MINUTES OF THE ASSEMBLY COMMITTEE ON TAXATION Sixty-eighth Session June 10, 1995 The Committee on Taxation was called to order at 1:15 p.m., on Saturday, June 10, 1995, Chairman 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. Morse Arberry, Jr. 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 ABSENT/EXCUSED: Mr. Michael A. (Mike) Schneider, Co-Vice Chairman GUEST LEGISLATORS PRESENT: Speaker Lynn Hettrick Mr. John Carpenter STAFF MEMBERS PRESENT: Mr. Ted Zuend, Deputy Fiscal Analyst OTHERS PRESENT: Mr. Kit Weaver, Carson City Assessor Mr. Mark Schofield, Clark County Assessor Chairman Jeannine Stroth called the meeting to order at 2:20 p.m., and asked the secretary to call the roll. A quorum was present. Chairman Stroth announced the first bill for discussion today is A.B. 490. ASSEMBLY BILL NUMBER 490: Gradually reduces and prospectively repeals business tax. Ms. Stroth stated last time this was discussed, we had some suggestions by the sponsor, Assemblyman John Carpenter and she asked Mr. Zuend to give a brief overview of what those suggestions were. Mr. Zuend explained Mr. Carpenter proposed two things. One would be to trigger the tax down should state revenues come in above the estimates made by the Economic Forum. The amount of revenue would have to be enough above the estimates so the additional revenues would recapture the amounts lost due to the reduction in the business license tax. The reduction, basically, would be an across the board exemption for the first five employees of any business in the state. That would cost the state, based on their best estimate, around $10-million per year at current levels. Ms. Stroth asked if there were any questions from the committee. Mr. Manendo commended Mr. Carpenter for bringing this measure to the legislature and reminded those present, he had mentioned his support the first time we discussed it. He wanted to state again, for the record, if we really want to help the small business people , we should provide some real help. We should maintain the provision that it would not be possible to "cap" a certain amount of businesses. As an example, we should look at using the figure of 50 or 100 employees or less would be affected for the tax exemption. There were some concerns that we cannot do what this bill proposes but he believes we can inasmuch as we did it in 1990. He explained he too is concerned with the revenue loss aspect but, we also have to be concerned about our small businesses in this state as they provide a service and bring in a lot of support to the communities. He would like to see this proposal implemented and as long as the revenue comes in, he does not see why we cannot start phasing out the tax for businesses using the formula of the exemption for at least one through five employees. Everyone seems to be in agreement the business activity tax was not a good tax. When you hit the small businesses, such as the "mom and pop" enterprises, he has a great deal of concern. He has many small businesses in his district and he hears these problems constantly. They really need help in their business establishments but they are afraid to hire an extra person as they simply cannot afford to. If we give them this exemption, it would provide some relief whereby they can employ more people. In his mind, this is what the bill is about, giving help to more people. By creating employment opportunities, we will be gaining more revenue in the long run as we will not be paying out as much money to social programs. Mr. Price pointed out he intends to favor moving the bill out and getting the tax exemption program affirmatively on the books but extending the effective dates respectively within the various sections beyond the next biennial fiscal year. He would like to see the next session of the legislature be aware this was coming down the road which would give them the opportunity of looking at the economy at that time. That would also give the legislature the opportunity to look at the philosophy, the fiscal impact, etc. Additionally, this would provide the governor time for future planning for budgetary purposes. He advised those present he has never been a supporter of this type of tax but with the $50-million to $60-million dollars it is bringing in every year, we cannot afford to immediately eliminate the tax revenue. If you are going to take this much money out of our current tax structure, you will have to think about how you are going to replace it. Our state is not large enough to lose that amount of revenue. This tax is probably the fourth or fifth largest revenue source in the state, with the first and second being gaming and sales taxes and the third being the insurance premium tax. This tax is probably down around fourth or fifth. He stated he would not be voting favorably to pass the bill out of committee. Speaking next was Mrs. Lambert who asked for clarification on the proposal for "reverse triggers". For example, in this biennium if there was a revenue surplus, would there be reverse triggers that would get rid of the one through five of the employees and if that did not happen would it occur in July 1997? She asked if that was the amendment and was advised by Mr. Zuend he did not have the answer but suggested Mr. Carpenter would. Mr. Zuend pointed out Mr. Carpenter would have to speak on that and whether he was assuming it would go in automatically in 1997 or not. His proposal suggested, for example, how pay increases were triggered in the past, if the estimated surplus, as judged by the Board of Examiners at the end of fiscal year 1996 was $10-million more than the planned surplus, then the exemption he had proposed would go into effect. He is not certain if Mr. Carpenter's suggestion was for an automatic effective date in 1997 or not. Mrs. Lambert pursued her line of questioning by asking if that was the case would the measure have to go to Ways and Means? That would also give the legislature the opportunity to look at the philosophy, the fiscal impact, etc. Would that affect the current biennium budget if you are just dealing with a phantom surplus. Mr. Zuend responded, once again, he did not know but that would be the call of Messrs. Arberry and/or Marvel. Mr. Carpenter took the podium in an attempt to address those questions. He stated it was his feeling if the money comes in over and above the projection, during the first year of the biennium, that is if it comes in so there is a $10-million surplus then the trigger would kick in. He agrees it would be a "reverse trigger"; we have done it before whereby if the money comes in we would spend it. This way, as he projects, if the money comes in we would be able to provide a five employee exemption from the business tax. If you work through that formula, the next legislative session would decide whether they wanted to continue the exemption or not for the next year, biennium or whatever. He feels if the money is there and it is $10-million over the Economic Forum by July 1, 1996, this trigger would go into effect. If the receipts were over and above for the next year, which would be 1996-97, he feels the legislators would be the ones who would make the call. Mrs. Lambert asked Mr. Carpenter if the thrust of his bill is with the proviso that "if there is a $10-million surplus in the second year of the biennium the exemption will trigger in for businesses for five or under employees, across the board; Mr. Carpenter responded in the affirmative. She pursued this line of questioning by asking if he would sunset that and let the next legislature decide whether to appeal the five and under part of the tax again, or would you have it ongoing? Mr. Carpenter replied he would prefer it be ongoing but the next legislature would have the budget figures and they could make that decision. It is his feeling if we do have this kind of surplus, it is time we give some relief back to the taxpayers. It should not, hopefully, upset any budgeting process. He feels the money committees have provided for large `rainy day' funds but if the money ($10-million) was not there this would not trigger in. Mr. Sandoval pointed out we have heard two concepts discussed today and asked Mr. Carpenter if he had any preference or comment on either of the two concepts regarding amendments to his bill. Mr. Carpenter responded he prefers his amendment as he feels it does give some relief back to the small business owners. He feels if that was in effect it would give the next legislative session something to consider. Mr. Manendo, who was not present for the testimony, asked if he could hear the two proposals. Mr. Zuend explained one proposal was introduced by Mr. Price who wanted to move the dates back in the existing bill by two years when the tax itself would be phased out. There would be no trigger mechanism on that. It would begin July 1997 and have a five-year phase out period beginning July 1, 1997 for the business license tax. Mr. Carpenter's proposal is that, should the Board of Examiners determine the projected General Fund revenue for fiscal 1995-1996 exceed the General fund revenues projected by the Economic Forum for the same fiscal year, and he assumes there would have to be some mechanism to adjust to any legislative changes that the legislature will enact in the next few weeks to the revenue base, by $10-million or more, then the first five employees of every firm throughout the state would be granted a permanent exemption from the business license tax. Mr. Manendo emphasized the small businesses are absolutely crying out for relief, they are hurting and he believes this is a responsible way to provide that relief and the reason it is responsible is we are not dipping into any funds that are current. If revenues come in and the next year or two we have a financially successful year, he cannot understand why we cannot send some relief down to those small businesses as soon as possible. He