MINUTES OF THE SENATE COMMITTEE ON TAXATION Sixty-eighth Session June 10, 1995 The Senate Committee on Taxation was called to order by Chairman Sue Lowden, at 9:00 a.m., on Saturday, June 10, 1995, in Room 227 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: Kevin Welsh, Deputy Fiscal Analyst, Fiscal Analysis Division Kathy Cole, Committee Secretary OTHERS PRESENT: Sam McMullen, Lobbyist, Northern Gaming Industry Association Tom Herndon, Council Member, Ward 1, Reno Barbara McKenzie, Lobbyist, City of Reno Steve E. Tackes, Chairman, Carson City Airport John Adkins, Deputy of Cash Management, Office of the State Treasurer Alvin K. Kramer, Treasurer, Carson City Michelle Hammon, Concerned Citizen Marvin Leavitt, Lobbyist, Las Vegas Janice Wright, Deputy Executive Director, Department of Taxation Robert Hadfield, Lobbyist, Nevada Association of Counties Michael Pitlock, Director, Department of Taxation Chairman Lowden opened the hearing on Senate Bill (S.B.) 546. Senator Rhoads explained to the committee that this was the third version and then proceeded to elaborate on the proposed changes. SENATE BILL 546: Imposes additional requirements for enactment of legislation that imposes or increases public revenue. (BDR 17-1958) SENATOR O'CONNELL MOVED TO DO PASS S.B. 546. SENATOR AUGUSTINE SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR ADLER WAS ABSENT FOR THE VOTE.) ***** Chairman Lowden opened the hearing on Senate Bill (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) Sam McMullen, Lobbyist, Northern Gaming Industry Association, explained the proposed amendments to this bill (Exhibit C). He called attention to the past problems with the bill that have now been addressed with the present amendments. Senator O'Connell asked to make some comments and ask questions with regard to this bill. She was primarily concerned with Mr. McMullen's "fair formula" that had been worked out through a "special benefit assessment" package in the Reno Redevelopment District. Further she was concerned about how the maintenance had been paid in the past and how was it to be paid through the passage of this bill. Mr. McMullen answered these questions while referring to his proposed amendments (Exhibit C). Tom Herndon, Council Member, Ward 1, Reno, informed the committee that he supports the redevelopment district and emphasized his belief in this bill that it will make downtown Reno cleaner and safer. Finally, Mr. Herndon said, "I have my reputation on the line here...[that it will make it cleaner and safer for all]." Barbara McKenzie, Lobbyist, City of Reno, asked to comment on questions that the committee has expressed concerning the notification of a public hearing on the redevelopment district's proposal in raising taxes to pay for maintenance and police protection in the downtown area of Reno. The discussion continued between Senator Augustine and Ms. McKenzie. A general discussion ensued as the amendments were defined and elaborated on by the committee members and the witnesses, Mr. McMullen, Mr. Herndon, and Ms. McKenzie. Senator O'Connell read directly from the bill and the amendment that it does say, "...you shall levy the assessment. I just want to point that out, that it doesn't matter if they protest. You are still going to levy the assessment. I want this included for the record." Mr. McMullen said he understood her concern, however, the district has been there in place and this will help it to continue. Mr. Herndon reiterated one more time, "We will have to decide on the level of service and how much that is going to cost. They will have input on that and then we will have to make the decision just as with your position, the buck stops with you; we will have to make that decision about the level of service to be provided." SENATOR AUGUSTINE MOVED TO AMEND AND DO PASS S.B. 308. SENATOR TOWNSEND SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND ADLER WERE ABSENT FOR THE VOTE.) ***** Chairman Lowden opened the hearing on Senate Bill (S.B.) 518. SENATE BILL 518: Makes various changes concerning Airport Authority of Carson City. (BDR S-1889) Steve E. Tackes, Chairman, Carson City Airport, explained how the bill would be charged to the individual who leases land at the airport; and the second section of the bill makes it so they do not have to wait 4 years to reappoint an individual, who is a city official, to the airport authority. SENATOR O'CONNELL MOVED TO DO PASS S.B. 518. SENATOR AUGUSTINE SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND ADLER WERE ABSENT FOR THE VOTE.) ***** Chairman Lowden opened the hearing on Senate Bill (S.B.) 315. SENATE BILL 315: Provides for establishment of allodial title to residential property. (BDR 32-1751) John Adkins, Deputy of Cash Management, Office of the State Treasurer, explained to the committee that he was present to help represent Senator Rawson who was unable to attend the meeting. Mr. Adkins expressed concern that the two proposed amendments had not been passed by the committee. Senator Lowden emphasized that they