NEVADA LEGISLATURE

Twentieth Special Session, 2003

ASSEMBLY DAILY JOURNAL

THE TWENTY-FOURTH DAY

Carson City (Friday) July 18, 2003

    Assembly called to order at 11:06 a.m.

    Mr. Speaker presiding.

    Roll called.

    All present except Assemblyman Hardy, who was excused, and Assemblymen Andonov, Christensen, and Sherer, who were absent. 

    Prayer by the Chaplain, Beverly Mobley.

    Let us pray. Dear Lord, You have see us challenged with difficult decisions and seen us joyful with rewards of accomplishment. With Your strength, we persevere through the toilsome; with Your humility we delight in meritorious prosperity. We look with hope and reliance to those among us who lead, who teach, who learn, who endeavor to improve. And we pray that You enlighten us so that we go forward with thoughtfulness and appreciation for each other. 

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 bill drafts, with Assemblyman Perkins as Chairman of the Committee of the Whole.

    Motion carried.

IN COMMITTEE OF THE WHOLE

    Assemblyman Perkins presiding.

    Quorum present.

    BDR 32-46, BDR 32-47, and BDR 32-48 considered.

Chairman Perkins:

    Since we don’t have BDR’s printed, what you are going to get to look at is an actual bill.  I wanted to explain that because normally you would have a bill draft request in front of you, but instead we will have the actual bill form, assuming the Committee of the Whole approves the bill drafts.     

Assemblywoman Buckley:  

    Yes, thank you, Mr. Chairman.  It would have killed an additional number of trees to do it twice, as well as burning out our staff even more than they are already burned out.  Would you like me to proceed with talking about the bill drafts?

Chairman Perkins: 

Please.

Assemblywoman Buckley: 

    The first bill draft request is the one that we alluded to yesterday.  It involves the passive revenue generators.  I think it’s important to move out a few more bills for an additional consideration and this would be the first one. 

Chairman Perkins: 

    We have a motion by Mrs. Buckley for a BDR to pass revenue generators we discussed yesterday.  Basically, that’s changing the collection allowances and I believe they have been somewhat non-controversial.  Motion seconded by Mr. Manendo.  All those in favor of the bill draft requests please signify by saying aye.  Any opposed?  The motion carries.  Mrs. Buckley can you, for our record, indicate the points in the bill draft request. 

    Assemblywoman Buckley:      

    The number, or the points being changed?

    Chairman Perkins: 

    Which collection allowances are being changed?

Assemblywoman Buckley: 

    Yes, thank you, Mr. Chairman.  It would reduce the cigarette stamp fee allowance to .5, reduce other tobacco allowances to .5, reduce the liquor tax allowance to, again, the same .5, as well as reduce the sales tax allowance to .5.  These are fees that retailers are allowed to keep out of our sales taxes and liquor taxes, and the like.  Now that we have moved to electronic collection and the burden is not so high, these concepts have been discussed as ways to generate additional money for schools. 

Assemblywoman Buckley:

    I move that we introduce BDR 32-47, Assembly Bill No. 2. 

Chairman Perkins:

    You have heard the motion.  Mrs. Buckley’s motion was for the introduction of BDR 32-47, which would then become Assembly Bill 2.  Seconded by Mrs. Chowning.  All those in favor of that motion please indicate by saying aye.  Are there any opposed?  Motion carries. 

    Assemblywoman Buckley:

    Thank you, Mr. Chairman.  I would then move the introduction of BDR 32-48, which would become Assembly Bill 3.

Chairman Perkins: 

    It has been moved by Mrs. Buckley and seconded by Mr. Oceguera for the introduction of BDR 32-48.  All those in favor of that motion please indicate by saying aye.  Are there any opposed?  Motion carries. 

Assemblywoman Buckley: 

    Lastly, Mr. Chairman, I would move for the introduction of BDR 32-46

Chairman Perkins: 

    It is moved by Mrs. Buckley and seconded by Mr. Oceguera for the introduction of BDR 32-46, which would then become Assembly Bill 4.  All those in favor of the motion please indicate by saying aye.  Are there any opposed?  Motion carries.  We now have all three bill draft requests.

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

ASSEMBLY IN SESSION

    At 11:18 a.m.

    Mr. Speaker presiding.

    Quorum present.

INTRODUCTION, FIRST READING AND REFERENCE

    By the Committee of the Whole:

    Assembly Bill No. 2—AN ACT relating to taxation; providing for the imposition and administration of a franchise tax on financial institutions for the privilege of doing business in this state; increasing the taxes on liquor and cigarettes; increasing the license fees charged for certain gaming establishments and manufacturers of interactive gaming systems; making various changes to the provisions governing the Fund to Stabilize the Operation of the State Government; changing the Disaster Relief Fund into an account in the Fund to Stabilize the Operation of the State Government; making various other changes relating to state financial administration; making technical corrections to certain previously enacted provisions; reducing the amount previously appropriated to the Interim Finance Committee for allocation to the Department of Taxation; repealing an appropriation made to the Fund to Stabilize the Operation of the State Government during a previous session; requiring the identification of state programs for the treatment of alcohol and drug abuse and state funded local programs and the development of a coordination proposal; providing penalties; and providing other matters properly related thereto.    

    Assemblyman Oceguera moved that the bill be referred to the Committee of the Whole.

    Motion carried.

    By the Committee of the Whole:

    Assembly Bill No. 3—AN ACT relating to state financial administration; providing for the imposition and administration of a franchise tax on business entities based on the amount of their Nevada taxable income; providing for the imposition and administration of an excise tax on employers based on wages paid to their employees; replacing the casino entertainment tax with a tax on all live entertainment; eliminating the tax imposed on the privilege of conducting business in this state; imposing a state tax on the transfer of real property and revising the provisions governing the existing tax; revising the fees charged for a state license for the restricted operation of slot machines; establishing the Legislative Committee on Taxation, Public Revenue and Tax Policy; making an additional appropriation; providing penalties;  and providing other matters properly relating thereto.

    Assemblyman Oceguera moved that the bill be referred to the Committee of the Whole.

    Motion carried.

    By the Committee of the Whole:

    Assembly Bill No. 4—AN ACT relating to state financial administration; requiring the Nevada Tax Commission to adopt regulations for the electronic submission of returns to the Department of Taxation and the payment of taxes, fees, interest and penalties using credit cards, debit cards and electronic transfers of money; reduces various allowances for the collection of sales and use taxes and taxes on intoxicating liquor and cigarettes; requiring a business that purchases tangible personal property for storage, use or other consumption in this state to register with the Department of Taxation at the time it obtains a business license; requiring an executive agency to submit to the Chief of the Budget Division of the Department of Administration the number of positions within the agency that have been vacant for a certain time and the reasons for each vacancy;  authorizing the Securities Division of the Office of the Secretary of State to waive the enforcement of provisions governing the sale of securities; imposing certain additional fees for the privilege of selling securities in this state; and providing other matters properly relating thereto.

    Assemblyman Oceguera moved that all rules be suspended, reading so far had considered second reading, rules further suspended, Assembly Bill No. 4 be considered engrossed, declared and emergency measure under the Constitution and placed on third reading and final passage.

    Motion carried unanimously.

general file and third reading

    Assembly Bill No. 4

    Bill read third time.

    Remarks by Assemblymen Perkins, Giunchigliani, and Buckley.

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

    Assemblywoman Buckley:

    Thank you, Mr. Speaker.  I just wanted to note for the record that this would raise, over the biennium, with just the passive revenue generators, $31,035 million.  In addition to the $44 million passed yesterday, that would bring the approximate total to $75 million. 

    Roll call on Assembly Bill No. 4:

    Yeas—38.

    Nays—None.

    Absent—Andonov, Christensen, Sherer—3.

    Excused—Hardy.

    Assembly Bill No. 4 having received a constitutional majority, Mr. Speaker declared it passed.

    Bill ordered transmitted to the Senate.

MOTIONS, RESOLUTIONS AND NOTICES

    Assemblywoman Buckley moved that the Assembly resolve itself into a Committee of the Whole for the purpose of considering Assembly Bill No. 2 with Assemblyman Perkins as Chairman of the Committee of the Whole.

    Motion carried.

IN COMMITTEE OF THE WHOLE

    Assemblyman Perkins presiding.

    Quorum present.

    Assembly Bills Nos. 2 and 3 considered.

Chairman Perkins: 

    We will start with AB 2.

Assemblywoman Buckley: 

    Yes, thank you, Mr. Chairman.  These taxes are ones that we have discussed all session long.  What AB 2 contains is an increase in a cigarette tax to $.50, an increase to the liquor tax at 75 percent, an increase on gaming at .5 percent as well as a 4 percent bank franchise fee.  These are items that have been considered in many other bills in many different sessions.  We thought that since we have now had success in grouping two and raising the revenue we need for schools in a piece-meal fashion, maybe this might give us another piece. 

    Chairman Perkins: 

    Comments or questions from the committee? Let’s take a quick recess. 

Mr. Chairman 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 11:27 a.m.

IN COMMITTEE OF THE WHOLE

    At 11:35 a.m.

    Assemblyman Perkins presiding.

    Quorum present.

Chairman Perkins:

    Are there other questions or comments from the committee?

Assemblywoman Buckley: 

    Thank you, Mr. Chairman.  There was a question about how much AB 2 would raise.  I want to address that.  The total in fiscal year 2003-2004 is $124,593,000.  The second year is $161,647,000.  The total would be $286,240,000.

Chairman Perkins: 

    Thank you. As well, the committee should note that there are no education provisions in this bill.  It’s been voiced on quite a few occasions that the decoupling may have a positive effect on our actions here.  So taking that as a concept, we are working here to find some progress.  It is the Chair’s intention that if this bill should pass, then the next thing we would do is take up the class-size reduction bill because this bill would cover the amount that it would cost.  We would fulfill our constitutional mandate of a balanced budget as we move forward.  Then we can take up another bill and see if we can make some additional progress.  In an effort to find progress, that is why you see the bill in its fashion in front of you.  Are there further comments or questions from the committee? 

Assemblywoman Giunchigliani: 

    Thank you, Mr. Chairman.  I would also point out that everyone in this house, Democrat or Republican alike, except for maybe three people, have been on record as saying that they would support tax increases.  I think the concerns have come down to what dollar amount would people actually support, be it $704 million, $636 million, or $511 million.  This gives everyone an opportunity then to not only fund and uncouple the class-size reduction, but it gives him or her an opportunity to really vote for a smaller tax package, which has been part of the concern.  All along, every person has said they would support the largest tax increase, whether it is $500 million, $600 million, or $700 million.  This is an attempt to try to see if we can help individuals grapple with that concern because no one in here says we don’t need taxes.  I think that is part of the concern we have had all along.  I think this is a real opportunity to give us an option.  This is broken up.  If you look at AB 2, this is the cigarette and liquor tax; you will also have an opportunity to finally increase gaming taxes, which I know the public has totally supported, and there is a 4 percent bank franchise fee, which is a common fee charged throughout the United States and we would still be the lowest in our region as far as bank franchises. At some point we have to stop shielding these corporations and these banks from paying their fair share.  This bill, I think, gives you that opportunity, so I would encourage my colleagues who had a concern about going for $600 million or $700 million.  Take a look at this.  This, in sincerity, gives you what you have been asking for.  It uncouples class-size reduction from the bill.  It gives you a lower dollar amount to be able to attribute and lets you tax both gaming and banks.  Thank you, Mr. Chairman.

Chairman Perkins: 

    Thank you, Ms. Giunchigliani.  Are there further comments or questions from the committee?  What is the pleasure of the committee?  There is a motion by Ms. Buckley for a do pass, seconded by Ms. Giunchigliani.  Are there any comments or questions on the motion?  Seeing none, all in favor of the motion please indicate by saying aye.  Any opposed?  Motion carries.

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

    ASSEMBLY IN SESSION

At 11:41 a.m.

Mr. Speaker presiding.

Quorum present.

REPORTS OF COMMITTEES

Mr. Speaker:

    Your Committee on Committee of the Whole, to which was referred Assembly Bill No. 2, has had the same under consideration, and begs leave to report the same back with the recommendation: Do pass.

Richard Perkins, Chairman

MOTIONS, RESOLUTIONS AND NOTICES

    Assemblywoman Buckley moved that all rules be suspended, reading so far had considered second reading, rules further suspended, Assembly Bill No. 2 be considered engrossed, declared an emergency measure under the Constitution and placed on third reading and final passage. 

    Motion carried unanimously. 

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

    Assembly in recess at 11:44 a.m.

ASSEMBLY IN SESSION

    At 11:53 a.m.

    Mr. Speaker presiding.

    Quorum present.

general file and third reading

    Assembly Bill No. 2

    Read third time.

    Remarks by Assemblymen Brown, Giunchigliani, Griffin, Leslie, Buckley, Knecht, Goldwater, Angle, Mabey, Gustavson, Carpenter, Parks, and
Mr. Speaker.

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

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

    Everybody should have a summary of the BDR on his or her desks. This is the same provision that has been in the revenue bills that we’ve considered this session. I can have the chairman of Taxation go through these provisions if anybody cares to, but in essence, you have got the electronic submission, bringing us into the 21st century. Also, there is the change in the collection allowances by the retailers. Are there questions or comments on the bill?

Assemblywoman Giunchigliani:

    Thank you, Mr. Speaker. I would also point out, that in addition, is the transitory trailer bill for the language to correct the timelines for the implementations of the Secretary of State’s fees.

    Assemblywoman Buckley:

    Yes, thank you, Mr. Speaker. I just wanted to note for the record that this would raise, over the biennium, with just the pass of revenue generators, $31,035,000. So, in addition to the $44 million passed yesterday, this would bring the approximate total to $75 million.

Assemblyman Brown:

    Thank you, Mr. Speaker. In regard to the bill pending before us, these are my feelings. The process we are engaged in, personally, encourages me. I think certainly there are taxes supported by the whole of this body that are undisputed, and we should move forward with them. I think by decoupling some of these we move that process forward. I am currently working on a law case involving a $200,000 dispute and $40,000 is undisputed, and we’re probably going to get a payment on that. We have $160,000 where there is some dispute. Our claim may not be as strong as I would like it to be, but we do have some legitimate claims. We think if we can get that undisputed portion paid probably both parties are going to be a lot more willing to look at the balance of that claim and be much more reasonable in the negotiations. I think this is a step forward. My personal opinion is we know where the “dog fight” is in this match. It’s in the broad-business tax or any type of income-based tax. AB 2 certainly contains a portion of that in the franchise tax on financial institutions. I had a constituent e-mail me and say, “Boy, I’m going to check and see what bank boards you serve on.” About the closest I get to banks is standing in the teller line with everyone else. I don’t have any particular interest in financial institutions. At least from my interactions with and my understanding of financial institutions, I think we have a set of institutions that are willing to “step up.” I think they are willing to “step up” on a stepped-up basis over and above what otherwise would be imposed upon a general business community. If you have someone who is willing to do that, it is incumbent upon us to work with them on something to appease some of their concerns, but I don’t think that the franchise tax does that. I know there have been agreements on paying a multiple of the payroll or a multiple of the Business Activities Tax. I think those are worthy things to work on. We know we have some institutions that would bring headquarters to Nevada and create jobs here, and that is something we should take into consideration in improving and diversifying our economy and business community in the State of Nevada. Again, I appreciate what we’re doing. There are other taxes that are not in dispute in AB 3.

    My personal feeling is let’s pile all those, which would be a substantial amount, into one of these bills and let’s leave the bills that require the greatest attention and compromise for a final bill. Let’s get some of this undisputed stuff out from under us. I feel badly that maybe this might not succeed because it has a bank franchise tax in it. There is no reason why we can’t get some of these taxes out, because they are undisputed. That is my position. If the Speaker is willing to look at that type of a motion then I would certainly be happy to make such a motion. Thank you, Mr. Speaker.

Assemblywoman Giunchigliani:

    Thank you, Mr. Speaker. I appreciate the comments that have been made. What we are offering is a mixture, so you have an opportunity to tax gaming and out-of-state corporations—not your constituents, not small businesses. Bank of America’s net income was $9.2 billion and across the nation they paid $3.2 billion in taxes and not one dime of the tax was paid in Nevada. Wells Fargo’s net income after taxes was $5.7 billion. They paid $3.1 billion in taxes and none of these taxes were paid in Nevada. The bill before you gives you the opportunity to tax gaming and banks and not your constituents. That’s the option here. We don’t have time to wait. You all got the e-mail from the Nevada School Board Association. Nye County has voted to delay opening their schools. This is your opportunity to join us, as we have always worked together in the past, and let’s do the right thing for schools in this state, for small businesses in this state, and for the every-day average citizen who will not be impacted under this legislation. Join us. This is our opportunity to once again work together in the bi-partisan spirit that we have always enjoyed in this legislative body, at least during my tenure. Please, I implore you, do the right thing.

