Friday, April 12 was the deadline for proposed legislation to receive committee approval within the originating legislative chamber. Unless it received a special exemption from the deadline, any bill that did not receive this approval died.
Among the bills that died as a result of this first deadline in the 77th Legislative Session were many forward-thinking, market-oriented policy solutions as well as short-sighted government interventions into the marketplace. This report reviews those good, bad and ugly bills.
The Good proposals that died
AB 254 (Assemblyman Ira Hansen et al.) and SB 195 (Sen. Michael Roberson) would have enacted a “parent-trigger law,” allowing parents of students in a failing school to enact significant changes to the school’s governance structure — including converting the school to a charter school. SB 311 (Sen. Aaron Ford), a watered-down version of the parent-trigger law that allows parents to convert a failing school to an empowerment school, survived the deadline.
AB 318 (Sen. Joe Hardy et al.) would have changed the cost threshold on public infrastructure projects at which state prevailing-wage laws begin to apply from $100,000 to $1.5 million. It also would have eliminated the requirement that anyone working more than eight hours in a single day on a public project receive pay at 1.5 times the prevailing-wage rate. Workers would still receive an overtime premium when working more than 40 hours per week. Even without overtime, prevailing-wage laws have been shown to increase pay by 44 to 46 percent and add significantly to the cost of public construction.
AB 368 (Assemblymen Jim Wheeler and Sen. Hardy) would have exempted home-based businesses with less than $100,000 in annual gross revenues from the requirement to obtain a state business license. As detailed in NPRI’s recent “Path to Sustainable Prosperity,” business licensing constitutes a barrier to entrepreneurship and job creation — particularly for aspiring entrepreneurs with modest means at their disposal.
AB 371 (Assemblyman Wesley Duncan) would have created a charter-agency framework that would have drastically changed the incentives facing state workers by allowing them to share in the savings if they could develop more efficient methods for delivering public services. The charter-agency approach was originally developed in Iowa under the leadership of former Democratic governor Tom Vilsack and was recognized by the Kennedy School at Harvard University with an “Innovations in American Government Award.”
SB 146 (Sen. Ben Kieckhefer) would have exempted public-school construction and any construction projects completed by the Nevada System of Higher Education from costly prevailing-wage requirements. Ohio lawmakers enacted a similar exemption in 1997. A subsequent review by that state’s legislative research staff concluded that the exemption allowed public schools to be constructed for 10.8 percent less money.
SB 151 (Sen. Don Gustavson et al.) would have reverted the allowable depreciation schedule used to determine annual car-registration fees to its pre-2009 structure. In 2009, lawmakers adjusted that schedule to slow down the allowable depreciation rate so that taxpayers would have to pay more each year to register their vehicles.
SB 161 (Sen. Roberson et al.) would have removed automatic attorneys’ fees from the state’s construction-defect law. Currently, attorneys have an incentive to file as many claims against private contractors as possible — irrespective of whether the claims are legitimate — because attorneys are guaranteed to recover lucrative fees for these claims. This raises the cost to contractors of obtaining insurance and, thus, the cost of new home construction.
The Bad proposals that died
AB 122 (Assemblymen Harvey Munford and Joseph Hogan) would have imposed a new excise tax on sales of fast food. Studies have found that low-income households consume a disproportionate share of inexpensive fast food and that fast-food restaurant density is more concentrated in low-income neighborhoods. Therefore, this “Happy Meal tax” would have been highly regressive.
AB 279 (Assemblywoman Peggy Pierce) would have levied a new corporate income tax at a rate of 4.5 percent on all business income beyond $500,000 annually. Not only would a corporate income tax limit the growth potential of native firms, but studies have shown that this is, by far, the most volatile tax instrument employed by states across the country.
The Ugly proposals that died
SB 95 (Committee on Commerce, Labor and Energy) would have created a “Task Force on Employee Misclassification” with the goal of penalizing workers and employers who agree to structure their relationship on an independent contracting basis instead of a traditional employee-employer relationship. Independent contracting is an important path to entrepreneurship and self-employment for many individuals.
SB 156 (Sen. Tick Segerblom, Sen. David Parks) would have required consumers of health insurance in Nevada to purchase coverage for acupuncture treatment, whether or not they ever intend to seek such treatment. Mandates such as this unnecessarily increase the cost of health insurance, thereby making it less accessible.
Many legislative proposals of the good, bad and ugly varieties also survived the first committee deadline and those will be reviewed in subsequent editions of this series. Of course, it is worth mentioning that there are no “hard deadlines” because legislative leadership can always revive nominally “dead” proposals by introducing them as amendments to other bills. This practice becomes increasingly common toward the conclusion of legislative sessions as lawmakers negotiate the “end game.”
Geoffrey Lawrence is deputy policy director at the Nevada Policy Research Institute. For more visit http://npri.org.