Wednesday, May 7, 2003 | 11:20 a.m.
CARSON CITY -- While the first three months of the Legislature passed with few political battles, an Assembly committee's move Tuesday to delay a revenue bill has legislative observers watching for the gloves to come off in the last 26 days of the 2003 session.
The Assembly Judiciary Committee held off voting on a Senate bill that would create a new class of business partnership in Nevada. State fees collected by people filing for those partnerships would bring in an estimated $50 million in revenue over the next two years.
That decision didn't sit well in the Senate, where Judiciary Committee Chairman Mark Amodei, R-Carson City, considers the measure an important part of the solution to the state's budget crisis.
The move by the Assembly committee showed that the tax debate between the Republican-controlled Senate and the Democrat-controlled Assembly could spill over into non-tax panels such as the judiciary committees, which traditionally handle the policy of state criminal and civil laws.
Senate Bill 298, brought by the Nevada Resident Agents Association, would create limited liability-limited partnerships as an incentive for other businesses to set up in Nevada. Businesses would pay increased fees for the privilege, bringing in an estimated $20 million to $30 million a year, according the Resident Agent Association President Derek Rowley.
Resident agents in Nevada receive a commission or fee for helping businesses -- particularly those from out of state -- to incorporate. Rowley estimates resident agents spend roughly $10 million of their own money each year to market the state to businesses from outside Nevada's borders.
An LLLP designation is being used in several states as a way to grant family trusts and partnerships similar liability from lawsuits as limited liability companies receive.
Thus SB298 is seen as the industry's answer to the revenue problem by saying, here's what businesses want and what they will pay for the service.
An identical measure, Assembly Bill 439, already died in the Assembly Judiciary Committee when Chairman Bernie Anderson, D-Sparks, did not process it before the deadline for first house passage last month.
Some supporters of SB298 fear it could meet a similar fate if Anderson does not process it by the deadline for second house passage next Friday.
Anderson called SB298 "suspicious" and said his committee didn't have an appetite to move forward with the measure Tuesday.
"It's just very suspect and given that we've only got one week and three days to go before the deadline for second house passage, it doesn't look that good," Anderson said.
Anderson said the reason he found the bill suspicious is that the recommended change to an LLLP did not come from the Uniform Commission on State Laws, but from the resident agents.
The Nevada Trial Lawyers Association also expressed some concerns on the liability protection aspect of the LLLPs during a hearing in the Senate Judiciary Committee.
Amodei said he's surprised at Anderson's claim the bill is "suspicious," because no one has registered opposition to the measure as part of the revenue source used to fill the state's $704 million deficit.
"I haven't gotten a single e-mail, call or letter," Amodei said. "I can't understand how the word suspicion comes into play and how this isn't seen as a significant part of keeping Nevada competitive to businesses."
Amodei also said the trial lawyers' concerns did not seem to interfere with processing the bill.
Amodei's committee is currently considering several measures important to Assembly Democrats, including the death penalty reforms that Anderson co-sponsored.
In addition to death penalty bills, the judiciary committees are each considering medical malpractice issues, corporate fraud and construction defects.
"If anything happens to any of the bills, it'll be done out in the open where people can see it," Amodei said, referring specifically to Assembly Bill 118 -- a measure barring the execution of those who were 16 or 17 at the time of their crime.
Anderson said he didn't think that either he or Amodei "are of the character that either one of us plays those games."
During the 2001 session a resident agents' bill and the death penalty did intertwine in the Senate Judiciary Committee.
Then-chairman Mark James, a Las Vegas Republican, proposed raising $60 million in fees through corporate filing fees and a car rental tax hike. It was also his committee -- despite James' call on the floor of the Senate for a moratorium on the death penalty -- that killed several death penalty reform measures, including one that would have barred execution of the mentally ill.
Legislative leaders, though, insist policy, not politics, are driving decisions on solving the pending budget deficit.
In the Assembly Taxation Committee on Tuesday afternoon, lawmakers continued an examination of Assembly Bill 281 -- the Nevada Task Force on Tax Policy's omnibus tax proposal. The panel considered AB281's plan to increase corporate filing fees by 50 percent, raising about $30 million in revenue per year.
When Rowley of the Resident Agents Association objected to that section of the bill, he said that level of increase, coupled with the proposed gross receipts tax, would "bring catastrophic change to Nevada's incorporation industry."
"You would destroy an industry that Nevada has worked decades to build," Rowley said.
He also said that given the increases approved in 2001, businesses have only to expect that the fees will continue to rise. In 2000, it cost $210 to file a corporation and an initial list of officers. That number rose to $340 after the 2001 Legislature and would rise to $515 under AB281.
Rowley also mentioned that his industry wasn't simply objecting to the increase without coming forward with its own proposal.
When two Republicans on the committee asked what the proposal was, Rowley quietly mentioned SB298. Anderson, who also sits on the Assembly Taxation Committee, looked and muttered something inaudible from the audience.
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