MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-Second Session
March 3, 2003
The Committee on Government Affairswas called to order at 9:12 a.m., on Monday, March 3, 2003. Chairman Mark Manendo presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Mark Manendo, Chairman
Mr. Wendell P. Williams, Vice Chairman
Mr. Kelvin Atkinson
Mr. Chad Christensen
Mr. Pete Goicoechea
Mr. Tom Grady
Mr. Joe Hardy
Mr. Ron Knecht
Mrs. Ellen Koivisto
Mr. Bob McCleary
Ms. Peggy Pierce
Ms. Valerie Weber
COMMITTEE MEMBERS ABSENT:
Mr. Tom Collins (excused)
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
JoAnn Aldrich, Committee Secretary
OTHERS PRESENT:
Patrick T.C. Smith, Legislative Advocate, City of Las Vegas, Nevada
Mark R. Vincent, CPA, Department of Finance and Business Services, City of Las Vegas, Nevada
Dave Semenza, Manager, Neighborhood Response Division, City of Las Vegas, Nevada
Lucille Lusk, Cochairman, Nevada Concerned Citizens, Las Vegas, Nevada
Robert S. Hadfield, Executive Director, Nevada Association of Counties, Carson City, Nevada
Mary C. Walker, representing Carson City, Douglas County, and Lyon County, and the Committee on Local Government Finance, Carson City, Nevada
Gordon Hella, Supervisory, Local Government Finance, Department of Taxation, Carson City, Nevada
Assembly Bill 135: Revises provisions governing authority of governing body of city to abate certain nuisances and dangerous and noxious conditions. (BDR 21-460)
Chairman Manendo opened the hearing on A.B. 135, and called Patrick Smith, representing the City of Las Vegas, to the witness table. Mr. Smith introduced Mark Vincent, CPA, Director of the Department of Finance and Business Services, City of Las Vegas, and David Semenza, Manager of the Neighborhood Response Division in Las Vegas.
Mr. Vincent stated that A.B. 135 was essentially a bill that would synchronize language in Chapter 244 with Chapter 268 in the Nevada Revised Statutes (NRS). The reason for this is that after ten years of placing abatement receivables on the tax role, the Clark County District Attorney advised the County Treasurer that the language differences between those two chapters might be interpreted as to not support the tax role collections. As a result, that practice was discontinued by the County Treasurer in June 2000. A.B. 135 would adopt the same language for the City of Las Vegas as was found currently in Chapter 244 for counties, so that the City of Las Vegas would have the same privilege as the County.
Mr. Vincent said he spoke with Katherine A. Hartig, Assistant County Treasurer, Clark County, and that the County Treasurer’s office supported this bill. Mr. Vincent said he would be glad to answer questions about the bill, and Mr. Semenza would answer questions about the abatement process.
Mr. Vincent added that since they had discontinued collecting abatements on the tax roles, the collection rate had dropped over 70 percent. Chairman Manendo asked for a brief summary of the bill and for some background information. Mr. Vincent said he was not sure of the history or when the language was added to the county chapter. He said that the language regarding the definition of abatements was a bill (A.B. 131 of the 71st Legislative Session) that was passed in 2001.
Mr. Vincent stated that A.B. 135 would allow special assessments to be collected as ordinary county taxes. In other words, it would allow the city to provide a list of delinquencies to the county treasurer, who would then place them on the tax role for collection in accordance with normal taxation procedures.
Assemblywoman Weber asked whether, on page 2 of the bill, the notification to the property owner had been removed, and if there was any notification other than the information showing on the tax role. Mr. Vincent answered that there was, and he would like Mr. Semenza to address the notice requirements. He said he understood that there would be no change to the notice requirement.
Mr. Semenza, Manager of Neighborhood Response, City of Las Vegas, said that written correction notices were problematic because of delivery problems in the rougher neighborhoods so the city had asked them to take care of it. For example, in the case of abandoned property, they would do everything they could to notify property owners and give them every opportunity to abate the problem. They would find mortgage companies, send out letters, and post notices on the property. If that approach was not successful, then through the legal process they would hire a contractor, have an abatement processed in order to secure a dangerous property and to keep the public away, and place a lien on the property.
