Big changes expected for education bill

Erin Neff

Thursday, May 31, 2001 | 10:40 a.m.

CARSON CITY -- One of two key bills designed to raise money for education this session could be headed for major changes.

The Assembly Judiciary Committee was expected to consider today amendments to Sen. Mark James' proposed increases in business fees.

Nobody had any problem with hiking the fees to raise an estimated $30 million over the next two years. But numerous concerns were aired about provisions in the bill that offer certain liability protections to corporate directors.

Senate Bill 577 is one of two key elements designed to fund a one-time 3-percent teachers' bonus in the first year and a 2-percent raise in the second year of the biennium. The second measure involves the recapturing of car rental tax.

James, R-Las Vegas, argued Wednesday that the liability provisions were necessary to attract new businesses to the state in light of the increasing fees.

"You're not prohibiting any type of lawsuit," James said amid concerns from the committee.

The bill would protect corporate directors from personal liability in cases not involving fraud.

Committee members asked why fraud had to be the standard when company directors could also be guilty of negligence or wanton disregard of facts.

Sam McMullen, a lobbyist for the Las Vegas Chamber of Commerce, urged the committee to pass the measure unchanged.

"The liability provisions are a fair trade-off for the increase in fees," McMullen said.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, said most of the fee increases apply to rarely used transactions such as mergers and restating incorporation.

The bill does increase the fee charged for new businesses to incorporate by $80.

"Why does an $80 increase need the kind of immunity provisions that will hurt other Nevada businesses?" Buckley asked.

Assemblyman Tom Collins, D-North Las Vegas, expressed concern that if SB577 passes with a "trade-off" for businesses he suspects additional trade-offs will be needed to pass tax increases in future legislative sessions.

"I don't want to have strings attached to be a precedent for you next time," Collins told McMullen.

Assemblyman Greg Brower, R-Reno, questioned three lawyers who suggested amendments to the liability provisions throughout the day's testimony. But when the panel recessed Wednesday evening he still wasn't sure there was a linkage between the fee increases and the liability provisions.

"The last thing we want to do is change substantive law just because it's the carrot at the end of a stick which is a fee," Brower said.

McMullen said the liability provisions were good public policy that could stand apart as an enticement for businesses.

Assemblywoman Ellen Koivisto, D-Las Vegas, asked whether anyone ever attempted to make it law, "if this is such good policy."

In addition to concerns over the liability provisions, the committee will likely have to amend the bill to clear up conflicts with other legislation that already passed both houses.