ASSEMBLY COMMITTEE MINUTES

MINUTES OF THE meeting

of the

ASSEMBLY Committee on Taxation

Seventy-Second Session

April 8, 2003

The Committee on Taxationwas called to order at 1:30 p.m., on Tuesday, April 8, 2003. Chairman David Parks presided in Room 4100 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. David Parks, Chairman

Mr. David Goldwater, Vice Chairman

Mr. Bernie Anderson

Mrs. Dawn Gibbons

Mr. Tom Grady

Mr. Josh Griffin

Mr. Lynn Hettrick

Mr. John Marvel

Ms. Kathy McClain

Mr. Harry Mortenson

Ms. Peggy Pierce

COMMITTEE MEMBERS ABSENT:

Mr. Morse Arberry Jr. (excused)

GUEST LEGISLATORS PRESENT:

None

STAFF MEMBERS PRESENT:

Ted Zuend, Fiscal Analyst

June Rigsby, Committee Secretary

OTHERS PRESENT:

Dino DiCianno, Deputy Director, Nevada Department of Taxation

Carol Sala, Administrator, Nevada Division of Aging Services

Carla Watson, Administrative Services Officer, Nevada Division of Aging Services

Earleen Heinz, Program Manager, Nevada Division of Aging Services

Dave Dawley, County Assessor, Carson City

Shaun Carey, City Manager, City of Sparks

Tony Armstrong, Mayor, City of Sparks

Ron Schmitt, City Council Member, City of Sparks

Michael Pennington, Public Policy Director, Reno-Sparks Chamber of Commerce

Vice Chairman Goldwater called the meeting to order at 1:58 p.m. He noted a quorum was present, and Assemblyman Arberry was excused. The hearing on A.B. 531 was opened.

Assembly Bill 531: Establishes joint and several liability of responsible person and other taxpayers for payment of certain taxes, interest and applicable penalties that are owed. (BDR 32-552)

Dino DiCianno, Deputy Director, Nevada Department of Taxation, commenced testimony in support of A.B. 531. The intent of the bill was to make responsible persons liable for use tax as well as sales tax. When Nevada Revised Statutes (NRS) 372.398, paragraph 1 and NRS 374.403 originally went into effect in 1995, the Department of Taxation believed that it covered both sales and use tax. It had since been determined that, due to the current language, the law only applied to retailers responsible for the remittance of sales tax. It was important to note that NRS 372 applied not only to sales tax but to use tax. The wording in the current statute needed to be corrected in order to make NRS 372.398, paragraph 1 apply to both sales and use tax. Mr. DiCianno stated it would close a loophole and make responsible persons liable for both taxes.

Assemblyman Marvel asked if anybody had been taking advantage of the loophole. Mr. DiCianno replied in the affirmative. Continuing his response to Mr. Marvel, Mr. DiCianno stated he was uncertain of the amount of revenues lost; however, he was aware of instances where there were cases before the Tax Commission that were lost because of that loophole.

Vice Chairman Goldwater commented that he believed that could happen, especially in situations of remote sales. Seeing no additional witnesses to testify on the bill, he closed the hearing on A.B. 531 and opened the hearing on A.B. 530.

Assembly Bill 530: Revises provisions governing certain property taxes. (BDR 32-489)

Dino DiCianno, Deputy Director, Nevada Department of Taxation, commenced testimony in favor of A.B. 530. The bill dealt specifically with the centrally assessed property taxation within the Department. There were two parts to the bill. The first part provided for a filing deadline for centrally assessed public utility property valued under NRS 361.320. The second part of the bill clarified for the Department of Taxation the authority to impose penalties and interest on delinquent accounts on centrally assessed properties on the unsecured tax roll.

Continuing, Mr. DiCianno stated that the current statute did not provide for a filing deadline. The Department had experienced numerous delays from taxpayers who failed to file. The current process was inefficient and administratively burdensome, with some taxpayers providing information just days before the assessments were due for presentation to the Nevada Tax Commission. That group was charged with certifying those valuations on the first Monday of October.

Regarding the second part of the bill, Mr. DiCianno stated that current penalties and interest under NRS 361.483 were imposed only on those delinquent tax accounts for centrally assessed properties on the secured tax roll. There was no current provision for the imposition of penalties and interest on delinquent tax accounts for unsecured centrally assessed properties. The exception was private car lines that were covered under NRS 361.320, subparagraph 9. The bill would provide for equal treatment of all industry types under central assessment, whether on the secured or unsecured tax roll. It would subject all delinquent tax accounts to the imposition of the penalties and interest.

Mr. DiCianno stated his Department received communication from Ms. Glenna Adams, representing SBC Communications. He stated his agreement to an amendment on Section 1, page 2, paragraph 2, and line 15. The amendment was requested by SBC, Sierra Pacific Power Company, Idaho Power, and Southwest Gas. The intent of the amendment was to change the 30-day requirement to 45 days. Mr. DiCianno stated the Department of Taxation was in agreement with the amendment.

Assemblyman Marvel requested examples of unsecured centrally assessed properties. Mr. DiCianno clarified that during the last legislative session, the Assessors’ Omnibus bill was intended to allow the Department of Taxation to take over the responsibilities for unscheduled air carriers. He stated that category represented the majority of properties on the unsecured tax roll.

Seeing no additional witnesses to testify in favor of or against the bill, Vice Chairman Goldwater asked if the Tax Commission had looked at A.B. 530. In response, Mr. DiCianno stated all of their bill drafts had been submitted for review by the Tax Commission. Vice Chairman Goldwater asked if official action had been taken, to which Mr. DiCianno replied, “Yes, they approved them.”

Vice Chairman Goldwater requested clarification on why A.B. 530 had a “two‑thirds” voting requirement. Mr. DiCianno explained it was based on the presence of penalties and fees in the bill language.

Vice Chairman Goldwater closed the hearing on A.B. 530 and opened the hearing on A.B. 515.

Assembly Bill 515: Makes various changes to provisions governing property tax assistance for senior citizens. (BDR 38-499)

Carol Sala, Administrator of the Nevada Division for Aging Services, introduced Carla Watson, Administrative Services Officer, and Earleen Heinz, Program Officer. Ms. Sala distributed a prepared statement (Exhibit C) and commenced testimony in favor of A.B. 515. The bill would simplify the existing income range schedule used for the Senior Citizens’ Property Tax Assistance Program. Specifically, it would provide a 100 percent rebate for taxes paid up to the $500 cap to those eligible claimants whose income was at or below the federal poverty level for family units of one or two. Other provisions of the bill would expand existing limitations or impose new eligibility limitations.

