MINUTES OF THE ASSEMBLY SUBCOMMITTEE ON TAXATION Sixty-eighth Session March 2, 1995 The Subcommittee on Taxation was called to order at 2:15 p.m., on Thursday, March 2, 1995, Chairman Mike Schneider presiding in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. SUBCOMMITTEE MEMBERS PRESENT: Mr. Michael A. (Mike) Schneider, Chairman Mrs. Maureen E. Brower Mr. Pete Ernaut Mr. Brian Sandoval SUBCOMMITTEE MEMBERS ABSENT: None GUEST LEGISLATORS PRESENT: Speaker Lynn Hettrick STAFF MEMBERS PRESENT: Ted Zuend, Deputy Fiscal Analyst OTHERS PRESENT: Mr. Bob Allgeier, Chairman/Douglas County Commission Mr. Scott Doyle, Douglas County District Attorney Mr. Steve Teshara, Exec. Director, Lake Tahoe Gaming Alliance Mr. Howard Barrett, Nevada Taxpayers Association Mr. Harvey Whittemore, representing the Nevada Resort Association ASSEMBLY BILL NO. 19 - Allows proceeds from optional tax on revenues from rental of transfer lodging imposed within transportation district to be used for public transit system. Chairman Schneider opened the Subcommittee hearing on A.B. 19 and asked for anyone wishing to speak in support or opposition. Speaking first was Mr. Scott Doyle, District Attorney from Douglas County who was accompanied by Mr. Allgeier, Chairman of Douglas County Commission. Mr. Doyle explained, as he understood the discussion that occurred last before the full Taxation Committee, there was some concern about the voter approval given to a 1% increment of the room tax in Douglas County in November 1992. Specifically, as to whether the ballot question would constitute sufficient voter approval for the proposed additional use of the room tax addressed in A.B. 19. He has discussed this concern with Speaker Hettrick and Mr. Harvey Whittemore, representing the Nevada Resort Association. The result of their discussions is incorporated in the memorandum distributed to the committee today. (Exhibit C) In 1992, the law provided that voter approval could be sought for the use of this increment of the room tax for the purposes of road construction and road maintenance projects. That was the focus of the ballot question and an explanation on that question was put before the voters in 1992. In order to address the concerns mentioned by some of the public officials, he suggested some additional text contained in a one page handout (Exhibit D). This would be subject to the committee's approval as well as any redrafting by the Legislative Counsel. It is transitory language quite comparable to the 1991 version of this bill. Basically it gives legislative recognition that voter approval has already been accomplished and the voter's in 1992 gave sufficient approval for additional use of this increment of the room tax as proposed by this bill. Speaker Hettrick explained he concurred with the statements of Mr. Doyle and feels this is an appropriate solution. They are proposing an additional measure which is in the process of being drafted as an amendment. This amendment would limit the bill to transportation districts contained all or partly within the Bi- state Compact but would allow Washoe County and Carson City to participate if they choose. It would also limit the possibility of involving every transportation district in the state. Some of the areas within the state have indicated they do not want to dilute their ability to keep the TOT taxes directed towards what is already classified as tourism projects. He urged the committee to incorporate the language in the requested amendment when taking action. He volunteered to answer any questions. Speaking next was Mr. Harvey Whittemore, appearing in behalf of the Nevada Resort Association and its member institutions located in the Tahoe basin. In discussions which took place after the full committee hearing on A.B. 19, the people he represents were concerned about the language of the bill. They wanted to be certain the ballot question which focused on roads was appropriately identified in the text of this bill. We are making a policy statement that the election satisfied, for purposes of A.B. 19, the use of the proceeds. He feels that has been addressed in the language provided by Mr. Scott Doyle. Additionally, the proposed amendment resolves the issue limiting this to a transportation district located within an area in state compact and not impacting Clark County nor Washoe County. Mr. Ernaut stated for the record, his law firm in Clark County represents a transit system in Las Vegas, but feels he does not have a conflict with this bill inasmuch as the proposed language puts a cap on not including Clark County. He asked if Incline Village is within the Regional Transportation Commission (RTC) and was advised in the affirmative. He pursued that line of questioning by asking if the Reno properties are in agreement with this. Specifically, if Washoe County Commission wanted to propose this for RTC in Washoe County would that be permissible. Mr. Whittemore responded in his judgement, you would have to make a corresponding change in the room tax legislation which presently limits all room tax revenues in Washoe County, for tourism projects. The Legislature added that language when the law was changed affecting the room tax to provide for both the National Automobile Museum and the bowling stadium. Mr. Ernaut asked Mr. Whittemore if it was his understanding the majority of funds collected from this will be used in the Tahoe basin and was advised there are two separate districts. The proceeds generated within the basin remain therein and those that are generated in the other township would be used there. Mr. Allgeier interjected that 92% of the TOT tax in Douglas County is generated within the Tahoe basin and 8% is from the Carson Valley portion. They have agreed within the counties these funds will be split 92% on the basis of TOT to the Tahoe basin and 8% to Carson Valley. There followed considerable discussion on the pros and cons of the proposed bill and amendments. Testimony was taken from those mentioned above, as well as Mr. Howard Barrett, representing the Nevada Taxpayers Association, Mr. Steve Teshara, representing the Nevada Gaming Alliance, and Mr. Ted Zuend, Deputy Fiscal Analyst from the Legislative Counsel Bureau. The general consensus was that everyone is interested in providing resources to accomplish the needed transit system within the Tahoe basin and, the amendment requested by Speaker Hettrick, Mr. Whittemore, and Mr. Doyle should be included. At the conclusion of the presentation, a motion was made by Mr. Ernaut, seconded by Ms. Brower that we amend and do pass. That is, using the verbiage proposed in the amendments. Motion passed unanimously. There being no further business, the meeting was adjourned. RESPECTFULLY SUBMITTED: Nykki Kinsley, Committee Secretary APPROVED BY: _____________________________________ Assemblyman Mike Schneider, Chairman Assembly Committee on Taxation March 2, 1995 Page