MINUTES OF THE ASSEMBLY COMMITTEE ON TAXATION Sixty-Eighth Session April 13, 1995 The Committee on Taxation was called to order at 1:15 p.m., on Thursday, April 13, 1995, Chairman Jeannine Stroth presiding in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Bob Price, Chairman Ms. Jeannine Stroth, Chairman Mr. Pete Ernaut, Vice Chairman Mr. Michael A. (Mike) Schneider, Vice Chairman Mrs. Maureen E. Brower Mrs. Joan A. Lambert Mr. Mark Manendo Mr. John W. Marvel Mr. P. M. Roy Neighbors Mr. Brian Sandoval Mr. Larry L. Spitler COMMITTEE MEMBERS EXCUSED: Mr. Morse Arberry, Jr. GUEST LEGISLATORS PRESENT: Mr. Max Bennett STAFF MEMBERS PRESENT: Mr. Kevin Welsh, Fiscal Analyst - Legislative Counsel Bureau OTHERS PRESENT: Mr. Bill Gregory, representing MGM Grand, Inc. Mr. C. O. Watson, Executive Director, Nevada Association of Tobacco & Candy Wholesalers OTHERS PRESENT, CONT. Mr. Joseph E. DiGrazia, Owner of DiGrazia Wholesale Distributors - Wells/Ely Ms. Janice Wright, Nevada Department of Taxation Mr. Mike Raifaisen, Capital Cigars & Candy Mr. John Orr - Department of Employment, Training, and Rehabilitation Ms. Teresa Maloney, Vice President - Coalition of Associations of 7-Eleven Franchisees Ms. Helen Foley, 7-Eleven Franchise Owners Association Mrs. Barbara Cegavske, testifying in behalf of Mr. Tim Cegavske, Legislative Committee Chairman of 7- Eleven Franchise Owners Association of Southern Nevada Mr. Toney Ramey - Reno/Sparks Chamber of Commerce Mr. Eric Cooper, Las Vegas Chamber of Commerce Mr. Howard Barrett, Nevada Taxpayers Association Chairman Jeannine Stroth opened the Committee on Taxation meeting at 1:15 p.m. and had the roll call taken. She announced a change in the order of business from the agenda: Assembly Bill 394 would be taken before Assembly Bill 154. Mr. Ted Zuend, Deputy Fiscal Analyst, was not present, but had provided a floor statement (Exhibit C), as well as a memorandum with information pertaining to A.B. 394 (Exhibit D) for the committee. ASSEMBLY BILL 394 - Increases discount allowed to cigarette dealers for service of placing revenue stamps on cigarette packages. Chairman Stroth recognized Mr. C. O. Watson, who identified himself as Director of the Nevada Association of Tobacco and Candy Wholesalers. He testified in favor of A.B. 394. He stated that A.B. 394 was simply asking for reinstatement of an allowance for stamping cigarettes that was reduced in 1991. He continued his presentation by reading from prepared text (Exhibit E). After his recital, Mr. Watson introduced Mr. Joseph "Sonny" DiGrazia, owner of DiGrazia Wholesale in Wells, Nevada. Mr. DiGrazia announced that he lived in Wells, where he has a warehouse, and also a branch warehouse in Ely. He supplies all of north-eastern Nevada from Battle Mountain east and from Jackpot south to Caliente. The "Meyercord fusion machine" does not belong to them; he had to lease it. Since 1990, it was leased at $600 a quarter. However, the last invoice for the second quarter payment was $1,035 -- an increase of 72 percent. The three percent discount on stamping was not adequate when one considered taxes, plus the minimum of four people required to operate the machine properly. In addition, they received nothing for stamping the Indian cigarettes, yet it took just as much time and just as many people to do the work. Chairman Stroth recognized Assemblyman John Marvel, who wondered why Mr. DiGrazia did not negotiate something with the Indians for stamping their cigarettes. Had he tried? Mr. DiGrazia explained that Indians were not liable to Nevada law. Due to competition, even a "side" negotiation could not be allowed. To keep any Indian accounts, they had to meet the price. As a matter of fact, that was where the state of Nevada got some business, too. They had to supply the stamps to DiGrazia at no cost. Actually, when DiGrazia bought Nevada stamps, part of the monies was allocated back to the state for cost of operation. He did not believe any monies came back to the state on Indian stamps, but was not certain. He did know there was no monetary value on Indian stamps; all they were for was recognition. Mr. Marvel noted that the Indians had "the best of all worlds" when it came to the cigarette stamping, and Mr. DiGrazia could not help but agree. Assemblyman Larry Spitler inquired how the cost was originally arrived at when four percent was determined to be an equitable fee. The reply: when the rule was enacted in 1947, the state of Nevada allowed four percent discount on the stamps. At that time, there were no automatic machines: it was all water decals. Later in the cigarette history, a Pitney-Bowes meter machine was introduced, (which could not be purchased, either). The state of Nevada then realized that was a "messy" operation and went to the Meyercord fusion machine. Mr. Spitler surmised the four percent discount on the taxes never came