Continuing, Ms. Sala stated that the Senior Citizens’ Property Tax Assistance Program had been transferred from the Department of Taxation to the Nevada Division for Aging Services, effective October 1, 2001. After the initial transitioning phase, Aging Services was able to identify some components of the program that could be simplified and others that could be enhanced.

Carla Watson, Administrative Services Officer, Nevada Division for Aging Services, called the Committee’s attention to a handout (Exhibit D). Page one contained a list of the ten primary provisions of A.B. 515. The first provision provided for simplification of the income range schedule to allow more equitable distribution to eligible claimants. That simplification would prevent minor income differences from causing significant differences in rebates. The structure of the schedule would change from the existing five set points to a graduated or sliding scale. Those graduated ranges would fall between 100 percent and 10 percent, as opposed to the existing five set points of 90 percent, 80 percent, 50 percent, 25 percent, and 10 percent. According to Ms. Watson, it would result in some eligible claimants receiving a larger rebate, while others would receive a smaller rebate. The graduated ranges were structured to provide 100 percent rebates of taxes paid, up to the $500 cap, to those eligible claimants whose income was at or below the federal poverty levels for family units of one or two persons.

Ms. Watson explained that the handout (Exhibit D) contained multiple schedules pertaining to the proposed changes. The first schedule, on page 2, contrasted the existing schedule that utilized the five set points with the proposed graduated percentage ranges. The second schedule, on page 3, identified the fiscal impact of the proposed changes. If accepted, those changes would not be implemented until fiscal year 2005 for income year 2003. The estimated fiscal impact for year 2005 was $189,900; however, due to three new eligibility limitations included in A.B. 515, the net fiscal impact was estimated at zero dollars.

Continuing, Ms. Watson stated the three new eligibility limitations were listed as items numbered 3, 4, 5 on page one of the handout (Exhibit D). The schedule on page 4 provided a comparison of case scenarios for clients who received rebates in fiscal years 2002 and 2003 and the impact on rebate amounts. The schedule on page 5 outlined the global impact of the new schedule when compared to the existing schedule for clients who received rebates in fiscal years 2002 and 2003.

Reading from Exhibit C, Ms. Watson explained the second provision of A.B. 515 would hold harmless those eligible claimants whose income was at or below the federal poverty level for family units of one filing as single-family or family units of two if filing jointly, if there were insufficient funds to provide 100 percent of calculated rebates to all eligible clients. Remaining rebates would be reduced by the percentage necessary to remain within the legislatively approved budget.

Ms. Watson explained that currently, if a supplemental appropriation was needed to provide rebates to all eligible claimants and the Interim Finance Committee did not approve a supplemental payment, all rebates would be reduced by the percentage necessary to remain within the legislatively approved budget. Holding harmless those eligible claimants whose income was at or below the federal poverty level for family units of one or two would allow those most in need of the refund to receive the entire allowable rebate. Those eligible claimants whose income was greater than the poverty levels would then absorb reductions to their rebates by the percentage necessary to remain within the legislatively approved budget. That would be in the case of the supplemental request failing to win approval of the Interim Finance Committee (IFC). If the provision were accepted, the Aging Services office would also recommend that language be included to allow for refunds to be processed for those claimants whose income fell at or below the federal poverty level for family units of one or two prior to the IFC meeting date. Remaining rebates would be held until 30 business days following the IFC meeting date.

Ms. Watson stated the third provision would limit the assessed value of the applicant’s principal residence to $75,000. Currently, there was no limitation on the assessed value of the applicant’s principal residence. If the assessed value was 35 percent of the cash value, a home assessed at $75,000 would have a cash value of at least $214,000. By limiting the assed value of the applicant’s principal residence to $75,000, certain claimants, who would be otherwise be eligible, would no longer be eligible to receive a rebate. The estimated fiscal impact was a reduction of $23,883 in rebates for fiscal year 2005.

Provision number four of A.B. 515 would limit the value of the applicant’s liquid assets to $400,000. Currently, there was no limitation on the value of the applicant’s liquid assets. Those assets included items that could be easily disposed, usually within three to six months and without large penalties for that disposal. Ms. Watson cited examples that included savings accounts, mutual funds, stocks, and bonds. She stated there could be instances where claimants had thousands invested in the stock market and, due to losses, would be eligible for a rebate if their income did not exceed the maximum amount. She posed the question, “Should these or other individuals who had hundreds of thousands in liquid assets be eligible for this program?” By limiting the value of the applicant’s liquid assets to $400,000, certain claimants who would otherwise be eligible would no longer be eligible for rebate. Ms. Watson added that, unfortunately, her agency was unable to estimate the fiscal impact for provision number four, because that information was not collected under current practices.

Provision number five of A.B. 515 disallowed claims for applicants who owned out-of-state real property that exceeded the assessed limitations in Nevada. Currently, property other than the home was not allowed an assessed value of more than $30,000 in Nevada; however, applicants would be allowed to own property in other states that exceeded the assessed limitations in Nevada. Ms. Watson stated that, as with liquid assets, the Nevada Aging Services Division was unable to estimate the fiscal impact of savings generated, since that data was not currently collected. Ms. Watson explained the Consumer Price Index (CPI) was applied to the maximum income each year in order to establish the new maximum income level.

Provision number six of A.B. 515 changed the CPI adjustment month from December to November. The CPI figures for December were not available before January 16, and that did not provide sufficient time to print new applications and instructions that reflected the new income maximum levels.

Provision number seven, according to Ms. Watson, extended the filing period from April 15 until April 30. Many claimants waited until the April 15^th deadline to file their federal income tax returns, and the Division had received complaints about inadequate time to get copies of tax returns to submit with their applications. Provision number eight added cleanup language to cover an exception that allowed the Administrator to extend the time to file a claim in the event of a hardship.

Provision number nine added language to allow the Administrator to appoint a designee to administer the claimant grievance process. Ms. Watson stated that provision number ten added language to allow the Administrator to appoint a designee to certify claims against the Senior Citizens Property Tax Assistance Account.

Assemblyman Marvel asked if there was a change in the fiscal impact, other than what was in the Governor’s Budget. Ms. Watson replied there was a zero fiscal note attached to the bill, even though changing the schedule would cost $189,000 in the initial stages. The new eligibility limitations being added had associated cost savings that were unknown. Ms. Watson speculated that the cost savings might offset the need for a fiscal note. The Division did not feel it would be appropriate to ask for additional funding for changing the schedule.

Assemblyman Marvel asked if the Fiscal Department reviewed A.B. 515, and Ms. Watson responded in the affirmative. She clarified that the information had been supplied to the Fiscal Division, but she had received no feedback from them. Mr. Marvel commented that the bill should go to the Assembly Committee on Ways & Means if there was a change in the rebate. He asked the witness if she was sure there was a zero fiscal impact.

In response, Ms. Watson stated the Division of Aging Services was unsure if adding the new eligibility limitations would allow them to provide all of the rebates at the 100 percent level. There were existing statute provisions that, in the event of a shortfall in the Division’s budget, a request for supplemental funds could be made to the Interim Finance Committee (IFC). If the IFC did not approve the supplemental funds, the claimant rebates were reduced by the percentage necessary to stay within the legislatively approved budget.

Assemblyman Marvel asked about the projected increase in eligibilities. Ms. Watson explained that of the 14,197 applications projected for 2003 there were 13,243 refunds expected. The Division projected a 5 percent increase during the coming years and expected to provide refunds in year 2004 for 13,905 rebates and for 14,600 rebates in 2005. She said a 5 percent increase in rebates was a normal level for each fiscal year. Mr. Marvel reiterated his concern that A.B. 515 should be re-referred to the Assembly Committee on Ways and Means. Vice Chairman Goldwater voiced agreement and asked if, even though the eligibility had been changed to make it budget-neutral, in practice it was still budget-neutral. There were many people who did not take advantage of it, and they were no longer eligible; however, there were people who would be taking advantage of the increased benefit.

Ms. Watson voiced agreement and stated, as the CPI was adjusted each year, it would eliminate some applicants but would also invite more eligible applicants. She expressed regret that the actual savings amount on two of the three eligibility limitations was unknown. The information had not been required of the applicants, and therefore the data was not collected. As far as limiting the assessed value of the applicant’s principal residence to $75,000, that was a number suggested by the Aging Services Division.

Vice Chairman Goldwater concluded that the Fiscal Division and Ted Zuend should review the bill, and it might need to go to the Assembly Committee on Ways and Means.

Assemblywoman McClain asked if the money was derived from the General Fund. Ms. Watson responded in the affirmative. For clarification, Ms. McClain stated, “People actually pay their taxes, the local government gets it, and then the state refunds to seniors.” She predicted there would be more incentive for seniors to apply.

Gaylyn Spriggs, representing the Nevada Taxpayers Association, commenced testimony in opposition to A.B. 515. Since the funding was limited, and there was a possibility of more applicants receiving less money, as well as having to go to the IFC for more funding, Ms. Spriggs concluded the time was wrong to make the changes proposed in the bill. The state budgets were under great stress. Although her organization was not opposed to helping senior citizens, nor were they opposed to some of the changes in dates of application, Ms. Spriggs voiced concern about the timing for those changes.

Assemblyman Marvel stated it would be appropriate to re-refer A.B. 515 to the Assembly Committee on Ways and Means.

Chairman Parks asked for additional witnesses.

Ms. Watson clarified that the Division of Aging Services would not necessarily require supplemental funding through the IFC. It was merely a precautionary provision due to the new eligibility limitations.

Assemblywoman McClain asked how many people would no longer qualify because their assets exceeded the threshold or because they owned out-of-state property. Ms. Watson explained that the Division did not normally track out-of-state property ownership. As such, she did not have numbers to show the decrease caused by that limitation. In response to Assemblywoman McClain, Ms. Watson addressed the eligibility limitations concerning the cap on liquid assets and the real property in other states. The Division did not currently request that information from applicants, thus it was not in their database. Ms. Watson anticipated the Division would collect one year’s worth of information for the next legislative session. If the new limitations were approved, the Division would plan to revisit them in future sessions in order to increase or lower the limitations.

To clarify, Assemblywoman McClain stated that, even if the bill were re-referred to the Assembly Committee on Ways and Means, the information would still not be available for their review. Ms. Watson confirmed that the information would not be available regarding the issue of the $400,000 cap and the out-of-state real property ownership. She added the Division did not want to add a fiscal note to A.B. 515, because the new limitations might offset the change in the schedule that was predicted to cause an impact of $189,000. She added it did not take into account any carryover that might be applied. The Division did not think it was reasonable to ask for more funding when the effect of the new limitations was unknown.

Assemblywoman McClain stated the program did not appear to be utilized by a lot of senior citizens. It was her impression that many seniors were not aware of the program.

Ms. Sala offered to clarify and explained that when the program was transferred to the Division of Aging Services in October 2001, the program had been “lost in the Department of Taxation.” After the program transfer, Aging Services made greater efforts to advertise the program and attract more applicants. That fulfilled the intent of transferring the program to Aging Services. Assemblywoman McClain voiced her approval of moving the proposal forward.

Assemblyman Mortenson asked about the procedure for refunding to renters. Earleen Heinz, Program Manager, Division of Aging Services, stated a renter’s refund was calculated based upon the rent that they actually paid, and that amount was multiplied by eight and one-half percent. That factor was set by the Legislature and was based on the amount attributable to property tax. The refund was then further adjusted according to the renter’s income category.

Assemblyman Mortenson requested clarification on the calculation of income and asked if it took into account child payments from a separated parent. Ms. Heinz stated that very few senior citizens had that source of income; however, there were applicants with social security income, and that was not included in the calculations. The statutes specified it was the income for the claimant or spouse. If they filed a federal income tax return, it would be the adjusted gross income tax figure. To that was added other income that was not part of the federal return. That included untaxed pensions and Individual Retirement Accounts (IRAs) that were still considered income from the standpoint of the Division of Aging Services.

Assemblyman Mortenson restated and said, “It would not be the federal adjusted gross income. There would be some additional incomes you would count.” Ms. Heinz replied in the affirmative.

Dave Dawley, Carson City Assessor, commenced testimony in favor of A.B. 515. He declared he was representing himself on the issue and did not speak for the other 16 assessors in the state of Nevada. He felt it was ironic the issue had arisen, because he had just spent hours on the telephone seeking help for an 80 year-old woman who was about to lose her mobile home. She had been delinquent in her taxes for the last three years. Mr. Dawley stated the program was designed for senior citizens such as that woman. There were other residents who had incomes of $7,000 to $8,000 in interest income and obviously had money in savings accounts; however, the senior citizens with incomes of $5,000 needed help. In conclusion, Mr. Dawley voiced his approval of the amendments to the bill.

Chairman Parks closed the hearing on A.B. 515 and opened the hearing on
A.B. 205.

Assembly Bill 205: Increases tax on rental of transient lodging within City of Sparks to pay certain costs related to promotion of tourism. (BDR S-256)

Chairman Parks invited testimony from the sponsors of the bill.

Assemblyman John Marvel, representing Assembly District No. 32, described the bill as a well-thought-out piece of legislation that had good consensus from multiple parties, including property owners, hotel operators, and city government. Mr. Marvel stated that various witnesses were scheduled to speak in support of A.B. 205.

Assemblyman Anderson, representing Assembly District No. 31, declared A.B. 205 to be an important piece of legislation for the city of Sparks. Passage of the bill would help the construction of the events plaza in the redevelopment district of Sparks, the oldest in the state of Nevada. The district was first established in 1978, and the development had visibly changed the downtown area of Sparks. It was obvious that the citizens took great pride in the accomplishments of the redevelopment agency. All residents of Washoe County enjoyed the benefits of that effort, and it was evidenced by events such as Hot August Nights, the Farmers Market, and the oldest official Christmas parade in the state. Mr. Anderson viewed A.B. 205 as another opportunity for Sparks to revitalize the downtown and to reexamine a tax rate that would go to worthwhile projects.

Assemblyman Marvel introduced Mayor Tony Armstrong, who was accompanied by City Manager Shaun Carey and City Councilman Ron Schmitt.

Shaun Carey, City Manager, City of Sparks, began a PowerPoint presentation. A copy of the slides (Exhibit E) was distributed to the Committee. Mr. Carey gratefully acknowledged Assemblyman Marvel and Assemblyman Anderson for their support of A.B. 205. Mr. Carey described Sparks as the second-largest economy in northern Nevada. Sparks faced multiple challenges as revealed by a declining visitor count, estimated at 4.9 million visitors and down from the previous 5.2 million during the last year.

Continuing, Mr. Carey stated that during the past 15 years, the entire area of Reno and Sparks had fallen behind Las Vegas in its ability to attract visitors and tourists. Gaming revenues were down, hotel occupancy was flat, and the area was facing some severe challenges in the form of competition from Indian gaming in northern California. That part of the local market was at risk. Serious competition was on the horizon, and that included Las Vegas. Mr. Carey voiced confidence in northern Nevada’s strategy and its ability to meet the challenges ahead.

Calling attention to a bar chart in his PowerPoint slides, Mr. Carey explained how gaming as a percentage of employment was declining in Washoe County. In 1992, gaming employment was 21 percent in Washoe County compared to 25 percent statewide. The current percentage of gaming employment was 16 percent, compared to a statewide figure of 22 percent.

Mr. Carey emphasized there was a collaborative planning effort in place for northern Nevada and the Reno-Sparks Visitors and Convention Authority (RSCVA). He voiced confidence that northern Nevada could reverse the downward trends in tourism statistics. Mr. Carey highlighted the fact that the area contained a “geographic center” that was diverse and unique. Lake Tahoe was considered a worldwide destination that attracted visitors. The entire area of northern Nevada could be marketed as America’s premier adventure place to visit.

Continuing, Mr. Carey stated new venues were being added to enhance the experience of visitors and convention attendees. Much of the credit had to be given to past legislative actions that included room tax increases. Expansions of convention facilities were evident, and that added to the competitive edge for the area. Mr. Carey emphasized the momentum of that effort had to be continued, and the area had to be unique and dynamic in order to remain competitive. It required that the traditional casino experience had to be complemented by offering additional retail, entertainment opportunities, and “must-see” attractions.

Victorian Square in Sparks, a prominent part of the area’s strategic plan, was considered a dynamic destination for visitors and the center of large scheduled events, having drawn more than 600,000 people to Sparks last year. With the completion of the planned venue in Victorian Square that would add retail and entertainment opportunities, the visitor count would increase.

Mr. Carey called attention to the slide (Exhibit E) that showed the multi-screen cinema complex and fountain display. He invited the Committee members to visit Sparks in the summer to witness children enjoying the interactive fountain. The rib cook-off was described as a major annual event for Sparks at the end of summer.

The Urban Land Institute was described by Mr. Carey as the preeminent organization that studied land development opportunities. Page 7 of the handout (Exhibit E) outlined the highlights of the Urban Land Institute Panel Report. According to Mr. Carey, the challenge for Sparks was the older downtown that contained buildings that had been transported to the area via railroad cars many years ago. With the surrounding pastureland, Sparks had raw land opportunities whose development could be enhanced through redevelopment dollars and the passage of A.B. 205. The health of the Reno and Sparks downtown areas was identified by the Urban Land Institute as extremely critical to the future of the area. Both downtowns had to be vibrant and successful, and Victorian Square offered the best contribution to that effort.

Mr. Carey, in closing, stated it was everybody’s responsibility to promote the northern Nevada area. The Urban Land Institute identified Victorian Square as a classic redevelopment opportunity and one that had the ability to be a “driver.” The location was ideal given the proximity to freeway interchanges and access by vehicles.

Continuing, Mr. Carey stated that Sparks had promoted a family-image community through the creation of an attractive central downtown. Goals for Victorian Square (Exhibit E) included a mixed-use, “Main Street” type of development that attracted retail, dining, entertainment, and residential growth. A high level of year-round and 24-hour uses was judged to be desirable. The attractive architecture of Victorian Square was distinctive, and it was becoming a place to visit over and over again.

Calling the Committee’s attention to a pictorial of Victorian Square, Mr. Carey stated it captured the vision and long-term plan. He described the hotel-casino industry as strong in northern Nevada. He cited John Ascuaga’s Nugget and the Silver Club as good examples of the public-private partnership that built Victorian Square. Mr. Carey urged the Committee to pass A.B. 205. The room tax would serve as a catalyst for the rebuilding of the older portions of downtown Sparks, and private development was expected to be inspired.

In terms of outcomes planned for the area, Mr. Carey summarized them as being centered on the creation of a lively town center and a place where visitors would return for repeat visits. One of the most critical outcomes was to promote Sparks as a third “scoring option” for the RSCVA marketing effort. By that, Mr. Carey explained that Sparks would be added to the Reno-Tahoe marketing program as the third destination area in northern Nevada.

Mr. Carey voiced pride over the strong coalition of city business leaders that collaborated and requested a 2.5 percent increase in room tax that would make Sparks equal with downtown Reno and would enable the completion of the Victorian Square master plan. The private sector support of the City’s efforts had been a critical success factor. Mr. Carey concluded by saying that additional public funding was urgently needed. The room tax was projected to generate $800,000 per year and that was bondable for the construction of a new and exciting venue in the Truckee Meadows. It would facilitate the traditional problems of dealing with historic lot lines that were common in older downtowns. Mr. Carey implored the Committee to help the northern Nevada economy, and A.B. 205 was a part of that support.

Ron Schmitt, Sparks City Councilman, commenced testimony in support of A.B. 205. In his 22 months with Sparks, his time had been devoted to issues of economic stimulation and diversification. As with the rest of the state, Sparks was struggling. There were many reasons, one being what could be offered to developers and businesses that were looking at the area. To illustrate his point, Mr. Schmitt shared a recent experience of a meeting with a developer in Kansas City. The city of Sparks was competing for that business, and, regrettably, the ability to award incentives to new business was limited.

Mr. Schmitt viewed A.B. 205 as a great tool to encourage diversification and to attract new business to the area. He gave credit to the coalition of public and private enterprises that had come together to make it happen. He implored the Committee to pass A.B. 205.

Assemblyman Mortenson commended the entrepreneurial spirit that was evident in Sparks. He asked to see the slide that contained the bar graph of employment percentages. Mr. Mortenson asked, if the actual numbers of employees rather than percentages were displayed, would the bar chart actually reveal growth. Mr. Carey stated he would have to examine the data before he could answer the question. Mr. Mortenson viewed the graph as a “happy graph” and not a depressing one. If the numbers of employees were increasing, but gaming employment percentages dropped, that would indicate successful diversification in the Washoe County business environment. That was desirable, according to Mr. Mortenson.

In response, Mr. Carey stated the real concern in northern Nevada was the flatness of the industry at the current time. There was a drop in the number of annual visitors to the area, and the City’s goal was to stabilize visitor numbers even with the threat of Indian gaming in California. Mr. Carey voiced agreement that there was evidence of diversification of northern Nevada’s economy; however, there had to be a commitment to becoming a world-class destination and America’s adventure place. The capacity was there, and the marketing effort was critical to capitalize on the advantages offered by northern Nevada.

Assemblyman Mortenson agreed and complimented the Victorian Square development.

Assemblyman Goldwater asked if there were zoning issues. Mr. Carey replied the area was under a six-block master plan, approved by the City Council, and it held all of its entitlements. A developer could approach the city of Sparks and work according to the architectural standards established by the community. Any new development had to enhance the existing surrounding areas. Planning and zoning efforts were in place and followed the adopted master plan, according to Mr. Carey.

Assemblyman Goldwater asked if there was cooperative effort with the State Economic Development Office. He commended the progress Sparks had made; however, he voiced some concern with the multitude of tax programs: the sales and use tax abatement program, property tax abatement program, the potential of incremental redevelopment financing, and room tax money. Mr. Goldwater recalled a situation in Las Vegas where a developer built a large casino, Main Street Station. When it failed, the owner left. It became a fire-sale asset for a gaming company at the expense of the taxpayer. Mr. Goldwater did not want to see a repeat of that situation.

Assemblyman Grady complimented the city of Sparks for its accomplishments in drawing visitors from multiple areas, including northern California and northern Nevada.

Mayor Tony Armstrong, City of Sparks, commenced testimony in support of A.B. 205. He acknowledged the help of Assemblyman Marvel and Assemblyman Anderson. He voiced pride in the collaboration he had witnessed and the willingness of businesses to support a self-imposed room tax of 2.5 percent. Mayor Armstrong commented it had been remarkable process. If passed, the tax was projected to generate approximately $800,000 per year. It would enable the redevelopment project to move forward. He expressed his appreciation to the Committee for hearing the proposal, and he extended a personal invitation to visit Sparks.

Assemblyman Marvel commended the city of Sparks for its accomplishments and success at achieving consensus among the parties involved in the legislative proposal. He asked if there would be an opportunity to develop the railroad museum in Sparks. Mayor Armstrong gave credit to Shaun Carey for the progress made on the proposed legislation. Regarding the Mechanics Building, Sparks was moving forward at the federal level. Congressman Gibbons was assisting with the Amtrak station project, estimated to cost between $35 million and $40 million. Progress was being made, and meetings had been held with the University and the Planetarium. The long-range goal was to construct an interfacing science center and a planetarium. The plans had been completed.

Michael Pennington, representing the Reno-Sparks Chamber of Commerce, commenced testimony in support of A.B. 205. He acknowledged the innovative redevelopment efforts of the city of Sparks during the last few decades. The bill had the support of business and government, and he felt it would provide the tools needed for northern Nevada to expand its economic base. The revenue generated would be used to enhance economic development beyond the Victorian Square project. Mr. Pennington stated A.B. 205 would benefit the entire urban area of Reno and Sparks.

Seeing no additional witnesses, Chairman Parks closed the hearing on A.B. 205. He announced he would accept a motion.

ASSEMBLYMAN MARVEL MOVED TO DO PASS A.B. 205.

ASSEMBLYMAN ANDERSON SECONDED THE MOTION.

THE MOTION CARRIED. (Assemblyman Arberry was absent for the vote.)

Chairman Parks commenced the scheduled work session and opened the discussion on A.B. 530.

Assembly Bill 530: Revises provisions governing certain property taxes. (BDR 32-489)

Chairman Parks commented there had been an amendment submitted that would amend the language on page 2 and change the number of days from 30 to 45 days. He called for a motion.

ASSEMBLYMAN MARVEL MOVED TO AMEND AND DO PASS A.B. 530.

ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.

THE MOTION CARRIED. (Assemblyman Arberry was absent for the vote.)

Chairman Parks opened the discussion on A.B. 531 and called for a motion.

Assembly Bill 531: Establishes joint and several liability of responsible person and other taxpayers for payment of certain taxes, interest and applicable penalties that are owed. (BDR 32-552)

ASSEMBLYMAN GRADY MOVED TO AMEND AND DO PASS A.B. 531.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

THE MOTION CARRIED. (Assemblyman Arberry was absent for the vote.)

A question was posed to Chairman Parks regarding A.B. 515. He noted it had exempt status, and he asked Ted Zuend, Fiscal Analyst, to comment on the bill. Mr. Zuend recalled that the Division of Aging Services, in their testimony, had concluded there was a zero fiscal impact. That conclusion was based on their decision to revise the eligibility requirements for the program and their opinion that the current appropriations were sufficient; however, their testimony indicated there was a possibility of the need to apply for supplemental funds from the Interim Finance Committee (IFC). The testimony from Aging Services indicated the imposition of caps on income and ownership of out-of-state property would have an unknown effect; as such, the exact fiscal impact was unknown.

Assemblyman Marvel recalled the testimony of the Nevada Taxpayers Association in which concern was expressed over the amount of uncertainty and budget constraints. Mr. Marvel concluded it was not the appropriate time to make the changes requested in A.B. 515.

Chairman Parks declared the bill would be held for two days.

Assemblywoman McClain stated, “The pot of money is there.” The change was in the distribution, and she understood that the program was underutilized, especially in southern Nevada. The program needed to be expanded, according to Ms. McClain, and she agreed with the Aging Services Division that there was a net zero fiscal impact.

Assemblyman Hettrick recalled testimony that said if the money was not there, they would reduce the benefit proportionally; however, there was also testimony that if the program needed money, they would appeal to the Interim Finance Committee for supplemental funding. Mr. Hettrick expressed his concern over the apparent contradiction, and asked if that issue could be resolved.

Changing topics, Assemblyman Hettrick voiced appreciation to the Chairman on his willingness to take a vote on A.B. 200; however, one of Mr. Hettrick’s supporting members was not present at the meeting, and Mr. Hettrick asked that the vote be postponed. Chairman Parks agreed with the request and said it could be held over to the work session on Thursday.

Chairman Parks closed the discussion on A.B. 515 and opened the discussion on A.B. 208.

Assembly Bill 208: Authorizes imposition of sales and use tax in certain counties for operation and maintenance of county swimming pool. (BDR 32-805)

Chairman Parks called the Committee’s attention to the work session document (Exhibit F, page 2) and reminded the members there was an amendment proposed for Section 6. That amendment would change the effective date to July 1, 2003, rather than “passage and approval.” There was also clarification that it was for maintenance and operation, not for construction of the facility. Chairman Parks noted it had been approved by the voters.

ASSEMBLYMAN ANDERSON MOVED TO AMEND AND DO PASS A.B. 208.

ASSEMBLYMAN GRADY SECONDED THE MOTION.

THE MOTION CARRIED. (Assemblyman Arberry was absent for the vote.)

Chairman Parks asked Assemblyman Hettrick if he wanted to open the discussion on A.B. 200. Mr. Hettrick responded in the affirmative as Assemblyman Arberry had arrived at the meeting.

Assembly Bill 200: Provides for sale of tax lien against parcels of real property. (BDR 32-204)

Ted Zuend, Fiscal Analyst, called the Committee’s attention to the work session document (Exhibit F, pages 1 and 6) and the proposed amendments. The bill provided for the sale to a private party of a tax lien against real property after taxes had been delinquent for one year. The use of tax liens would provide revenues to local governments faster and limit their losses if the owner filed for bankruptcy protection. Investors would gain access to a new investment option that could provide higher income. County treasurers appeared to oppose A.B. 200, principally because of the additional interest that would be applied. The prime sponsor, Assemblyman Hettrick, had submitted amendments that were attached. One key amendment eliminated the ability of the holder of the tax lien to apply for a deed to the property.

Continuing, Mr. Zuend explained he had suggested an amendment for Section 23 on page 17 because the existing language was confusing, and there was a staff‑suggested technical correction for Section 24, page 15, and line 36. It would refer to NRS 541.230.

Assemblyman Hettrick voiced agreement with the amendments and reminded the Committee the legislation was only “enabling.” It allowed the county treasurer the option to take the action. About 95 percent of all liens and delinquent tax bills were actually paid off within the first year. As such, Mr. Hettrick stated it would be a tiny percentage that would make it through to any long-term process. It would be the same issue that would result if they retained the existing system, specifically the property would go to sale. As enabling legislation, it provided opportunity to the smaller counties to recoup some of the taxes owed.

Assemblyman Goldwater offered to explain why he would vote for A.B. 200. His earlier objection related to the testimony of the treasurers who indicated that the bill would adversely affect their ability to do their jobs. After reading the bill explanation, Mr. Goldwater did not see evidence to support the concerns of the treasurers. The bill gave the treasurer full authority to work with the people on solutions. The bill did not grant authority to anybody to strong-arm citizens for tax lien collections.

Chairman Parks asked the author of the bill to explain why a number of the treasurers appeared to be lukewarm to the bill.

Assemblyman Hettrick believed it was for two reasons. The first was “change”; the treasurers were comfortable with the current system. The second reason related to the financial incentive currently enjoyed by the counties. The counties were “sitting on property tax money that is essentially divided three ways; one-third to the county, one-third to the state, and one-third to schools.” When a property owner failed to pay his taxes, interest and penalties were filed against the unpaid property tax. The county kept all of the interest and penalties, while the school district and the state received no share. According to Mr. Hettrick, the counties were fearful of losing that revenue. He said the truth was, with the redrafting of the amendment, the interest and penalties were given to the county when the lien was purchased. The only portion not received by the counties would be the compounding of the interest and penalty amount.

Chairman Parks added that the Committee had envisioned the proverbial senior citizen who was threatened by “thugs.”

Assemblyman Hettrick commented that it was important to remember that someone was investing in the document, a tax lien on a fully secured and collateralized instrument. “They are not there to collect the money. They know they get a secured instrument, and they are not going to go out and bang on this guy’s door or send someone to collect it. It was just a matter of time, and it was assured, just as it would be with the county, that this will have to go to sale, and they will recoup their money. They are not going to bang on anybody’s door.” As such, Mr. Hettrick assured the Committee that senior citizens would not face a threatening collector at their doors.

Assemblywoman McClain added her support, because the legislation was enabling. If there was concern for senior citizens, she suggested looking at A.B. 515.

Chairman Parks called for a motion.

ASSEMBLYMAN MARVEL MOVED TO AMEND AND DO PASS A.B. 200.

ASSEMBLYMAN GRIFFIN SECONDED THE MOTION.

THE MOTION CARRIED. ASSEMBLYWOMAN PIERCE AND ASSEMBLYMAN ANDERSON VOTED NO. (Assemblyman Arberry was absent for the vote.)

Chairman Parks opened the discussion on A.B. 366.

Assembly Bill 366: Provides exemption from governmental services tax for vehicles registered by resident of Nevada who is in Armed Forces of United States and required to live in another state. (BDR 32-347)

Ted Zuend, Fiscal Analyst, read from the work session document (Exhibit F, pages 3 and 13). The bill provided a $2,000 exemption for an active member of the Armed Forces who was a permanent resident of Nevada but was stationed in another state for military purposes. It also provided for indexing of the $2,000 to allow for inflation. The prime sponsor of A.B. 366 emphasized that granting the exemption would be the fair and right thing to do in order to show appreciation of those who serve our country. The bill supporter had also noted that federal law exempted non-resident servicemen from being compelled to pay the taxes of the state where they were stationed. As such, a non-resident serviceman stationed in Nevada would not pay vehicle taxes.

Continuing, Mr. Zuend stated there had been no opposition to A.B. 366; however, the Taxpayers Association had a reputation for being opposed to exemptions of any kind. The Department of Motor Vehicles (DMV) submitted a fiscal note that indicated a revenue loss of between $400,00 and $1.6 million. Former Assemblywoman Marcia de Braga had proposed an amendment that would change the bill in two ways. The first would exempt the vehicle and put the Nevada resident on the same status as those who were non-residents. No taxes would be owed on their vehicles while they were on active military duty, regardless of location. The second amendment would be similar to those found in A.B. 533, a veterans’ exemption. It would eliminate dates of service from statute and would simply allow the application of the veterans’ exemption to all veterans with at least 90 days of military service and an honorable discharge.

Continuing, Mr. Zuend explained that the Department of Taxation had submitted a fiscal note. The note assumed “a worst-case scenario” if the change was enacted, meaning that every veteran would apply for the exemption. Currently, of the more than 200,000 veterans in Nevada, less than 10 percent of them received an exemption. That statistic suggested that many veterans chose not to apply for the exemption. The fiscal note, under the worst case scenario, would be as much as $7.7 million per year for the Department of Taxation’s portion, estimated at one-half of the total. The Department of Motor Vehicles (DMV) did not attach a fiscal note or said there was no fiscal impact.

According to the Department of Taxation, 46 percent of veterans applied for their exemptions through property tax, and the other 54 percent utilized the motor vehicle exemption. Generally, the vehicle exemption was worth slightly more because the rate was as high as 5 percent in Clark County, while the property tax rate was typically only about 3 percent. In judging the likelihood of a $7.7 million loss, Mr. Zuend stated at least half of the veterans in Nevada were from the Vietnam War, the Korean War, or World War II, and they already qualified for exemptions. In response to Assemblyman Goldwater, Mr. Zuend stated veterans of the Grenada conflict did not receive an exemption.

Mr. Zuend concluded by estimating the number of exemptions might double the current cost, and perhaps, in reality, would be $3 million to $4 million per year, rather than the $16 million to $18 million per year.

Chairman Parks recalled that Mr. Schofield, in his testimony on A.B. 533, had indicated there were fewer than 20 percent of veterans applying for their exemptions.

Assemblywoman McClain recalled the passage of another bill that corrected a problem with giving away license plate registration; however, A.B. 366 appeared to give away the same amount. It did not make sense to her.

Chairman Parks reminded her that the topic was veterans’ exemptions. She acknowledged that, but stated the topic was also money. Chairman Parks announce that A.B. 366 would be held until the next meeting.

Chairman Parks opened the discussion on A.B. 437.

Assembly Bill 437: Revises definition of "supplier" for purposes of tax on and sale of liquor. (BDR 32-1161)

Chairman Parks called for a motion.

ASSEMBLYMAN GOLDWATER MOVED TO DO PASS A.B. 437.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

Chairman Parks asked for discussion of the bill.

Assemblyman Mortenson requested clarification on testimony that had indicated the bill would be anti-trust in nature and would allow the creation of one large distributor. He asked if there was any validity to that argument.

Ted Zuend, Fiscal Analyst, recalled that testimony and, in reviewing the bill, he was impressed by the substantive change to the language, especially in relation to the definition of “supplier.” Mr. Zuend also recalled that the Department of Taxation witness had testified that, in the way A.B. 437 had been drafted, it was indeed the way the law was currently being enforced. The reason for proposing the bill was to ensure there was no loophole in the three-tier distribution system. The Department of Taxation had confirmed that legally they did not allow anybody to take advantage of secondary sales of foreign liquor. Those secondary sales were already illegal under statute (Exhibit F, page 4).

Chairman Parks repeated the motion and called for the vote.

ASSEMBLYMAN GOLDWATER MOVED TO DO PASS A.B. 437.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

THE MOTION CARRIED.

Chairman Parks opened the discussion on A.B. 442.

Assembly Bill 442: Provides for abatement of property taxes for certain residences to avoid severe economic hardship. (BDR 32-783)

Assemblyman Lynn Hettrick, District No. 39, sponsor of A.B. 442, offered to summarize the proposal and the attached amendment (Exhibit F, pages 4 and 18). The bill allowed for abatement of property tax based upon severe economic hardship. The abatement applied only to the value of the land. In would not allow a person to build a very expensive home and then claim economic hardship.

Mr. Hettrick described the intent of A.B. 442 as designed to address the situation at Lake Tahoe where land prices had risen to such a high level that landowners were being forced off their land. That land was being sold back to government, which had the negative effect of removing the land from the tax rolls. Mr. Zuend had recommended that it would be good to use the language, “one or more of the last assessments,” in both places where it read, “the result of the last assessment.” Mr. Hettrick stated that bill drafting agreed with that change in language. The Nevada Taxpayers Association did not disagree with the bill, but they did ask that criteria be added to the language; however, Mr. Hettrick commented he had not received any criteria from them.

In talking with the assessors, Mr. Hettrick stated they felt a burden would be placed upon them; however, he added “we sat here and talked with the treasurers who wanted to ameliorate taxes for people when they had problems.” The assessors were accustomed to doing that, and there was an appeals process in place to handle issues. Mr. Hettrick concluded by saying if the bill was not passed, people would be forced out of their homes against their will, and property would be sold back to the federal government and removed from the tax rolls. The situation already existed. The bill had a “recapture provision,” which stated that upon sale of the property there would be repayment of seven years of taxes at the higher rate. It was merely an abatement, not an escape.

Chairman Parks called for a motion.

ASSEMBLYMAN MARVEL MOVED TO AMEND AND DO PASS A.B. 442.

ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.

THE MOTION CARRIED.

Chairman Parks announced the discussion on A.B. 533 was postponed until the work session at Thursday’s meeting. He opened the discussion on A.J.R. 8.

Assembly Joint Resolution 8: Proposes amendment to Nevada Constitution to authorize reassessment of real property for taxation purposes upon transfer of ownership and, under certain circumstances, upon its conversion to another use. (BDR C-348)

Assemblyman Hettrick commented that A.J.R. 8 was carried over from the last session. He stated, because of voter action last year, he did not believe that
action on A.J.R. 8 was needed.

Chairman Parks clarified that Assemblyman Anderson sponsored the A.J.R. 8 under discussion, and it was not the same resolution mentioned by Assemblyman Hettrick. The resolution under discussion dealt with property tax and transfer of ownership.

Assemblyman Anderson commented the resolution should go to Mr. Mortenson’s Assembly Committee on Constitutional Amendments. Chairman Parks asked if he wanted to make a motion to do pass A.J.R. 8 and refer it to Constitutional Amendments.

ASSEMBLYMAN ANDERSON MOVED TO DO PASS A.J.R. 8.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

Assemblyman Goldwater interrupted the motion and asked if the practical effect of passing A.J.R. 8 would create a situation where the Legislature could pass a “Proposition 13” as was done in California.

Ted Zuend, Fiscal Analyst, acknowledged that A.J.R. 8 had some elements of that; however, it merely authorized the Legislature, and, he added, “They would not have to do anything if they chose not to.” Assemblyman Goldwater responded, “Yes, but they could.” Mr. Zuend replied in the affirmative and explained it would allow for the revaluation of property upon sale (Exhibit F, page 5). Given the current system of taxes, there were two approaches. One would be the California method where there would be a return to a market-value approach. That would complicate the workload for assessors in Nevada.

The second method, one that would require the passage of legislation, would be to reassess at the effective market value at the time it was transacted. In order to retain the current system utilizing a depreciation, the assessor would have to bifurcate the assessment to determine the market value of the land and the residual. The latter would be the value of the improvement at the time of sale. To remove all depreciation from property at the time of sale under the current system the property would be over valued significantly in most cases. A twenty-year home was not worth the same as a new home of similar size and shape.

Concluding, Mr. Zuend stated one approach would lead in the direction of the California system, where there would be a return to a market value approach. If the Legislature wanted to protect homeowners from property tax increases, it would have to do something differently. Currently, the value of the improvement was reduced by one and one-half percent per year, fixed. If the home was old or a person resided there for a long time, the benefit of that reduction would be realized. If the market-value approach were utilized, that would not be possible; however, a cap could be placed on annual assessment increases. California used a figure of 2 percent. The Nevada Legislature could choose any percentage in order to protect the longtime homeowner. That would also address the problem at Lake Tahoe.

Assemblyman Goldwater reiterated that his concern related to the potential of a Proposition 13 situation. In his view, it was not the best thing to do. The contract with the voters that was slowly being broken was a statutory $3.64 cap on property tax. The promise was that property values and taxable assessment would not be increased beyond that cap. Mr. Goldwater agreed with the constitutional prohibition of exceeding the cap, and he voiced his opposition to A.J.R. 8.

Assemblywoman McClain voiced her agreement with Assemblyman Goldwater.

Assemblyman Anderson offered to respond to concerns regarding A.J.R. 8. It was enabling legislation, and he stated it was essential to care for the older communities in the state of Nevada. Properties that were moving on and off the tax rolls had a detrimental effect on communities. Although a promise was made to the people of Nevada, Mr. Anderson did not believe the people envisioned what would happen to older pieces of property that converted to special uses. He reiterated his concern for the smaller communities, and stated A.J.R. 8 would provide opportunities to older neighborhoods in transition from residential to business use. He encouraged the constitutional question to move forward and to go to the voters.

Assemblyman Grady recalled similar legislation from previous sessions that was proposed twice and ultimately declared unconstitutional. At that time, the discussion centered on the older neighborhoods of the Reno area, where some of the oldest homes were selling for millions of dollars. Mr. Grady viewed the resolution as beneficial to both the urban and the rural areas of Nevada. He urged support for A.J.R. 8.

Chairman Parks stated there was a motion on the floor from Assemblyman Anderson and seconded by Assemblyman Hettrick to approve A.J.R. 8.

Assemblyman Griffin asked if the legislation would allow the option to reset property values at some level based on purchase price. He recalled his concern centered on the impact to the value of the property. It would not necessarily change the situation from a revenue standpoint, which had been the original intent. Mr. Griffin asked the fiscal analyst to clarify.

Ted Zuend replied that the problem with “stripping off the depreciation” was that it was not possible to strip all of it off. He added, “The predicate would be that you would have to value it at the market value at the point of sale. That would be less than the value of the land plus the replacement costs and the improvements at that point in time, which is our current system.” Assemblyman Griffin asked if that would slow down the depreciation from that point in time, because there would be a splitting, creating a much higher value on the structure at resale. In terms of assessment, there would be a lowering in the value of the land. As such, depreciation would be much slower, and that would be one of the effects.

In response, Mr. Zuend stated it would require legislation to handle that at some point in the future. The Nevada Legislature in 2007 would have to consider the issue. The current system was not based on market value; rather, it was based on taxable value that was market value of land plus depreciated improvements. An assessor, such as Mr. Dawley, would testify that it was not feasible to strip the depreciation away and not have a value that in almost all cases exceeded market value.

Assemblyman Griffin commented there would be a trade-off. Mr. Zuend replied the Legislature would decide how best to handle those properties at the point of sale and the expected outcome after that. Would further depreciation be allowed once that new valuation of the improvement was established? Mr. Zuend added that it was not impossible to do; rather, it was not as simple as it appeared to be under the terms of the current bill and the bill mentioned by Assemblyman Grady.

Assemblyman Goldwater fully concurred with Assemblyman Anderson; however, Mr. Goldwater always viewed tax assessment bills as balloons. He clarified by stating, “Wherever you push, it pops out someplace else.” He suspected that was part of Mr. Griffin’s viewpoint. Regardless of what happened, somebody would be left in some vulnerable situation. Mr. Goldwater’s greatest concern was the current unfair situation was not as bad as it could be in the future under a law that was constitutionally prohibited.

Chairman Parks asked the maker of the motion if he would like to withdraw his motion and bring it back for consideration on Thursday. Assemblyman Anderson stated he would withdraw his motion on A.J.R. 8. He voiced concern that the bill had to be out of the Taxation Committee and into the Committee on Constitutional Amendments. Chairman Parks clarified that it had been concurrently referred. Assemblyman Anderson was aware that it was a resolution and, therefore, did not fit the Friday time period. He restated his offer to withdraw the motion on A.J.R. 8.

Chairman Parks accepted the offer and announced the resolution would be held for further discussion.

The meeting was adjourned at 4:05 p.m.

RESPECTFULLY SUBMITTED:

June Rigsby

Committee Secretary

APPROVED BY:

Assemblyman David Parks, Chairman

DATE: