MINUTES OF THE SENATE COMMITTEE ON TAXATION Sixty-eighth Session March 30, 1995 The Senate Committee on Taxation was called to order by Chairman Sue Lowden, at 1:30 p.m., on Thursday, March 30, 1995, in Room 224 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Sue Lowden, Chairman Senator Kathy M. Augustine, Vice Chairman Senator Ann O'Connell Senator Dean A. Rhoads Senator Randolph J. Townsend Senator John B. (Jack) Regan Senator Ernest E. Adler STAFF MEMBERS PRESENT: Kathy Cole, Committee Secretary DeLynn Gillentine, Committee Secretary Kevin Welsh, Deputy Fiscal Analyst, Fiscal Analysis Division OTHERS PRESENT: Bryan Gresh, President, The Gresh Group Incorporated Roger Means, Director, School Planning & Government Relations, Washoe County School District Pat Coward, Lobbyist, Nevada Collectors Association Clayton Holstine, City Manager, City of Reno Samuel P. McMullen, Lobbyist, Northern Gaming Industry Association Carole Vilardo, Lobbyist, Nevada Taxpayers Association Marvin Leavitt, Lobbyist, City of Las Vegas Barbara Reed, Clerk/Treasurer, Douglas County Kit Weaver, Carson City Assessor, Assessors Association of Nevada Alvin P. Kramer, Treasurer, Carson City Ande Engleman, Executive Director, Nevada Press Association Senator Lowden introduced the following bill draft requests (BDRs). BILL DRAFT REQUEST R-613: Statutorily require two final floor votes in each house of legislature to pass any proposed tax increase. SENATOR REGAN MOVED FOR COMMITTEE INTRODUCTION OF BDR R-613. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR ADLER WAS ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST 32-600: Authorize commission on Economic Development to grant certain exemptions ` to new and expanding businesses. Senator Rhoads was asked to give further explanation of the BDR. Senator Rhoads said: It requires two votes to be taken on any tax increase, a minimum of 15 days and a maximum of 30 days [also]...it change[s] the rules of the Senate. There ...[will] be an amendment coming that would try to get it on the ballot next year along with the Gibbon's Petition and let the taxpayers then have two options. SENATOR REGAN MOVED FOR COMMITTEE INTRODUCTION OF BDR 32-600. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'CONNELL VOTED NO. SENATORS ADLER, AUGUSTINE, AND TOWNSEND WERE ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST S-1890: Authorize metropolitan police department to submit to voters question of whether additional property tax should be levied to hire additional police officers. SENATOR O'CONNELL MOVED FOR COMMITTEE INTRODUCTION OF BDR S-1890. SENATOR REGAN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR ADLER WAS ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST 32-357: Require certain counties to develop transportation plans and programs in compliance with federal law. Senator Lowden introduced a bill draft request from the Regional Transportation Commission (RTC). It requests to increase the amount of bus service out to the rurals, in particular the Mesquite and Boulder City areas. Senator O'Connell asked the chair if anyone was present that could answer some questions. The senator wanted to know how many new buses this is going to require [and] why there is no fiscal note attached. Indeed, she exclaimed, "I can hardly believe that there is no fiscal note on it, especially since we are still subsidizing bus lines." Bryan Gresh, President, The Gresh Group Incorporated, representing the Regional Transportation Commission (RTC), of Clark County stated: This is...simply an enabling legislation allowing for the exploration...of service to some of the outlying areas...including Boulder City and Mesquite. Folks who have been paying the quarter percent sales tax for transportation issues who at this point have not been able to receive any of the benefits. Senator O'Connell inquired, "Are we making any money from this [tax] money...on the bus line yet?" Mr. Gresh stated, "I am happy to say, that compared to national figures..." It was at this point Senator O'Connell declared, "I don't want to know about national figures! I just want to know, are we in Clark County making any money from it yet?" Mr. Gresh responded by saying, he would place a call to the executive director and get some figures for the committee regarding this matter. Further, Mr. Gresh declared: The bus service will not involve full-size buses. It will be an on demand, phone in advance, phone in reservation, that will allow folks to go to the doctors or wherever else they might need to go, again in the outlying areas. Senator O'Connell asked Mr. Gresh, "Then, this is not a public transportation? [Would] this be an EOB [Economic Opportunity Board of Clark County] type of transportation?" Mr. Gresh replied, "It is for those who are not covered under the elderly or the disabled. They [already] have para-transit capabilities that include areas like Boulder City...This is for the rest of us." Senator Lowden said, "Do we have a motion? We will continue to address this issue...on April 19, 1995, at 2:00 p.m., in Room 119." SENATOR REGAN MOVED FOR COMMITTEE INTRODUCTION OF BDR 32-357. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR O'CONNELL VOTED NO. SENATOR ADLER WAS ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST 32-1888: Expands authorized uses of proceeds from supplemental vehicle privilege tax. Senator Lowden said this bill draft came from Senator O'Donnell. Senator Regan explained what this bill resulted from by saying: This problem arose at the expansion of McCarran and...might have come out of that. There were some people who were isolated there. This looks like this might be a way to help them move with the McCarran expansion and/or any right of way or eminent domain situation when the persons are not receiving moving expenses. At this point, there was a discussion among the committee members regarding this bill draft request. Senator Regan continued to examine the bill draft by saying, "Section 2 must [be] approved [by the] registered voters..." SENATOR REGAN MOVED FOR COMMITTEE INTRODUCTION OF BDR 32-1888. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR ADLER WAS ABSENT FOR THE VOTE.) ***** Senator Lowden opened the hearing on Senate Bill (S.B.) 131. SENATE BILL 131: Authorizes retail sellers to collect fees from customers who issue checks with insufficient funds. (BDR 8-208) Pat Coward, Lobbyist, Nevada Collectors Association testified and presented Exhibit C. Mr. Coward testified by saying: Addressing the amendment...we have changed the section from 97 to 597 which is a section on miscellaneous. We have removed the word "retail" and just left it [this would be on line 3 of the original bill] and made it "seller" and we have changed the dollar amount from $20 to $35. The basis for the $35 figure is Exhibit D. In the research we have found that the rules of the United States Supreme Court, they...also have a $35 fee for that. ...We feel that figure [is] reasonable. It should take care of the issue for some time. Senator Lowden asked if anyone in the committee had any questions. She asked, "Is there anyone else here who wants to speak to this bill?" SENATOR LOWDEN MOVED TO AMEND AND DO PASS S.B. 131 AS AMENDED. SENATOR TOWNSEND SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR ADLER WAS ABSENT FOR THE VOTE.) ***** Senator Lowden closed the hearing on S.B. 131 and opened the hearing on S.B. 308. SENATE BILL 308: Provides exemption for tax levy of certain taxing districts in certain cities from statutory limit on total ad valorem tax levy. (BDR 32-732) Clayton Holstine, City Manager, City of Reno, along with Roger Means, Director, School Planning & Government Relations, Washoe County School District spoke with regard to S.B. 308. Mr. Holstine testified in favor of this senate bill by saying: This is a bill that would remove from the tax cap calculation both the police service district and the tax maintenance service district in downtown Reno. We are pursuing this because of the unique nature of these taxing districts. Unlike most tax efforts where a city or a county would put together a package and bring it back out to the voters or the affected property owners, this is a situation of a more "self tax" where the property owners would come to the city, sign a petition for a specific level of service, in this case both police and maintenance. The city council in Reno has already enacted the maintenance district and [it] has been in place for 2 years. We are in the process of going through and enacting the police district. The way the tax works...right now in Reno we have a tax rate of $3.26 which is fairly significantly lower than what the $3.64 rate [and it] gives various entities opportunities to pursue that rate. This would move us up to...a total of $3.58. This generates a small amount of money because we are talking about a fairly small base of 32 cents county wide which is what Roger [Means] is here to speak to on a school district basis. This would generate somewhere in the neighborhood of...