Mr. Vincent added that the city would send out a bill. The county office also would send out a notice, usually after the bill became delinquent, and then they proceeded with collection.
Assemblywoman Weber asked if this meant that there was no actual lien, or whether perhaps the notice had changed. Mr. Semenza replied that tax money was used to abate nuisances and to secure dangerous buildings. When the work was done, they would put a lien on the property to recover the tax money they spent for the abatement. In the last few years, the collections had been reduced by 70 percent because they no longer appeared on the tax roles.
Assemblyman Hardy asked if the lien process had been abolished. Mr. Vincent said that they would continue to file liens against the properties. The special assessment language in the bill came from Chapter 244, which would allow the city to treat the assessments as if they were ordinary taxes.
Assemblyman Hardy asked why the lien language had been stricken, and if there was language elsewhere that allowed the lien process to remain in force. He wanted to know how would this apply to charter city lien procedures.
Mr. Vincent could not address the charter city process, but according to the City of Las Vegas legal staff, although the lien language itself was stricken, this bill would not prevent their office from filing liens in the future to recover costs. Mr. Hardy would like the Committee Legal Counsel’s opinion on how it would affect the charter cities in terms of overlapping Nevada Revised Statutes (NRS).
Eileen O’Grady, Committee Legal Counsel, referred to a section in Chapter 268 that described special assessments as liens. Even though the name had been changed, it was still a lien with the same priority as county property taxes. Ms. O’Grady was not aware that any of the city charters had specific provisions on the abatement of nuisances, but this bill would apply to them because Chapter 268 applies to both charter cities and those incorporated by law.
Assemblyman Hardy said that in Boulder City they had looked at the lien process with abatements before, and being a charter city, Boulder City did something like that. He thought there might be a conflict that could require a change to the city charter.
Mr. Goicoechea said he had no questions.
Lucille Lusk, representing Nevada Concerned Citizens, took the witness stand and said that they were neutral on this A.B. 135, in the sense that it seemed like a good idea that the cities could collect this money for the work they performed. Her concern was that no one had clarified that a notice of lien would be given to an individual after the abatement was complete. She thought that citizens should receive a notice that would clearly state the amount that would appear on their tax bill. She said that what she heard in earlier testimony was that notice is not given unless the bill becomes delinquent. She felt that giving clear notice of taxes due, so that the tax bill did not come as a surprise, would eliminate unnecessary stress between citizens and government.
Chairman Manendo closed the hearing on A.B. 135, and opened the hearing on A.B. 149.
Assembly Bill 149: Makes various changes concerning local government finance. (BDR 31-322)
Robert Hadfield, Executive Director for the Nevada Association of Counties (NACO), said that A.B. 149 was a technical corrections bill for items that were brought to the attention of the Board of Directors by the Committee on Local Government Finance. Mr. Hadfield said that NACO wanted to correct several provisions that they thought were corrected two years ago. Mr. Hadfield introduced two experts who were available to answer questions on the subject corrections, Ms. Mary Walker and Mr. Gordon Hella.
Mary Walker, representing Carson City, Douglas County, and Lyon County, and the Committee on Local Government Finance, Carson City, Nevada, came to the witness table. She said that A.B. 149 proposed to change two separate provisions. The administrative provision in Section 1, which she described as a “correction to an administrative process problem” would first be explained by Mr. Gordon Hella, Department of Taxation. Then Ms. Walker would explain the proposed changes to Section 3.
Gordon Hella, Supervisor of Local Government Finance, Department of Taxation, stated that the intent of the proposed change to Section 1 in A.B. 149 was to move the time frame for filing for exempt status for special districts. The law was changed in the 2001 Legislative Session, but the Department of Taxation found it difficult to manage the approval process. For example, a district could file for exemption and file its final budget on the same day, April 15. If the Department found that the special district did not qualify for any reason, then the final legal budget had already been filed with the Department and with the county. By moving the date back to March 1, the Department would have 30 days to review the application and to notify the district of its approval or denial.
Mr. Hella clarified that the law was originally changed to April 15 from December 31 because districts were unsure of the expenditures that they might have for the current year. Allowing for conditional approval when expenditures were less that $200,000, the special districts would be able to save the cost of an audit. The reason a special district may have budget expenditures over $200,000, but actual expenditures under $200,000 would likely be related to capital projects that were not completed within the budget year. Mr. Hella concluded his explanation of the proposed changes to Section 1.
Assemblyman Grady asked if the special districts would need to refile each year. Mr. Hella said that the law required that they file annually.
Ms. Walker described the proposed changes to Section 3, page 5, which would eliminate a “catch-22” situation in current taxation law. She said that she would use the example of a county because they sometimes collected taxes on behalf of other governmental entities within their jurisdiction, such as cities.
As an example, Ms. Walker discussed counties that collected the Indigent Accident Fund tax, currently 1.5 cents per $100 of assessed valuation. After collection, the counties then submit those taxes to the state’s Catastrophic Indigent Fund, which was utilized for motor vehicle accidents. After counties collected the taxes, by law they were required to remit all Indigent Accident Fund tax monies to the state. If the counties did not follow that procedure, they would be in violation of the law.
The problem arose when counties collect past-due taxes from a prior year, usually because the recipient had been delinquent in paying the bill. The county would still be required by law to remit all taxes collected during the current year plus part of last year’s taxes. Although the collection delay had not been anticipated, if the county followed that law and remitted all the tax money collected to the state, the counties would inadvertently overspend their budgets, which was also illegal. Either way the counties handled that situation, they would be in violation of the law.
Ms. Walker stated that the proposed change to A.B. 149 would resolve the issue as follows. When a local government received revenue that had not been anticipated when they prepared the budget, and statute required that the entity remit the funds to another governmental agency, in that case overspending the budget would not be a violation of law. Passage of A.B. 149 would allow government entities to follow the intent of the law without causing a statutory failure to appear on their audit reports.
Chairman Manendo closed the hearing on A.B. 149.
Assembly Bill 224: Revises provisions relating to Nevada Arts Council. (BDR 18-531)
ASSEMBLYMAN WILLIAMS MOVED FOR COMMITTEE INTRODUCTION OF BDR 18-531.
ASSEMBLYWOMAN PIERCE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Collins was not present for the vote.)
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Assembly Bill 225: Provides that Public Employees’ Deferred Compensation Program approved by committee to administer the Program may consist of any plan to reduce taxable income. (BDR 23-505)
ASSEMBLYMAN WILLIAMS MOVED FOR COMMITTEE INTRODUCTION OF BDR 23-505.
ASSEMBLYMAN KNECHT SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Collins was not present for the vote.)
Chairman Manendo announced that Clark County Commissioner Myrna T. Williams was in the audience. Ms. Williams served in the Nevada Legislature 1985–1994 and was Speaker Pro Tempore in 1991 and 1993. Ms. Williams was invited to speak but declined the invitation.
Assemblyman Atkinson introduced his daughter, Hailey Atkinson, to the Committee. Mr. Atkinson said she kept asking him why he had to go away every week, so he brought her along for a week, hoping she would not ask anymore.
Assembly Bill 116: Revises provisions relating to state purchasing. (BDR 27‑‑485)
Chairman Manendo asked Assemblyman Grady to report on the working group meetings regarding A.B. 116. Mr. Grady said he and Assemblywoman Pierce met twice with some people to discuss this bill, and those folks met separately with others, and they could come to no conclusion. Chairman Manendo and Assemblyman Grady both stated that the sponsors of the bill had requested the Committee to indefinitely postpone A.B. 116.
ASSEMBLYMAN GRADY MOVED TO INDEFINITELY POSTPONE A.B. 116.
ASSEMBLYWOMAN PIERCE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY. (Mr. Collins was not present for the vote.)
Chairman Manendo adjourned the meeting at 9:40 a.m.
RESPECTFULLY SUBMITTED:
JoAnn Aldrich
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman
DATE: