various industries, right? 

    Assemblyman Parks:

    That is correct.

    Assemblywoman Buckley:

    Thank you, Mr. Chairman. I would move that we adopt the amendment and amend and do pass SB 6.

    Chairman Perkins:

    We have a motion by Ms. Buckley and a second by Mr. Goldwater. Are there any comments or questions on the motion?  All those in favor of the motion please indicate by saying aye. Are there any opposed?  Motion carries. The amendment is adopted.

    Assemblyman Hettrick:

    Thank you, Mr. Chairman. Given the situation of the negotiations that have gone on over the last week, and given the headline in the paper saying that it may not be easy to reach an agreement, even with a simple majority, I would like to move that this body request a bill draft for a continuing resolution to fund education. I believe we should, at least, have that draft in hand so if we come to an impasse here, that for some reason can’t be moved, we fund education and move on. I think that is our responsibility and we would all agree to that. So, I would like to move that we request a bill draft for a continuing resolution to fund education.

    Chairman Perkins:

    We have a motion from Mr. Hettrick, seconded by Ms. Angle. I would just suggest to the body that, if we can come to a resolution, a continuing resolution would not be necessary. I think that we’ve been ordered back here to get our work done expeditiously, and I have some optimism, after the discussions we’ve had with the Senate, that we will be able to conclude our work very quickly.

    Assemblywoman Buckley:

    Thank you, Mr. Chairman. To you and through you, to my colleague the Minority Leader, I have some very practical concerns about that. One of the things that we are trying to do this session is to make some improvements to our education system. I understand that we are allocating about $229 million additionally to fund education. That includes textbooks, a 2 percent salary increase, and the like. Additionally, we have at least approximately a $200 million hole in the budget based on 9/11. So, we need that amount just to keep the other services going. So, as a practical matter, I don’t want to give the school district what we gave them last time. I want to give them enough to keep up with growth, and to pay a measly 2 percent increase. I think if we do anything with a continuing resolution, or with our entire bill, we should raise the teacher salary increase to 3 or 4 percent, so that we are keeping our qualified teachers. How does that work, when we are in such a deficit situation? What does that do to the school district, when they need to extend offers, and all we are doing funding by previous rates? Wouldn’t we be better served, in this body, to continue to work towards two-thirds in both houses for a budget that makes sense and at least keeps up with growth in education? I see a continuing resolution as taking a step backwards. I guess what I was going to say, because this kind of took me by surprise, maybe we should wait till Wednesday before we do that, but you know what, that’s accepting failure. That is unacceptable. We need to come up with this budget, and we need to fund it so that the school districts can finally make their offers and get qualified teachers in every classroom. We should not accept defeat. Our children don’t deserve it.

    Assemblyman Collins:

    Thank you, Mr. Chairman. I want to say that I do not agree the Minority Leader. I want to share a story with you. Many of you know how to golf, and you know about golfing and hitting a ball to the hole. This story is about a famous golfer, Arnold Palmer. He was at a championship golf tournament and was walking up to the tee, and his caddy walked up and said, “Mr. Palmer, watch out for the water trap on the right, and the rough on the left.” Mr. Palmer turned to the caddy and said, “I don’t want you to tell me anything except the distance from here to the hole. I don’t want any distractions about the rough on the right or the trap on the left. I just want to get to the goal.” The point is, as the Majority Leader just said, lets work towards passing a bill tonight, let the Senate pass it tomorrow, and lets get the work done. We don’t need anything else that distracts from that, whether it’s a sand trap or a resolution to paint the building. Lets just stick to passing this budget and this education plan, and that is all that anybody here should be focused on, besides eating, sleeping and keeping yourself alive. Thank you.

    Assemblyman Hettrick:

    Thank you, Mr. Chairman. I totally agree, and we know that there is a simple majority requirement to pass a bill out of here. I have real concerns whether or not that bill will be passed in the Senate. I believe we ought to address reality. This is conditional. It would be sitting there if we need it. Certainly, this body would have to vote on it. If this body doesn’t agree to it then that’s fine. Should we just wait? I think not. If we prefer, we could go to a bill, and I believe there is some agreement on most of the taxes that are included here, and if the body prefers, I don’t think we would have a problem with a bill that would fund education and a portion of the taxes. I’m trying to make sure, and I believe this body as a whole, is trying to make sure that education gets funded. This is not a grandstand or a play, this is just reality. We ought to take care of the contingency that may arise and not wait until it is upon us. That was the purpose for this request.

    Assemblyman Knecht:

    Thank you, Mr. Chairman. First, I want to say welcome back to Mr. Collins. We are glad to see you are well, and apparently your stories have switched from cars to golf and that’s an improvement. Secondly, if we took the viewpoint that Mr. Collins espouses, no one would ever buy insurance. What the Minority Leader is proposing is a prudent insurance policy. I think we should show that prudence and adopt it as he proposed. Thank you Mr. Chairman.

    Assemblywoman Giunchigliani:

    Thank you, Mr. Chairman. I understand what the Minority Leader is attempting, and I appreciate it, because I do understand that there is a commitment here for education. I don’t think anyone would argue that. However, we all made a commitment to be here today, and when I was called back here, instead of doing my yard work, I came here with optimism. That optimism is to say that we can get the job done. I agree with our Majority Leader, I still think that we should do this with more than a two-thirds vote, because that’s what this business has always done. We’ve always looked beyond partisan politics and done the right thing. I just fear that a constitutional provision at this point, or a continuing amendment or resolution will allow those who have been a no vote all along will continue to hold us hostage, and divert the issue of trying to bring about resolution. That’s our job. We’ve got time. We can move this amendment. We can move a bill to the Senate. I think that the Senators, once they have a piece of Legislation that is as reasonable as I think this is. This bill is reasonable and it’s fair. It treats grandparents, and moms and dads and aunts and uncles and kids alike. No one got a sales tax, and no one got a property tax. We’re trying to simply deal with corporations that are not paying their fair share now.

    I would call on us to get this resolved in the next two days, because at least for those of us from southern Nevada, we have until the fifteenth to put our GATE teachers and our specialists back in the classroom. We cannot afford to wait any longer, and I think we have the ability and the wherewithal to get this accomplished. While I appreciate the motion, hopefully we won’t need a continuing resolution. When you are doing negotiations, and I used to negotiate, you try to get to a win-win, ladies and gentlemen. We are trying to make everybody feel good about what they are doing. Everybody will have a little pain, but it is a win-win, and I think that ought to be our focus tonight and tomorrow. Let’s get the job done and go home so that we can take care of our families and our businesses as well.

    Assemblywoman Angle:

    Thank you, Mr. Chairman. I, too, support the idea of doing a continuing resolution for education because, as my colleague from the south stated, the fifteenth isn’t that far away. We’re only two days away, and I think we need to give them at least that assurance that we’re going to go forward with education, and that they can go ahead and do their hiring. They may not be able to do it at the levels that we would like. We have a bill before us, SB 5; we could pass that out as well. This is, at least, a stopgap measure, and I would like to see us make the BDR available so that if we need it, we have it.

    Chairman Perkins:

    The Chair’s view is, that if we need to do something we can do it fairly quickly. I think that if it’s looked at as something that we are going to do instead of what we are doing today, we won’t get our real work done. It won’t take very long to put one together if we have to, but if we focus on our work at hand I think we will be fine. In that regard, I don’t think that a continuing resolution would be necessary today.

    Assemblyman Goldwater:

    That was exactly what I was going to ask the Chair. How long would it take?  Thank you.

    Assemblyman Beers:

    Thank you, Mr. Chairman. Assemblywoman Giunchigliani has twice stated that these corporations would end up paying zero. I guess I am kind of curious. I am somewhat handicapped as I did not sit on the Committee of Taxation, but I was under the impression that these companies all pay the Nevada Business Activity Tax, the Nevada Real Property Tax on its land and buildings, the Nevada Personal Property Tax on equipment and furnishings, the Nevada Unemployment Tax, the Nevada Sales and Use Taxes on their purchases for things not for resale, the Nevada Insurance Premium Tax that is among the highest in the nation, the Federal Social Security Tax which comes back to Nevada in the form of benefit checks for the retired and disabled, and Federal Income Tax that comes back to Nevada in the form of grants to state and local governments to pay for roads, welfare, schools, and things like that. Have they been exempted?

    Chairman Perkins:

    Are there further remarks to the motion?  All those in favor of the motion please indicate by saying aye. Are there any opposed?  Motion fails.

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

ASSEMBLY IN SESSION

    At 3:57 p.m.

    Mr. Speaker presiding.

    Quorum present.

MOTIONS, RESOLUTIONS AND NOTICES

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

    Motion carried.

general file and third reading

    Senate Bill No. 6.

    Bill read third time.

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

    Amendment No. 7.

    Amend sec. 11, page 4, line 31, by deleting “0.6” and inserting “0.5”.

    Amend sec. 24.18, page 8, by deleting lines 38 through 44 and inserting:

    “Sec. 24.18.  1.  Except as otherwise provided in subsection 2, “financial institution” means:

(a) 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, or a similar institution chartered or licensed pursuant to federal law and doing business in this state;

(b) Any other person conducting loan or credit card processing activities in this state; and

(c) Any other bank, bank holding company, national bank, savings association, federal savings bank, trust company, credit union, building and loan association, investment company, registered broker or dealer in securities or commodities, finance company, dealer in commercial paper or other business entity engaged in the business of lending money, providing credit, securitizing receivables or fleet leasing, or any related business entity, doing business in this state.

2.  The term does not include:”.

    Amend sec. 24.18, page 9, line 1, by deleting “1.” and inserting “(a)”.

    Amend sec. 24.18, page 9, line 3, by deleting “2.” and inserting “(b)”.

    Amend sec. 24.20, page 9, by deleting lines 5 through 16 and inserting:

    “Sec. 24.20.  “Gross revenue” means the total amount of the money and the value of any other consideration received or receivable by a financial institution which the financial institution is required to report for the purposes of federal income taxation.”.

    Amend sec. 24.38, page 11, line 25, by deleting “3” and inserting “4”.

    Amend sec. 24.46, page 13, lines 38 and 40, by deleting “income” and inserting “revenue”.

    Amend sec. 24.46, page 13, by deleting lines 41 and 42 and inserting: “institution from its entire operation as a financial institution.”.

    Amend sec. 27, page 18, by deleting lines 3 through 18 and inserting:

    “Sec. 27.  “Admission charge” means the total amount, expressed in terms of money, of consideration paid for the right or privilege to have access to a facility where live entertainment is provided.”.

    Amend sec. 31, page 18, line 35, after “463.0169.” by inserting: “The term does not include a licensed gaming establishment that is licensed for less than 51 slot machines, less than six games, or any combination of slot machines and games within those respective limits.”.

    Amend sec. 36, page 19, by deleting lines 10 through 41 and inserting:

    “Sec. 36.  1.  Except as otherwise provided in this section, there is hereby imposed an excise tax on admission to any facility in this state where live entertainment is provided. If the live entertainment is provided at a facility with a maximum seating capacity that is:

(a) Less than 7,500, the rate of the tax is 10 percent of the admission charge to the facility plus 10 percent of any amounts paid for food, refreshments and merchandise purchased at the facility.

(b) At least 7,500, the rate of the tax is 5 percent of the admission charge to the facility.

2.  Amounts paid for gratuities directly or indirectly remitted to persons employed at a facility where live entertainment is provided or for service charges, including those imposed in connection with the use of credit cards or debit cards, which are collected and retained by persons other than the taxpayer are not taxable pursuant to this section.

3.  A business entity that collects any amount that is taxable pursuant to subsection 1 is liable for the tax imposed, but is entitled to collect reimbursement from any person paying that amount.

4.  Any ticket for live entertainment must state whether the tax imposed by this section is included in the price of the ticket. If the ticket does not include such a statement, the taxpayer shall pay the tax based on the face amount of the ticket.

5.  The tax imposed by subsection 1 does not apply to:

(a) Live entertainment that this state is prohibited from taxing under the Constitution, laws or treaties of the United States or the Nevada Constitution.

(b) Live entertainment that is provided by 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. § 501(c).

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

(d) Live entertainment that is not provided at a licensed gaming establishment if the facility in which the live entertainment is provided has a maximum seating capacity that is less than 300.

(e) Merchandise sold outside the facility in which the live entertainment is provided, unless the purchase of the merchandise entitles the purchaser to admission to the entertainment.

(f) Live entertainment that is provided at a trade show.

(g) Music performed by musicians who move constantly through the audience if no other form of live entertainment is afforded to the patrons.

(h) Live entertainment that is provided at a licensed gaming establishment at private meetings or dinners attended by members of a particular organization or by a casual assemblage if the purpose of the event is not primarily for entertainment.

(i) Live entertainment provided in the common area of a shopping mall.

6.  As used in this section:

(a) “Facility” means any area or premises where live entertainment is provided and for which consideration is collected for the right or privilege of entering that area or premises.

(b) “Maximum seating capacity” means, in the following order of priority:

(1) The maximum occupancy of the facility in which live entertainment is provided, as determined by the State Fire Marshal or the local governmental agency that has the authority to determine the maximum occupancy of the facility;

(2) If such a maximum occupancy has not been determined, the maximum occupancy of the facility designated in any permit required to be obtained in order to provide the live entertainment; or

(3) If such a permit does not designate the maximum occupancy of the facility, the actual seating capacity of the facility in which the live entertainment is provided.”.

    Amend sec. 38, page 20, lines 29 and 30, by deleting “shall, jointly,” and inserting:

“shall:

(a) Jointly,”.

    Amend sec. 38, page 20, between lines 32 and 33, by inserting:

    “(b) Upon request, assist the other agency in the collection of that tax.”.

    Amend sec. 39, page 20, line 33, by deleting “1.  Each” and inserting:

    “1.  Except as otherwise provided in this section:

(a) Each”.

    Amend sec. 39, page 20, line 38, by deleting “2.” and inserting “(b)”.

    Amend sec. 39, page 20, between lines 41 and 42, by inserting:

    “2.  The Board or the Department, if it deems it necessary to ensure payment to or facilitate the collection by the State of the tax imposed by section 36 of this act, may require reports to be filed not later than 10 days after the end of each calendar quarter.”.

    Amend sec. 39, page 20, line 43, by deleting “month” and inserting “period”.

    Amend sec. 41, page 21, by deleting line 19 and inserting:

    “(b) Preserve those records for:

(1) At least 5 years if the taxpayer is a licensed gaming establishment or until any litigation or prosecution pursuant to this chapter is finally determined, whichever is longer; or

(2) At least 4 years if the taxpayer is not a licensed gaming establishment or until any”.

    Amend sec. 44, page 23, by deleting line 19 and inserting: “establishment is taking any action”.

    Amend sec. 44, page 23, by deleting lines 25 and 26 and inserting: “licensed gaming establishment is taking any action with the intent to defraud the State or to evade”.

    Amend sec. 44, page 23, line 30, by deleting: “paid for live entertainment”.

    Amend sec. 44, page 23, by deleting line 32 and inserting: “upon the taxable liability of business entities that”.

    Amend sec. 45, page 23, by deleting lines 36 and 37 and inserting:

    “(a) Is unable to collect all or any part of an admission charge which was included in the taxable receipts reported”.

    Amend sec. 45, page 24, by deleting lines 8 and 9 and inserting:

    “3.  If a taxpayer collects all or any part of an admission charge for which he claimed a credit on a return for a”.

    Amend sec. 45, page 24, by deleting lines 12 and 13 and inserting:

    “(a) The amount collected in the admission charges reported pursuant to paragraph (a) of subsection 1;”.

    Amend sec. 48, page 25, line 20, by deleting “month” and inserting “reporting period”.

    Amend sec. 49, page 25, line 37, by deleting “the month” and inserting:

“the reporting period”.

    Amend sec. 57, page 28, line 13, by deleting “Any” and inserting “1.  Any”.

    Amend sec. 57, page 28, between lines 17 and 18 by inserting:

    “2.  As used in this section, “licensed gaming establishment” includes a licensed gaming establishment that is licensed for less than 51 slot machines, less than six games, or any combination of slot machines and games within those respective limits.”.

    Amend sec. 58.16, page 29, by deleting lines 13 through 15 and inserting:

“to 26 U.S.C. § 501(c); or”.

    Amend sec. 58.28, page 30, by deleting lines 33 through 38 and inserting:

    “8.  Any revenue from the operation of a vending stand”.

    Amend sec. 58.28, page 30, line 40, by deleting “10.” and inserting “9.”.

    Amend sec. 58.44, page 33, line 16, by deleting “$100,000” and inserting “$500,000”.

    Amend sec. 58.44, page 33, by deleting lines 17 through 20.

    Amend sec. 58.48, page 35, by deleting lines 23 through 25 and inserting:

    “5.  Any revenue received:

(a) As dividends or distributions by a parent organization from the capital account of a subsidiary entity of the parent organization; or

(b) As payments between:

(1) A parent organization and a wholly owned subsidiary entity of the parent organization; or

(2) The wholly owned subsidiary entities of a parent organization.”.

    Amend sec. 58.48, page 36, between lines 5 and 6, by inserting:

    “15.  Any revenue of the business entity from the sale or distribution of gasoline or any other motor vehicle fuel.”.

    Amend sec. 58.50, page 36, line 6, by deleting “1.”.

    Amend sec. 58.50, page 36, by deleting lines 10 through 26 and inserting: “regulations must be consistent with the methods of dividing income contained in the provisions of the Uniform Division of Income for Tax”.

    Amend sec. 62, page 41, by deleting lines 20 through 22 and inserting: “to 26 U.S.C. § 501(c).”.

    Amend sec. 63, page 42, by deleting lines 13 and 14 and inserting “newspaper.”.

    Amend the bill as a whole by adding a new section designated sec. 64.5, following sec. 64, to read as follows:

    “Sec. 64.5.  The Department shall deposit all money it receives pursuant to sections 61 to 66, inclusive, of this act in the State Treasury for credit to the State General Fund.”.

    Amend sec. 75.3, page 55, by deleting lines 25 through 27 and inserting:

“26 U.S.C. § 501(c);”.

    Amend sec. 77, page 57, line 8, by deleting “$3.45” and inserting “$2.93”.

    Amend sec. 78, page 57, line 15, by deleting “$3.60” and inserting “$3.08”.

    Amend sec. 78, page 57, line 17, by deleting “$1.30” and inserting “$1.12”.

    Amend sec. 78, page 57, line 20, by deleting “70” and inserting “60”.

    Amend sec. 78, page 57, line 23, by deleting “16” and inserting “14”.

    Amend sec. 80, page 58, line 9, by deleting “42.5” and inserting “40”.

    Amend the bill as a whole by deleting sec. 80.5 and adding:

    “Sec. 80.5.  (Deleted by amendment.)”.

    Amend sec. 82, page 59, line 7, by deleting “37.5” and inserting “35”.

    Amend the bill as a whole by deleting sec. 82.5 and adding:

    “Sec. 82.5.  (Deleted by amendment.)”.

    Amend sec. 83, page 60, line 7, by deleting “42.5” and inserting “40”.

    Amend the bill as a whole by deleting sec. 83.5 and adding:

    “Sec. 83.5.  (Deleted by amendment.)”.

    Amend sec. 95, page 62, line 39, after “of” by inserting “the”.

    Amend sec. 95, page 62, by deleting lines 41 and 42 and inserting:

    “4.  The county recorder of a county:

(a) Whose population is 100,000 or more 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.

(b) Whose population is less than 100,000 may deduct and withhold from the taxes collected 1 percent of those taxes to reimburse the”.

    Amend sec. 167, page 111, line 33, by deleting “and”.

    Amend sec. 174, page 118, by deleting lines 36 and 37 and inserting: “pursuant to this section if:

    (a) The establishment is licensed for less than 51 slot”.

    Amend sec. 174, page 118, line 39, by deleting the italicized period.

    Amend sec. 174, page 119, line 9, after the closed bracket by inserting:

“; or

(b) The facility in which the live entertainment is provided has a maximum seating capacity that is at least 7,500.”.

    Amend sec. 174, page 119, between lines 24 and 25 by inserting:

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

(g) Live entertainment that is provided or occurs at private meetings or dinners attended by members of a particular organization or by a casual assemblage and the purpose of the event is not primarily for entertainment.

(h) Live entertainment presented in a common area of a shopping mall.”.

    Amend sec. 186.4, page 138, line 13, by deleting “or” and inserting “or”.

    Amend sec. 186.9, page 142, by deleting lines 3 through 6 and inserting:

“pursuant to 26 U.S.C. § 501(c); [or]”.

    Amend the bill as a whole by adding new sections designated sections 188.3 through 188.7, following sec. 188, to read as follows:

    “Sec. 188.3.  Section 58 of Assembly Bill No. 553 of the 72nd Session of the Nevada Legislature is hereby amended to read as follows:

    Sec. 58.  1.  If projections of the ending balance of the State General Fund fall below the amount estimated by the [2003] Nevada Legislature for Fiscal Year 2003-2004 or 2004-2005, the Director of the Department of Administration shall report this information to the State Board of Examiners.

    2.  If the State Board of Examiners determines that the ending balance of the State General Fund is projected to be less than $60,000,000 for Fiscal Year 2003-2004 or 2004-2005, the Governor, pursuant to NRS 353.225, may direct the Director of the Department of Administration to require the State Controller or the head of each department, institution or agency to set aside a reserve of not more than 15 percent of the total amount of operating expenses or other appropriations and money otherwise available to the department, institution or agency.

    3.  A reserve must not be set aside pursuant to this section unless:

    (a) The Governor, on behalf of the State Board of Examiners, submits a report to the Legislature, or, if the Legislature is not in session, to the Interim Finance Committee, stating the reasons why a reserve is needed and indicating each department, institution or agency that will be required to set aside a reserve; and

    (b) The Legislature or Interim Finance Committee approves the setting aside of the reserve.

    Sec. 188.5.  Section 61 of Assembly Bill No. 553 of the 72nd Session of the Nevada Legislature is hereby amended to read as follows:

    Sec. 61.  1.  There is hereby appropriated from the State General Fund to the Interim Finance Committee the sum of $12,500,000 in Fiscal Year 2003-2004 and $20,000,000 in Fiscal Year 2004-2005 for information technology and additional operational costs that may be required by the Department of Taxation or other state agency to implement or modify the collections of State General Fund revenues . [approved by the 72nd Session of the Nevada Legislature.]

    2.  If the Department of Taxation or other state agency determines that additional resources are necessary for information technology or additional operational costs related to subsection 1 the State Board of Examiners shall consider the request and recommend the amount of the allocation, if any, to the Interim Finance Committee.

    3.  The Interim Finance Committee is not required to approve the entire amount of an allocation recommended pursuant to subsection 2 or to allocate the entire amount appropriated in subsection 1.

    4.  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.

    Sec. 188.7.  Section 1 of Senate Bill No. 243 of the 72nd Session of the Nevada Legislature is hereby amended to read as follows:

    Section 1.  [1.  There is hereby appropriated from the State General Fund to the Fund to Stabilize the Operation of State Government created by NRS 353.288 the sum of $30,000,000.

2.]  Notwithstanding the provisions of NRS 353.235:

[(a)] 1.  Upon receipt of the projections and estimates of the Economic Forum required by paragraph (d) of subsection 1 of NRS 353.228 to be reported on or before December 1, 2004, the Interim Finance Committee shall project the ending balance of the State General Fund for Fiscal Year 2004-2005, using all relevant information known to it.

[(b)] 2.  Except as otherwise provided in [paragraph (c),] subsection 3, there is hereby contingently appropriated from the State General Fund to the Fund to Stabilize the Operation of State Government created by NRS 353.288 the amount, if any, by which the projection required by [paragraph (a)] subsection 1 exceeds the amount of the ending balance of the State General Fund for Fiscal Year 2004-2005 as estimated by the [2003 Legislature.

(c)] Nevada Legislature.

3.  The amount of any appropriation pursuant to [paragraph (b)] subsection 2 must not exceed [$20,000,000.] $50,000,000.”.

    Amend sec. 189, page 143, by deleting lines 28 through 31 and inserting:

    “Sec. 189.  1.  NRS 353.272, 364A.160, 375.025 and 375.075 are hereby repealed.

    2.  NRS 463.4001, 463.4002, 463.4004, 463.4006, 463.4008, 463.4009 and 463.4015 are hereby repealed.

    3.  NRS 364A.010, 364A.020, 364A.030, 364A.040, 364A.050,”.

    Amend sec. 190, page 143, by deleting line 39 and inserting:

    “Sec. 190.  Notwithstanding the provisions of NRS 353.288:”.

    Amend sec. 190, page 144, by deleting lines 2 through 20 and inserting: “sources to the State General Fund as projected by the Nevada Legislature for the applicable fiscal year; and

    (b) The total amount of all applicable contingent appropriations enacted for the 2003-2004 Fiscal Year and the 2004-2005 Fiscal Year by the Nevada Legislature for which the conditions for the contingent appropriations were satisfied.

    2.  Any excess amount of revenue determined pursuant to subsection 1 must be used as follows:

    (a) An amount estimated by the Interim Finance Committee to pay for expenditures that will occur in the next biennium for which the corresponding expenditures in the current biennium were paid or are to be paid from a source other than the State General Fund, but for which the alternative source of revenue likely will not be available or will not be received during the biennium, must be used to replace previously used nonrecurring revenue. This amount must be accounted for separately in the State General Fund.

    (b) The remaining excess amount of revenue must be transferred to the Fund to Stabilize the Operation of the State Government created by NRS 353.288, in such an amount that does not cause the balance in the Fund to exceed the limitation on that balance set forth in NRS 353.288.

    (c) Any remaining excess amount of revenue must be transferred to the Fund for Tax Accountability created pursuant to section 191 of this act.”.

    Amend the bill as a whole by deleting sec. 193 and adding:

    “Sec. 193.  (Deleted by amendment.)”.

    Amend sec. 194.56, page 165, line 16, by deleting “194.2” and inserting “165.2”.

    Amend sec. 195, page 166, by deleting lines 13 through 26 and inserting:

    “1.  Section 173 of this act does not apply to any taxes precollected pursuant to chapter 463 of NRS on or before the effective date of that section.

    2.  Sections 80, 82 and 83 of this act do not apply to any taxes precollected pursuant to chapter 370 of NRS on or before the effective date of those sections.

    3.  Sections 77, 78 and 172 of this act do not affect the amount of any license fees or taxes due for any period ending on or before July 31, 2003.

    4.  Sections 26 to 58, inclusive, of this act apply to any taxable admission charge that is collected pursuant to the provisions of those sections on or after January 1, 2004.

    5.  Section 144 of this act do not apply to any contracts made before the effective date of that section.”.

    Amend sec. 196, page 166, line 27, by deleting “2” and inserting “3”.

    Amend the bill as a whole by adding a new section designated sec. 196.1, following sec. 196, to read as follows:

    “Sec. 196.1.  Notwithstanding the provisions of section 165.2 of this act, the Department of Education, the Budget Division of the Department of Administration and the Fiscal Analysis Division of the Legislative Counsel Bureau shall carry out the provisions of subsections 1 and 2 of that section for fiscal year 2003-2004 as soon as practicable after the effective date of that section.”.

    Amend sec. 196.3, page 166, by deleting lines 39 through 45 and inserting:

    “2.  As used in this section:

    (a) Except as otherwise provided in paragraph (b), “financial institution” means:

        (1) 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, or a similar institution chartered or licensed pursuant to federal law and doing business in this state;

        (2) Any other person conducting loan or credit card processing activities in this state; and

        (3) Any other bank, bank holding company, national bank, savings association, federal savings bank, trust company, credit union, building and loan association, investment company, registered broker or dealer in securities or commodities, finance company, dealer in commercial paper or other business entity engaged in the business of lending money, providing credit, securitizing receivables or fleet leasing, or any related business entity, doing business in this state.

    (b) “Financial institution” does not include:”.

    Amend sec. 196.3, page 167, line 1, by deleting “(a)” and inserting “(1)”.

    Amend sec. 196.3, page 167, line 3, by deleting “(b)” and inserting “(2)”.

    Amend sec. 196.5, page 167, by deleting line 7 and inserting: “institution on or after November 1, 2003.”.

    Amend sec. 196.5, page 167, line 13, after “(a)” by inserting:

““Financial institution” has the meaning ascribed to it in section 24.18 of this act.

    (b)”.

    Amend sec. 196.5, page 167, line 15, by deleting “(b)” and inserting “(c)”.

    Amend the bill as a whole by adding a new section designated sec. 196.7, following sec. 196.5, to read as follows:

    “Sec. 196.7.  The Legislative Committee on Taxation, Public Revenue and Tax Policy established by the provisions of section 127 of this act shall:

    1.  Review and study:

    (a) The impact, if any, that the imposition of the tax on live entertainment imposed pursuant to section 36 of this act has had on revenue received by the state and local governments from special events conducted in this state.

    (b) Whether promoters of special events are contracting with entities in other states to hold the special events in those other states as a result of the imposition of the tax.

    (c) The loss of revenue, if any, from special events resulting from the imposition of the tax.

    (d) The feasibility and need for exempting such special events from the tax.

    (e) Standards and procedures that may be adopted for determining whether special events should be exempt from the tax and the qualifications for such an exemption.

    2.  Submit a report of the results of its review and any recommendations for legislation to the 73rd Session of the Nevada Legislature.”.

    Amend sec. 198, pages 167 and 168, by deleting lines 31 through 45 on page 167 and lines 1 through 31 on page 168, and inserting:

    “Sec. 198.  1.  This section and sections 59, 60, 67, 69, 75, 75.3, 75.7, 76, 80, 82, 83, 86, 87, 88, 90 to 93, inclusive, 98, 101, 112, 114, 116, 125 to 132, inclusive, 144 to 165, inclusive, 168, 173, 178, 188 to 188.7, inclusive, 190 to 193, inclusive, 194.10, 194.14 to 194.56, inclusive, 194.60, 194.62, 195, 196, 196.1, 196.7 and 197 of this act and subsection 1 of section 189 of this act become effective upon passage and approval.

    2.  Sections 194.58 and 194.64 of this act become effective upon passage and approval and apply retroactively to June 30, 2003.

    3.  Sections 165.2, 165.4, 165.6, 166.2, 194 and 194.66 of this act become effective upon passage and approval and apply retroactively to July 1, 2003.

    4.  Sections 77, 78, 79, 81, 84, 85, 172, 174, 175 and 177 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 August 1, 2003, for all other purposes.

    5.  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.

    6.  Sections 24.10 to 24.74, inclusive, 185.30 to 186, inclusive, 186.4, 186.6, 186.8, 186.9 and 196.5 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 November 1, 2003, for all other purposes.

    7.  Sections 1 to 24, inclusive, 25 to 58, inclusive, 61 to 66, inclusive, 68, 70.5, 71.5, 72.5, 73.5, 74, 89, 94 to 97, inclusive, 99, 100, 102 to 111, inclusive, 118 to 124, inclusive, 133 to 143, inclusive, 166, 167, 169, 170, 171, 176 and 179 to 185, inclusive, of this act and subsection 3 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.

    8.  Sections 80.5, 82.5, 83.5, 166.4, 187 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”.

    Assemblywoman Buckley moved the adoption of the amendment.

    Remarks by Assemblymen Buckley and Brown.

    Assemblywoman Buckley requested that the following remarks be entered in the Journal.

Assemblywoman Buckley:

    Thank you, Mr. Speaker. We have already heard, just a few minutes ago, the details of the bill. I would like to add just a couple of additional pieces of information that would serve to answer some member’s questions. Our very able staff has e-mailed me some additional information that members might find useful. From Ted Zuend, according to the table from the Federation of the Tax Administrators, most states do have a separate Bank Franchise Tax. Many, however, are taxed at the same rate as their Corporate Income Tax, and so, that’s where I believe that relationship comes from. According to his quick research, only about four seem to have it just taken care of in their Corporate End Tax. The rest do have a separate Bank Franchise Tax, including Delaware. I just wanted to include that additional information.

    Assemblyman Brown:

    Thank you, Mr. Speaker. I, too, was just checking online. It does appear that of the states that were compared, Arizona has a Corporate Income Tax of 6.698 percent, and a Bank Income Franchise, or whatever we would call it, that is identical. Oregon’s Corporate Income Tax is 6.6 percent and a bank tax of 6.6 percent. Idaho has a Corporate Income Tax of 7.6 percent with a bank tax of the same, 7.6 percent. Utah has a Corporate Income Tax of 5 percent, and a bank tax of 5 percent. California wins the prize. Its corporation tax is 8.84 percent and the bank tax is the same, plus 2 percent, at 10.84 percent.

    My concern is that we are using mere semantics here, calling it a franchise tax. I think California is the only one that really impacts their banks any differently than any other corporation in their state. Unless any one can shed any light on that’s what I deduce from the information before me. Thank you Mr. Speaker.

    Amendment adopted.

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

    Mr. Speaker announced if there were no objections, the Assembly would recess subject to the call of the Chair.

    Assembly in recess at 4:03 p.m.

ASSEMBLY IN SESSION

    At 4:16 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.

    Assemblywoman Buckley moved that the reading of histories be dispensed with for this legislative day.

    Motion carried.

general file and third reading

    Senate Bill No. 6.

    Bill read third time.

    Remarks by Assemblymen Buckley, Hettrick, Carpenter, Goldwater, Knecht, Giunchigliani, Hardy, Mortenson, Brown, Beers, Christensen, Collins, Horne, Mabey, and Gibbons.

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

    Assemblywoman Buckley requested that the following remarks be entered in the Journal.

    Assemblywoman Buckley:

Thank you, Mr. Speaker.  I think I will keep my speech rather short since I have given an overview of the bill several times.  Senate Bill 6 does a number of things.  It funds education for our state and makes improvements to education that will insure that our schools keep even with growth and begin to improve.  The bill raises revenue in a number of different ways including enacting a small tax, .5 percent on payroll, and a franchise tax, as well as the bank franchise tax as suggested to us by the Senate.  Additionally it expands the casino/live entertainment tax and by primarily passing those revenues collected from tourists taking in our shows.  In my opinion, it is a fair and balanced way to more fully be able to fund the state’s budget. 

    We have a choice when we look at new taxes.  We can try to hit the everyday Nevada taxpayer or we can, instead, impose a small business tax.  My colleague, a few seats down, said earlier Nevada businesses already pay sales taxes and other taxes.  Certainly, if they own property, they pay property taxes.  They pass sales taxes on to our constituents and to us.  Nevada, unlike most other states, doesn’t have a broad-based business tax because we have traditionally relied on gaming and mining.  Gaming can afford to pay more and they will under this bill.  They would pay under the gross revenue tax, the payroll tax, their non-casino revenue, the franchise tax, and from the tourists who go to casinos.  It is time that big businesses began to pay a little bit in Nevada in terms of a broad based business tax. 

    What this bill does is try to make it fair and equitable.  It does not mirror any where near the levels in nearby conservative states such as Utah and Arizona.  I don’t compare to California because they are so out of whack that I don’t think it is a good comparison for Nevada.  It is a small, but equitable, way to have Nevada businesses finally begin to pay the taxes they pay in every other state to the State of Nevada to support our needs, whether it is education, human services, or to make sure that families with members who are mentally ill are just able to get into the mental health clinics.  Our state has lagged behind every area, whether mental health funding, treating individuals with disabilities, or education.  I am tired of us always being last in the nation in every category when we can keep up and climb out of the basement by just making our companies pay less than they are paying in every other state.  I think it is the right thing to do and I think it is time for Nevada to take this step. 

    Assemblyman Hettrick:

    Thank you, Mr. Speaker.  I have to rise in opposition to the bill.  It is regrettable that the education portion is attached here, but we understand why it is.  All of us support education.  That has been well documented and I won’t go into it any more.  I think your amendment today improves the bill in some senses and makes it worse in others.  I still have the problem that we are creating, I believe, taxes that will have a chilling effect on the business environment and job creation in the State of Nevada.  Unfortunately, we have to create the Nevada IRS to collect these taxes.  For those reasons, Mr. Speaker, I still have to oppose this bill as written.  Thank you.

    Assemblyman Carpenter:

    Thank you, Mr. Speaker.  I have to rise in opposition to this bill.  One thing that really concerns me is right now Nevada is ranked either second or third in business climate to bring companies into Nevada.  I know out in the rurals we are trying desperately to bring in new business and I am afraid that this is going to really hurt.  I don’t know if anyone has ever sat down and tried to figure out where we are going to be with these new taxes.  I am no lover of banks, but I don’t want to drive them out of here.  When I was a young sheepherder and cowboy, I had to borrow a lot of money.  I am afraid if they hadn’t been around, instead of being kind of successful, I would still be doing what I had done with my first job, shoveling coal.  I have a little concern about this deal. 

    Assemblyman Goldwater:

    Mr. Speaker, thank you.  I rise in support of this bill.  I can tell you, as someone who has worked in financial services and studied business most of my professional life, we won’t drive banks out.  Wherever there are deposits banks will be.  They are less and less in the rurals, not because of taxes, but because of the lack of a deposit base.  Additionally, the members have heard me argue on this floor many times about economic development and redevelopment and the way we give away our existing tax base for the purposes of economic development.  I think the main argument I have heard so far regarding Senate Bill 6 is that it some how will create a devastating, or bad business climate for Nevada.  I would wholeheartedly disagree.  I have empirical evidence to suggest that I am correct.  When businesses are surveyed as to why they locate any particular place, taxes is on that list.  However, it is nowhere near the top of the list.  What kind of thing do businesses look for when they relocate, or stay in a particular area?  Number one is workforce and education.  Do we have an educated workforce?  We have always touted around here that we are trying to be the next Silicon Valley.  Silicon Valley isn’t the lowest taxed place in the United States of American, not even close.  Their taxes are huge.  On one hand we are saying we don’t want to be the next California, yet we want to turn into the next Silicon Valley.  It doesn’t make sense.  Why was Silicon Valley successful?  They turned out university graduates from some of the most prestigious universities.  Their school system was excellent.  There are a number of cultural institutions nearby.  These are the things that will attract businesses to Nevada.  Our good university system is funded by taxes.  Our good K-12 education system and educated workforce are funded by these business taxes.  These are the businesses that we want to move to Nevada. 

    Anyone, as my bosses have always told me, can sell on price.  If you are selling the cheapest thing in the world, anyone can sell it.  Selling Nevada on quality, which is what we are trying to do here, is what we are going to have to do.  We are going to have to change our sales pitch for this state, no doubt about it.  We are going to have to change it to say, “If you want good workers for your companies, banks, and computer companies, locate to Nevada, because our test scores are great.  Our K-12 educations are wonderful.  Our university is turning out excellent graduates.”  This is what Senate Bill 6 does.    This is the business climate we want to create for Nevada’s future. 

    Assemblyman Knecht:

    Thank you, Mr. Speaker.  A couple of years ago I moved here.  I moved my family here from Silicon Valley after having lived there for four years and having worked there off and on for over a dozen years.  I went to school at one of those universities.  Contrary to the Nevada-bashing that we are last in everything that is good and first in every thing that is bad, I came here, as do many people, for the quality of life.  I came for the many different benefits.  As someone who has lived there, I guarantee you Nevada is much better.  One of the reasons it is better is because of its tax and regulatory climate.  I am happy to be here.  I look forward to staying here, living the rest of my life here and raising my children here.  If we pass this bill today we are taking the first step into turning Nevada into East California.  That is not why I came here.  What we are also doing is killing a major business, the largest private employer in Carson City.  What we are doing is not passing reasonable tax increases and reasonable spending increases, but grossly excessive tax and spending increases.  To the extent that we need to pass taxes, what we will be doing is passing the most onerous kind of tax; the specific industry franchise tax, the gross receipts tax and its variations.  We don’t need to do that.  We all know, every one of us that there are broad-based business taxes that could attract the support of my colleagues and myself, in the minority, but they haven’t been allowed to be brought up here.  For those reasons, Mr. Speaker, I will be voting against this bill. 

    Assemblywoman Giunchigliani:

    Thank you, Mr. Speaker.  When we started this session we were asked to raise taxes on just about everything.  We did allow, and had a wonderful process, of openness as we have always had in this body, regarding taxes, budgets, and anything else that came up that had nothing to do with anything half the time.  We still discussed it and talked about it.  We were asked to tax people’s videos, movies, and golf.  We were asked to raise sales taxes.   We were asked to look at property taxes.  We were also asked to adopt a broad based business tax that would begin to make corporations, currently not paying, pay their fair share.  That is what SB 6 does.  It is a reasonable, fair bill that allows our constituents to not have to go into their own pockets.  When they open their property tax bill there will not be an increase in it because of this bill.  When they go to purchase food there will not be an additional sales tax.  When they go to buy diapers there will not be sales tax that we have added.  Prescription drugs will not be taxed.  Families can take their children to movies and to family activities.  They can go to amusement parks and they will not be taxed.  I know it is easy to focus on what we don’t like, but why not focus on what we do like. 

    This bill is a compromise.  It is one that does not hit the everyday person.  It is one that makes sure gaming begins to pay more, banks pay where they don’t pay currently, and for once, we will capture that franchise fee from banks.  Right now, our constituents are paying the same fees that are being charged in other states, but that money is going to schools in Utah.  That money is going to schools in Arizona and Idaho.  All we are saying is, pay the lowest amount, pay it here in Nevada first, and make sure our schools are funded with it.  We are just asking people to step up to the plate, not unreasonably, but in a fair and equitable manner.  That is all SB 6 does.  Try to find something that you like in it rather than just focusing on one piece that you don’t care about.  Let’s do the peoples business, do it the right way, and let’s do it in partnership like we always have.  I came across a quotation from Eleanor Roosevelt, “Learn from the mistakes of others because we can’t live long enough to make them all ourselves.”  I am hoping maybe today we can learn from some of our mistakes that we have done in the past sessions and do the right thing.  Let’s fund our schools.  Let’s put in a fair and equitable tax base.  Let’s go home.  Thank you, Mr. Speaker.

    Assemblyman Hardy:

    Thank you, Mr. Speaker.  I do like education.  I do like Democrats and Republicans who can vote for taxes.  I do like the fact that these taxes will fund schools.  I do like a majority vote.  I do like the Senate.  I do like consensus that will come out of this.  Thank you, Mr. Speaker.

    Assemblyman Mortenson:

    Thank you, Mr. Speaker.  All of us near the beginning of the session received a letter from the Chairman and CEO of MGM, Terry Lani.  I would like to expound on what my colleague from Assembly District 10 said.  Terry Lani, in his letter to all the legislators said, “I am curious to know how many businesses we have already scared away by being forty-ninth in the United States for educating our children.”  It seems we are low, or close to it, in any other number of other important social measures.  Yes, we are number two, or three, in business, but, when are we going to start to try and raise the social measures and get us up from the bottom of the barrel.  If we have businesses that move here simply because they can have very low taxes then maybe we just don’t want those businesses.  Let’s pass some taxes that will help people and not worry about the businesses. 

    Assemblywoman Buckley:

    Thank you, Mr. Speaker, for recognizing me a second time.  I want to respond a little bit to some of the debate.  As we all know, any member can bring up any sort of bills that they want during this legislative process.  There was a comment that this tax plan is grossly excessive.  It is the most modest of tax increases to business of all of our surrounding states.  The lowest.  We did that deliberately because we recognize that Nevada businesses do not need grossly excessive increases to their taxes.  In regard to creating industry specific taxes, we didn’t do that except for financial institutions, which is done separately in almost every other state in the nation because they are so unique in the revenue they bring in.  With regard to suppression of economic development, no one wants that.  We want to attract as many businesses as possible to the urban and rural areas.  How intriguing that the head of the Nevada Development Authority urged us to create a broad based-business tax for the very reasons cited by my colleague in Assembly District 10.  Some say we don’t want to pass this bill because we don’t want to create a Nevada IRS.  I am sorry to inform everyone but we already have one.  We just call it the Nevada Department of Taxation. 

    I guess that last thing I want to add is, you can’t be called a Nevada-basher for wanting to improve Nevada.  I didn’t move to Nevada two years ago, I moved here twenty-three years ago.  I got my first job as a maid at the MGM hotel.  I made a pretty good wage for being just out of school.  I was real smart then.  I said, “I am eighteen.  I am sick of school.  I am never going back to school.” So, I moved to Las Vegas and I got a job as a maid at the MGM.  It was a pretty good job.  It paid well.  Did I ever anticipate that twenty-three years later I would be the first female Majority Leader in the history of the State of Nevada?  No.  Nevada gave me that opportunity.  It gave everyone of us an opportunity to succeed in our business, with our families, and with our public service. It is not bashing Nevada to say I want my children to get a good education.  It is not bashing Nevada to say I want a constituent with a mentally ill child to be able to get medication.  That is wanting the same success that we have been able to achieve for everyone we represent.  That is caring for Nevada, not bashing Nevada. 

    Assemblyman Brown:

    Thank you, Mr. Speaker.  I, too, wish to respond to a couple of comments that have been made.  First of all, some of the comments from the assemblywoman from District 9 focused on what most of us would call regional pricing, the Wal-Mart argument.  I have no problem seeing them pay taxes, but to suggest that a broad-based business tax is synonymous with making, solely, regional pricing based businesses pay taxes is not accurate in my mind.  As I was driving here today from the airport to Carson City I was looking at some of the businesses that would be impacted.  First, I noticed Meeks Lumber on the left hand.  It is a home improvement type store.  They will pay on this tax.  I don’t think they are involved in regional pricing as a local business.  Many of us have frequented Adele’s.  They will pay.  They, I am sure, do not have a regional type pricing.  I often bought dollar gifts for my daughters at the Dollar Tree Store as I left Carson City and I think that they probably do not pay based upon regional pricing.  These locations, I am confident, at least if they have the philosophy or the ability that I would with my particular business, will pass that on.  They keep saying it is all about the margin.  If the market will bear it, the price will be increased.  Maybe that is not going to happen at Wal-Mart or Target, but how many big box stores do we have in Nevada?  One hundred?  Two hundred? I don’t know, but I am confident that we have ten to twenty thousand businesses and these are all going to be impacted.  To the extent possible, that is going to be passed on, right to the individual. So the comments that we are trying not to hit regular Nevadans I don’t think bears out.  I am sure there may be some instances where the market may not bear it and they may pay out some of their profits. 

    In regard to comments made by the Majority Leader, I would give the following response.  I would concede that one-quarter of one percent of the gross business, or the one-eighth as we have additionally discussed, is very modest.  However, we have also heard it stated from this floor that forty-seven other states have a similar tax.  I think we had one other state that has a similar gross receipts tax.  It is possible that under this tax scheme a corporation could pay 100 percent of what would have been a profit tax, because we measure it on the gross.  They make nothing.  If I have a small business, I would have no problem paying one-quarter of one percent.  That is not an issue.  But we all know there are business cycles and business entities that operate on a very small margin and one-quarter of one percent of their gross could be a very significant number. 

    For the purpose of accuracy I make those comments.  I would also, Mr. Speaker, make a comment or two about some statements that the assemblywoman from District 6 made, with regard to education.  In its original form, SB 6 is a tax bill.  I am not prepared to vote on this tax bill based upon my fiscal philosophy on state spending.  The constitution says that each bill should have one subject.  The Senate abided by that.  I don’t think we are charging, necessarily, that body with issuing bad checks by passing both those bills out.  It would be equally as simple a matter to just sit on the school funding, rather than combining it with this bill.  I think that is unfortunate.  There have been, certainly, allegations in past floor statements that anybody who presses the red button is opposed to education and anybody who presses the green button favors education.  I came from a family that didn’t have much.  I was number seven of eight kids.  I have made that statement before.  If you want a bike, David, that is great, but you have to find a way to fund it.  If you want a college education, David, that is great, but you need to find out how you are going to fund that.  At one time during college I worked three jobs to pay my way through.  Now I am being told I am anti-education.  I resent that just a little bit.  I have a daughter in public school.  I would do nothing to jeopardize her education.  I fully support the education section of this bill, but I believe in my principles and my philosophies.  I am not stating here that folks who press the green button are wrong and I am right, but those are my core principles and I am going to abide by them.  I think it is unfortunate the bills have been combined.  I hope it is not just a political fiction that we have to combine the two; I think they could be separated.  I will be voting no.  Thank you, Mr. Speaker. 

    Assemblyman Beers:

    Thank you, Mr. Speaker.  I wanted mention that I find the absence of a property tax in this bill a rather hollow victory.  We already raised the property tax in Section 20 of SB 507, six weeks ago.  Thank you, Mr. Speaker. 

    Assemblyman Christensen:

    Thank you, Mr. Speaker.  As I have been represented by the Minority Leader, my comments have been minimal as we have been here in special sessions going through these bills.  I think now might be the appropriate time to share some of my thoughts, in particular to SB 6, and a lot of the dialog that has been happening here in this great room.  I found it interesting that earlier in the week some groups had referred to me as one of the “mean fifteen.”  I thought it was interesting because as I campaigned, and as I have been here, I have done all that I can to deliver on my campaign promises.  As I campaigned, I told people that I believed in a very lean and very accountable government.  In everything that I did in representing them I would be working on a lean and accountable government.  I wish they had called me one of the “lean and mean fifteen,” because that would have been an honor. 

    We have also talked in this room about profitability and which companies are profitable.  Banks seem to be the target right now.  I like banks.  I have actually worked in banking so I understand their business model.  I am glad that banks are profitable.  I am glad that a lot of other companies are profitable.  I would encourage all of us to consider how we talk about that so that we don’t make Nevada a target or that this legislature, in the future, might be looking for profitable targets to go after for its revenue. 

    In regards to other comments made about me, and perhaps my colleagues as well, not to make this personal but I thought it was interesting, a colleague had said that I am here only to protect the businesses within Nevada’s borders.  That may be.  Perhaps I am.  For those that have thought that about me I would say I don’t think that is a bad thing to say about someone, and I actually took that as a credit, because I realize everyone of my constituents that has a job gets that from the business where they have that job.  Thank goodness they have a job so that they can eat.  When it comes to constituent will, I feel nobody knows, and maybe someone would argue this with me, as I have represented my views and my district, keep in mind that nobody knows Assembly District 13 better than me right now. 

    This tax plan has been referred to as an investment.  I have also worked in that arena.  Every time I have worked with a client in regard to their investment it was voluntary.  Taxation is anything but voluntary.  I understand what people who make this representation are referring to, in businesses and people being willing to step up for their state.  It seems like nearly everyone in this state has both a business and are constituents, I like what a wise man once said, “Men should not run faster than they have strength.” Moderation and balance are valuable assets, in particular, when you are doing with the laws of financial structure.  When you think you are standing in a battleship, but you are really standing in a canoe, especially right now when we are maybe still in a little bit of an economic recession, maybe we are out of the recession, but, never the less, we are on the heels of a recession, and with a very aggressive state budget, what we are talking about here, puts us in a vicarious place.  Particularly where it deals with business development, which is something I feel I know very well.  I haven’t gone through a whole lot of surveys because I actually meet with a number of those companies who are relocating or who have other business interests here.  I know why they come here.  Where I live it doesn’t look like Newport Beach, but there is a tremendous amount of economic opportunity and I am glad to play a role in continuing that. 

    My personal feeling, and the reason why I have stood up and said that this budget is aggressive and that I wanted to see it opened and the price tag come down and looking at it like buying a car; my suggestion would have been to hold off on buying the Porsche.  Many people have told me that now that I am here I have to fix this problem and I am working on it.  If we want to catch up for inaction in the past, and bring the price down, to me that meant, let’s not just out and get a lousy car, instead of getting the Porsche, let’s just get a great BMW at half the price.  I tremendously respect the colleagues that I have had the opportunity to serve with here.  My views are conservative.  I believe there are tax plans and structures that could have helped us accomplish the goal.  I feel like this one is still considerably more aggressive than I, and my constituents, would like to see and therefore, to the surprise of everyone, I will be voting no.  Thank you for letting me share those thoughts, Mr. Speaker. 

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

    Thank you, Mr. Christensen.  I am going to ask the remaining members to speak to the bill and not make campaign speeches, please.  Mr. Collins.

    Assemblyman Collins:

    Thank you, Mr. Speaker.  I want to speak to the need for this legislation 

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

    Mr. Collins, I am going to ask you to stay with Senate Bill 6, please.

    Assemblyman Collins:

    Yes, Senate Bill 6.  I am supportive of Senate Bill 6.  There are lots of reasons for doing that.  We need this bill.  I had better not tell you then that I rode my horse across District 13 on the north side, and sighted my rifle on the west side before my colleague that represents it now was ever born.  I know that district probably as well as he does, but I won’t say that.  I am sorry, Mr. Speaker. 

    This bill is a very conservative approach to the needs of Nevada.  Having been here five terms, we have cut things and we are trying to replace part of them.  I urge my colleagues to support this legislation.  Thank you.

    Assemblyman Horne:

    Thank you, Mr. Speaker.  I stand in support of this bill.  I think it is important to remember that we are trying to balance.  Everyone here agrees that education is important.  Everyone also agrees that business is important to the State of Nevada.  We want to bring new businesses here, but as has been said before, basically to ask a business to move to the State of Nevada and say please come here because we have a pretty close to average school system, is not a good selling point.  We are trying to provide our state with a better education system.  Our franchise tax, in particular, that everyone here has issues with, is one-tenth of one percent.  It is the lowest in the nation.  In my opinion, these are baby steps to moving toward where we need to be.  I stand in support of this because, right now, our budget isn’t that of a large or fancy sports car or luxury car.  It is that of an old, used, beat up car, that you buy at one of those car lots with second and third chance financing. That is where we are now.  It hurts in order to move up and we need to move up.  We need to get a better car to transport our children to the future.  Then we can have those students graduate with a quality education, not only from our K-12 but also our higher education, as our colleague from District 10 stated earlier.  I stand in support of this bill and I hope that you will too.  Thank you.

    Assemblyman Mabey:

    Thank you, Mr. Speaker.  It is an honor for me to stand and speak in front of this body.  It has been a great experience being here for five months now.  I have learned to appreciate each one of you.  My concern with the bill is that I think it will tip the balance.  I agree that we need to pay more.  I actually want to pay more taxes, but I don’t want our state to pay the amount that this bill will raise.  As a self-employed businessperson, $500,000 seems like a lot of gross revenue, but our costs are often near that.  You are going to end up taxing people that hardly make any money whereas in our state, according to a survey, there are almost two thousand state employees that make more than $100,000.  That is about two percent of workforce.  Under this they won’t pay any tax.  There could be a self-employed businessperson that might make $20,000 and he is going to pay this tax and the state employee won’t pay any tax.  Mr. Lani, who my colleague from District 42 mentioned, makes well over $1 million.  His company that he works for will pay a tax, but he won’t pay a tax.  The self-employed businessperson has to pay for his own retirement.  A government employee has the PERS account.  They get 2.5 percent times their number of years in the system, up to 75 percent of their salary if they work for thirty-five years.  A self-employed businessperson doesn’t have that.  He doesn’t have his health insurance paid for.  I don’t think this is balanced.  It is against the businessperson and specifically the self-employed businessperson. 

    The other thing that surprises me is how we exempt the insurance company. It is said that they already pay a 3.5 percent insurance premium.  I bet you not one of them pays a 3.5 percent insurance premium themselves, we pay it.  When I pay my $100,000 malpractice insurance it doesn’t say $96,500 plus 3.5 percent, it says $100,000.  I pay that.  When you pay your automobile insurance or your health insurance you pay the 3.5 percent.  I don’t understand why the insurance companies are exempt.  In my opinion they should pay on their profits just like anyone else would under this bill.  I want to raise our taxes.  My five kids have all gone to public school.  I went to public school.  I really want to vote for a tax, I do, but I can’t vote for this one.  Thank you, Mr. Speaker.

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

    I want to take the privilege of the Chair to make two specific points.  First, to the distinguished member from Carson City, we have begged for offers of different types of taxation over the past few weeks.  In fact, we spent number of hours with the Minority Leader, and others, trying to find what would work best.  Secondly, the other comment that I think was somewhat directed at me, to my colleague from Henderson.  It was my decision to combine the bills upon advise of counsel.  It was easy for the Senate to send us those bills separately because they had another house yet to pass.  That is why I think they felt the comfort in sending them separately.  It was on advise of counsel that we did that. 

    Assemblywoman Gibbons:

    Thank you, Mr. Chairman.  I apologize.  Would someone of this body explain a little bit about Section 29?  How limited or how broad is this committee of legislators in revealing taxes, will they be able to know what people gross?  That gives me some concern.  If someone would address that I would appreciate it.  I am sorry to ask it at this late date.

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

    Can you indicate a page number for us?

    Assemblywoman Gibbons:

    Page 86, Section 29, line 18.  The part I am concerned with is on line 34, “conduct investigation and hold hearings in connection with its powers pursuant to this section.”  I think that is a lot of power for legislators to be involved in reviewing taxes, so I want to hear from someone, maybe the Chairman of Taxation.

    Assemblywoman Buckley:

    Thank you, Mr. Chairman.  To you and through you to my colleague.  It would be the same rules that would apply to every other legislative committee.  We have, first of all, no business, as well as no right, to do independent investigations of peoples’ earnings.  This would be a general committee to look at any of the taxes raised, whether there is any unintended consequences, whether there needs to be recommendations to the next legislature for changes, and that sort of thing.   It is not to be an investigation into any sort of private holdings.  That would be improper and not in keeping with our legislative protocol.

    Roll call on Senate Bill No. 6:

    Yeas—26.

    Nays—Andonov, Angle, Beers, Brown, Carpenter, Christensen, Goicoechea, Grady, Gustavson, Hardy, Hettrick, Knecht, Mabey, Marvel, Sherer, Weber—16.

    Senate Bill No. 6 having received a constitutional majority, Mr. Speaker declared it passed, as amended. (Pursuant to Guinn v. Legislature, et al., 119 Nev., Adv. Op. 34 at 16)

    Bill ordered transmitted to the Senate.

    Assemblyman Hettrick rose to a point of order regarding the constitutionality of the passage of Senate Bill No. 6.

    Mr. Speaker ruled against the point of order.

    Assemblyman Hettrick appealed Mr. Speaker’s decision and requested a roll call vote on the Speakers decision to the point of order.

    Mr. Speaker announced if there were no objections, the Assembly would recess subject to the call of the Chair.

    Assembly in recess at 5:04 p.m.

ASSEMBLY IN SESSION

    At 5:14 p.m.

    Mr. Speaker presiding.

    Quorum present.

    Assemblyman Hettrick’s motion for a roll call vote was not sustained.

Assemblywoman Buckley moved that the Assembly adjourn until the Call of the Speaker.

    Motion carried.

    Assembly adjourned at 5:15 p.m. 

Approved:                                                                Richard D. Perkins

                                                                                  Speaker of the Assembly

Attest:    Jacqueline Sneddon

                    Chief Clerk of the Assembly

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