suggested we may want to consider limiting this to businesses with 100 employees or less, he would be curious as to what type of money that would be and then maybe we can exempt more. Mr. Sandoval wanted to congratulate Mr. Carpenter for proposing this bill and the proposed amendment regarding the Economic Forum. He believes it is good, responsible tax policy and made the following motion: MOTION BY MR. SANDOVAL, SECONDED BY MR. MANENDO TO AMEND AND DO PASS, USING THE AMENDMENT THAT IT WILL BE A `REVERSE TRIGGER' AND WILL COME INTO EFFECT IF THE REVENUE PROJECTIONS FROM THE ECONOMIC FORUM EXCEED THE PROJECTION BY $10-MILLION. THIS WILL BE A PERMANENT EXEMPTION. Prior to the vote Mr. Spitler explained he was speaking against the motion for a couple of reasons. He pointed out they had this discussion previously when they talked about what is going on with our tax policy in Nevada. He drew the committee's attention to the referendum he feels would have passed to bring on, basically, a gross tax on profits or net proceeds or whichever way they were going to go. The public liked that. Sitting on Ways and Means, as he does, he realizes we cannot build prisons fast enough and all you have to know is they cost about $32-million a piece. We do not have an extra bed between now and the end of this biennium. The same stressors are reflected on our school system. He emphasized he would love to repeal all of these taxes as they are not good taxes but we have never really had a stable tax base here. The responsibility for revenue has always been placed on gaming and if you create holes now, ultimately it falls back on gaming and then what happens is we impact our tourism. He feels it is premature to hop in here and say, suddenly that we are going to have another biennium like the biennium that we have now that gave us a surplus to put these stressors on prisons. Someone is going to end up with a higher tax somewhere. We are going to be establishing a very unstable business climate for small businesses where they will not know from year to year what their taxes are going to be. He will not be supporting this motion. After hearing the comments from Mr. Spitler, several committee members concurred with the importance of this proposed change and it was the consensus of those present we should wait until we have the vote of the entire committee. Additionally, as Mr. Price pointed out, this will probably be rereferred to Ways and Means because of the potential affect on the budget. Mr. Sandoval, introducer of the motion, postponed action on his motion with the concurrent of the second and no vote was taken. The hearing was closed and the scheduled hearing on A.B. 607 was opened. ASSEMBLY BILL NUMBER 607: Makes various changes concerning payment of property taxes. Chairman Stroth asked Mr. Zuend to go over this measure including an explanation of the proposed amendment (Exhibit C). He pointed out this bill was heard several days ago. It is sponsored by Speaker Hettrick and has two separate parts, one which would grant tax relief in the form of a proration of taxes on property where an improvement ceases to exist. The second part, as written, requires the county treasurer to notify property owners that a penalty is proposed or allows them to waive penalties for the late payment of taxes. Speaker Hettrick has proposed an amendment requiring the treasurer to notify the taxpayer a penalty is proposed but he does have recourse to the Department of Taxation. He called attention, specifically, to Section 2 of the amendment which simply requires the treasurer to notify the property owner he has been penalized and he has recourse for an abatement of the penalty from the Department of Taxation. Speaker Hettrick was present and informed the committee he is satisfied with the proposed amendment and was here today just in the event there were any questions. Mr. Sandoval interjected he felt an explanation is in order regarding his amendment to this bill. Basically, the history of what is behind this amendment is a project within his district, that is a planned unit development called Caughlin Ranch. At the time this ranch was developed, the developer was required to build a park, which he did, and also put approximately $1-million worth of improvement into that park. This is a public park open to everyone, located near an elementary school and no one is refused entrance. Recently, the homeowners' association, which is the owner of the park, was assessed a tax bill of $13,000. He was approached by some of his constituents regarding this issue, feeling this was unfair inasmuch as they have a public park they are required to maintain, yet they are also required to pay property tax as well. He met with several individuals including the assessors and tried to reach a solution; this amendment is the product of those discussions. Basically, what this amendment will do is provide an exemption for people who provide a park for public purpose. He emphasized he would not be proposing this amendment if the park were limited to the residents of Caughlin Ranch and he has discussed this with Speaker Hettrick. He considers this a friendly amendment to his bill. This issue is included in the same chapter. He volunteered to answer any questions. There being none, the following motion was made: MOTION BY MRS. LAMBERT TO AMEND AND DO PASS, ASSEMBLY BILL NUMBER 607, SECONDED BY MR. NEIGHBORS. Prior to the vote being taken, Ms. Brower asked if this was a widespread problem and was advised by Mr. Sandoval, to his knowledge it is not, but he suggested there are some assessors in the audience and we may want to address the question to them. Responding to the question was Mr. Kit Weaver, Carson City Assessor who stated, as this time, they know of only one situation like this and that is the Caughlin Ranch Park. Testifying in response to the question was Ms. Irene Porter, representing the Southern Nevada Home Builders, who advised the members more often than not, the counties or cities are putting in a requirement for the contractor or developer to include something whether it is a greenbelt area, retention pond, etc. The requirement that they put in additional amenities is beneficial to them in attempting to get their project approved. If they do not accept the dedication, it will always be an obligation of the person who has this project. If it is a detention pond it is not much value to the improvements. If it is a greenbelt, there is not much value in the improvement. But, if it is a park it could be hundreds of thousands of dollars and they have to appraise all improvement. Only in the cases of Caughlin Ranch where the park had to be built and dedication was not accepted, would this be an issue. Mrs. Brower pointed out she had learned of a situation similar to this having to do with the Summerlin area where they built a very large park and greenbelt area and she wondered whether they were in the same situation. Responding to that question was Mr. Mark Schofield, Clark County Assessor, who explained in Clark County there is, in fact, an issue dealing with the section of Summerlin in the Sun City area. However, it is a departure from this particular matter and a totally unrelated circumstance. Mr. Neighbors called attention to page 1 of this bill, line 11 whereby it stated, "the property has ceased to exist" wherein you have closed the rolls and all of a sudden someone has torn down a building, hotel or whatever. What kind of problem does that give them. He was advised by Mr. Schofield, if they have closed the roll, they have until July 1st to make a recommendation to the County Commission or if the roll is still open, there is a provision in statute and that would be a factual error because of its demolition or destruction. They would then remove the improvement portion of that property from the roll. After that time, there is no provision to address that issue because of the lien date being July 1. THE VOTE ON THE PREVIOUS MOTION TO AMEND AND DO PASS WAS UNANIMOUS. Mr. Price proposed making another amendment to this bill but was vigorously dissuaded by the remaining members who expressed a desire to see this bill go through with the idea of changing things if needed in the future or perhaps putting his proposed idea into another bill. It was pointed out there are other bills we could put the proposal into. The hearing was then opened for A.B. 627 with action as follows: ASSEMBLY BILL NUMBER 627: Revises formula for allocation to counties of proceeds of additional excise tax levied on motor vehicle fuel. A letter opposing A.B. 627 from the Elko County Commission was distributed (Exhibit D) and made part of the record. Chairman Stroth reminded the members this was the Clark County bill on which we heard a great deal of information about lanes, highways, etc. She asked if there was any further discussion or comments. Ms. Brower recalled, specifically, at the conclusion of our last hearing, there were a great number of questions remaining and additional information was needed regarding the impact on all the counties. The proponents of the bill had stated they would not be able to obtain that information this year. She stated she was ready to make a motion as follows: MS. BROWER MOVED TO INDEFINITELY POSTPONE ASSEMBLY BILL 627. MOTION SECONDED BY MRS. LAMBERT AND UNANI- MOUSLY CARRIED. Ms. Stroth opened the hearing on A. B. 668 with action as follows: ASSEMBLY BILL NUMBER 668: Proposes to amend Sales and Use Tax to continue exemption for gross receipts from sale of tangible personal property by certain organizations and prohibits collection of tax unless question is defeated by voters. SENATE BILL NUMBER 144: Proposes to exempt property sold by or to certain organizations from taxes on retail sales. She explained this is the counterpart to S.B. 144 related to charitable organizations and sales tax. There was some discussion after the last meeting regarding several amendments to S.B. 144 and Mr. Ted Zuend was requested to go over the amendments. Mr. Zuend, addressing S.B. 144, explained the amendments are within the first reprint of the bill on page 2, in two places of this page. The actual amendments to the statutes of Nevada will include the term "nonprofit" and will be included before, "religious, charitable or educational purposes". Also, in the ballot question, which is in section 4 of the bill, approximately line 36, the term "non profit" will be inserted before "religious, charitable or educational purposes". On page 3, lines 26, 27, strike the reference to 501 (C3) of the Internal Revenue Code. On page 4, at the end of line 5 we are adding a new sub-section which is on the educational exemption. It says, "the instruction of the public and dissemination of information on subjects beneficial to the community", so that educational groups that primarily perform that service and, of course, they are nonprofits and meet the criteria, would also be exempt. On page 5 at lines 9 and 10, in section 14, again, 501 (C3) would be struck from the bill. At line 36 on the same page the same extension of the educational exemption would be imposed for the Local School Support Tax which has to do with the instruction of the public in dissemination of information on subjects beneficial to the community. Ms. Stroth asked if these changes have satisfied all interested parties and prior to receiving a reply from Mr. Zuend, Ms. Lucille Lusk, representing the Nevada Concerned Citizens spoke up in behalf of her clients as well as speaking for Ms. Bobbie Gang, who represents Nevada Womens Lobby. She stated there was still a concern, when this was discussed previously, on behalf the Women's Lobby and Planned Parenthood about removing the 501(C3) provision. Ms. Gang has checked with her clients and they are satisfied at this point. As far as she is aware, all other interested parties are satisfied as well. Speaking next was Ms. Janice Pine, representing St. Mary's Health Network. She pointed out she concurs with the amendments but it is her hope that it would be possible to have it be made part of the legislative record that it is the committee's intent that not-for-profit medical facilities are considered to be charitable organizations within that definition. Mrs. Lambert, directing a question to Mr. Pitlock, asked about the interpretation of various parts of this measure and asked him if this would create any problem for him. Mr. Pitlock, Executive Director for the Department of Taxation, responded at the present time, the Department does not have any problem with the language in the bill. He believes the intent behind this legislation is pretty clear and provides a significant improvement in the level of guidance provided to the Department. He does not anticipate any difficulty. Once we got through the hurdle of removing the 501 (C3) language, the Department feels very comfortable with the rest of the language and the direction. There was no further testimony from those present with the following action being taken: MR. MANENDO INTRODUCED A MOTION TO AMEND AND DO PASS ON S.B. 144; SECONDED BY MS. BROWER. MOTION PASSES UNANIMOUSLY. Chairman Stroth closed the hearing on S.B. 144 and opened the work session on A.B. 668. She recalled on A.B. 668 there was language that would immediately cease collection of sales and use tax on charitable organizations and, as testified by our Department of Taxation, this is something that could not be done. MS. BROWER MOVED TO INDEFINITELY POSTPONE THIS BILL; SECONDED BY MRS. LAMBERT. Prior to the vote being taken, Mr. Spitler asked if all the critical issues from A.B. 668 are covered in S.B. 144 and was advised in the negative. He then asked for an explanation of those areas. Ms. Stroth pointed out, the way she understands it, we would cease collecting the sales tax and in S.B. 144 it requires that it go back as a ballot question. No further questions were posed. VOTE ON THE PREVIOUS MOTION WAS A MAJORITY VOTE WITH MR. SPITLER VOTING `NAY'. Next item on the agenda was SJR 17. SENATE JOINT RESOLUTION NUMBER 17: Proposes to amend Nevada constitution to allow legislature to exempt property from taxation if amount of tax to be collected would be less than cost to collect it. The work session was opened with no one wishing to testify. MR. SANDOVAL INTRODUCED A MOTION TO `DO PASS' SENATE JOINT RESOLUTION #17; MOTION SECONDED BY MRS. LAMBERT AND CARRIED UNANIMOUSLY. Agenda item SJR 18 was taken up with action as follows: SENATE JOINT RESOLUTION NUMBER 18: Proposes to amend Nevada constitution to authorize abatement of property tax for certain owners of single-family residences. Chairman Stroth asked Mr. Ted Zuend, Deputy Fiscal Analyst, to elaborate on the merits of this resolution for the committee, whereupon he explained this would be a constitutional amendment allowing the legislature to provide an abatement of a tax or exemption, whichever they chose or a combination of both. This would allow the exemption in terms of economic hardship of a particular single family residence. This would have to be approved by two successive sessions of the legislature and then a vote of the people. After that time the legislature could, if it wished, although it would not be forced to, provide some guidance on how the exemption or abatement would be provided. There were no questions nor testimony on the resolution, whereby: A MOTION FOR `DO PASS' ON SJR 18 WAS MADE BY MR. PRICE, SECONDED BY MR. MANENDO. Prior to voting on the motion, Mrs. Lambert stated she was speaking against that motion, inasmuch as when you are talking about providing an exemption for severe economic hardship you are probably talking about property taxes high enough for middle Nevadans to have economic hardship if not severe economic hardship and she cannot support anything that might allow that to happen. She understands our constitution has a $5.00 limit on the property tax rate but currently our assessed value is 35% and there is nothing to stop it from going to 100% of the taxable value. She noted for the record she would be voting against this. Mr. Price interjected the reason he made the motion and supports this concept is because he likes having situations where constitutionally and legally the legislature itself has this opportunity to make those kinds of decisions. This would, if it went through the whole process, allow some future legislature to make those kinds of considerations. He elaborated on his statements by pointing out in some states where the simple act of filing a homestead protection on your home will also give you a property tax of some degree. He is not suggesting that is good, bad or indifferent but his thought is he likes the legislature to have as broad a power as possible. Ms. Brower pointed out she agrees with Mrs. Lambert and concurs with her statements. VOTE ON THE MOTION RESULTED IN THE MOTION BEING DEFEATED BY A VOTE OF THREE AYES AND FOUR NAYS. MRS. LAMBERT THEN MOVED TO INDEFINITELY POSTPONE SJR 18; MOTION SECONDED BY MR. NEIGHBORS. VOTE WAS UNANIMOUS. ASSEMBLY CONCURRENT RESOLUTION NUMBER 17: Directs Department of Taxation to review and revise regulations governing collection of taxes on retail sales of food prepared for immediate consumption. Chairman Stroth reminded those present, this committee had previously heard a bill relative to vending machines where it was intended to tax all food the same no matter where it was dispensed. We had a small problem with the question of whether this was possible and it was the opinion of Ms. Brenda Erdoes, Legislative Bill Drafter, that we need to come back with a bill and be specific about the intent. She asked Mr. Zuend if he would explain the concerns of Ms. Erdoes. Mr. Zuend pointed out ACR 17 was a resolution, essentially, supporting the Department of Taxation's effort to review the exemption for the taxation of food intended for immediate consumption and they are pursuing that idea along those lines. One section of the bill, during the 1979 legislation, stated that vending machines would be taxed regardless of the situation. Because of what the Department of Taxation is attempting to do to create this so-called `level playing field', that section would have to be repealed. That was a bill signed by the Governor and still remains a part of the statutes. This is not directly a part of NRS but it is part of the Statutes of Nevada and is binding until this legislature repeals that section. Until you repeal that section, you cannot use a concurrent resolution. You have to use another bill. He elaborated further by explaining this committee can do two things: you can repeal your amendment to A.C.R. 17 and go ahead with the resolution, or you could simply repeal all your action on A.C.R. 17, and let that one go. Then, amend a bill that is available to reincorporate the provisions in A.C.R. 17 as well as the language repealing the 1979 section of the statute that instructed the Department of Taxation to treat vending machine food as taxable in all cases. He suggested we resurrect a bill that has been indefinitely postponed by the committee. That action must be approved by 2/3 vote of the committee. He specified, the committee could use any bill on any subject in order to make this work. It was eventually determined that A. B. 170 would be used, thereby the following action was taken: MR. PRICE MOVED TO RESCIND THE ACTION ON ASSEMBLY BILL NUMBER 170 WHEREBY THIS RESOLUTION WAS INDEFINITELY POSTPONED. SECONDED BY MR. SANDOVAL AND CARRIED UNANIMOUSLY. Mr. Zuend felt we could amend in the entire content of A.C.R. 17 into that bill, then repeal the section that was in the 1979 legislation, add a new section granting legislative intent that it is the intent of this legislature that like food be treated equally, whether for the exemption or whether it is taxable. He suggested we may need a legislative finding on this to partially include some introduction of why we are doing this. We would include a couple of "Whereas's" as to why the legislature has changed its mind about the issue. Speaking next was Mr. Pitlock, Executive Director of the Department of Taxation, who commented he was confused about the action that was being taken. What is preventing the Department from treating vending machine sales equally with other kind of sales is not in a particular section of the NAC but a statement of legislative intent that is included in the annotated version of the NRS so when you are talking about repealing a section, he is not certain what it is you are going to repeal unless it is that statement of legislative intent. Mr. Zuend agreed with Mr. Pitlock's statement and enlarged upon it by pointing out it is referred to in Chapter 372 of the NRS. What would be repealed would be the 1979 law which is a statute even though it is not codified in the NRS as a statute. It would be the plan to repeal that statute and substitute a new legislative intent to basically stipulate what the legislation is seeking for the non-taxation for a particular food item. Mrs. Lambert interjected, in the advisor's note under NRS 372.284 where it addresses food for human consumption, there is a lot of language stating the legislative intent and she proceeded to read the reference aloud. She assumes that is the section we are talking about and suggested we would want a bill referring to the last sentence in that section. We just want a bill that says, (in the statutes of Nevada, 1979 Chapter 286) take out the sentence: "exemption is not intended to include sales by or from catering services or vending machines". She asked if that is the amendment wanted. Mr. Pitlock, addressed the committee once again, explaining the real problem is the vending machines. Catering services tend much more to purchase food at a restaurant except they come to your home and prepare it. There is additional language in the statute Mrs. Lambert was reading about food for home preparation that is another phrase that is causing his Department some problems. He urged the committee, if they are going to prepare an amendment, to deal with that phrase as well as that is no longer applicable to the regulatory scheme they are looking at. It is focusing more on the phrase, "intended for immediate consumption". That is the key phrase the regulations are built on, not intended for home preparation. There was no further discussion nor comments to be offered, therefore, the hearing on this resolution was closed. MRS. LAMBERT MOVED THAT WE AMEND A.B. 170 TO ADOPT THE PROVISIONS PROPOSED BY MR. PITLOCK WITH CHAPTER 286, STATUTES OF NEVADA 1979. MS. BROWER SECONDED THE MOTION AND IT CARRIED UNANI- MOUSLY. Mr. Zuend suggested we consider a motion to rescind our previous action on A.C.R.17 wherein it was indefinitely postponed. MOTION TO RESCIND PREVIOUS ACTION ON A.C.R.17 WHEREIN IT WAS INDEFINITELY POSTPONED WAS IN- TRODUCED BY MRS. LAMBERT, SECONDED BY MS. BROWER AND UNANIMOUSLY CARRIED. A MOTION WAS THEN INTRODUCED BY MRS. LAMBERT TO INDEFINITELY POSTPONE ACTION ON A.C.R. 17; SECONDED BY MS. BROWER AND CARRIED UNANIMOUSLY. Prior to adjourning the meeting, Ms. Lucille Lusk wished to make a comment in regard to A.B. 668 (previously discussed) reminding the committee that bill mirrors to a great deal S.B. 144 and contained within it interim relief. She stated like all of the members, she has been somewhat uneasy with the idea of ceasing collection on something that had previously been passed by the voters, but there is one possibility they may want to consider. That is, relating to A.B. 668 and that is the concept of having the Department of Taxation hold those dollars in trust and if the ballot question passes, refunding them to the charities from whence they came. That is included in A.B. 668 on page 4, lines 12 through 20. Of course, A.B. 668 contemplated it being done right away. The concept she is asking the committee to consider, that would not be done until the ballot question passes and if it passes, it would be returned. Mrs. Stroth asked Mr. Pitlock for his comments whereby he stated his only comment at this point in time, would be that he would hope if the committee seriously intends to consider this proposal, they give the Department an opportunity to develop a fiscal note. He feels there is a fiscal impact with the Department having to go and track those exemptions and hold them separately then subsequently having to refund them. That is his only comment at this time. Ms. Lusk agreed with that and added perhaps one other possibility would be that an administrative fee could be withheld in order to cover the fiscal note. Of course, the Department would have to look at that. Mrs. Stroth thanked those who testified today and closed the meeting. RESPECTFULLY SUBMITTED: Nykki Kinsley, Committee Secretary Assembly Committee on Taxation June 10, 1995 Page