about as a result of what it actually cost to do the work. However, he was corrected in that assumption. In 1947, a cost analysis had been done. The water decal method was expensive and slow. Then was when it was agreed that four percent discount on the taxes would be put into place; it stayed that way until 1991. "Has anything been done since 1991 to justify the costs outlined in Mr. Watson's letter?" asked Mr. Spitler. "For example, had a cost analysis been done that considered direct labor costs or handling?" There was one done in Mr. Watson's own company and Mr. Spitler thought it would be very beneficial for the Committee to know what the direct cost was. A cost analysis would be provided later. The increase in the number of cigarettes that were stamped in the last 12 years was delineated on the last page of Mr. Watson's letter (Exhibit E). Chairman Stroth noticed there was a slight decrease in number of cartons of cigarettes stamped, but the expenses had risen. To testify next in favor of A.B. 394 was Mr. Mike Raifaisen of the Capital Cigar and Candy Company. He agreed with Messrs. Watson and DiGrazia that costs had risen and operations were more expensive. It was important to wholesalers to "get back to one percent." Ms. Janice Wright with the Nevada Department of Taxation testified next. She had provided Mr. Welsh with a copy of the fiscal note prepared by the department. For fiscal 1996, the impact would be a loss of $478,902. Cigarettes remained fairly flat during the years, so it was anticipated that cost would be an ongoing cost. Of the loss, 71 percent would be that which would be generated for the state general fund; the remaining 28.5 percent would be a loss to the local governments. Mr. Marvel wondered how Nevada's cigarette taxes compared to neighboring states. "Arizona or New Mexico had increased theirs," Ms. Wright replied. For a while, when Nevada had increased cigarette costs, there were problems because some people no longer came into Nevada to purchase their cigarettes because the surrounding states had lower taxes. It was Ms. Wright's understanding that some states had started to increase their cigarette tax; she would provide a breakdown of all the western states later. The sales of cigarettes has "flattened" out and the sale of cigarette stamps had reduced over the past ten years. There had also been a decrease in the volume that appears to be consumed. Ms. Wright informed the Committee that "the Economic Forum in their cigarette projections recommended flat across the board." The total tax collection from cigarette stamps for fiscal 1994 was over $49 million. The revenue stamps sold in fiscal 1994 totaled over $136 million. Assemblyman Roy Neighbors asked if the percentage had been four percent and then had returned to four percent; what was the history? Ms. Wright confirmed that in 1991, the Legislature decreased it from four percent to three percent; prior to that, it had been four percent since 1961. However, in 1947 when the cigarette tax was originally enacted, it was ten percent that was split 50/50 between the entities that received the discount allowance for stamping and the state general fund. The overall amount was reduced in 1949 to seven percent. In 1961, it had been reduced to four percent. It remained at four percent until 1991. (The rationale behind that had something to do with the budgetary concerns.) Chairman Stroth recognized Assemblywoman Joan Lambert, who thought the one percent decrease coincided with the 15 percent tax increase . . . so it was three percent on a much larger base. Ms. Wright concurred. Mr. C. O. Watson revisited the 12 year comparison. In 1983, 140 million packages of cigarettes were stamped. In the last 12 years, there were four million less packages stamped. He pointed out that labor, equipment, and overhead costs had increased in the last dozen years. That was the basis for their new quest to bring the number back to the four percent figure: in his opinion, it was simple mathematics and general business consensus. There were no further questions for Mr. Watson and Chairman Stroth inquired if there was anyone present to speak for or against A.B. 394. There were none; hence, the hearing on A.B. 394 was closed. Ms. Stroth then opened the hearing on A.B. 154. Mr. Ted Zuend was not present, but had prepared a floor statement on A.B. 154 (Exhibit F) that was disseminated to the Committee members. ASSEMBLY BILL 154 - Provides for exclusion of disadvantaged employees when calculating amount of business tax due. Assemblyman Max Bennett, District 14, (the sponsor of this bill) opened the testimony by announcing, "The policy decision to be made on A.B. 154 is: can a reduction in income, coming into the state of Nevada, actually be beneficial? Is the return on the investment worth the risk? Is it worth the reduction in our expenditures?" Mr. Bennett contended