    Assemblyman Brown:

    Thank you, Mr. Speaker, for recognizing me a second time. My response to that would merely be, we certainly have alternatives to laying similar numbers upon those organizations and entities, as the good Assemblywoman has just mentioned, but it does not have to be that particular method. There is a method that may be more agreeable and would gain that type of support, and we could join. I am not saying we can’t at this moment, and I am not representing any members of this body. It certainly would gain that support if it were in another form. Thank you, Mr. Speaker.

    Assemblyman Griffin:

    Thank you, Mr. Speaker. I want to echo my colleague from Green Valley and my colleague from Las Vegas. Obviously, I have been on record a few times now in favor of the bank franchise tax. Going through the committee process I understand why, in my opinion, it is good tax policy. For the same reasons that you mention, we are in a crisis. We are in a crisis, if I can use your words, whether for a franchise tax or a unique payroll tax on banking institutions. For the purpose of trying to find the votes, I realize there are policy reasons why payroll may not be acceptable on banks versus why a franchise tax may not be acceptable on banks. If we agree to do this in pieces, and I agree with my colleague from Green Valley, this is a good step. I think we need to find something that gets us out of here. I know that is everybody’s opinion, and if we can have the discussion on this particular issue now, I would appreciate it, Mr. Speaker. Let’s try to figure out how to get this piece done.  I would appreciate some comments. Thank you, Mr. Speaker.

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

    Thank you, Mr. Griffin. I think that’s why we are using somewhat of an unorthodox manner to try and get something done.

Assemblywoman Leslie:

    Thank you, Mr. Speaker. I rise in support of AB 2. I have a question for my colleague from Henderson. The alternative method that you’re talking about is double payroll, triple payroll. Does any other state tax banks that way? I haven’t heard about it. If they don’t, then what is so different about Nevada that we can’t have a franchise tax or business tax when all the surrounding states in the region have? I honestly just do not understand the objection.

Assemblyman Brown:

    Thank you, Mr. Speaker. I don’t believe that is the case.  If the industry is in favor of that, I do believe administration and compliance is much easier through that type of method. It is a very simple calculation versus using a more serious accounting method as I believe would be necessary using gross receipts and then apportioning for the state, etc. Again, my feeling is, if the money satisfies one group of voters in this body and they are willing to step up to that and a method satisfies another group of this body, then to me we’re done. Let’s find the dollar amount and go with it. Thank you.

    Assemblywoman Buckley:

    Thank you, Mr. Speaker. We received an announcement that Nye County is going to delay the opening of schools for two weeks. Today, if we don’t pass a bill, the GATE, literacy, and computer programs for Clark County will be shut down. All of the other school districts are cutting programs and are unable to hire. Why would we stop the passage of this bill because we want the banks to pick out the method they would be taxed? I don’t get that. Every other state that has a bank tax uses a franchise tax. It’s not easier to create something new that has never been tried before. It’s riskier. If the only reason to do it is because the banks get to pick what tax they want, why don’t we just shut this place down; let every industry come in here and say how much they’re willing to pay and how they’re willing to pay it. Let’s just abdicate our responsibilities and say, “Special interests come on in. You get to pick how it’s going to work.” I don’t understand what we’re doing here.

Assemblyman Knecht:

    Thank you, Mr. Speaker. I would like to echo the comments of the gentleman from District 22. I think there is a way to do this. AB 2, as it stands, is definitely not the way to do it. Nevada has many banking and finance jobs in great part because of the reasonable tax regime they face here. These are great jobs, in fact, and are a real boom to the Nevada economy. Also, the banking and finance institutions are some of our best corporate citizens.

    These jobs are mobile. They can leave and go elsewhere at almost any time. We have a good chance to gain more of these jobs, or to lose the ones we already have depending on how we vote on this bill, which is destructive as it stands. Let’s be real clear here. The answer to the two members of the majority who raised questions is the surrounding states are irrelevant because we’re in competition for these jobs with the states that have no banking franchise fee at all. That’s the relevant standard here. A vote for this bill will keep jobs from coming here, and it will drive away existing jobs. I want to make it very clear, if we pass this bill as it stands we will lose thousands of jobs that would otherwise come here and may be a thousand we already have or more. A vote for this bill will harm our economy and our people and it will add to welfare rolls and other public spending. If you want those bad results, then vote for this bill. A vote against AB 2 will keep jobs here and attract new jobs to the state. A vote against AB 2 will grow our economy and benefit all our people. It will keep down welfare roles and public costs. For all these reasons, unless AB 2 is amended to contain a tax on banks and financial institutions that is reasonable, it can still raise the same money but it has to be of a reasonable nature. Unless it is amended, I will vote against it. Let me close by saying, Mr. Speaker, it is cynical and wrong to say that those of us who support reasonable taxes and spending have been asking for something like this. We have been clear all along that there are two important tax issues: the amount and the kinds of taxes. This bill in its current form with a franchise fee cynically continues the pattern of bringing unacceptable and destructive taxes. It is a continuation of the mismanagement that has been the problem throughout this year, and that is another reason I will vote against it if it’s not amended. Thank you, Mr. Speaker.

Assemblyman Goldwater:

    Mr. Speaker, thank you. Fascinating, fascinating discussion. Let’s take what we know and what we don’t know. This is what we know. What we know is Bank of America said Wednesday it plans to open 19 new banking centers in the Las Vegas area by 2005, including seven this year, out of 500 new branches across the country in jurisdictions with a far greater tax burden then we have in Nevada, with or without this franchise tax. We do know that. Speculation that the financial industry might up and leave is purely speculation. We don’t know that. We do know there are a number of jobs we will lose should we not pass this particular tax. Important jobs in Clark County, for example, teachers that are excellent citizens, who are fine contributors to the community will not get jobs should we not enact this bank franchise tax. That we know for sure. So, why are we suggesting inaction on what we don’t know rather than acting on what we know? I can’t find an answer to that. The other thing I can’t find an answer to is for my colleague’s questions from Washoe County. Is it because of a threat of job migration, a threat of industry migration? We know very well that industries are migrating to and from and in and out of Nevada for a plethora of reasons. The reasons they are leaving Nevada is because the schools aren’t as good as they are in other areas. The universities aren’t as good. The social infrastructure is bad. Why are you not rushing to protect those businesses from leaving for those reasons? Why are we not standing up protecting that? Job migration will occur with or without taxes. Taxes are a factor; they are not the sole factor. I would like to ask you openly. Are we not enacting the bank franchise because it is difficult to administer? Mr. Speaker, it is an open question to those who are opposed to this. They will tax banks, but it is difficult to administer. I would like to hear a response, anything as to why this is not good.

Assemblywoman Angle:

    Thank your, Mr. Speaker. I would like to go along with my colleague, and say let’s look at those things we know or don’t know. I rise in opposition to AB 2. First of all, we do know these institutions aren’t losing their bricks and sticks. It’s not the bank branches that are moving. It’s their back office jobs that are moving. Jobs that only need a computer terminal are moving. They are not going to take Nevadans with them. Over 2,000 jobs in those back offices now paying property taxes and sales taxes are not going to be leaving Nevada; they are going to be staying here on unemployment. Those jobs are not going to Utah or Arizona. They are going to Wyoming or farther. Secondly, I would like to talk a little bit about education. We have offered several times to pass the DSA. Let’s pass a continuing resolution to fund at current levels, or at least, let’s pass the constitutional minimum that our Constitution requires. Let’s just pass that out. We could do that now and fund education at the Constitutional minimum. Finally, I would like to say we need to amend this bill. I have considerations beyond the gross receipts tax I see in this bill and that’s the tobacco tax. When we raise that tax we will actually have less revenue coming in from tobacco. When that happens, the funding for our Millennium Scholarships goes down. The less money we have coming in from that revenue source the less we have for education, so I would ask you to consider these things. I strongly oppose this bill. Thank you, Mr. Speaker.

Assemblyman Griffin:

    Thank you for recognizing me again, Mr. Speaker. To continue my last comments, I would answer the question the Majority Leader presented to this body, “Why do it this way? Why consider doing this at the industry’s preference?” I would say, going back to my experience over the last 170 days, the criticisms of the franchise tax is greatly exaggerated. I think the criticism of using a payroll mechanism as a way to finance the banks is also somewhat exaggerated. I don’t know the answer to the question, other than to say the reason why you might want to consider this is because it just might pass. I don’t know that. I think we can assume that with this particular language, it won’t pass. If Nye County is delaying its school for two weeks, that’s what is being said now. It may get worse, it may get better and it’s going to apply to Clark County and several other counties. I don’t know if it’s the best tax policy, but it may be worthy of the discussion we’re having right now. It’s great because it just might pass. That would be the only answer I could come up with for “Why would we do it that way?” Thank you, Mr. Speaker.