$15 million on an annual basis. The fact that we have to apply this rate in such a small area really distorts the rate and therefore, it ends up taking out almost all of the tax capability. That is one issue and the other issue I spoke [about] to you first and that is, that the nature of this...is something where it is for the purpose or is brought to us by people who want to tax themselves for specific service. Two of the key issues [in] downtown Reno are the safety of people, safety of tourists, and the cleanliness of the area. That's what both of these tax rates were established to do. The Legislature did enact the ability for us to do this in 1989...so what we are asking is [that] this calculation not impact the other taxing districts, the school district, the county everybody else, because of the unique nature of the tax. Roger Means, Director, School Planning and Government Relations, Washoe County School District said: I want to state loudly that [the] Washoe County School District is a strong supporting partner in the redevelopment districts in the city of Reno and in the city of Sparks. It is our belief that when the redevelopment is completed and those districts go back on the tax rolls that they will be a tremendous benefit to [the] Washoe County School District. I want to be on the record stating that right up front. Our concern is pure and simple we have a growing school population...[and] we are proposing to go back to the taxpayers in 1996 for another bond issue. In all likelihood it will be in the neighborhood of $150 million to $200 million. Two hundred million dollars on a 20-year bond in our district would affect the tax rate to the tune of 17 cents, so our concern is just pure and simple mathematics. We want to make sure there is enough space under the cap for us to go back to the voters in 1996 for school bonds. Senator Townsend asked to respond to Mr. Means testimony by saying: First of all, since this affects a lot of our [constituents]. . .we do represent the Silver Legacy, which is probably the largest payers. We also represent the largest RSCVA [Reno-Sparks Convention & Visitors Authority], Harold's Club, and a number of others. Since we are going to tax them I guess it is ok. Senator Townsend suggested that there has been an ongoing debate as to who should "in fact, pay for certain things." The senator then gave an example, "I believe one of them is the [police] substation whether that is going to be the city of Reno's or the Reno-Sparks Convention & Visitors Authority (RSCVA) [responsibility]." Senator Townsend asked of Mr. Means or Mr. Holstine, "Has that been resolved?" Mr. Holstine replied, "We do have that worked out and that is not actually one of the issues that will be funded under this particular taxing instrument." Senator Townsend asked for clarity by saying, "OK. Now, the maintenance of that (police) substation will that be included in this?" Mr. Holstine responded, "No. That will be part of the both the city's budget and the RSCVA's budget relative to our lease agreement." Senator Townsend furthered the questioning, "That will be independent from this?" Mr. Holstine concurred. A discussion ensued between Senator Townsend and Mr. Holstine. Senator Townsend asked, "The additional dollars generated by this would be for the district's add-on and I believe I was at that city council meeting when they voted to add, was it 10 more officers?...and was that part of the district or was that just a general part of the general increase in law enforcement?" Mr. Holstine replied, "The 10 was the general increase in law enforcement taking advantage of the federal crime bills." He then informed the committee that there would be up to two squads, with seven officers in each squad. They would then be placed "directly... in the downtown area above and beyond what is already the level of service there." Senator Townsend and Mr. Holstine discussed in detail the particulars of enacting S.B. 308 at the city level. That is, they discussed work shifts, skyline space responsibility, and when the first squad could begin. Mr. Holstine asserted, "We have pursued the first squad of officers and they are anticipated to actually start I believe on June 12." Senator Townsend asked Mr. Means: [Do] you feel comfortable with leaving enough space between our current tax level the one we included you with this and our cap, so that if you do want to go out in 1996 you can still maintain enough dollars under this to meet what the school district's goal would be for that coming 5 year planning time? In response to the senator's question, Mr. Means said, "Senator, If I understood your question if this tax levy for the downtown policing district/maintenance district remains under the tax cap, then, there would not be sufficient room under the tax cap for us to generate enough tax dollars for the school district." Senator O'Connell then asked: Mr. Holstine, under Nevada Revised Statutes (NRS) 268.795 if there is not an ability for somebody who does not want or who is in disagreement with the levy, and as I read this, it can be levied on an annual basis...to protest...there is no due process, is there? In other words...there is no ability for them to challenge it [the levied tax]. Mr. Holstine explained, "There are a couple of different mechanisms, one is the Citizen's Committee...which will be an oversight to both to the operations as well as the level of service taxing issues." Senator O'Connell asked, "[If the committee]...could be made up of the people pushing it [for the bill]?" Mr. Holstine responded, "In terms of...? It is going to be made up of people who are security people within the major properties. People who have knowledge of security issues, policing issues." Senator O'Connell asked if that is written anywhere. Mr. Holstine said, "That it is in the agreement with them." Mr. Holstine offered to supply a copy of the agreement to the committee. Senator O'Connell reiterated by stating, "What I am concerned about is the due process, once the tax is levied, it is levied." Mr. Holstine said: There is...the [citizen's] committee. The second area as with any tax rate that is established, it is established on an annual basis. In our budget [there] is a public hearing that goes before the city council on the third Tuesday in May of each year and would be approved by the council [and then, it is] forwarded to the state by June first. There is that availability for someone to come in and to protest the level of service... We want to have...[an]...ongoing due process with the people who are paying this tax... Senator O'Connell then directed her question back to Senator Townsend by asking, "Do we have any indication of...[how many] people want this?...Is it a 100 percent effort to get this tax on?..." Senator Townsend responded by saying: "I tried to follow the deliberations in downtown Las Vegas with regard to Fremont Street and juxtapose those against our efforts downtown [in order] to come to some resolution on this. The last thing I heard is that there is innominate in trying to accomplish this for purposes of preempting some misunderstanding about who should be responsible for additional maintenance and law enforcement, and that becomes a serious problem. If you say, we are going to spread it across the general population then all of a sudden there is an argument of, `Wait a minute! Wait a minute! Wait a minute!' Downtown in our policy...downtown creates all the problems, therefore, they ought to pay for them. Then, you get into the issue the neighborhood versus the commercial and gaming center in a complete argument with each other. So, in an effort to bypass that kind of conflict...our downtown property owners said, `With the changing faces of downtown...we will work in unison and come up with this kind of tax plan.' We think it solves an awful lot of the problems. I can't say that every single property owner jumped up with a banner and waved the flag, no, because a lot of the little guys perhaps didn't, but it was a large coalition of people who put [this] together that's why...[it is here, before us]. Senator O'Connell reemphasized her concerns by saying: I guess my question is that you just want to make sure that they, [the little business person] can afford it. It is going to be hoisted on them and in our area it is the larger hotels and the larger companies downtown that really want and pushed it and the smaller guys for the most part had been pushed out. Since, there is no due process in here...[and]...before I support it [I] want to make sure that is not going to happen them again. Mr. Holstine commented with the following statement: I think Senator Townsend's description of this is probably pretty accurate. I mean to say...it has been supported by a majority of the property owners. We wouldn't have the petition in our hands if it hadn't been and I think the key issue there is those properties are going to pay the lion share of this district. As far...[as the]...due process [issue], again the committee process as well as the council adoptee ordinance in a public hearing format every year...will be part of the redress anybody has with regard to the district and the tax cut. Senator Lowden asked Mr. Holstine some questions: Mr. Holstine, do you think you could you give this committee the petition that you are talking about? [In this way,]...we [can] have a comfort level that there are people out there who really want this. [Also,]...could we have...an outline of the redevelopment area...that [can] be [put] on the record? We are not going to act on this today, because we have too many questions that need to be answered. Senator Rhoads asked, "...Mr. Means could you give us the size of the bond that you are anticipating or approximately in the next few years as to what it would do to the tax rate?" Mr. Means responded in the affirmative. Senator Townsend requested that Mr. Holstine, give the committee a "...detailed map of the district and the portion outside the district. ...In order to help us come to an understanding...of the implications of this..." Mr. Holstine furthered his testimony by saying: One point I don't think I made clear in the initial comments is this... The district we are talking about for police and for maintenance is smaller then the whole redevelopment district itself. There has been a concerted effort to try to, from the police case, to form a district where the real problem is so that we aren't going out and taxing people in the peripheral of the problem. I will bring you both the redevelopment maps and the district maps...[as you requested]. Mr. Samuel McMullen, Lobbyist, Northern Gaming Industry Association said: I represent a local consortium of casino's in the northern part of the state, Reno, Washoe County. We informally call it Northern Gaming Industry Association affiliated with and certainly [in] support [of] the Nevada Resort Association. On this issue, it basically represents the group that at least in great part, are the taxpayers paying the funds [for the] police protection and maintenance protection districts. In fact, it was our legislation originally, our idea, and we would of course through the development authority of Reno and the other businesses downtown and in the redevelopment area, supported it, triggered it, and have agreed to voluntarily to pay it. I want to make it clear on the record that there is no objection from those people other then maybe the incidental tax burden, but I am not aware of any general opposition. Fundamentally, as far as I know everyone is in favor of this. It basically frees up authority for potential taxes, if they are ever necessary. We never meant to compromise that. We wanted to create an experience, Senator O'Connell and some of the rest of you know, that we could test this out, see how it works and then if it did work and in fact was implemented correctly, then we could go from there. There was an earlier discussion that it should be taken out from under the cap...since it is not really truly a property tax. In fact, it may need to be outside the caps. When we first did this and basically because it was experimental [we] wanted to keep some control, some sort of tag on it. That was not done. Now it is up, [and one has been]...operating for many years and we are finalizing the second one. The point I think is that those people who are paying it, voluntarily paying [for] it, understood it was supposed to be something extra, [and] never meant to compromise the taxing and bonding authority of the cities or of any other municipality. Clearly, [they] would like to have it taken out from under the $3.64 cap." Senator Lowden told the committee that they would be receiving materials from Mr. Holstine at a later date. This completed the testimony in favor of S.B. 308. The senator opened the meeting for those who oppose S.B. 308. Carole Vilardo, Lobbyist, Nevada Taxpayers Association, stated she was speaking in opposition to Senate Bill 308. Ms. Vilardo said: I appreciate what the downtown redevelopment area is trying to do relevant to their police and their maintenance, however this bill is not just for Reno's downtown redevelopment area. This bill is for every redevelopment area we have in this state, which I believe right now there is seven of them. In addition to that, you have no cap that you have put on it and by going outside with the rate that might be levied for maintenance or police you in theory are allowing a rate in a redevelopment area for those two reasons that is levied to go to $5 the constitutional rate. I submit to you that the committee introduced...last Friday or Monday of this week a bill from the interim committee on taxation and revenue to increase the cap to $4. The reason that bill, I speak as a member of that committee, was accepted by the committee, was because there are needs, where there needs to be more flexibility under the cap. Because you raised it to $4 you at least [you] put some control on it....[I]...understand you have not automatically increased taxes to $4 because you have a secondary cap of 106 percent, but on this one I think you've got something that is so open ended that within a couple of years we could wind up in some of the redevelopment or urban development areas with a $5 tax rate. So, I would urge you to very seriously think about the mechanism that you are looking at. Is it only one area that has testified for the use of this?...Could you not do an assessment that might be the same, but not put it out...? There are other ways to accomplish this. There is the bill before you... Senator Lowden asked Ms. Vilardo another question stating, "Could you compare this to the Fremont Experience? How [did]...we do that 2 years ago as opposed to what we are being asked to do now?" Ms. Vilardo responded with an affirmative, however, she relayed the question and several other comments in regard to the Las Vegas project, known as the Fremont Street Experience onto another witness, Mr. Marvin Leavitt. Marvin Leavitt, Lobbyist, City of Las Vegas came forward and testified stating: The Fremont Street Experience was funded by a number of sources, revenues, one in particular was involved in the legislation last session, was one as it relates to the room tax. The room tax was increased to permit the issues of bonds that would be repaid from that. From that tax, there is no property tax other then the normal property tax that comes to a redevelopment agency, which is...the overlapping rate multiplied by the amount of the increment. That [tax] comes to the redevelopment agency that was used in the Fremont Street Experience and helped with their particular overrides or anything else that has been used in that project. Senator Adler then asked the witness, "In that instance you are financing the infrastructure and here you are financing the services, or paying for services. I am trying to figure how you would finance police services through [a] room tax." In response to Senator Adler's question and concerns, Mr. Leavitt said, "The Fremont Street Experience has both elements in it. Where you have construction of the basic facility and...the operation of the project after its construction period is over. So, there is both elements in there. It's a fairly expensive project and continued to operate after it's already complete." Senator Adler next wanted to know if there was a maintenance component in there and Mr. Leavitt concurred that there was. Further, the senator wanted to know, "At what percentage of the Fremont Experiences is maintenance as opposed to services?" Mr. Leavitt answered by saying: It is almost impossible to give you that information, as it changes over time. Where you have, of course, in its initial basis it's not operating at all, so the money from room taxes and all other sources are being used for construction. We will eventually turn that around, where...most of it down the road, will be used for maintenance purposes, so, it is back and forth. Of course, when the bonds are completely paid off then we won't have the tax at all...I can give you the percent, but it changes over time, so it wouldn't be a very meaningful number. Senator Lowden furthered the discussion by asking Mr. Leavitt, "How did Las Vegas handle the businesses that don't have rooms? I remember that there were a number of businesses along that area that...are not resorts... How is that handled?" Mr. Leavitt replied by stating: The properties who don't have rooms, do not get taxed...as part of this project. Those to the right on Fremont Street have room tax of 2 percent and those who get farther away get down to 1 percent or those who...are receiving less value from the project [pay less]...at least...that [is] the idea. Those properties that [pay] other than the property tax, that pay goes into the redevelopment agency itself, it is spending part of it [toward the services]...but they would be paying it anyway. [Accordingly,]...they are not involved directly. Senator Lowden declared, "So, if you don't have any rooms, it's a free ride." Mr. McMullen asked to respond to the other witnesses' comments. This is in relation to Ms. Vilardo's testimony...I want to give you a couple pieces of history on this. First, we chose a special assessment type of mechanism because at that time in Reno's history it was sort of like `let us get up and do something.' There had been so much in terms of taxpayers' protests that we went around, we got the whole city to agree on going forward with this. We had some other things ...[and] we basically took a vehicle that was in place and [one that] everybody understood. That is why it ended up being a property-tax type vehicle...property-tax type collection mechanism, property-taxed based structure...for setting the cost. Consequently, it rolled into this feature and now we are faced with the issue. If there had been a way to, [a] practical [way], as well as politically correct, [have] some other funding mechanism, maybe we should have done that. Maybe, that's something we can look at this time...I guess it is a tax or a fee, but whether or not it is of the same dignity of a mandatorily imposed or voter override imposed property tax it's certainly not of that magnitude at all. There is no way this fee can be charged...on your own statutes without the taxpayers themselves getting together and petitioning for this to be levied. The city can't even initiate this not by themselves. No municipality can. So, consequently, it isn't of the same sort of animal that you would normally think of in terms of normal concepts of capping or the restrictions that generally you think of in terms of revenues. It's clearly to provide additional revenue outside the normal mechanisms and do things that take pressures off of the other city resources. It is voluntarily imposed. The upshot of that frankly is, that [it] is not done unless there is some sort of agreement between the city and the taxpayers of how the money will be spent...what staffing... That is basically more true about the maintenance district and less true about police district, but, true about both. It is not like another tax... Senator O'Connell reiterated her concerns regarding this bill, S.B. 308 in which it appears to be "open ended and it can be increased on biannual basis and the fact that there is no redress [or due process] for the people." Mr. McMullen acknowledged he could see a need to at least consider a "reasonable cap." He said, "[That is,] maybe a specific cap for this particular type of vehicle...or a percentage cap basically...something that makes sense...I don't think anyone would have any problem with that." Senator O'Connell then asked Mr. McMullen, "Do you have any problem with the ability to put a percentile in there or something as far as people who are not happy [with the tax]...?" Mr. McMullen view is that the Citizen's Committee will provide an adequate recourse for the taxpayers involved in the redevelopment service districts. Senator O'Connell drew attention to the fact that even though it can be an open hearing, "...deaf ears can be turned to an open hearing. That means nothing." Senator O'Connell and Mr. McMullen continued to their discussion in search of some answers to the issues of due process and just what districts would be affected by this bill. Senator Lowden and other committee members joined this discussion, as did Ms. Vilardo who had testified earlier. It was determined by the committee and the witnesses that there are seven redevelopment districts and they are scattered throughout the state. In this discussion Ms. Vilardo wanted to correct something she had [spoken incorrectly] in her earlier testimony. Ms. Vilardo asked Mr. Kevin Welsh, Deputy Fiscal Analyst, Fiscal Analysis Division, to clarify, "Is NRS 268.780 and NRS 268.785 strictly the Reno redevelopment police protection area?" Mr. Welsh affirmed that they are. Ms. Vilardo continued to address the committee, "I said this would apply to everybody [all seven redevelopment districts] and I would like to correct that...it is [only] Washoe County... There are some qualifications on this...It might not [apply] to the others, but, I did want to maintain my objections even though it is not totally open ended." There was a general discussion among the witnesses, Mr. McMullen and Ms. Vilardo, the committee members, and Mr. Welsh. It was agreed that the committee wanted to do something, but how to do it and with what vehicle they should do this means that they need to have a "meeting of the minds." Accordingly, some points were made by the various individuals present in flushing out how the redevelopment agency works along with the taxpayers in the affected districts and subdistricts. Further, there were some questions about the Legislature getting involved with a particular city's redevelopment district. For instance, Senator Adler questioned, "I don't know how much we [the Legislature] should be getting involved in the business of the City of Reno. If the business people want to do this...[then, they should take care of it]." Senator O'Connell said, "This has nothing to do with the NRS [268.780- 268.795]...it does not apply strictly to Reno as far as we can tell here." However, it was agreed that this section does indeed apply to Reno's Redevelopment District. Senator Lowden closed the hearing on S.B. 308 and opened the hearing on S.B. 309. SENATE BILL 309: Revises provisions governing delinquent taxes. (BDR 32-660) Barbarba Reed, Clerk/Treasurer, Douglas County said, "I am here in support of S.B. 309. This bill was discussed by many of the county treasurers at the annual conference of County Fiscal Officers Association (CFOA) last May. This bill is one of the CFOA bill draft requests. We are all in support of this bill however, we would like to make one suggestion or modification as duly noted on Exhibit E. In the discussion that ensued Senator O'Connell explored the feasibility of amending her bill or other bills onto this senate bill. Senator Lowden asked Mr. Welsh to please look into this matter to see if this could be accomplished. Mr. Kit Weaver, Carson City Assessor, Assessors Association of Nevada, was asked to testify by Senator O'Connell. Mr. Weaver said, "We have been in support of something like this for many years." He then showed a newspaper from Carson City, with published names and said: This is the deadbeat list. These are the people who aren't paying their taxes. If they don't want to pay their taxes that's fine, but, if they do want to pay their taxes...if they pay every bill right on time...I think it is very unfair for them to get published 4 consecutive weeks when it's out of their control. [For example,] perhaps their home was sold from one bank to another. Perhaps, they just did a refinance. In the case of the assessors we're the ones responsible for the addresses and we work very hard to make sure that the tax bill goes to the address of the owner, but sometimes there's a mistake or a problem...and in those cases sometimes they make this list. The other is in some cases there's a change in the size of the parcel either a road dedication or an abandonment, we have to assign a new parcel number. So, sometimes there is a mix up that way. All of these are outside the control of the taxpayer... What this [bill] would do is give them one more warning if they were delinquent and most of them would pay their taxes. Senator Regan inquired of Mr. Weaver, " If we passed this bill would you have a first class mailing, if the addressee is not there it would be returned to you? You would have notification of someone [if they no longer lived there]..." Senator Regan surmised that the taxpayers could save even more money because the returned notices would help the assessor's update their records and locate the owners. Mr. Weaver concurred that the savings could be substantial for the taxpayers as they are charged for each mailing and publication of their names in the newspaper, he then, sited in S.B. 309 ..."on page 3, line 22, there's also that reference of $1 and we agree as to whatever the cost of the mailing...it doesn't seem to change from year to year. The correct amount should be charged to the taxpayer, not $1." As the discussion continued Senator Augustine wanted to know why it would cost $1 or more for a mailing. Mr. Weaver explained, the first class notice would not be a dollar, however, if the assessor's office had to send a certified letter with the notice enclosed, then, that could run between $3 and $4 dollars. Further, he said, "Right now the treasurer is charging them for whatever their costs are. But, this bill would say they can only charge $1 for the certified letter [as well as the initial first class notice]." Senator Augustine asked Mr. Weaver to refer to S.B. 309 page 2, line 4, "Was this the area that you were talking about `the certified copy'?...That's just for the second copy of the notice..." Mr. Weaver affirmed this to be true. As he noted it might only be 50 cents for the first letter that would be sent out. Mr. Alvin P. Kramer, Treasurer, Carson City, testified saying: With the amendment that is proposed I am in favor of this bill...it would allow us to do a service to the taxpayers... [This bill if enacted]...would give us time for those results to go out and allow people to come back in and pay their taxes without their name being in the paper... We are talking about the final quarter taxes being paid...it being paid a month earlier... This [bill] would be a reasonable way of notifying the [taxpayers]...directly. Ande Engleman, Executive Director, Nevada Press Association, spoke against S.B. 308 by stating: Evidently, from what Mr. Kramer said, `Blackmail works!' Essentially, that is what you are being asked to do is to legalize blackmail. They can in fact send out a letter to people who have not paid their taxes and say, `if you pay it now we won't put your name in the paper. But, if you don't pay it, then, we will put your name in the paper.' The reason why the publication is being made in the newspaper is because the courts have long held that that is a legal due process notification of citizens. That's why you have all those legal notices from the courts...[such as lawsuits or divorces] they are placed in the newspapers both by law and as a rule of the Nevada Supreme Court, because that is the legal way of due notice...[Another plus to putting the taxpayers name in the newspaper became apparent]...there was so much embarrassment that people promptly paid taxes... I cannot endorse legalized blackmail. I cannot endorse the use of what is a legal notice in the newspapers in that way. Senator O'Connell asked that the committee hold the bill and not vote on it until she found out about her amendment. Senator Lowden agreed to hold the bill to see if Senator O'Connell's amendment would work as part of S.B. 309. After the last witness testified, Senator O'Connell asked to correct the record, following a discussion with Mr. Welsh. Senator O'Connell said, "I just read the references that we were talking about on S.B. 308 that had to do with Washoe County...the NRS references are NRS 268.780 through NRS 268.795, and the references in NRS 268.781, so it is narrowed, strictly to just Washoe County." Senator Lowden closed the hearing on S.B. 309 and adjourned the meeting at 3:00 p.m. RESPECTFULLY SUBMITTED: ____________________________ Kathy Cole, Committee Secretary APPROVED BY: Senator Sue Lowden, Chairman DATE: Senate Committee on Taxation March 30, 1995 Page