the return on investment in A.B. 154 "looked great." For example, assuming welfare was a $3,000 per year expenditure, Mr. Bennett figured there would be a 30:1 return on investment. Assemblyman John Marvel wondered how many employees would be effected by the passage of A.B. 154. "Just from the Department of Rehabilitation," replied Mr. Bennett, "4,033 people would be eligible. The current cost for those employees is almost $4 million. That is 9.78 to 1 return on investment." Mr. Marvel asked Mr. Bennett what he thought the potential was for hiring those "handicapped" persons. Specifically, were there a large field of people who would probably be hired in the future if A.B. 154 passed? "For everyone we get working in the private sector, that is one we are not paying for in the public sector," Mr. Bennett asserted. He recited from a handwritten note from the Welfare Department (Mr. Orr's group): "I believe the proposal could assist some welfare recipients to obtain work." If hired, there was no credit on the business tax to the employer. But there was a "mighty" credit back to the state, because the state would not be expending the monies. Mr. Bennett thought a similar measure for high school students would be introduced in the future (vocational programs). Mr. Bennett was aware there was a bill to phase-out the business tax over a five year period. Mr. Marvel philosophized the business license tax was going to be opened to a plethora of exemptions all across the board. Assemblywoman Maureen Brower questioned the numbers Mr. Bennett recited; specifically, what was the figure $3.9 million relating to? "We spend $3.9 million a year on 4,033 people to train, prepare, and get them ready to return to work," explained Mr. Bennett. "If passage of A.B. 154 would nudge an employer into considering a person for work whom they would not normally consider, and if that person were currently receiving financial aid from the state, then we are looking at a 9.78 to 1 return on investment." "What is the fiscal note on state or industrial insurance?" inquired Ms. Brower. Mr. Bennett felt he had been supplied a "totally biased fiscal note." But Assemblyman Mark Manendo had the figure for revenue loss for FY95-96: it was $12.5 million. In FY96-97, it was $13.2 million. The total was almost $26 million loss in two years. At that point, Ms. Janice Wright stepped forward to testify. She contended there would be a fiscal impact of a loss to the general fund of $12.6 million. Those numbers had been developed by determining that the total potential qualified individuals would be 122,483. The way the Department of Taxation derived the number was by defining three different categories: the additional displaced worker, the at-risk employee, and finally the eligible dislocated worker. Surveys had been conducted by reviewing the Employment, Training and Rehabilitation Department records and it was determined that 964 individuals were in the first category of additional displaced workers. The at-risk employees was difficult to determine because it included two groups: (1) those who had attained 18 years of age and were seeking full-time employment for the first time, and (2) persons who were repeat juvenile offenders (the court sealed those records, so the Department of Taxation made the calculation based on the non-high school graduates, of which the number (according to the Census Bureau) was determined to be 105,000. And when the individuals under 25 years of age who have not graduated from high school were added in, there were another 10,000 people. Therefore, there were 116,419 eligible individuals in the category of at-risk employees. Of eligible dislocated workers -- the ones the federal U.S. code described as either having been terminated, layed-off, or long-termed unemployed (such as housewives returning to the work market, self-employed farmers/ranchers) -- there are 5,100. Therefore, there were 964 additional displaced workers; 116,419 were determined to be at-risk employees (includes repeat juvenile offenders--no figures); and 5,100 individuals in the eligible, dislocated worker category. There were 122,483 potential qualified individuals. At $100 per individual, the total was over $12 million dollars per year. Mr. Bennett begged to respond immediately, but the Chair wanted to keep order by having the two persons who had signaled they had questions to speak before him. Assemblywoman Lambert asked Ms. Wright about the 116,000 category (no high school education), because she found it difficult to believe that none of those people had a job before they reached the age of 18. She asserted that "most of them MUST have had SOME job!" Further, as far as estimating, Ms. Lambert thought there must be some idea of how many juvenile offenders there were; she could not believe Ms. Wright had the correct figure. Ms. Wright explained an at-risk employee was defined in the code as being either a repeat juvenile offender who was seeking his first full-time employment after attaining the age of 18, or as a person who had not graduated from high school. The repeat juvenile offender was not sufficiently defined for this purpose and the Department of Taxation was not able to obtain court records; therefore, the number was not included for that. Since there was no calculation for that group, the Department of Taxation had to decide how to determine the figure for non-high school graduates. The figure had been estimated according to the U.S. population. The census bureau provided the figures. The Bureau of Economic Research indicated there were approximately 104 million in this group, of which 9,099 were over the age of 25 and the remaining were under the age of 25. They determined that 21.2 percent of the 25 or older were non-high school graduates. For the purpose of this, the Department of Taxation determined half of that group would be in the work force already; therefore, 105,000 have already been in the work force. The individuals who were under the age of 25 in that group are 10,498. Add the two figures together and the total was 116,419. Assemblywoman Maureen Brower noted that Ms. Wright had developed a lot of numbers of how many disadvantaged persons, how many at-risk, etc. Was there a formula the committee should be made aware of; the Department of Taxation had arrived at a "tremendously big figure." "We tried to determine, of the group that was eligible, would half of them be going into the work force? Would a quarter of them? Those were the calculations that we made. We agreed that 100 percent of them would not be available to go into the work force. We used the calculation of that one portion: only half of them would actually be seeking employment." Assemblyman Mark Manendo asked Mr. Bennett how he felt about Ms. Wright's numbers. Mr. Manendo also commented that if A.B. 154 were adopted, a responsible act should be taken by figuring out what might need to be cut or what areas might need to be raised, etc. Mr. Bennett expressed surprise over so much controversy being raised. He was amenable to "cleaning up" language in A.B. 154. He wanted to keep the numbers reasonable. He wanted a minimum of 80-90 percent of people eligible to receive the tax cut to be those who were at extreme risk of being on the public dole or were already on the public dole. Mr. Bennett stressed he wanted a good return on the investment to where the actual tax dollars spent were less. "The intent of A.B. 154 is to put at-risk people to work and save the state money at the same time," summarized Mr. Bennett. Assemblyman Larry Spitler asked if any off-sets were included that might be associated with dislocated workers, or people who might in some way be receiving social services who are both general and federal funded programs. And Ms. Janice Wright affirmed that she was not saying anything about A.B. 154, nor had the Department of Taxation provided what the additional cost to the state was if there were at-risk employees who were currently receiving state services. All the Department of Taxation looked at was the actual dollar loss in business tax. There is an on-going cost to Nevada for having people unemployed and being provided social services, but that was NOT a part of the fiscal note. But Mr. Spitler pointed out that Ms. Wright had used a demographer and demographers had ratios to compare the numbers to. So the numbers that were presented were pure numbers that did not take into consideration the partial balance: some would be taken off a program that may be federally funded or generally funded. Ms. Wright confirmed the Department of Taxation did not recognize the on-going cost to the state for providing these services; it only recognized the loss in business tax that would come into the coffers. It did not show the other side. Mr. Spitler thought Human Resources should provide a better response. They could tell the proportion of people currently receiving assistance and tell what portion of that assistance is general fund supported, as well as what portion is federally funded. Mr. Marvel wanted to get to the bottom line. Mr. Bennett declared the bottom line was that anybody who took advantage of the program resulted in a minimum of 9.78 to 1 return on investment to the taxpayers of the state of Nevada. The dollars could not be realistically provided because, as Mr. Bennett emphasized, "For every person . . . for every dollar that was not taken in . . . the state did not spend $9.78. The more people that we got to take advantage of the program, the better it was to the state." Further, Mr. Bennett stated he had asked staff to prepare an amendment that Mr. Spitler had suggested. Staff requested that Mr. Bennett wait until after A.B. 154 was heard. The suggestion was to include the amount of time (a limitation) to which business could take advantage of this for each individual employee. Mr. Bennett thought a two year period was a very good probation period for a new worker. Mr. Marvel interjected there would be an administration cost to this program -- just in trying to sort out those who qualify in this class. And Mr. Bennett agreed and added that Mr. Orr would hopefully address that question when he testified. Next, Mr. Bill Gregory, representing MGM Grand, Inc., testified in favor of A.B. 154. Mr. Gregory explained he was present at the request of Assemblyman Bennett, not because MGM Grand wanted to save any money on the business tax and not because they wanted to try to tell the Committee how to run tax policy. The reason why Mr. Bennett had asked Mr. Gregory to testify was to tell the MGM story. The MGM Grand was committed to hiring at-risk individuals in the community. In September of 1992, the management of the MGM Grand Hotel Casino and Theme Park committed 1,200 jobs to at-risk individuals in the community through their employment out-reach program. The goals of the program were to provide job skills and employment for 1,200 individuals drawn from a variety of social service organizations in southern Nevada. Of those 1,200, 800 had been on welfare before they were hired. Otherwise, these individuals would probably have little chance of achieving even entry level employment. The numbers were impressive: obviously, now that 800 people were no longer on welfare, there was an enormous amount of savings to the taxpayer. In 1994, the total annual gross wages for those 1,200 individuals was over $12 million dollars, and with benefits and tips, $30 million. Another program that MGM is somewhat involved with is Nevada Partners. The major stockholder for MGM was responsible for the organization. Nevada Partners is a 501.C3 non-profit organization that offers life skills and job readiness training for at-risk and disadvantaged persons in southern Nevada. It was established in 1992, following civil unrest in Las Vegas and after the first Rodney King trial. The organization received its financial start from a $1 million donation from the Lindsey Foundation, and continued to receive on-going support from Lindsey and other businesses. Since it was established in 1992, Nevada Partners has placed approximately 2,200 at-risk and disadvantaged persons in jobs throughout southern Nevada. In January of 1995, they opened their new 2.5 million square foot center. The center has classrooms, computer labs, etc., and provides job skills training for its clients. Nevada Partners receives no federal or state funding; it has overwhelming support of the business community and works with more than 160 businesses. Some of those serving on the Board of Directors include Governor Bob Miller; Major Jan Jones; Bob Maxie, Chairman of the Board, MGM Grand, Inc., etc. Mr. Gregory concluded his testimony by stating he was in favor of the concept because MGM was very committed to hiring the at-risk and disadvantaged individuals in the community. There being no questions for Mr. Gregory, the Chair recognized Mr. John Orr from the Department of Employment Training and Rehabilitation. Mr. Orr supported A.B. 154, mainly because he thought it would make his department's job easier. He explained that his department's job was to put people to work; they targeted people who were disadvantaged and at-risk. There were 56,000 new jobs created in Nevada last year. The administrative costs associated with A.B. 154 were unknown to Mr. Orr at present. He had a problem with the A.B. 154 as originally written because of the "no time-limit." Mr. Orr illustrated that his father had worked 45 years without a high school diploma and Mr. Orr said he would laugh at the notion he needed an incentive to go work when he was 60 years old. So the Department of Employment Training and Rehabilitation would support the notion by Assemblyman Spitler to put in some kind of time limit. A.B. 154 was intended to provide an incentive for hiring, and he thought that should be focused upon. It was NOT intended, he believed, to be an incentive for continued employment. It was an opportunity to allow people to get their feet into the labor market based on their skills and abilities and commitment to stay in the labor market and stay off public assistance. In conclusion, Mr. Orr said that Assemblyman Bennett had information on costs associated with the 4,033 people identified as being disadvantaged or at-risk as defined during fiscal year 1994. But the department did not provide income maintenance, etc., (they were not the Welfare Department). The almost $4 million dollars which was reported to Mr. Bennett as being dollars they spent in connection with those people would probably be spent in spite of A.B. 154. That money was spent primarily in job training; his department felt they should be training people to provide for the business community qualified job applicants. Roughly two-thirds of the people Mr. Orr dealt with were either on welfare or some other form of public assistance. If the average welfare cost was $330 to $400 a month, the savings were easy to calculate. Mr. Marvel asked Mr. Orr for a dollar figure between federal and general fund money. Mr. Orr advised that the majority of the $4 million spent on the unidentified group in FY94 was spent through the job training partnership act on dislocated workers and on associated dislocated workers: about $3 million of that was all federal money. (His department did not break down the rest of it.) Their budget support, though, was roughly 93 percent federal and 7 percent general fund. As far as an analysis of what the savings might be accrued to the general fund, the Welfare division might be able to provide more information because that was where the savings would obviously reside. Mr. Bennett contended that over $6,500 dollars a year on welfare per recipient was the average: half welfare and half general fund. As an estimate, Mr. Bennett thought a good average would be $3,000 per year for each welfare recipient coming from the state fund. Assemblyman Mark Manendo questioned the figure of 4,033 people who fell into the category of clientele that the Department of Employment, Training, and Rehabilitation dealt with. But Mr. Manendo had been looking in the book under the fiscal and it stated 5,100 individuals fell under the category in FY94. That was approximately a 1,100 difference he wanted to bring to the attention of the Taxation Committee. Next, Chairman Stroth recognized Ms. Teresa Maloney. But Ms. Helen Foley, who represented 7-Eleven Franchise Owners, stepped forward to speak, and it was she who introduced Ms. Teresa Maloney, a franchise owner in Reno. Ms. Foley also introduced Mrs. Barbara Cegavske, who owned a 7-Eleven Franchise with her husband Tim in Las Vegas. Ms. Foley testified in support of A.B. 154; one of the things that came to their attention with A.B. 154 was an opportunity for displaced, at-risk, or dislocated workers to be in the work force and remove them from the welfare rolls. She was surprised to hear the number was as high as it was, with 2/3 of those people maybe on welfare. To have a probation period was understandable and advisable; if someone was on a job for two years, they gained strong developed skills that make them employable in other areas. She suggested a further limitation could be the number of people per employer that could qualify for the program. The economic advantages were rehashed. Ms. Teresa Maloney owned a 7- Eleven store since 1982. In January of 1995, she and her husband opened a small independent store: Maloney's Market. She also stated she was vice-chairman of the National Coalition of 7-Eleven Franchisees and represented over 2,000 franchisees across the country. Today, she appeared in behalf of the 200 7-Eleven's. Her written testimony was disseminated to the Taxation Committee (Exhibit G). Many of the people that A.B. 154 would effect would be people who went to 7- Eleven stores and other convenience stores for jobs. She estimated 25 percent of the 7-Eleven employees would fit the description . . . spoken to in A.B. 154. In their view, A.B. 154 really was a win for three people: the employer got a benefit for taking a risk and giving someone a chance; a potential employee got some self- esteem and an opportunity to become self-sufficient; and the state of Nevada had the potential to remove some people from welfare and other unemployment rolls. In conclusion, they strongly supported the enactment of A.B. 154. Assemblywoman Joan Lambert wondered if A.B. 154 might encourage 7-Elevens to create jobs where none exist now, to maybe hire an extra person to give someone a chance. Ms. Maloney thought the potential was there. She then introduced Mrs. Barbara Cegavske, who wanted to address Ms. Lambert's question. Mrs. Cegavske handedout a letter (Exhibit H) from her husband Tim Cegavske, who was not present. She affirmed they were constantly looking for people. In the last three weeks, she had four ads in the newspaper and hired one person. It was not for lack of trying; it was for lack of people coming in. When she heard the unemployment statistics, she questioned it, because her store paid above minimum wage and also provided other benefits to their employees that not all convenience stores provided. Mrs. Lambert furthered the thought, saying, "When you are faced with a situation where you cannot find employees to ring the register and everyone is doubling up on work, the potential is there to create a position because you might be inclined to hire an at-risk juvenile offender who might stock." Mrs. Cegavske agreed, adding that one of the qualifications she once asked for was a high school diploma. That qualification could not be asked for anymore because most of those who applied for jobs at her business did not have a high school diploma. She wanted the following story to be put into her testimony : A year ago, she had hired a 21 year old without a high school diploma and who had committed several offenses. He told her that no one would hire him. He had long hair, he rode in on a motorcycle, and he had a pierced ear. She said he worked for her almost six months. She provided him a lot of training and gave him an opportunity. She took a risk. In conclusion, she urged the Committee's support of A.B. 154. She felt it was a bill that was very much a part of the society to help the community. Ms. Foley interjected with proposed changes to A.B. 154; specifically, on page 1, line 15, where A.B. 154 spoke to "at-risk employees," she thought the bill would be clearer if it read a "person OVER 18 years, who was a repeat juvenile offender." Ms. Foley pointed out that, if it did not say it on line 15, there might be some confusion because at the end of A.B. 154 it said, "or a person who had NOT graduated from high school." That could mean anyone under the age of 18 years who was still in high school! She did not believe that was the intention. That being said, Ms. Stroth asked if anyone had any questions. There were none. She then asked for those persons who wished to testify in opposition to A.B. 154. Mr. Toney Ramey, who represented the Reno/Sparks Chamber of Commerce, was acknowledged and presented himself for testimony. Mr. Ramey said the Reno/Sparks Chamber of Commerce was opposed to A.B. 154. As a coalition of businesses, they understood that some taxes were necessary to finance government so business could have a safe and relatively free market in which to operate. Acknowledging this, for some taxes the Chamber advocated the policy of a broad base, which meant: "exclude everyone, exclude no one". This is why they opposed A.B. 154. It excluded certain persons from the business tax. Also, it opened the door for further exclusions, which were coming up in future meetings. Saying that, Mr. Ramey announced he was a masters student at the University of Reno; he specialized in economics - public finance. What his education had taught him about tax policy was: "the broader the base, the better tax." This was why Mr. Ramey saw a problem with A.B. 154. He then invited questions from the Committee. There were no questions from the Committee for Mr. Ramey. Chairman Stroth then recognized Mr. Eric Cooper. Mr. Cooper represented the Las Vegas Chamber of Commerce. He stated the Las Vegas Chamber of Commerce Government Spending and Taxation Task Force is opposed to A.B. 154. But not because it helped disadvantaged workers; they would hate to seem like the "grinch who stole Christmas." The position the Chamber had, however, was that it was the first exemption they had seen and there were two more to follow. One was A.B. 64 (exempts businesses that employ pupils in work education programs) and S.B. 254 (exempts child care establishments). The Las Vegas Chamber of Commerce felt A.B. 154 was a BAD tax policy. They felt it was not a good idea to start piecemealing out certain tax exemptions aimed at certain types of business, or certain classes of employees to exempt the business tax on. They felt it opened the door for more and more organizations to become exempt from business tax. Mr. Cooper agreed with Assemblyman Marvel in the statements he made earlier to that effect. On that basis, they opposed A.B. 154. Mr. Howard Barrett from the Nevada Taxpayers Association presented himself for testimony in opposition to A.B. 154. The Taxpayers Association was opposed to any exemptions from any bills for any taxes as a general policy. He pointed out the tax exemptions were really expenditures of tax dollars. They were not just appropriations from the general fund. Mr. Barrett stated, "You would be making the expenditure without bringing it into the general fund. If such a program, particularly with figures the Tax Commission has supplied, were to be adopted by a tax exemption, it would seem better policy to bring the monies in, run them through the general fund, and consider the program as done on any other program . . . and then make a budget appropriation for the program rather than a tax exemption in the first place." Seeing there were no questions for Mr. Barrett, Chairman Stroth asked if there were any others who wished to testify for or against A.B. 154. Seeing none, she closed the hearing on A.B. 154. There being no further business to come before the Committee, the meeting adjourned at 2:40 p.m. RESPECTFULLY SUBMITTED: Carolyn Grabski, Committee Secretary APPROVED BY: Assemblyman Bob Price, Chairman Assemblyman Jeannine Stroth, Chairman Assembly Committee on Taxation April 13, 1995 Page