Assemblyman Mabey:

    Thank you, Mr. Speaker. The Assistant Minority Leader took the words right out of my mouth. I, like my colleague from Green Valley, have no dog in this fight. I don’t go to a bank but once every five years and write about two checks each year, thanks to my good wife. So, my interaction with banks is minimal.  But my little daughter at school doesn’t care where she gets the $50 million. If the bank wants to give $50 million or whatever they have agreed to as a payroll tax or franchise tax, she doesn’t care. She just wants to go to school. She’s one of those kids that love school. If the banks want to give it in a certain way and it will get the bill out of here, then I think that’s what we should do. Thank you.

Assembly Gustavson:

    Thank you, Mr. Speaker. I do have a question directly to the bill. I would address it the Majority Leader if she has an answer or anyone else who might.

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

    Please direct you question to the chair, and I will find an answer for you.

    Assemblyman Gustavson:

    We would all like to pass a bill and get out of here and fund education. There is no question about that. We have been debating this franchise tax and gross receipts tax and different types of income taxes. If this is going to hold up the bill, maybe we should take a look at removing that from this particular bill and putting it in AB 3. The Majority Leader gave the figures of how much this would raise for fiscal year 2003 and 2004. My question is, how much would this raise if we were to remove the franchise tax from AB 2 so we could move on with this bill?

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

    The reduction in the amount would be about $17.6 million, as listed on the sheet and implemented in the second year of the biennium.

    Assemblywoman Giunchigliani:

    Thank you, Mr. Speaker. We have heard the debate that the reason we shouldn’t support a bank franchise fee and instead should deal with a payroll tax is because it is hard to do. I would suggest that creating a bank payroll tax, no state has a payroll tax in the United States, will indeed create a mini-IRS for those of you who are concerned about that part of it. The franchise tax is the common way of doing business throughout the United States for banks. Now, where are they going to migrate to, Wyoming? Well, good luck in the wintertime as far as I’m concerned. On that point, let’s see, where are they going to go, Alabama? They pay 6.5 percent there, not the 4 percent we’re recommending. Alaska pays anywhere between 1 and 9.4 percent. Are they going to Arizona? They would pay 6.968 percent; California, 10.84 percent; Colorado, closest to us, 4.63 percent. Where are they going to migrate? I heard words in the hall last week by the banking lobby, the first day they said, “We’re going to lose 200 jobs.” The very next day it was 4,000 jobs. I’m not sure how that ratio was worked out. No matter, I’m tired of those types of bogus threats. They are going to automate. They are going to continue to automate. That’s why they are opening branch offices rather than actual large buildings, that is why they will have Starbucks located nearby. They want to look like retail stores. The reason they want to choose payroll is because they will be downsizing. They are now, even without a franchise tax, so they can automate. So, they want to pick a tax that they very well know will decrease. More importantly, it comes down to who is shielding whom? We have too many people serving in this Legislature in both houses that sit on bank boards. I was so ignorant I did not even know you got paid to serve on bank boards. There are some people that are paid to attend a meeting, simply to attend a meeting, $30,000 to $40,000 per year to serve on a bank board. So, just whom are we shielding here, folks? This is ridiculous. My colleague from District 10 is quite correct. If you’re worried about losing jobs, worry about the teachers and support personnel and the administrators that cannot sign a contract. No matter what we do here today, you have 600 teachers that cannot sign a contract in Clark County. You have an opportunity to tax gaming in this bill. Those choosing to vote “no” on it, you are also giving gaming a pass, and I think shame on us because we should make them pay more. We should not continue to hit the one or two industries that currently pay in this state at the expense of the other industries. Take a look at this again. Think more closely about it. We will be able to at least start moving forward. You asked to have this uncoupled. We’re giving you what you asked for; now step up to the plate.

    Assemblyman Carpenter:

    Thank you, Mr. Speaker. I think for the first time in the session, we have a chance to make a compromise. Whatever the arguments are, one side and the other on the banking franchise fee, I think we must realize that it’s not going to pass. We can amend this bill and get three parts out and have three parts left that will pass. We need to fund the schools. We know that. We can get three parts out and bring in substantial monies. There are other parts of the tax bill that will also pass. We can compromise to get the bank franchise fee out for the people who have their heels dug-in on it. Later a payroll tax, or whatever tax can be amended, and have an opportunity to do another tax or two. I think this is the way to go, and then we can fund the schools. We can argue about the ones in disagreement later. We need to support the schools, and I think that’s the way to do it. This is a unique opportunity for us to compromise. Sure we will all have to give in to get the schools open and keep them open, as we should be doing. This gives us that opportunity. Amend this bill to take the bank franchise fee out, get the others added, and argue later. Thank you, Mr. Speaker.

Assemblyman Knecht:

    Thank you, Mr. Speaker for recognizing me a second time. I have three quick points. This bill, especially as it stands, cannot be about school funding. The total revenue that would be raised by this bill, as it stands, is $286 million, yet, only $17 million of that is included in the bank tax. Therefore, the claim that if the bank tax is taken out, we can’t fund schools with the remaining $269 million doesn’t pass the lab test. This is not about school funding at all. We have indicated, I might add, a willingness to consider other taxes on banking. Second, Mr. Speaker, the proponents of this bill, as it stands, have studiously ignored South Dakota, which along with Wyoming is one of those states that doesn’t have a bank franchise fee. South Dakota has long hosted bank jobs, and I personally am willing to bet that if we pass this bill, we will see an exodus of hundreds and thousands of jobs from Nevada to South Dakota. That is what this is all about. It is a question of whether we’re going to get and keep thousands of jobs or whether we’re going to lose them. That is what people are voting for. If you vote for this bill, as it stands, you’re voting to chase those jobs out. If you vote against it, and if you want to amend it so we can get the $269 million and pass a reasonable banking tax, then you’re voting to keep the jobs. Let me finally say, this is ultimately about compromise. When we talk about $17 million out of $286 million, we’re talking about less than 7 per cent of the revenues. Anyone who is serious about compromise, anyone who really wants to fund education, anyone who really wants to do the right thing will make the compromise to get 93 per cent of this out and get $269 million in new revenues, so we can fund education and move forward and then find a bank tax that works. Thank you, Mr. Speaker.

    Assemblyman Parks:

    Thank you, Mr. Speaker. I would like to address the comment we have constantly heard that banks will all go to South Dakota. I think we all know there are a tremendous number of financial institutions in South Dakota. Citibank has its largest credit card processing center in South Dakota. Two days ago, after hearing this repeatedly, I asked one of the bank representatives a question. The question I put directly to him was, “Tell me why all financial institutions will abandon Nevada and go to South Dakota if we were to institute a tax, impose some kind of a bank or financial excise tax?” I said, given the fact the rate in South Dakota starts at 6 per cent, what makes South Dakota, other than its wonderful winters, so enticing that banks are interested and willing to relocate to South Dakota where they start off paying 6 per cent on net income of $400 million or less? It is on a stair-step, so it does decline as the amount of net income increases, but it is a fairly substantial amount when you look at $400 million as the first tier. To this day, I still haven’t gotten an answer. I was told I would get an answer in a matter of hours. I would say it has been over 48 hours, and I still haven’t gotten an answer. Thank you.

    Assemblywoman Buckley:

    Thank you, Mr. Speaker. As many of us have heard, the Federal court has issued a decision in the lawsuit. While it may be unusual procedure, I would like Brenda Erdoes, legislative legal counsel, to announce the decision during this discussion, as it may change how people view the vote. I would call a one-minute recess to allow her to make the announcement.

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

    Assembly in recess at 12:28 p.m.

    ASSEMBLY IN SESSION

    At 12:31 p.m.

    Mr. Speaker presiding.

    Quorum present.

general file and third reading

    Remarks by Assemblymen Buckley and Carpenter.

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

Assemblywoman Buckley:

    Thank you, Mr. Speaker.  Even with that ruling, I would still like to have two-thirds for every single bill passing this legislature.  My good friend from Elko said, “Let’s compromise.”  We have compromised on bills for the ten years I have been here and done it well.  We achieved better results, as a result of give and take.  This session, on this issue, I don’t see where there has been any give, with regard to the minority side.  What is it?  “We don’t like bank franchise tax, so you give in.  Don’t do it.”  There are policy reasons for our concern.  What a payroll does on banks is help the big guys to the detriment of the little guys.  Let’s say you have a brand new start-up bank.  They start by doing one branch and emphasize customer service and so they have a high payroll.  They are just starting out so their loans aren’t that high, they are making very little income, and they have high payroll costs. But the big guys can, and do, outsource, automate, and are making money hand over fist and yet all you are looking at is payroll without any regard to profitability.  How many times this session have I heard, “Oh, a small franchise fee is terrible.  It taxes someone without regard to whether they make a profit.”  Well, that is what a payroll would do on a bank.  I guess what I come back to is there are policy reasons.  It is risky.  It is not done in any other state.  The only thing I have heard articulated is, “Well, the banks want it that way.”  That perplexes me.  When it is risky and not done on ability to pay, I don’t understand that rationale at all. 

    Compromise means give and take.  All I keep hearing is, no, no to the GRT, no to our efforts to fix the GRT, no to the Oreo plan, no to a franchise fee, no to net profits, and no to the number already approved by the legislature as a whole.  I hear, “Gee, we are sorry some of our members on the Committee on Ways and Means never even voted no in a subcommittee, but we are still going to insist that the number get lower.”  Where is the give here?  I haven’t seen any give and take.  I would meet anybody in the middle, anybody at all.  I have said that all session long and I still say it.  Certainly there can be an appeal next week to the Nevada Supreme Court for a petition of rehearing.  Certainly it can go to the United States Supreme Court.  That can happen, but I think the chances are pretty unlikely.  We can do the right thing, right here.  We can meet in the middle, pass the bill by two-thirds, make the courts irrelevant, and make the people begin to respect our process again.  That is what kills me.  The legislature, I am sure, is the least respected branch of government now.  The average person on the street doesn’t know who is right or who is wrong, they think we are squabbling children.  All hell is going to break loose in the next thirty days.  If Nye County is already pushing back their school date start by two weeks, all hell is going to break loose.  As a parent who has a child in school, I can just imagine what those parents are going to say.  I am truly ashamed of all of us.  Everybody, get off your high horses.  Let’s come up with something that makes sense.  It doesn’t mean you get it all one way.  We give on one and you give on one.  Let’s get this thing done.  You can’t win on everything.  Neither side can.  You pick one and I’ll pick one.  Let’s do it right now. 

Assemblyman Carpenter:

    Thank you, Mr. Speaker.  Sitting by the Majority Leader for ten sessions in the Committee on Judiciary, sometimes she wins and sometimes I lose.  Sometimes I win and sometimes she loses.  All I can see is this argument perplexes me, too.  There are people on both sides who have great arguments.  I know if we take the bank franchise fee out we can pass the other three.  I think there are two or three other taxes that we can pass that will fund education.  That is what we need.  I have three grandchildren and I don’t want to see them out of school.  I don’t know were we will end up.  I don’t know if we will have a bank franchise fee or payroll tax fee, or if there are enough sheep in Nevada, maybe we can tax them.  We don’t have many sheep left.  I think if we can amend this bill, get that out, let people argue, something will happen here.  We need to get enough money, as I see it, to fund education.  This goes a long way and there are two or three other ones that we can do and then we can argue about the other things.  That is the way I see it.

Assemblywoman Buckley:

    Thank you, Mr. Speaker.  The bottom line is we have to fund a number.  We agree on certain taxes in this body; that is everybody but two.  So we could agree on a number of them.  We have ten left and we probably agree on seven of them.  The bottom line is we need to agree on all of them and we needed to do it a month ago.  We can’t argue later.  We need to do it today.  We shouldn’t go home until this is done.  I am ashamed to go home when this isn’t done.  I put it right back at you.  If we do a franchise tax on banks, what will you give?  I didn’t hear you give one.  That is what we have to do.  You can’t say, “No broad-based tax on business.  We want banks our way.  We want the number our way.”  You have to give on one or the other.  I will give.  You tell me what you would give.

Assemblyman Carpenter:

    Thank you, Mr. Speaker.  This is kind of interesting.  As I see it, and we have been talking in our caucus for a long time, $704 million is the number.  That is what the Governor asked for in what I call his Bible, the little book he handed out when he made his speech here. The other day I was reading the Senate plan and it called for $804 million.  If we can arrive at $704 million of new money, I think that gives the Governor what he wanted.  In addition to that, I think we received about $100 million from the federal government.  That gives $100 million more than he asked for.  In the Senate bill, I think they were going to double the BAT tax, or the tax on employees.  When you double the tax it hurts the little person who has to depend on a lot of labor to run their business.  If we reduce the amount down to $704 million, then we can reduce the BAT tax to $50.  That means we would be paying fifty percent more than we are now.  I am willing to do that to see my grandkids in school.  It leaves a little more that you can argue with about whether it is banks being treated the same as the rest of us, or you can come up with a magic formula that everybody can agree to.  I think that is kind of where we are and it seems to me the increase from last session’s budget to this session’s budget is a large amount.  It is an amount that quite a lot of people in Nevada don’t agree with, and a lot of people in Nevada do agree.  If we can reduce the budget a little bit we can satisfy everybody.  Then we can take it back to the voters and they will decide whether the next session we have people in the Assembly who want to pass another billion dollar tax increase, or maybe they think like me, that we should not grow government quite so much.  I know we have to make some kind of a compromise now, and that is where I am coming from. Ms. Majority Leader, I do appreciate you, and this has been quite a discussion maybe we should have had in private.  However, it has been out in front of the world, so here we are.  That is my idea, reduce this budget down to where we can all kind of agree, and go home. 

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

    Mr. Carpenter, I know this is a bit unusual, but it seems to be the best dialog we have had in a little while, so I am interested in continuing it.

Assemblywoman Buckley:

    Thank you, Mr. Speaker.  I have heard the magical number $704 million, which was the Governor’s roll up costs for what it would take to fund government at the same level.  If you add in $54 million for pay raises, $40 million for textbooks, and the $30 million for the teachers’ PERS contribution, that gives us $828 million and that is what is in this bill right now.  If you take out what has already been passed, these two bills are $776 million.  The Review-Journal reported this morning that the Assembly Republican caucus said in order to reach their number they had to cut the salary increases for teachers, the salary increases for state employees, Senior RX, and Nevada CheckUp, as well as $40 million in the university system.  I don’t know whether that is the $704 million or the $636 million, or the $511 million, but maybe we should put those numbers up on a board and say, “Who wants to cut the teachers’ salaries?”  Raise your hand if you want to cut the teachers’ salaries.  Right now.  If it means cutting the budget and getting to a lower number, raise your hand.  Everybody is willing to say $704 million, but no one is willing to make the cut to get there.  What is the next number?  Who wants to cut Senior RX?  Raise your hand.  Getting kids off health insurance, Nevada CheckUp? Raise your hand.  The salary increases for the state employees.  Do you want to cut them?  What are we talking about here?  You can’t pick a number from the air.  The cuts have real consequences.  We have been working in good faith.  Someone said the number had to come down so we said, “Why don’t we cut out the Rainy Day Fund? It is risky, we have nothing in the bank, but okay, if we can fund schools today, let’s do it.”  So we did that.  We knocked down $5 million from the Department of Taxation so that we can defer their computer program.  Any cut that we have talked about that made sense, even though we thought it wasn’t a good idea, we would do to fund schools.  We have said our door is open, but when you talk about the things on this list, no one will publicly say they support it.  So what is the answer?  “Oh, let the Governor do it.”  That makes a lot of sense.  It is our job to do it, not the Governor’s.  What are we going to tell the Governor?  “Oh, you cut Senior RX.  You cut the pay increases.”  I don’t want to show everyone that is how you get to a lower number.  You want a lower number? You want the companies to pick the way they are taxed? I will give on one of them.  I will give on something, but you know, it is a two way street.  It isn’t we go home if you do it all my way.

Assemblyman Carpenter:

    Thank you, Mr. Speaker.  I think that there is room to make these reductions.  We don’t have to cut Senior RX, but maybe there is some room to cut a little bit out of a lot of programs.  I was a county commissioner for years and we had to cut our budgets and they still have to do that. I think we can do it if we sit down and it won’t hurt anyone.  I know with that big of a budget, and that big of an increase, we can cut the money down to get to the magic number of $704 million.  I think if we put people in the room that understands these numbers we can come up with that.  That is what I think we really should do. 

    Assemblywoman Buckley:

    Well, we kind of did that.  The bottom line is, there are three things that cost a lot of money that are being funded in this budget: K-12 education, Human Resources, and the University System.  Prisons are also included, but those are the big-ticket items.  If you want to get to that level of cuts, you have to take some cuts out of those.  That is the bottom line.  Ask staff to prepare a list of things that we could cut to get to the $704 million and on just about every list it is the teachers’ salary increases, Senior RX, or it is Nevada CheckUp.  This is because those were the things we were so behind in that it took money to get us to a starting level.  The other thing on the list was the Las Vegas psychiatric hospital.  That kills us down there.  We have had ten beds for years.  We are still not to the level where we were when Governor Miller cut it in 1991.  They kill our community.  It is awful.  Mentally ill people go to the emergency rooms because we don’t have a bed for them.  That is how bad things are down south.  I go back to my people and say you are the ones who pay the lion share of the taxes yet we don’t even have beds for the mentally ill. 

    Getting back to the tit-for-tat, if we remove the bank franchise fee, would you vote for a net profits tax on other companies?  Would you vote for a franchise fee on other companies?  In the same argument about payroll, you didn’t like the double BAT, but a straight, capped payroll is a BAT.  One hundred dollars for a BLT equals a .47 percent rate on a capped payroll. What you are doing is making people pay taxes based on how many people they hire, even where they make no profit.  That is what a straight payroll is.  So why would we do that for the banks?  Regardless of the ability to profit, I am going to tax you on your labor costs.  Still, if we had to give on one, even though it makes no sense, we need everyone. I don’t mean to pick on my good friend from Elko, but we need everyone to be willing to give.  Who is willing? 

Assemblyman Carpenter:

    Thank you, Mr. Speaker.  I said I am willing to pay 50 percent more on the payroll tax.  I am willing to pay the 33 percent more on my few slot machines, providing my wife doesn’t take them out.  I am willing to pay the increase in the annual fee to register my business.  It is $25 now for lifetime, but I am willing to pay the $100.  In the bill we just passed, I think the one we just passed, when we figure out our sales tax, we get to take off a penny and a quarter.  We reduced it down to half a penny.  I am willing to do that.  As a small businessman I am stepping up to the plate.  If you have some way to get Wal-Mart and other big business, without killing me, I am willing to do it.  I don’t know how you can, because we have some kind of deal in this country that says taxes have to be equal between all people.  I am willing to sit down and come up with these reductions and try to make this thing work.  I think there is a way to do it.  Five billion dollars is a lot of money and if we can’t take a small percentage out of that, three percent or whatever it is.  I think we need to do this so that we can go home.  Maybe we won’t even touch the programs you mentioned. Senior RX and the others, but we have to be able to sit in a room and look at all these things and try to hammer them out and see what we can do.  I am more than willing to do that.  I will admit I am not an expert on the budget and I would much rather sit next to you in the Committee on Judiciary with our friend from Sparks.  It has been more fun and more enlightening.  I think our caucus has good people and I think your caucus has good people.  I think we can come out with something and we can get out of here.  Thank you, Mr. Speaker. 

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

    Assembly in recess at 12:53 p.m.

    ASSEMBLY IN SESSION

    At 2:13 p.m.

    Mr. Speaker presiding.

    Quorum present.

general file and third reading

    Remarks by Assemblymen Buckley, Giunchigliani, Brown, Arberry, Beers, Goldwater, and Mr. Speaker.

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

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

    When we went into recess we were on General File considering Assembly Bill 2.

Assemblywoman Buckley:

    Thank you, Mr. Speaker. After consultation with you and the Minority Leader, it appears that not one member of the Minority Caucus is willing to support a bank franchise fee. Accordingly, this vote will fail again. So, I would like to move that this bill, Assembly Bill No. 2, be placed on the Chief Clerk’s Desk.

Assemblywoman Giunchigliani:

    Thank you, Mr. Speaker. I do not want to speak to the motion, although I do agree with it. Under Order of Business 15, I wanted to try to summate where we are. All session, we’ve heard an issue of a number. Actually, we didn’t. Our colleague from district 10 actually put it very well. Why don’t we just put together, based on the discussion that was going on here, a bipartisan committee to take a look at the budget? Why don’t we have that committee hear presentations from all of the directors and personnel? They could go through that and make changes. Why don’t we invite public testimony to provide pros and cons? Why don’t we listen to the lobbyists? Why don’t we make a recommendation and then get the other house, in a bipartisan manner, to sit down and do the same thing and come to an agreement? Oh, that’s what we just spent four months doing. We’ve already done that.

    Now today we’re back here debating the $704 million, or the $636 million, or the $511 million. Every time we think we have it resolved, it is really all about what kind of taxes people want to support to fund whatever is in the budget. But I guess my sense of frustration comes from the disrespect towards the committees of Ways and Means and Senate Finance after all the work that they did during the regular session, for 120 days. The Majority Leader mentioned that there had been suggested cuts that have been noted in the newspaper, so I thought that I should just give a scenario. The University and Community College System was recommended to have a cut of about $44 million, if I remember from the article. Well, I looked back, and starting on February 26, we had a budget hearing and no recommendations were made to reduce the funding, by the Assembly Republicans. On April 10, we had a joint sub-committee. Only the Senator from District 1 requested that staff find a way to fund dental school equipment. No recommendations were made by the Assembly Republicans to reduce funding. On April 29, there were budget closings in a joint committee, with no recommendations made by the Assembly Republicans to reduce funding. On May 14, there were budget closings in Ways and Means. The only member to vote no was the Minority Leader, and he indicated it was because of his concerns regarding the future funding and the loss of the Estate Tax with the UCCSM. On May 16, there were budget closings in the Joint Committee of Senate Finance and Ways and Means. The motion of the Assembly to concur with the actions of the Senate, regarding funding of the Fire Service Academy in Carlin, had only three no votes, which were myself, our colleague from District 10 and our colleague from District 4. No recommendations were made on how to reduce the funding by the Assembly Republicans. Now I could go to the Senior Rx program, the prescription drug program, which was also mentioned in the newspaper. On February 11, there were no recommendations made on reductions. On April 3, there were no recommendations made. On April 24, concern was expressed that the Tobacco Settlement funds would be used up eventually, depleting the Senior Rx program. The Minority Leader suggested an amendment to reserve $300 thousand out of the General Fund, and the committee voted with him to amend that. That was the only suggestion. On May 14 budget closings, there was a motion to approve the subcommittee and it received all “yes” votes. The Minority Leader thanked our colleague from District 27, and the members of the committee, for obtaining maximum funding for Douglas County’s Suicide Prevention Program.

    I could go on and on, but I think that shows the picture. The process works. If people chose not to avail themselves with that process, then that’s their mistake. But it worked; the budget number that was agreed on by both houses was not at issue at any time during those proceedings. I’m frustrated to still be sitting here. I have lost count of what day of the special session it is, and we’re still being floated this bogus idea that the number makes a difference. Now, if that’s the case, rather than cutting prescriptions for seniors, and health benefits for kids, we could cut into the rural drug court. We could cut into the youth community services. We could cut into the NDI that was begged for, or the Narcotics Drug Task Force, but we didn’t, because we are all one state. At this point, it is very frustrating, because as one state, we funded rural county initiatives. We funded northern Nevada initiatives. We did it because we are state representatives. Now here we are again debating whether or not a bogus number is the issue or the type of tax is the issue, and I would submit to you that whatever type of taxes are implemented by this body, and I believe something will be implemented, the overwhelming majority, I might even suggest two-thirds of those taxes, will come from southern Nevada in order to subsidize the remainder of the state. So, if we from southern Nevada are willing to step up to the plate, and say, “Here’s what we believe should be taxed, we like taxes that don’t impact our constituents and do not hurt small business, but go after small banks.” And this is our opportunity. You know we understand that the majority of the money is coming from southern Nevada, but we’re willing to pay that. Yet we still have individuals digging their heels in, saying, “I won’t go beyond this number. I won’t support this particular tax.” You’re not even going to pay it. How many banks do you have in rural Nevada that are going to pay the 4 percent? I’ll tell you, the majority of them, no, two-thirds of them, are going to come from southern Nevada. Regardless of what happens here, it is time to stop shielding these corporations. Let’s step up to the plate and get on with the business of the people. We have an opportunity to resolve this matter today. Time is of the essence, and I beg you to do this, because it is the best thing for schools and for kids and for their parents. We cannot hold them hostages any longer.

Assemblyman Brown:

    Thank you, Mr. Speaker. I have just a couple of comments in response to our colleague from Assembly District 9. When I came here, I had never heard of something called the core group. I understood that the process is that Assembly Ways and Means and Senate Finance really do the work. I got into it a little way and learned from somebody who had been here a bit longer. The real work gets done in the core group meetings. I kind of thought that was fascinating, because I think that most of this is supposed to be open to the public. I think it is interesting that you can plump up budgets. You can cut, butcher, or do whatever behind closed doors in the core group meetings. My understanding of what happened in those core group meetings is that representatives from each caucus were invited to that. I believe that we made representations as to what our caucus wanted to fund, and it was a significantly lower number. From that point on, I understand that we were not necessarily invited until the last meeting, when we reiterated that we have nobody at $900 million, three or four above $800 million, and then we are scattered below that, with some being clustered around $704 million. I think that was the breakdown.

    In my personal opinion, you resolve the tension between the two-thirds and the simple majority by doing the following. When you know that you are going to, whether it is inflate a budget or if the budget on its own rises to such a level that it must receive new taxes, at that point it becomes incumbent on the majority or those that control a simple majority vote and the spending, to then sit down during the process. In this situation I would say that really is in the core group meeting, where most members have represented to me that the work really gets done. You work through it and you find the compromise at that time. That did not happen and I think it was a breakdown in the process. Notwithstanding the fact that, on day 54, notice went out to the world that at least 19 standing in this caucus represented that we believe $511 million is the number. I think that is very significant. I think that action should have been taken at that point, and I don’t think it happened.

    I’ve got to make a comment, also, about the education issue. It’s been stated that this is all about funding education and I guess at this point it is, because were talking about very practical realities. At the same time, money is fungible. Fungible means that you can kind of mix it up. If one goes in, at a later date you can pull it out and it has the same value. Certainly, had the education budget gone out first, we would not be having this discussion. Even if the Distributive School Account (DSA) went out at this time, the first dollars, in my opinion, would go to education, and we would not have this discussion. Now, I know there have been comments that we cannot do that, and I think some of those are legitimate, according to the Constitution, but we’ve got other problems with the Constitution at this point. I do think that if it were passed, the first dollars would go to education, and that would take us out of the crisis. I feel badly that it was not the first budget out. I still have not received sufficient explanation as to why education did not go out first.        

    There are also comments in regard to the fact that the number is bogus. I don’t believe that’s the case. Also, it’s been stated that it is really about the method. I can represent, at least for myself, that I have concerns about the number and the method. I will tell you that there is an interconnection there, because the number facilitates the need for certain methods. If we are at $704 million, there may be an impact as to what is needed. I’m not saying that I have all of that resolved. I think that we can move forward and I think we are moving in the right direction. Frankly, as I have mentioned before, we have certain numbers, that are undisputed, in taxes that probably can pass with a two-thirds majority vote, such as the Bank Franchise Fee with $17 million, or the profits tax at $68 million or $70 million. There are other taxes that, frankly, probably ought to go out of here with a two-thirds vote. If we can get them out of here, we ought to do this. I’m not sure what our course of action is going to be here, but if SB 6 is going into some kind of conference committee, we ought to pass it out in an undisputed way so that if there is any kind of challenge it’s reduced to a minimum in the future. Those are just the thoughts of one assemblyman, Mr. Speaker, and I will finish with that. Thank you for your time.

Assemblyman Arberry:

    Thank you, Mr. Speaker. I need to clarify something that was said by my colleague from the Henderson area. He was bringing up this issue about the core group. The core group is not a secret order of the Legislature. We do not meet to create and secretly discuss issues in this body, and make secret decisions. There are 42 of us in here, and look at us now. The 42 of us can’t really get that much done, because everyone has their own mind and their own brain to use in thinking about, and feeling about, these issues. So, the core group comes together when we have issues that are on the table that we cannot resolve as a group. As a person who has been on the money committee for many years, listening to someone who has never been on the money committee, or ever set foot in the committee, say that this is some sort of secret order the way it appears offends me.

    Mr. Speaker, there is also this big issue about education. The reason why the other budgets close so smoothly is because we have a distinction between the Ways and Means Committee and its sub committees, and the Senate Finance Committee and its sub committees. We did this on purpose to cut down on a lot of the debate, and the arguments that we used to have in the olden days. The way the two committees used to come together was that we would sit across the table from each other, have the two chairmen look at each other and yell at each other, and then leave and walk out. We realized that we needed to come up with a better system. So, the two houses got together and decided to have sub-committees made up within the two money committees, to break down the delusion and make the decisions that we need to make in order to bring it back to the committee body as a whole. Each committee respects what their sub committees report back with. There are some things that we do not all agree with. As the chairman, I don’t agree with what some of my sub-committee chairmen come back with, but I respect the decision of the sub-committees, and that’s the way the process is. It works. It was a decision that we made to cut down on wasted time. Now that we are limited to 120 days, we arrive here two weeks before you ever even get here. You come in here fresh, and we are already tired, and now we’re all still here.

    I take it to heart, when all of you mistrust us. To all of you who don’t sit on the committee, Republicans or Democrats, your party, your friends and your colleagues work their butts off to deliver a balanced budget the best way we know how. Now you come down to this point in time and make it appear that we did not make any good decisions. I had no idea it was going to come down to this. If I had known during the first two weeks, when I left home, moved into a house at twelve o’clock at night, saying, “I’m too old to be doing this” I’m not sure I would have done it. I’m 50 years old, and I had to move into a house at twelve o’clock at night, carrying boxes, so that I can crank it up here and do what’s right for the state. I take on that responsibility, because I run for election all the time. Now we find out that we’re still here on July 18, discussing the same issues with a lot of this body that does not even sit on the committee. So, we take that to heart, when you sit here and tell us what we do and what we don’t do. We don’t micromanage the budget. We respect what the agencies come in and tell us, but when there are issues that you and your parties have concerns about, we look at those issues. We make decisions about those issues. If there is an issue that is hardcore, we do not pass it. The body gets together. When I say body, I mean the committee of Ways of Means. Everybody voices his or her concerns. There was no ram and jam in this budget. The whole idea was to try and balance the budget. We tried to do that with the prisons, and we tried to do that with welfare. It may look like that went pretty smoothly, but it wasn’t that smooth. The way it looks to you, when we lay it on the table for this body, is that everything was perfect. We had our discussion, our likes and our dislikes, and everybody did not agree with the welfare budget. Everyone didn’t agree with the prison budget, but we weren’t about to let the prisoners out. We weren’t about to let little kids starve. We weren’t about to do that. Then it came down to the DSA, which was the last thing. You guys sit here and you ask why we let the DSA be the last thing. It was the last thing on the table because we could not come to an agreement on it. We didn’t pick and choose that; putting education and kids on the line like this. It was a decision that we, what you call the core group, the Senate Majority Leader, the Speaker, the Majority Leader and myself sat down and said what can we do to resolve this so that we will not be here till July the 18th. We couldn’t even come up with a decision when we talked about the DSA, that we could take back to the body of the Republicans. The Minority Leader was in these meetings, too. We were asking, “When you take it back to your body, what can you live with?” Here we are talking about the same thing, the DSA. Now, can you imagine all of us sitting in one little room? We can’t even get together in one big room and come up with any decisions. So, I take offense to that, as chairman of the committee, when we worked our butts off to try to give you a balanced budget with the minimum amount of dollars. We didn’t pad that budget. We didn’t sneak anything extra into the budget, like we normally do at the end of a session when you’re sleeping. We didn’t slide anything special in, because we realized that we could not do that this time. We didn’t have the money. We didn’t have the wherewithal to do that. So, when you sit here and think that we made an extra, extra budget so that we can pad it, we did not.  It’s not padded. It is just provides a little bit to make sure that we can take care of the Nevadans.

    My colleague alluded to this earlier, and some days I have fought against the north-south issue, and I’m the one always leading the pack when it comes to a north-south issue. I try to draw the line in the sand and say, “I understand the rural problems, because I’ve got the rural brothers.” When my colleague from Battle Mountain comes to me with a rural issue, I understand and I sympathize, because I’m from a community, which is small like a rural area. We understand those things, and when he says that he needs something for his area, we bust our butts trying to get it for him. It is vice-versa, because he asks me what I need down in Las Vegas. We know it comes from the same pool of dollars.

    So, we need to stop this and stop saying there is a core group. The core group, like I said, is not some special group, or some guru group that comes together and says this is what we are going to do to the legislators, and they don’t have a clue. That is not happening. We are trying to get us out of here, and we find that the fewer people that are discussing it, the easier it is to come up with a decision. We did not slide anything behind your back. We just said that this is what we have on the table. We want to deal with class size reduction and we want to get the schools open properly. So, Mr. Speaker, with all due respect, I don’t like the idea of somebody painting a picture that this core group is some secret group. We are not a secret group. We are just trying to get the work of the people done at a nice pace.

Assemblyman Beers:

    Thank you, Mr. Speaker.  I must say this feels a little less smooth to me than it does for my colleague from District 7.  Let’s not lose sight of the fact that this is a one-third increase in the scope of our state government spending.

    Assemblyman Goldwater:

    Mr. Speaker, thank you.  The chairman of Ways and Means is very eloquent.  I don’t even think I should be giving this speech because I think our colleague from Sparks should.  If you can think of a better process to do this budget, that doesn’t include a core group or budget hearing, to address the wants of the people and the means in which we do it, that would be great.  Democracy itself is not even close to perfect, but you have to respect the process.  If you can come up with a better way, I would love to hear from you, Assemblymen, on the best way to corral sixty-three competing interests, personalities, wants, and means, represented in a republic.  While we are on the subject of the process, where are we going from here?  It is fascinating to me that we are going to absolutely excuse four months of budget work from people who weren’t there.  I sat on that committee and never once was anyone in there, except for the members and the people from the agencies.  It is audacious to say that you know better and you know the number, to say the least. 

    I like the number “three percent.”  Three percent, if we remember, is what the governor required his agency head to cut before he suggested this budget.  He said, “Don’t come in here and suggest anything above, and in fact, cut.” We are suggesting a cut beyond what Governor Guinn required his agency department heads. 

    The Assemblywoman from District 9 suggested we have already gone through a budget process.  The gentleman from Elko suggested that we start all over again.  That is fine.  Let’s look at the revenue side of things.  I have a good idea on how to come up with something logical regarding taxes.  We will form a study group made up of some of the brightest minds.  We will put together as much credible data as possible.  We will open these hearings up to the public, and we will state what our assumptions and methods are, listen to public testimony, and then put together a report.   Oh, we did that?  Here is the report.  Current services with no increase in programs, at least $700 million in 2002.  You want it fair and easy to administer?  What do you want it to be?  It is all grounded in reason and logic.  It is voluminous.  It is well done and thought out.  It takes into account employment and desire for economic growth.  It is all there.  Nobody has challenged this report, its inputs or methods.  This has been an increase in spending of thirty percent, a third more.  I will tell you this; healthcare costs, a major piece of the state budget, increased forty percent on average nationwide.  Malpractice premiums were a major factor in driving the increase in the cost of healthcare, as were prescription drugs.  If we built a fence around this state and never added another citizen our healthcare spending and a third of our budget would have grown by forty percent alone.  There is no magic number that says this is wasteful spending. We have thrown out the budget process, because clearly we are not respecting the work. We have thrown out logic and reason on how to arrive at a revenue number.  We don’t realize what we are really doing is undermining the form of government that we all fell in love with, which is democracy. 

    What is going to happen from here?  We have undermined republic government.  Will we address revenue problems in the future?  Yes.  We won’t see it in this body, though.  We will see it in ballot boxes and media campaigns.  You want to see California?  It is going to be California and every one of you participated in that. You made it that way.  I want this in the record, because I want to look back in ten years, realizing what we have done, which is undermine the republic form of government of representation.  We will destroy this state because things will be on the ballot.  That is the only way things will get done.  That is not the best thing in the world.  The legislatures of the future won’t be looked at to solve problems, they will be looked through, to correct whatever misdeeds are going to direct democracy.  It is not good.  If you have a better idea on how to do it, I would love to hear it, but that is the process.  I hope we can respect the process and know what we have done and are continuing to do to this state and hopefully it is not too late to change it. 

MOTIONS, RESOLUTIONS AND NOTICES

    Assemblywoman Buckley moved that Assembly Bill No. 2 be taken from the General File and placed on the Chief Clerk's desk.

    Motion carried.

MESSAGES FROM THE Senate

Senate Chamber, Carson City, July 18, 2003

To the Honorable the Assembly:

    I have the honor to inform your honorable body that the Senate amended, and on this day passed, as amended, Assembly Bill No. 4, Amendment No. 11, and respectfully requests your honorable body to concur in said amendment.

    Also, I have the honor to inform your honorable body that the Senate on this day concurred in the Assembly Amendment No. 10 to Senate Bill No. 2.

    Also, I have the honor to inform your honorable body that the Senate on this day respectfully refused to concur in the Assembly Amendments Nos. 3, 4, 7 to Senate Bill No. 6.

Mary Jo Mongelli

Assistant Secretary of the Senate

UNFINISHED BUSINESS

Consideration of Senate Amendments

    Assembly Bill No. 4.

    The following Senate amendment was read:

    Amendment No. 11.

    Amend the bill as a whole by renumbering sections 21 and 22 as sections 22 and 23 and adding a new section designated sec. 21, following sec. 20, to read as follows:

    “Sec. 21.  Section 208 of Senate Bill No. 2 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

    Sec. 208.  1.  This section and sections 188.1 to 195, inclusive, and 203 of this act become effective on September 1, 2003.

    2.  Sections 1 to 188, inclusive, 196 to 202, inclusive, and 204 to 207, inclusive, of this act become effective:

    (a) Except as otherwise provided in paragraph (b) or (c), on November 1, 2003.

    (b) On January 1, 2004, for the purpose of requiring a resident agent who desires to resign to file a statement of resignation for each artificial person formed, organized, registered or qualified pursuant to the provisions of title 7 of NRS for which the resident agent is unwilling to continue to act as the resident agent for the service of process.

    (c) On January 1, 2004, for the purpose of requiring a resident agent to file a certificate of name change of resident agent if the name of the resident agent is changed as a result of a merger, conversion, exchange, sale, reorganization or amendment.”.

    Amend sec. 22, page 11, by deleting lines 10 through 12 and inserting:

    “Sec. 23.  1.  This section and sections 1, 2, 3, 8, 9, 10, 12, 13, 15, 16, 17 and 22 of this act become effective upon passage and approval.

    2.  Sections 11 and 14 of this act become effective upon passage and approval and apply retroactively to July 1, 2003.

    3.  Sections 4 to 7, inclusive, of this act become effective on August 1, 2003.

    4.  Sections 18 to 21, inclusive, of this act become effective upon”.

    Assemblywoman Buckley moved that the Assembly concur in the Senate amendment to Assembly Bill No. 4.

    Remarks by Assemblywoman Buckley.

    Motion carried by a constitutional majority.

    Bill ordered to enrollment.

Recede From Assembly Amendments

    Assemblywoman Buckley moved that the Assembly do not recede from its action on Senate Bill No. 6, Assembly Amendment No. 7, that a conference be requested, and that Mr. Speaker appoint a first Conference Committee consisting of five members to meet with a like committee of the Senate.

    Remarks by Assemblywoman Buckley.

    Motion carried.

    Assemblywoman Buckley moved that the Assembly do not recede from its action on Senate Bill No. 6, Assembly Amendment No. 4, that a conference be requested, and that Mr. Speaker appoint a first Conference Committee consisting of five members to meet with a like committee of the Senate.

    Remarks by Assemblywoman Buckley.

    Motion carried.

    Assemblywoman Buckley moved that the Assembly do not recede from its action on Senate Bill No. 6, Assembly Amendment No. 3, that a conference be requested, and that Mr. Speaker appoint a first Conference Committee consisting of five members to meet with a like committee of the Senate.

    Remarks by Assemblywoman Buckley.

    Motion carried.

Appointment of Conference Committees

    Mr. Speaker appointed Assemblymen Buckley, Goldwater, Parks, Hettrick, and Geddes as a first Conference Committee to meet with a like committee of the Senate for the further consideration of Senate Bill No. 6.              

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

    Assembly in recess at 2:48 p.m.

ASSEMBLY IN SESSION

    At 2:49 p.m.

    Mr. Speaker presiding.

    Quorum present.

REMARKS FROM THE FLOOR

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

Assemblywoman Buckley:

    Thank you, Mr. Speaker.  One of our colleagues almost didn’t come in today because of the death of a beloved neighbor.  When she was comforting the neighbor’s beloved spouse who was left behind, she was told to, “Get back to the Legislature.  You represent us. We love you and you need to do what is right for our kids.” Dr. Ross Tappan was fifty-three years old and an anesthesiologist.  He was described by my colleague as a beloved husband, father, neighbor, honorable citizen, talented sportsman, and dedicated physician. My colleague was shocked at how he was lost.  He was blessed with so much and left such a great legacy.  My colleague wanted us to remember the great man that he was and the great family that he had, and that they would say, “Don’t worry about comforting us, go back to the Legislature and do what is right because you represent us, and we need to resolve this for the schools.  The schools are more important than you helping us.” 

    Assemblywoman Buckley moved that the Assembly adjourn until Saturday, July 19, 2003 at 12:00 noon, and that it do so in the memory of
Dr. Ross Tappan

    Motion carried.

    Assembly adjourned at 2:51 p.m. 

Approved:                                                                Richard D. Perkins

                                                                                  Speaker of the Assembly

Attest:    Jacqueline Sneddon

                    Chief Clerk of the Assembly

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