Bill > AB449

Introduced Session

Legislative Counsel's Digest: Existing law requires the Office of Economic Development to approve 1 applications for the abatement of certain taxes if the Office determines that an 2 applicant business has satisfied certain requirements. (NRS 274.310-274.330, 3 360.750-360.754, 360.890, 360.950) Among the requirements which a business 4 must satisfy to receive an abatement of taxes from the Office is to have executed an 5 agreement with Office that includes the provisions specified by law. (NRS 274.310-6 274.330, 360.750-360.754, 360.890, 360.950) Existing law requires a business 7 whose abatement has been approved by the Office to repay the amount of the 8 abatement if the business ceases to meet the requirements for the abatement or 9 ceases to operate before the time specified in the agreement between the business 10 and the Office. (NRS 274.310-274.330, 360.750-360.754, 360.894, 360.970) 11 Sections 1-6and 13-15of this bill make the approval of such applications upon 12 determining that a business has satisfied the applicable requirements permissive 13 rather than mandatory. 14 Under existing law, for the purpose of any partial tax abatement which the 15 Office is required or authorized to approve, the Office is deemed to have approved 16 the partial tax abatement: (1) upon approval by the Board of Economic 17 Development for partial tax abatements with a projected value to a single entity of 18 $250,000 or more; and (2) upon approval by the Executive Director of the Office 19 for partial tax abatements with a projected value to a single entity of less than 20 $250,000. (NRS 231.0695) Section 12of this bill removes the $250,000 threshold 21 so that the Office is deemed to have approved a partial tax abatement only upon 22 approval of the partial tax abatement by the Board. 23 Sections 1, 3and 4of this bill require the Office, in determining whether to 24 approve an application for certain partial abatements of taxes for an expanding 25 business, to consider the number of employees of the business enrolled in Medicaid 26 and the costs to this State to provide Medicaid coverage to those employees. 27 Existing law creates the Account for Affordable Housing and requires money 28 deposited in the Account to be used for certain purposes related to affordable 29 housing. (NRS 319.500, 319.510) Sections 1, 3and 4of this bill require the 30 agreement entered into between the Office and an applicant for certain partial tax 31 abatements to include a statement that the applicant will, for each fiscal year in 32 which the abatement is in effect, pay to the Department of Taxation an amount 33 equal to 10 percent of the dollar amount of the abatement for that fiscal year, which 34 the Department is required to transmit to the State Controller for deposit in the 35 Account for Affordable Housing. Section 16of this bill requires money which is 36 deposited in the Account pursuant to an agreement between the Office and a 37 business which has received a tax abatement to be used in the county in which the 38 business operates. Sections 1, 3and 4require a business whose partial abatement 39 has been approved by the Office to repay the amount of the abatement if it fails to 40 make the payment to the Department for deposit in the Account for Affordable 41 Housing. 42 Existing law provides that a business which makes a capital investment of at 43 least $1,000,000 in a program at the University of Nevada, Reno, the University of 44 Nevada, Las Vegas, or the Desert Research Institute for the support of research, 45 development or training related to the field of endeavor of the business and which 46 meets certain other requirements is eligible to apply for a partial abatement of 47 personal property taxes. If the business makes a capital investment of at least 48 $500,000 in the Nevada State College or certain other institutions within the 49 Nevada System of Higher Education in support of college certification or research 50 or training related to the field of endeavor of the business and the business meets 51 certain other requirements, the business is also eligible to apply for a partial 52 abatement of personal property taxes. (NRS 360.752) Section 2of this bill revises 53 the criteria to be eligible for these partial abatements of personal property taxes by: 54 (1) reducing from $1,000,000 to $500,000 the amount of capital investment which a 55 business must make in a program at the University of Nevada, Reno, the University 56 of Nevada, Las Vegas, or the Desert Research institute; (2) increasing the average 57 hourly wage that must be paid by the business to its new employees in this State 58 from at least 100 percent of certain average hourly wage rates to at least 110 59 percent of certain average hourly wage rates; and (3) removing the requirement to 60 employ a certain number of full-time employees for the duration of the abatement. 61 Under existing law, if the Office approves certain partial abatements of 62 property taxes, the Office determines the duration of the partial abatement of 63 property taxes, but the duration of such a partial abatement must be at least 1 year 64 but not more than 10 years. (NRS 361.0687) If the partial abatement approved by 65 the Office is a partial abatement of the personal property taxes imposed on a data 66 center, the duration of the partial abatement of such taxes may also be for a 67 duration of at least 10 years but not more than 20 years if certain requirements are 68 met. (NRS 361.0683) Section 7of this bill limits the duration of a partial abatement 69 of the personal property taxes imposed on a data center to a period of at least 1 year 70 but not more than 10 years. 71 Under existing law, if the Office approves certain partial abatements of the 72 modified business tax, the partial abatement must equal 50 percent of the amount of 73 modified business tax otherwise due during the first 4 years of the operation of the 74 business. (NRS 363B.120) Section 8of this bill requires the partial abatement to be 75 for any period of at least 1 year but not more than 4 years. 76 Sections 9-11of this bill create the Division of Small Business Development 77 within the Office of Economic Development and prescribe the duties of the 78 Division relating to encouraging the creation, cultivation and growth of small 79 businesses in this State. 80 SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 360.750 is hereby amended to read as follows: 360.750 1. A person who intends to locate or expand a 2 business in this State may apply to the Office of Economic 3 Development pursuant to this section for a partial abatement of one 4 or more of the taxes imposed on the: 5 (a) New business pursuant to chapter 361, 363B or 374 of NRS. 6 (b) Expanded business pursuant to chapter 361 or 363B of NRS 7 or the local sales and use taxes. As used in this paragraph, local 8 sales and use taxes means the taxes imposed on the gross receipts 9 of any retailer from the sale of tangible personal property sold at 10 retail, or stored, used or otherwise consumed, in the political 11 subdivision in which the business is to be located or expanded, 12 except the taxes imposed by the Sales and Use Tax Act and the 13 Local School Support Tax Law. 14 2. The Office of Economic Development shall may approve 15 an application for a partial abatement pursuant to this section if the 16 Office makes the following determinations: 17 (a) The business offers primary jobs and is consistent with: 18 (1) The State Plan for Economic Development developed by 19 the Executive Director of the Office of Economic Development 20 pursuant to subsection 2 of NRS 231.053; and 21 (2) Any guidelines adopted by the Executive Director of the 22 Office to implement the State Plan for Economic Development. 23 (b) The applicant has executed an agreement with the Office 24 which must: 25 (1) Comply with the requirements of NRS 360.755; 26 (2) State the date on which the abatement becomes effective, 27 as agreed to by the applicant and the Office, which must not be 28 earlier than the date on which the Office received the application; 29 (3) State that the business will, after the date on which the 30 abatement becomes effective, continue in operation in this State for 31 a period specified by the Office, which must be at least 5 years, and 32 will continue to meet the eligibility requirements set forth in this 1 subsection; 2 (4) State that the business will offer primary jobs; and (5) State that the business will, for each fiscal year in which 4 the partial abatement is in effect, pay to the Department of 5 Taxation an amount equal to 10 percent of the dollar amount of 6 the partial abatement for that fiscal year, which the Department 7 shall transmit to the State Controller for deposit in the Account for 8 Affordable Housing created by NRS 319.500; and 9 (6) Bind the successors in interest of the business for the 10 period specified period. pursuant to subparagraph (3). (c) The business is registered pursuant to the laws of this State 12 or the applicant commits to obtain a valid business license and all 13 other permits required by the county, city or town in which the 14 business operates. 15 (d) Except as otherwise provided in subsection 4 or 5, the 16 average hourly wage that will be paid by the business to its new 17 employees in this State is at least 100 percent of the average 18 statewide hourly wage as established by the Employment Security 19 Division of the Department of Employment, Training and 20 Rehabilitation on July 1 of each fiscal year. 21 (e) The business will, by the eighth calendar quarter following 22 the calendar quarter in which the abatement becomes effective, offer 23 a health insurance plan for all employees that includes an option for 24 health insurance coverage for dependents of the employees, and the 25 health care benefits the business offers to its employees in this State 26 will meet the minimum requirements for health care benefits 27 established by the Office. 28 (f) Except as otherwise provided in this subsection and NRS 29 361.0687, if the business is a new business in a county whose 30 population is 100,000 or more or a city whose population is 60,000 31 or more, the business meets at least one of the following 32 requirements: 33 (1) The business will have 50 or more full-time employees 34 on the payroll of the business by the eighth calendar quarter 35 following the calendar quarter in which the abatement becomes 36 effective who will be employed at the location of the business in 37 that county or city until at least the date which is 5 years after the 38 date on which the abatement becomes effective. 39 (2) Establishing the business will require the business to 40 make, not later than the date which is 2 years after the date on which 41 the abatement becomes effective, a capital investment of at least 42 $1,000,000 in this State in capital assets that will be retained at the 43 location of the business in that county or city until at least the date 44 which is 5 years after the date on which the abatement becomes 1 effective. 2 (g) Except as otherwise provided in NRS 361.0687, if the 3 business is a new business in a county whose population is less than 4 100,000, in an area of a county whose population is 100,000 or more 5 that is located within the geographic boundaries of an area that is 6 designated as rural by the United States Department of Agriculture 7 and at least 20 miles outside of the geographic boundaries of an area 8 designated as urban by the United States Department of Agriculture, 9 or in a city whose population is less than 60,000, the business meets 10 at least one of the following requirements: 11 (1) The business will have 10 or more full-time employees 12 on the payroll of the business by the eighth calendar quarter 13 following the calendar quarter in which the abatement becomes 14 effective who will be employed at the location of the business in 15 that county or city until at least the date which is 5 years after the 16 date on which the abatement becomes effective. 17 (2) Establishing the business will require the business to 18 make, not later than the date which is 2 years after the date on which 19 the abatement becomes effective, a capital investment of at least 20 $250,000 in this State in capital assets that will be retained at the 21 location of the business in that county or city until at least the date 22 which is 5 years after the date on which the abatement becomes 23 effective. 24 (h) If the business is an existing business, the business meets at 25 least one of the following requirements: 26 (1) For a business in: 27 (I) Except as otherwise provided in sub-subparagraph (II), 28 a county whose population is 100,000 or more or a city whose 29 population is 60,000 or more, the business will, by the eighth 30 calendar quarter following the calendar quarter in which the 31 abatement becomes effective, increase the number of employees on 32 its payroll in that county or city by 10 percent more than it 33 employed in the fiscal year immediately preceding the fiscal year in 34 which the abatement becomes effective or by twenty-five 35 employees, whichever is greater, who will be employed at the 36 location of the business in that county or city until at least the date 37 which is 5 years after the date on which the abatement becomes 38 effective; or 39 (II) A county whose population is less than 100,000, an 40 area of a county whose population is 100,000 or more that is located 41 within the geographic boundaries of an area that is designated as 42 rural by the United States Department of Agriculture and at least 20 43 miles outside of the geographic boundaries of an area designated as 44 urban by the United States Department of Agriculture, or a city 45 whose population is less than 60,000, the business will, by the 1 eighth calendar quarter following the calendar quarter in which the 2 abatement becomes effective, increase the number of employees on 3 its payroll in that county or city by 10 percent more than it 4 employed in the fiscal year immediately preceding the fiscal year in 5 which the abatement becomes effective or by six employees, 6 whichever is greater, who will be employed at the location of the 7 business in that county or city until at least the date which is 5 years 8 after the date on which the abatement becomes effective. 9 (2) The business will expand by making a capital investment 10 in this State, not later than the date which is 2 years after the date on 11 which the abatement becomes effective, in an amount equal to at 12 least 20 percent of the value of the tangible property possessed by 13 the business in the fiscal year immediately preceding the fiscal year 14 in which the abatement becomes effective, and the capital 15 investment will be in capital assets that will be retained at the 16 location of the business in that county or city until at least the date 17 which is 5 years after the date on which the abatement becomes 18 effective. The determination of the value of the tangible property 19 possessed by the business in the immediately preceding fiscal year 20 must be made by the: 21 (I) County assessor of the county in which the business 22 will expand, if the business is locally assessed; or 23 (II) Department, if the business is centrally assessed. 24 (i) The applicant has provided in the application an estimate of 25 the total number of new employees which the business anticipates 26 hiring in this State by the eighth calendar quarter following the 27 calendar quarter in which the abatement becomes effective if the 28 Office approves the application. 29 3. Notwithstanding the provisions of subsection 2, the Office 30 of Economic Development: 31 (a) Shall not consider an application for a partial abatement 32 pursuant to this section unless the Office has requested a letter of 33 acknowledgment of the request for the abatement from any affected 34 county, school district, city or town. 35 (b) Shall consider the level of health care benefits provided by 36 the business to its employees, the projected economic impact of the 37 business and the projected tax revenue of the business after 38 deducting projected revenue from the abated taxes. 39 (c) Shall, if the applicant for a partial abatement pursuant to 40 this section is an existing business in this State, consider the 41 number of employees of the business enrolled in Medicaid and the 42 costs to this State to provide coverage under Medicaid for those 43 employees. 44 (d) May, if the Office determines that such action is necessary: 45 (1) Approve an application for a partial abatement pursuant 1 to this section by a business that does not meet the requirements set 2 forth in paragraph (f), (g) or (h) of subsection 2; 3 (2) Make any of the requirements set forth in paragraphs (d) 4 to (h), inclusive, of subsection 2 more stringent; or 5 (3) Add additional requirements that a business must meet to 6 qualify for a partial abatement pursuant to this section. 7 4. Notwithstanding any other provision of law, the Office of 8 Economic Development shall not approve an application for a 9 partial abatement pursuant to this section if: 10 (a) The applicant intends to locate or expand in a county in 11 which the rate of unemployment is 7 percent or more and the 12 average hourly wage that will be paid by the applicant to its new 13 employees in this State is less than 70 percent of the average 14 statewide hourly wage, as established by the Employment Security 15 Division of the Department of Employment, Training and 16 Rehabilitation on July 1 of each fiscal year. 17 (b) The applicant intends to locate or expand in a county in 18 which the rate of unemployment is less than 7 percent and the 19 average hourly wage that will be paid by the applicant to its new 20 employees in this State is less than 85 percent of the average 21 statewide hourly wage, as established by the Employment Security 22 Division of the Department of Employment, Training and 23 Rehabilitation on July 1 of each fiscal year. 24 (c) The applicant intends to locate in a county but has already 25 received a partial abatement pursuant to this section for locating that 26 business in that county. 27 (d) The applicant intends to expand in a county but has already 28 received a partial abatement pursuant to this section for expanding 29 that business in that county. 30 (e) The applicant has changed the name or identity of the 31 business to evade the provisions of paragraph (c) or (d). 32 5. Notwithstanding any other provision of law, if the Office of 33 Economic Development approves an application for a partial 34 abatement pursuant to this section, in determining the types of taxes 35 imposed on a new or expanded business for which the partial 36 abatement will be approved and the amount of the partial abatement: 37 (a) If the new or expanded business is located in a county in 38 which the rate of unemployment is 7 percent or more and the 39 average hourly wage that will be paid by the business to its new 40 employees in this State is less than 85 percent of the average 41 statewide hourly wage, as established by the Employment Security 42 Division of the Department of Employment, Training and 43 Rehabilitation on July 1 of each fiscal year, the Office shall not: 44 (1) Approve an abatement of the taxes imposed pursuant to 1 chapter 361 of NRS which exceeds 25 percent of the taxes on 2 personal property payable by the business each year. 3 (2) Approve an abatement of the taxes imposed pursuant to 4 chapter 363B of NRS which exceeds 25 percent of the amount of 5 tax otherwise due pursuant to NRS 363B.110. 6 (b) If the new or expanded business is located in a county in 7 which the rate of unemployment is less than 7 percent and the 8 average hourly wage that will be paid by the business to its new 9 employees in this State is less than 100 percent of the average 10 statewide hourly wage, as established by the Employment Security 11 Division of the Department of Employment, Training and 12 Rehabilitation on July 1 of each fiscal year, the Office shall not: 13 (1) Approve an abatement of the taxes imposed pursuant to 14 chapter 361 of NRS which exceeds 25 percent of the taxes on 15 personal property payable by the business each year. 16 (2) Approve an abatement of the taxes imposed pursuant to 17 chapter 363B of NRS which exceeds 25 percent of the amount of 18 tax otherwise due pursuant to NRS 363B.110. 19 6. If the Office of Economic Development approves an 20 application for a partial abatement pursuant to this section, the 21 Office shall immediately forward a certificate of eligibility for the 22 abatement to: 23 (a) The Department; 24 (b) The Nevada Tax Commission; and 25 (c) If the partial abatement is from the property tax imposed 26 pursuant to chapter 361 of NRS, the county treasurer. 27 7. An applicant for a partial abatement pursuant to this section 28 or an existing business whose partial abatement is in effect shall, 29 upon the request of the Executive Director of the Office of 30 Economic Development, furnish the Executive Director with copies 31 of all records necessary to verify that the applicant meets the 32 requirements of subsection 2. 33 8. If a business whose partial abatement has been approved 34 pursuant to this section and is in effect : ceases: (a) To Ceases to meet the requirements set forth in subsection 36 2; or (b) Operation Ceases operation before the time specified in 38 the agreement described in paragraph (b) of subsection 2 , ; or (c) Fails to make a payment to the Department of Taxation 40 required by the agreement described in paragraph (b) of 41 subsection 2, 42 the business shall repay to the Department or, if the partial 43 abatement was from the property tax imposed pursuant to chapter 44 361 of NRS, to the county treasurer, the amount of the partial 45 abatement that was allowed pursuant to this section before the 1 failure of the business to comply unless the Nevada Tax 2 Commission determines that the business has substantially complied 3 with the requirements of this section. Except as otherwise provided 4 in NRS 360.232 and 360.320, the business shall, in addition to the 5 amount of the partial abatement required to be paid pursuant to this 6 subsection, pay interest on the amount due at the rate most recently 7 established pursuant to NRS 99.040 for each month, or portion 8 thereof, from the last day of the month following the period for 9 which the payment would have been made had the partial abatement 10 not been approved until the date of payment of the tax. 11 9. A county treasurer: 12 (a) Shall deposit any money that he or she receives pursuant to 13 subsection 8 in one or more of the funds established by a local 14 government of the county pursuant to NRS 354.6113 or 354.6115; 15 and 16 (b) May use the money deposited pursuant to paragraph (a) only 17 for the purposes authorized by NRS 354.6113 and 354.6115. 18 10. The Office of Economic Development may adopt such 19 regulations as the Office of Economic Development determines to 20 be necessary to carry out the provisions of this section and 21 NRS 360.755. 22 11. The Nevada Tax Commission: 23 (a) Shall adopt regulations regarding: 24 (1) The capital investment that a new business must make to 25 meet the requirement set forth in paragraph (f) or (g) of subsection 26 2; and 27 (2) Any security that a business is required to post to qualify 28 for a partial abatement pursuant to this section. 29 (b) May adopt such other regulations as the Nevada Tax 30 Commission determines to be necessary to carry out the provisions 31 of this section and NRS 360.755. 32 12. An applicant for a partial abatement pursuant to this section 33 who is aggrieved by a final decision of the Office of Economic 34 Development may petition for judicial review in the manner 35 provided in chapter 233B of NRS. 36 13. For the purposes of this section, an employee is a full-time 37 employee if he or she is in a permanent position of employment 38 and works an average of 30 hours per week during the applicable 39 period set forth in subsection 2. 40

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Teresa Benitez-Thompson (D)*, 

(Pursuant to Joint Standing Rule No. 14.3.1, no further action allowed.) (on 04/10/2021)

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