had not taken action on the amendments as the committee needed clarification from the title people and Senator Rawson requested more time for dialogue. Mr. Adkins said, "We felt that we really did not understand this bill...This is major tax policy decision, because it creates a haven for the senior citizens... The senior citizen will be able to set aside monies to pay for his house taxes and/or debts of any other nature so that he can have peace of mind..." Mr. Adkins continued his testimony voicing his concerns about the costs and exemptions, along with the title people and their possible problems if this bill became law. Alvin K. Kramer, Treasurer, Carson City, said, "Our only concern, is that the different citizens who pay property tax be treated equally and that the rates, either the assessed rates or the tax rates, if they were frozen at any point in time, would not be paying their fair share..." Senator Regan declared that "...this bill would confuse 99.9 percent of the title people... and I would recommend we IP [Indefinitely Postpone] this bill..." Chairman Lowden said they would not do that until the title people meet with Senator Rawson and see if the differences could not be worked out. She then closed the hearing on S.B. 315. Chairman Lowden opened the hearing on Bill Draft Request (BDR) 32-812. BILL DRAFT REQUEST 32-812: Provides exceptions to statutory limit on taxes ad valorem. Michelle Hammon, Concerned Citizen, asked the committee to not do anything with the bill as it had been taken care of in other legislation earlier in the session. Chairman Lowden closed the hearing on BDR 32-812 and opened the hearing on Senate Bill (S.B.) 254. SENATE BILL 254: Exempts child care establishments from business tax. (BDR 32-1581) Senator O'Connell summarized her findings in investigating what businesses would be affected by this bill. A general discussion ensued. Chairman Lowden closed the hearing on S.B. 254 and opened the hearing on Senate Bill (S.B.) 487. SENATE BILL 487: Provides exception to statutory limit on total rate of taxes ad valorem for rate required to be levied for support of county school district. (BDR 32-606) SENATOR TOWNSEND MOVED TO INDEFINITELY POSTPONE S.B. 487. SENATOR O'CONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RHOADS AND ADLER WERE ABSENT FOR THE VOTE.) ***** Chairman Lowden opened the hearing on Senate Bill (S.B.) 320. SENATE BILL 320: Increases statutory limit on total rate of taxes ad valorem. (BDR 32-607) Marvin Leavitt, Lobbyist, Las Vegas, commented that we had asked the Department of Taxation for some more information on the changes in property value and what the preceding year's tax rates were, in order to come up with some criteria base. Kevin Welsh, Deputy Fiscal Analyst, Fiscal Analysis Division, handed out the bill explanation, as Mr. Leavitt had requested and then continued his testimony. He referred to the effect this bill would have on some counties. Janice Wright, Deputy Executive Director, Department of Taxation, explained their formula to help the counties through adjustments in their taxes. Mr. Leavitt joined the discussion which revolved around the safeguards within the bill along with and misconceptions about any proposed amendments. Robert Hadfield, Lobbyist, Nevada Association of Counties, examined the problems counties are having, those who have no growth at all and yet their services are in even greater need for their citizens. Chairman Lowden recommended they close the hearing on S.B. 320 to allow the language to be worked on by Mr. Leavitt, Ms. Wright, and others in the public. Senator Lowden opened the hearing on Senate Bill (S.B.) 485. SENATE BILL 485: Provides credit for bad debts against taxes on retail sales. (BDR 32-610) SENATOR AUGUSTINE MOVED TO DO PASS S.B. 485 AND RE-REFER TO THE SENATE COMMITTEE ON FINANCE. Discussion ensued among the committee members. Michael Pitlock, Executive Director, Department of Taxation, said, "I believe there is some confusion...on how the fiscal note was calculated... Based on the information I have seen so far, the revised fiscal note will come out...to $3-$4 million..." He then referred to the proposed amendments recommended by the retail association. He stated with these amendments the department could support this bill. SENATOR AUGUSTINE WITHDREW THE MOTION. Senator Regan continued to comment on this bill. SENATOR REGAN MOVED TO AMEND AND DO PASS S.B. 485. SENATOR TOWNSEND SECONDED THE MOTION. Chairman Lowden said, "We have a motion and a second, but we have not seen the amendment, so we are going to hold this bill. It has been passed." Senator O'Connell stated that, "For the record, I have not spoken on this bill nor will I be voting on it." THE MOTION CARRIED. (SENATOR O'CONNELL ABSTAINED FROM THE VOTE. SENATORS RHOADS AND ADLER WERE ABSENT FOR THE VOTE.) ***** Chairman Lowden adjourned the meeting at 10:15 a.m. RESPECTFULLY SUBMITTED: Kathy Cole, Committee Secretary APPROVED BY: Senator Sue Lowden, Chairman DATE: Senate Committee on Taxation June 10, 1995 Page