NEVADA LEGISLATURE

Twentieth Special Session, 2003

ASSEMBLY DAILY JOURNAL

THE TWENTY-FIFTH DAY

Carson City (Saturday) July 19, 2003

Assembly called to order at 11:01 p.m.

Mr. Speaker presiding.

Roll called.

All present except Assemblymen Christensen and Hardy, who were absent.

Prayer by the Chaplain, Beverly Mobley.

Let us pray. Dear Lord, together, we, as a body, are whole. Individually, we are a part of the whole, but the body is not complete without the spirit. We pray, Lord, that you lift our spirit, nourish our spirit, and strengthen our spirit, with joy, kindness, and thankfulness, so that we, as individuals, may bring integrity to the whole.

Amen.

Pledge of allegiance to the Flag.

Assemblyman Oceguera moved that further reading of the Journal be dispensed with, and the Speaker and Chief Clerk be authorized to make the necessary corrections and additions.

Motion carried.

MOTIONS, RESOLUTIONS AND NOTICES

Assemblywoman Buckley moved that the Assembly resolve itself into a Committee of the Whole for the purpose of considering Senate Bill No. 5, with Assemblyman Perkins as Chairman of the Committee of the Whole.

Motion carried.

IN COMMITTEE OF THE WHOLE

Assemblyman Perkins presiding.

Quorum present.

Senate Bill No. 5, Assembly Amendment No. 12 considered.

Chairman Perkins:

You should have SB 5 in your bill books and there should be a proposed amendment distributed to the committee as well.

Assemblywoman Buckley:

Thank you, Mr. Chairman. As all of us are all aware, we need to end this legislative session and fulfill our constitutional duties to schools. The consideration of SB 5 is another step forward to try to reach that goal. The amendment to SB 5 we have in front of us does a number of things. It amends SB 5, first of all, which is the Distributive School Account bill. It also modifies some of the tax decisions that have been made. It does this by rearranging the taxes and secondly, by reducing the amount of taxes required in SB 6. I’ll review those major changes. First, it changes the capped payroll tax in SB 6 to a modified business tax. It does this in several ways. It changes the idea away from a head-tax and moves to consider all of the gross wages of a business. Under the old payroll tax a business would be charged $210 for each employee whether the employee was a dishwasher or CEO or, tonight it seems appropriate, a highly paid lobbyist. Under this plan the real wages of everyone are included. It gives businesses that offer health insurance a dollar-for-dollar deduction. It lowers the rate to .85 percent the first year down to .65 percent the second and following years, and eliminates the Business License Tax, or the existing head tax. It fixes the live entertainment tax to what we agreed to previously. They are the exact same changes. As you recall, we made several good suggestions on how to improve this tax by lowering it, primarily for stadiums for over 7,500 seats.

The next important thing this amendment does is to add the Class Size Reduction bill. It lowers the taxes on cigarettes to 50 cents, liquor to 50 percent. It removes the room tax and reduces taxes by removing the Rainy Day Fund’s $30 million. It removes $5 million from the Department of Taxation in section 63 and makes several of the technical changes that Legal has found, through their very diligent work this legislative session, to make sure everything conforms with its own internal references and to make sure the language is the best it can be. This bill is effective upon the passage of SB 6 and enables this body to do a couple of very important things tonight: fund the Distributive School Account, fund class-size reduction, and do it by lowering the taxes already approved in SB 6, which is still pending before this body. I would urge this body’s support.

Assemblywoman Gibbons:

Thank you, Mr. Chairman. I just want to clarify SB 6 is the original version passed by the Senate, not the one passed this body passed?

Chairman Perkins:

We voted yesterday, if you recall, to not recede from the Assembly amendments, but we have not yet sent that bill to the Senate. If this amendment passes, and SB 5 is amended, then we would send this bill to the Senate. Once they pass SB 5, then the Assembly could rescind its action whereby it did not recede from its amendments and then recede from those amendments. The two bills would fit together and fund education and provide the revenue stream for our state. Are there further questions or comments from the committee?

Assemblyman Hettrick:

Thank you, Mr. Speaker. In section 63 it appears that we have stricken the $30 million appropriated to the General Fund in the previous section. It shows on page 53, section 188.7, we are striking section 1 where we appropriate the $30 million to the Rainy Day Fund. But, when we go to the next page, 54, it shows the amount of the appropriation must not exceed $50 million. Are we now setting it up so we automatically put the whole $50 million in for the second year of the biennium?

Chairman Perkins:

Mark, can you respond to the question, please?

Mark Stevens, Assembly Fiscal Analyst:

The $50 million is contingently appropriated if the amount in subsection 1 exceeds the amount of ending fund balance in the State General Fund in fiscal year 2004-2005, as estimated by the Nevada Legislature. So, if there were sufficient funding to allow the trigger to go off at the end of the current biennium, then $50 million would be appropriated to the Rainy Day Fund. If there weren’t sufficient monies, the $50 million appropriation would not be made.

Chairman Perkins:

If the money came in above what is projected, would it go into the Rainy Day Fund, but only up to the $50 million level?

Mark Stevens:

Correct.

Assemblyman Hettrick:

Thank you, Mr. Speaker. The 7 percent is the fashion we did this before. I see 7 percent on page 55, but I’m trying to read this as fast as I can.

Chairman Perkins:

Mark, can you explain to the committee if the two fit together and provide the same language that this committee has dealt with before?

Mark Stevens:

On page 55(a), it says, “One hundred seven percent of the total revenue from all sources to the State General Fund as projected by the Nevada Legislature for the applicable fiscal year,” and in (b), any amounts contingently appropriated, which would include the $50 million Rainy Day Fund. Then, there are other places where the money above 107 percent would go, listed further down the page. I am happy to go through those if you would like me to.

Assemblyman Hettrick:

I am just trying to make sure this language works. I think on page 55 it does what we discussed, which is anything above 107 percent over the budget, and then the money would take care of “one-shot” money. That’s the way I read it, “alternative source of revenue will likely not be available or will not be received during the biennium must be used to replace previously used non-recurring revenue.” That is what we talked about, but the way it looks on page 54, it says if at the end of the year it’s over the amount estimated by the Legislature then there is an appropriation that must not exceed $50 million. It appears to me the two are in conflict.

Chairman Perkins:

If the initial money comes in over projections, up to $50 million goes into the Rainy Day Fund, then over 7 percent, it goes into cover the holes that you spoke of earlier, the one-shot non-recurring money; then back to the Rainy Day Fund; then back to the tax refund fund. The first trigger, if you will, would go into the Rainy Day Fund up to $50 million. Mark, what would be 7 percent of the general fund? Maybe that will put it into perspective for us.

Mark Stevens:

I would have to calculate it to be sure, but it would a little over $150 million dollars.

Chairman Perkins:

So it would be from the first $150 million that the $50 million would come from to go into the Rainy Day Fund, and then when we hit the 7 percent trigger then it goes to the other. It sounds to me that they are not in conflict with each other.

Assemblyman Hettrick:

I understand what it’s saying, Mr. Chairman, and I appreciate the explanation. I think the intent of what we were trying to do was to say that we ought to take any money initially that was over, if we were fortunate enough to generate a surplus, and put it toward the nonrecurring revenue hole that we know exists which is about $200 million, and then we would allow it, as I understood it, to go to the Rainy Day Fund to be saved at the rate of $30 million. Now, what we’re doing is to take the first $50 million that would trigger, so it would go immediately and not be subject to the 7 percent at all. Then, we would have to get 7 percent over which is another $150 million before we could put money toward the $200 million hole which would take $350 million plus the $50 million, or $400 million.

Chairman Perkins:

I think that was the case before, but now we were reducing the appropriation by $30 million. So originally it would have been a $30 million portion in the Rainy Day Fund with an additional $20 million; now it would shoot up to $50 million. I don’t think it’s inconsistent with what we did before, it’s just that now we’re backing out $30 million in appropriations directly to the Rainy Day Fund, so this is now refilling it before we get to the 7 percent portion.

Assemblyman Hettrick:

I will quit with this, Mr. Chairman. I understand what’s happening. I guess, but that’s not the way I understood it. I thought the discussion we had was that we ought to fill the hole first, and then go to the Rainy Day Fund as the second part of what’s on page 55 because the hole is the nonrecurring revenue and we’re going to put it away in the Rainy Day Fund where we can’t get to it. So, maybe it was my misunderstanding, but that was the way I understood we were going to do this.

Chairman Perkins:

I think it was my understanding that the first money that came in over the 7 percent threshold would not go directly to the Rainy Day Fund, as it had previously been directed, and then would be available to fill the hole first. Are there other questions or comments from the committee? I want to make sure you have plenty of opportunity to ask our staff the questions you need to get answered.

Assemblywoman Angle:

Thank you, Mr. Speaker. On page 19, section 66, I have two or three questions. The first is a point of clarification. In part (d) of section 66, subsection 2, it says, “Be accompanied by a fee of $125.” What is that fee currently?

Assemblywoman Buckley:

$75.

Assemblywoman Angle:

So that is an increase of $50?

Assemblywoman Buckley:

It is, but the other fees in the bill have been decreased by a much larger amount such that the net impact of this bill is lowering fees, lowering appropriations and that’s why it doesn’t need a two-thirds, anticipating your next question.

Assemblywoman Angle:

Actually my next question was on page 32, in section 39, subsection 2 part (c). I was wondering if you could explain to me this definition of, “a person who operates a business from his home and earns from that business not more than 66 2/3 percent of the average annual wage, as computed…” Tell me how that would relate to those home businesses. We have had this discussion many times during the regular session, such as the Avon lady. So, who is this person who operates this business from his home?

Chairman Perkins:

You spoke to it. It is actually to exempt the Avon person, the Amway person, and the other type of home jobs those types of folks do. It was the wage chosen to create a threshold so they could operate without being subject to that tax.

Assemblywoman Angle:

So if a person like that did make more than this, then they would be subject to this; is that correct?

Chairman Perkins:

That is correct.

Assemblywoman Angle:

My final question is on page 33, section 40.5, subsection 2(d), this is the tax on employees, is that correct? They were paying $25 now they’re paying $125.

Chairman Perkins:

I believe this is the state business license fee.

Mark Stevens:

The business license fee is currently a one-time fee of $25. I believe the executive budget recommended an annual fee of $100. This amount has gone up and down a variety of times, and in this particular amendment the annual fee would be $125.

Assemblywoman Angle:

How is that different from section 66, my first question, where it says, “must be accompanied a fee of $125,” and I was told it went up from $75 and here we have it at $25. Are these different fees?

Mark Stevens:

It’s one in the same. The $75 fee was the amount originally in SB 6 that has been increased to $125, and there are a couple of different sections in the amendment where the $125 annual business license fee is included. Brenda could probably explain better than I why it needs to be in multiple sections of the bill, but it is the same fee.

Assemblywoman Angle:

So, we increased it to $75 in SB 6, and now we’re increasing it to $125. Is that correct?

Mark Stevens:

Currently, it is a one-time $25 fee for a business. This amendment would increase that to an annual fee of $125.

Assemblywoman Angle:

Thank you very much, Mr. Chairman.

Assemblyman Carpenter:

Thank you, Mr. Chairman. As I understood it, and you can correct me if I’m wrong, I thought the annual fee was going to be $75 and in here we’re increasing it to $125, so doesn’t that make it a fee increase that would have to be a two-thirds vote?

Chairman Perkins:

Brenda, please answer that for us.

Brenda Erdoes, Legislative Counsel:

This amendment, if it is finally adopted in SB 5, will not have the affect of actually increasing the fee. Once the amendment is passed in SB 5, it will amend SB 6. It will not become effective on its own, and it will not make any of these increases on its own. It will only make these increases or revise the provisions of SB 5. In fact, the revenue it generates will actually be less than the revenue it currently generates. Beyond that, the two-thirds is not required during this special session by the Supreme Court’s order in the Writ of Mandamus issued to you.

Assemblyman Carpenter:

Thank you, Mr. Speaker. I would seem to me under SB 6 we would be paying $75 a year, but under this amendment its $125. I think it is an increase to the people that will be paying it. Overall it may not be, but there is no question that to raise it from $75 to $125 makes it a $50 increase to the people that have to pay it for the annual business license fee.

Brenda Erdoes:

There is no question that SB 6 increases the amount of the fee. Currently, without the amendment, it increased from $25 to $75 and with this amendment it would increase to $125. Once this amendment is adopted, if you adopt it, this bill will not increase the fee on its own. It only amends sections of SB 6. In other words, if SB 5 were to be passed as amended, and then SB 6 didn’t pass, the fee would not be increased. These sections only become effective if SB 6 becomes effective. Then again, the other part of the two-thirds is the Supreme Court has sent this body a Writ of Mandamus directing it to operate expeditiously under a simply majority rule, so that takes away the two-thirds pursuant to the Supreme Court.

Assemblywoman Buckley:

If I could add a practical comment, I think we’ve wanted to keep the business license fee as low as possible. One of the things that happens, of course, since we have to balance the budget, is every time you try to lower one tax fiscal staff goes back to a couple of taxes to balance it all out to make sure it all adds up. One of the other important goals, I think, besides keeping the business license fee low, was to keep any sort of modified business tax or employer tax that folks are going to be paying as low as possible. The bill that came across in SB 6 was one percent of capped wages, or $215 for each employee you have. This version is the work of a number of people in this body in both houses who have been working on it for weeks to come up with a fairer scheme. What that does is enable the other tax to be reduced. For example in SB 6, the total amount in FY 2004 was $128 million. This reduces it to $117 million. In the second year, FY 2005, the tax was $199 million. This reduces it to $188 million. For all of those small businesses that might have been impacted in a worse scenario in SB 6 because they are paying on their employees regardless of profitability, we were able to lower that substantially by reducing the pay rate. You always have to balance which one is it better to lower, but it seems to most folks who have been working on this that it’s better to get the broad-based tax as low as possible because that’s the one that’s going to hurt small businesses rather than a one-time fee. No one likes paying $50 more for a fee, but in relationship to the counties, for example, when they do business licenses, at least in Clark County, they’re paying $200 just for a business license. If you’re looking at a one-time fee to the small business employer versus having to pay on every employee, every month, it seemed that getting the rate lower across the board made sense. I would be happy to hear arguments about it, but that’s what most of our colleagues had said.

Assemblyman Carpenter:

Thank you, Mr. Chairman. That may be true or may not be true, we would have to take our own specific businesses and apply what this first rate would be. There is no question in my mind that in SB 6 it was $75 and now we’re amending it in SB 5 to go to $125. I have heard so much rhetoric about getting to the big guys, and this certainly doesn’t get to the big guys, but it does get to the small people who have to pay the $125 and Wal-Mart who will have to pay $125. I guess I have a little problem with that. As far as the other part, we could calculate it to our own individual businesses. I would have felt much better if this would have been left at $75 like it was in SB 6. Thank you.

Assemblyman Beers:

Thank you, Mr. Chairman. I just wanted clarification. In the absence of the Supreme Court ruling, that we don’t need two-thirds, would this require two-thirds?

Brenda Erdoes:

I do not believe it would, because of two factors. One is that this bill does not increase revenue on its own. If it was passed and signed by the Governor, unless SB 6 passes, which actually does increase the revenue, this bill would not have any effect. Additionally, the overall effect of SB 6 by this amendment is that the total revenue goes down. It actually reduces the amount of revenue that would be raised by SB 6.

Assemblywoman Angle:

Thank you, Mr. Chairman. On page 17, Section 26 (a), it has the definition of employee. For clarification purposes, I am wondering if a sole proprietor would be included in this; having to pay the tax we put on employees. Am I reading that right?

Brenda Erdoes:

This is the definition of “employee.” It is the definition that would apply for the business to pay wages to this person as an employee and then the amount of the wages paid totally by the employer are calculated. If your question goes to whether this person who is defined in the definition of “employee” would pay, the answer is no.

Assemblywoman Angle:

Thank you, but for example, if I have a business and I am my own employee and I am paying myself a wage out of that business, will I have to pay this fee, as my own employee and employer?

Brenda Erdoes:

Yes, you would if you are an employee of your business, but if you are not, then you would not. It goes back to the provisions of Chapter 612 for the unemployment compensation. If you are paying unemployment compensation for yourself from your business, as an employee, then you would also pay under this. If you are not paying for unemployment compensation under Chapter 612 because you are not an employee of your business then you would not be covered by this tax either.

Assemblywoman Angle:

Thank you, Mr. Chairman.

Assemblyman Carpenter:

Thank you, Mr. Chairman. I hate to talk about this but it is very important, I think, to small business. The way it is written in Section 11, is that a gross on the total wages you pay or just the $21,500 that we have been hearing so much about? It is on page 2, Section 11, where it says, “hereby impose an excise tax on each employer at the rate of 0.85 percent of the wages, as defined in NRS 612.190, paid by the employer during a calendar quarter with respect to employment.” Is that on the total gross wages or just on the $21,500 that we have been hearing so much about?

Assemblywoman Buckley:

This is a modification of the $21,500 that we have been hearing so much about. What this does is attempt to take out some of the inequities of that. The $21,500 required you to pay $215 per employee, per head, regardless of your profitability. So if you’re a small business, a comic store for example, you are paying the same as one of our lobbyists with a secretary. You are both paying $215. What this does, instead, is look at a more modified business tax where you look at all wages and then you lower the rate. In addition, it gives a credit for a healthcare deduction. One of the arguments all along has been that there are businesses that require more government services, so why are we treating them similarly as businesses that do not have many employees? Or that have employees who need services? What this does is reward those employers who offer healthcare coverage by giving them a deduction. It does indeed modify the payroll tax idea and changes it to one that is seen as more progressive and fair.

Assemblyman Carpenter:

Thank you, Mr. Chairman. Yes, I understand that and I don’t have a problem with that. However, I just did a little figuring here, and I think it is right. A person who was earning $10 an hour, they get about $20,000 a year, so if we multiply the 0.85 I think we come up with about $170. If you are trying to pay your employees more than a minimum wage then we do have to pay quite a bit more. I guess if you are only going to pay minimum wage you might have a lower fee than the $100 that we are paying now, but if you try to pay a higher wage to people then you are going to be paying more. I just wanted to point that out.

Chairman Perkins:

That rate drops to 0.65 in the second year of the biennium. It would be 0.65 in perpetuity. It will decrease in the second half of the biennium.

Assemblywoman Buckley:

Mr. Chairman, one other thing to add, as well. Most employers who are paying more than minimum wage, and pay a good salary, also offer healthcare. In addition to the rate of 0.65, as opposed to one percent in the capped version, would reduce it the further amount, it would then be reduced a further amount by virtue of any healthcare benefits that were paid. Some economists see this as being a better model.

Assemblyman Oceguera:

Thank you, Mr. Chairman. I move that we amend and do pass.

Chairman Perkins:

We have a motion by Mr. Oceguera, seconded by Mr. Atkinson to amend and do pass Senate Bill No. 5, using Amendment No. 12. Is there any discussion on the motion? All those in favor of the motion please indicate by saying aye. Are there any opposed? Motion carries unanimously.

On motion of Assemblywoman Buckley, the committee did rise and report back to the Assembly.

ASSEMBLY IN SESSION

At 11:41 p.m.

Mr. Speaker presiding.

Quorum present.

REPORTS OF COMMITTEES

Mr. Speaker:

Your Committee on Committee of the Whole, to which was referred Senate Bill No. 5, has had the same under consideration, and begs leave to report the same back with the recommendation: Amend, and do pass as amended.

Richard Perkins, Chairman

MOTIONS, RESOLUTIONS AND NOTICES

Assemblywoman Buckley moved that Senate Bill No. 5 just reported out of committee, be placed on the Second Reading File.

Motion carried.

SECOND READING AND AMENDMENT

Senate Bill No. 5.

Bill read second time.

The following amendment was proposed by the Committee of the Whole:

Amendment No. 12.

Amend the bill as a whole by renumbering sections 6 through 29 as sections 75 through 98 and adding new sections designated sections 6 through 74, following sec. 5, to read as follows:

“Sec. 6. Section 4 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 4. “Employer” means any employer who is required to pay a contribution pursuant to NRS 612.535 for any calendar quarter, except an Indian tribe, nonprofit organization or political subdivision. For the purposes of this section:

1. “Indian tribe” includes any entity described in subsection 10 of NRS 612.055.

2. “Nonprofit organization” means a nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C. § 501(c).

3. “Political subdivision” means any entity described in subsection 9 of NRS 612.055.

Sec. 7. Section 11 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 11. 1. There is hereby imposed an excise tax on each employer at the rate of 0.85 percent of the wages, as defined in NRS 612.190, paid by the employer during a calendar quarter with respect to employment.

2. The tax imposed by this section must not be deducted, in whole or in part, from any wages of persons in the employment of the employer.

3. Each employer shall, on or before the last day of the month immediately following each calendar quarter for which the employer is required to pay a contribution pursuant to NRS 612.535:

(a) File with the Department:

(1) A return on a form prescribed by the Department; and

(2) A copy of any report required by the Employment Security Division of the Department of Employment, Training and Rehabilitation for determining the amount of the contribution required pursuant to NRS 612.535 for any wages paid by the employer during that calendar quarter; and

(b) Remit to the Department any tax due pursuant to this chapter for that calendar quarter.

4. Except as otherwise provided in subsection 5, an employer may deduct from the total amount of wages reported and upon which the excise tax is imposed pursuant this section any amount authorized pursuant to this section that is paid by the employer for health insurance or a health benefit plan for its employees in the calendar quarter for which the tax is paid. The amounts for which the deduction is allowed include:

(a) For an employer providing a program of self-insurance for its employees, all amounts paid during the calendar quarter for claims, direct administrative services costs, including such services provided by the employer, and any premiums paid for individual or aggregate stop-loss insurance coverage. An employer is not authorized to deduct the costs of a program of self-insurance unless the program is a qualified employee welfare benefit plan pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq.

(b) The premiums for a policy of health insurance or reinsurance for a health benefit plan for its employees.

(c) Any amounts paid by an employer to a Taft-Hartley trust formed pursuant to 29 U.S.C. § 186(c)(5) for participation in an employee welfare benefit plan.

(d) Such other similar payments for health care or insurance for health care for employees as are authorized by the Department.

5. An employer may not deduct from the wages upon which the excise tax is imposed pursuant this section:

(a) Amounts paid for health care or premiums paid for insurance for an industrial injury or occupational disease for which coverage is required pursuant to chapters 616A to 616D, inclusive, or 617 of NRS; or

(b) Any payments made by employees for health care or health insurance or amounts deducted from the wages of employees for such care or insurance.

6. An employer claiming the deduction allowed pursuant to subsection 4 shall submit with the return filed pursuant to subsection 3 proof of the amount paid in the calendar quarter that qualifies for the deduction. If the amount of the deduction exceeds the amount of reported wages, the excess amount may be carried forward to the following calendar quarter until the deduction is exhausted.

7. As used in this section, “employee welfare benefit plan” has the meaning ascribed to it in 29 U.S.C. § 1002.

Sec. 8. Section 24.18 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 24.18. 1. Except as otherwise provided in subsection 2, “financial institution” means:

(a) An institution licensed, registered or otherwise authorized to do business in this state pursuant to the provisions of chapter 604, 645B, 645E or 649 of NRS or title 55 or 56 of NRS, or a similar institution chartered or licensed pursuant to federal law and doing business in this state;

(b) Any other person conducting loan or credit card processing activities in this state; and

(c) Any other bank, bank holding company, national bank, savings association, federal savings bank, trust company, credit union, building and loan association, investment company, registered broker or dealer in securities or commodities, finance company, dealer in commercial paper or other business entity engaged in the business of lending money, providing credit, securitizing receivables or fleet leasing, or any related business entity, doing business in this state.

2. The term does not include:

(a) A nonprofit organization that is recognized as exempt from taxation pursuant to 26 U.S.C. § 501(c).

(b) A credit union organized under the provisions of chapter 678 of NRS or the Federal Credit Union Act.

Sec. 9. Section 24.20 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 24.20. “Gross revenue” means the total amount of the money and the value of any other consideration received or receivable by a financial institution which the financial institution is required to report for the purposes of federal income taxation.

Sec. 10. Section 24.46 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 24.46. The Department shall adopt regulations providing for the allocation or apportionment to this state of the tax liability of a financial institution pursuant to this chapter. If the federal taxable income of a financial institution is derived from business conducted both within and outside this state, whether or not the financial institution is physically present in another state or is subject to another state’s jurisdiction to impose a tax on the financial institution, the apportionment factor for determining the tax liability of the financial institution derived from business conducted by it in this state must consist of a fraction, the numerator of which is the gross revenue of the financial institution from customers whose address is within this state, and the denominator of which is the gross revenue of the financial institution from its entire operation as a financial institution.

Sec. 11. Section 27 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 27. “Amount paid for live entertainment” means:

1. If the live entertainment is provided at a facility with a maximum seating capacity of less than 7,500, the total amount, expressed in terms of money, of consideration paid for admission into the facility and for food, refreshments and merchandise purchased at the facility.

2. If the live entertainment is provided at a facility with a maximum seating capacity of at least 7,500, the total amount, expressed in terms of money, of consideration paid for admission into the facility.

Sec. 12. Section 30 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 30. 1. “Business entity” includes:

(a) A corporation, partnership, proprietorship, business association and any other person engaging in business.

(b) A natural person engaging in a business if he is deemed to be a business entity pursuant to section 34 of this act.

2. The term does not include a governmental entity.

Sec. 13. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto new sections designated sections 30.3 and 30.7, following sec. 30, to read as follows:

Sec. 30.3. “Facility” means:

1. Any area or premises where live entertainment is provided and for which consideration is collected for admission into that area or those premises if the live entertainment is provided at:

(a) An establishment that is not a licensed gaming establishment; or

(b) A licensed gaming establishment that is licensed for less than 51 slot machines, less than six games, or any combination of slot machines and games within those respective limits.

2. Any area or premises where live entertainment is provided if the live entertainment is provided at any other licensed gaming establishment.

Sec. 30.7. “Game” has the meaning ascribed to it in NRS 463.0152.

Sec. 14. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto new sections designated sec. 32.3 and 32.7, following section 32, to read as follows:

Sec. 32.3. “Maximum seating capacity” means, in the following order of priority:

1. The maximum occupancy of the facility in which live entertainment is provided, as determined by the State Fire Marshal or the local governmental agency that has the authority to determine the maximum occupancy of the facility;

2. If such a maximum occupancy has not been determined, the maximum occupancy of the facility designated in any permit required to be obtained in order to provide the live entertainment; or

3. If such a permit does not designate the maximum occupancy of the facility, the actual seating capacity of the facility in which the live entertainment is provided.

Sec. 32.7. “Slot machine” has the meaning ascribed to it in NRS 463.0191.

Sec. 15. Section 33 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 33. “Taxpayer” means:

1. If live entertainment that is taxable under this chapter is provided at a licensed gaming establishment, the person licensed to conduct gaming at that establishment.

2. Except as otherwise provided in subsection 3, if live entertainment that is taxable under this chapter is not provided at a licensed gaming establishment, the owner or operator of the facility where the live entertainment is provided.

3. If live entertainment that is taxable under this chapter is provided at a publicly owned facility or on public land, the person who collects the taxable receipts.

Sec. 16. Section 34 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 34. A natural person engaging in a business shall be deemed to be a business entity that is subject to the provisions of this chapter if the person is required to file with the Internal Revenue Service a Schedule C (Form 1040), Profit or Loss From Business Form, or its equivalent or successor form, or a Schedule E (Form 1040), Supplemental Income and Loss Form, or its equivalent or successor form, for the business.

Sec. 17. Section 36 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 36. 1. Except as otherwise provided in this section, there is hereby imposed an excise tax on all amounts paid for live entertainment at the follow rates:

(a) If the live entertainment is provided at a facility with a maximum seating capacity of less than 7,500, 10 percent of the amount paid for live entertainment.

(b) If the live entertainment is provided at a facility with a maximum seating capacity of at least 7,500, 5 percent of the amount paid for live entertainment.

2. Amounts paid for gratuities directly or indirectly remitted to persons employed at a facility where live entertainment is provided or for service charges, including those imposed in connection with the use of credit cards or debit cards, which are collected and retained by persons other than the taxpayer are not taxable pursuant to this section.

3. A business entity that collects any amount that is taxable pursuant to subsection 1 is liable for the tax imposed, but is entitled to collect reimbursement from any person paying that amount.

4. Any ticket for live entertainment must state whether the tax imposed by this section is included in the price of the ticket. If the ticket does not include such a statement, the taxpayer shall pay the tax based on the face amount of the ticket.

5. The tax imposed by subsection 1 does not apply to:

(a) Live entertainment that this state is prohibited from taxing under the Constitution, laws or treaties of the United States or the Nevada Constitution.

(b) Live entertainment that is provided by or entirely for the benefit of a nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C. § 501(c).

(c) Any boxing contest or exhibition governed by the provisions of chapter 467 of NRS.

(d) Live entertainment that is not provided at a licensed gaming establishment if the facility in which the live entertainment is provided has a maximum seating capacity of less than 300.

(e) Live entertainment that is provided at a licensed gaming establishment that is licensed for less than 51 slot machines, less than six games, or any combination of slot machines and games within those respective limits, if the facility in which the live entertainment is provided has a maximum seating capacity of less than 300.

(f) Merchandise sold outside the facility in which the live entertainment is provided, unless the purchase of the merchandise entitles the purchaser to admission to the entertainment.

(g) Live entertainment that is provided at a trade show.

(h) Music performed by musicians who move constantly through the audience if no other form of live entertainment is afforded to the patrons.

(i) Live entertainment that is provided at a licensed gaming establishment at private meetings or dinners attended by members of a particular organization or by a casual assemblage if the purpose of the event is not primarily for entertainment.

(j) Live entertainment that is provided in the common area of a shopping mall, unless the entertainment is provided in a facility located within the mall.

Sec. 18. Section 38 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 38. 1. The Board shall:

(a) Collect the tax imposed by this chapter from taxpayers who are licensed gaming establishments; and

(b) Adopt such regulations as are necessary to carry out the provisions of paragraph (a). The regulations must be adopted in accordance with the provisions of chapter 233B of NRS and must be codified in the Nevada Administrative Code.

2. The Department shall:

(a) Collect the tax imposed by this chapter from all other taxpayers; and

(b) Adopt such regulations as are necessary to carry out the provisions of paragraph (a).

3. For the purposes of:

(a) Subsection 1, the provisions of chapter 463 of NRS relating to the payment, collection, administration and enforcement of gaming license fees and taxes, including, without limitation, any provisions relating to the imposition of penalties and interest, shall be deemed to apply to the payment, collection, administration and enforcement of the taxes imposed by this chapter to the extent that those provisions do not conflict with the provisions of this chapter.

(b) Subsection 2, the provisions of chapter 360 of NRS relating to the payment, collection, administration and enforcement of taxes, including, without limitation, any provisions relating to the imposition of penalties and interest, shall be deemed to apply to the payment, collection, administration and enforcement of the taxes imposed by this chapter to the extent that those provisions do not conflict with the provisions of this chapter.

4. To ensure that the tax imposed by section 36 of this act is collected fairly and equitably, the Board and the Department shall:

(a) Jointly, coordinate the administration and collection of that tax and the regulation of taxpayers who are liable for the payment of the tax.

(b) Upon request, assist the other agency in the collection of that tax.

Sec. 19. Section 39 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 39. 1. Except as otherwise provided in this section:

(a) Each taxpayer who is a licensed gaming establishment shall file with the Board, on or before the 24th day of each month, a report showing the amount of all taxable receipts for the preceding month. The report must be in a form prescribed by the Board.

(b) All other taxpayers shall file with the Department, on or before the last day of each month, a report showing the amount of all taxable receipts for the preceding month. The report must be in a form prescribed by the Department.

2. The Board or the Department, if it deems it necessary to ensure payment to or facilitate the collection by the State of the tax imposed by section 36 of this act, may require reports to be filed not later than 10 days after the end of each calendar quarter.

3. Each report required to be filed by this section must be accompanied by the amount of the tax that is due for the period covered by the report.

4. The Board and the Department shall deposit all taxes, interest and penalties it receives pursuant to this chapter in the State Treasury for credit to the State General Fund.

Sec. 20. Section 41 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 41. 1. Each person responsible for maintaining the records of a taxpayer shall:

(a) Keep such records as may be necessary to determine the amount of the liability of the taxpayer pursuant to the provisions of this chapter;

(b) Preserve those records for:

(1) At least 5 years if the taxpayer is a licensed gaming establishment or until any litigation or prosecution pursuant to this chapter is finally determined, whichever is longer; or

(2) At least 4 years if the taxpayer is not a licensed gaming establishment or until any litigation or prosecution pursuant to this chapter is finally determined, whichever is longer; and

(c) Make the records available for inspection by the Board or the Department upon demand at reasonable times during regular business hours.

2. The Board and the Department may by regulation specify the types of records which must be kept to determine the amount of the liability of a taxpayer from whom they are required to collect the tax imposed by this chapter.

3. Any agreement that is entered into, modified or extended after January 1, 2004, for the lease, assignment or transfer of any premises upon which any activity subject to the tax imposed by this chapter is, or thereafter may be, conducted shall be deemed to include a provision that the taxpayer required to pay the tax must be allowed access to, upon demand, all books, records and financial papers held by the lessee, assignee or transferee which must be kept pursuant to this section. Any person conducting activities subject to the tax imposed by section 36 of this act who fails to maintain or disclose his records pursuant to this subsection is liable to the taxpayer for any penalty paid by the taxpayer for the late payment or nonpayment of the tax caused by the failure to maintain or disclose records.

4. A person who violates any provision of this section is guilty of a misdemeanor.

Sec. 21. Section 44 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 44. 1. If:

(a) The Board determines that a taxpayer who is a licensed gaming establishment is taking any action with intent to defraud the State or to evade the payment of the tax or any part of the tax imposed by this chapter, the Board shall establish an amount paid for live entertainment upon which the tax imposed by this chapter must be based.

(b) The Department determines that a taxpayer who is not a licensed gaming establishment is taking any action with intent to defraud the State or to evade the payment of the tax or any part of the tax imposed by this chapter, the Department shall establish an amount paid for live entertainment upon which the tax imposed by this chapter must be based.

2. The amount established by the Board or the Department pursuant to subsection 1 must be based upon the tax liability of business entities that are deemed comparable by the Board or the Department to that of the taxpayer.

Sec. 22. Section 48 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 48. 1. Except as otherwise provided in NRS 360.235 and 360.395:

(a) No refund may be allowed unless a claim for it is filed with:

(1) The Board, if the taxpayer is a licensed gaming establishment; or

(2) The Department, if the taxpayer is not a licensed gaming establishment.

A claim must be filed within 3 years after the last day of the month following the reporting period for which the overpayment was made.

(b) No credit may be allowed after the expiration of the period specified for filing claims for refund unless a claim for credit is filed with the Board or the Department within that period.

2. Each claim must be in writing and must state the specific grounds upon which the claim is founded.

3. Failure to file a claim within the time prescribed in this chapter constitutes a waiver of any demand against the State on account of overpayment.

4. Within 30 days after rejecting any claim in whole or in part, the Board or the Department shall serve notice of its action on the claimant in the manner prescribed for service of notice of a deficiency determination.

Sec. 23. Section 49 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 49. 1. Except as otherwise provided in this section and NRS 360.320, interest must be paid upon any overpayment of any amount of the tax imposed by this chapter in accordance with the provisions of section 38 of this act.

2. If the overpayment is paid to the Department, the interest must be paid:

(a) In the case of a refund, to the last day of the calendar month following the date upon which the person making the overpayment, if he has not already filed a claim, is notified by the Department that a claim may be filed or the date upon which the claim is certified to the State Board of Examiners, whichever is earlier.

(b) In the case of a credit, to the same date as that to which interest is computed on the tax or amount against which the credit is applied.

3. If the Board or the Department determines that any overpayment has been made intentionally or by reason of carelessness, the Board or the Department shall not allow any interest on the overpayment.

Sec. 24. Section 60 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 60. (Deleted by amendment.)

Sec. 25. Section 62 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 62. 1. “Business” includes:

(a) A corporation, partnership, proprietorship, limited-liability company, business association, joint venture, limited-liability partnership, business trust and their equivalents organized under the laws of this state or another jurisdiction and any other person that conducts an activity for profit; and

(b) The activities of a natural person which are deemed to be a business pursuant to section 65 of this act.

2. The term does not include:

(a) A governmental entity.

(b) A nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C. § 501(c).

(c) A person who operates a business from his home and earns from that business not more than 66 2/3 percent of the average annual wage, as computed for the preceding calendar year pursuant to chapter 612 of NRS and rounded to the nearest hundred dollars.

(d) A business whose primary purpose is to create or produce motion pictures. As used in this paragraph, “motion pictures” has the meaning ascribed to it in NRS 231.020.

Sec. 26. Section 63 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 63. 1. “Employee” includes:

(a) A natural person who receives wages or other remuneration from a business for personal services, including commissions and bonuses and remuneration payable in a medium other than cash; and

(b) A natural person engaged in the operation of a business.

2. The term includes:

(a) A partner or other co-owner of a business; and

(b) Except as otherwise provided in subsection 3, a natural person reported as an employee to the:

(1) Employment Security Division of the Department of Employment, Training and Rehabilitation;

(2) Administrator of the Division of Industrial Relations of the Department of Business and Industry; or

(3) Internal Revenue Service on an Employer’s Quarterly Federal Tax Return (Form 941), Employer’s Monthly Federal Tax Return (Form 941-M), Employer’s Annual Tax Return for Agricultural Employees (Form 943) or any equivalent or successor form.

3. The term does not include:

(a) A business or an independent contractor that performs services on behalf of another business.

(b) A natural person who is retired or otherwise receiving remuneration solely because of past service to the business.

(c) A newspaper carrier or the immediate supervisor of a newspaper carrier who is an independent contractor of the newspaper.

(d) A natural person who performs all of his duties for the business outside of this state.

4. An independent contractor is not an employee of a business with which he contracts.

Sec. 27. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto a new section designated sec. 64.5, following sec. 64, to read as follows:

Sec. 64.5. The Department shall deposit all money it receives pursuant to sections 61 to 66, inclusive, of this act in the State Treasury for credit to the State General Fund.

Sec. 28. Section 65 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 65. The activity or activities conducted by a natural person shall be deemed to be a business that is subject to the provisions of sections 61 to 66, inclusive, of this act if the person is required to file with the Internal Revenue Service a Schedule C (Form 1040), Profit or Loss From Business Form, or its equivalent or successor form, a Schedule E (Form 1040), Supplemental Income and Loss Form, or its equivalent or successor form, or a Schedule F (Form 1040), Profit or Loss From Farming Form, or its equivalent or successor form, for the business.

Sec. 28.5. Section 66 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 66. 1. Except as otherwise provided in subsection 8, a person shall not conduct a business in this state unless he has a business license issued by the Department.

2. An application for a business license must:

(a) Be made upon a form prescribed by the Department;

(b) Set forth the name under which the applicant transacts or intends to transact business and the location of his place or places of business;

(c) Declare the estimated number of employees for the previous calendar quarter;

(d) Be accompanied by a fee of $125; and

(e) Include any other information that the Department deems necessary.

3. The application must be signed by:

(a) The owner, if the business is owned by a natural person;

(b) A member or partner, if the business is owned by an association or partnership; or

(c) An officer or some other person specifically authorized to sign the application, if the business is owned by a corporation.

4. If the application is signed pursuant to paragraph (c) of subsection 3, written evidence of the signer’s authority must be attached to the application.

5. A person who has been issued a business license by the Department shall submit a fee of $125 to the Department on or before the last day of the month in which the anniversary date of issuance of the business license occurs in each year, unless the person submits a written statement to the Department, at least 10 days before the anniversary date, indicating that the person will not be conducting business in this state after the anniversary date.

6. The business license required to be obtained pursuant to this section is in addition to any license to conduct business that must be obtained from the local jurisdiction in which the business is being conducted.

7. For the purposes of sections 61 to 66, inclusive, of this act, a person shall be deemed to conduct a business in this state if a business for which the person is responsible:

(a) Is organized pursuant to title 7 of NRS, other than a business organized pursuant to chapter 82 or 84 of NRS;

(b) Has an office or other base of operations in this state; or

(c) Pays wages or other remuneration to a natural person who performs in this state any of the duties for which he is paid.

8. A person who takes part in a trade show or convention held in this state for a purpose related to the conduct of a business is not required to obtain a business license specifically for that event.

Sec. 29. Section 67 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 67. (Deleted by amendment.)

Sec. 30. Section 70 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 70. NRS 360.300 is hereby amended to read as follows:

360.300 1. If a person fails to file a return or the Department is not satisfied with the return or returns of any tax, contribution or premium or amount of tax, contribution or premium required to be paid to the State by any person, in accordance with the applicable provisions of this chapter, chapter 362, 364A, 369, 370, 372, 372A, 374, 377, 377A or 444A of NRS, NRS 482.313, or chapter 585 or 680B of NRS , or sections 24.12 to 24.74, inclusive, of this act, as administered or audited by the Department, it may compute and determine the amount required to be paid upon the basis of:

(a) The facts contained in the return;

(b) Any information within its possession or that may come into its possession; or

2. One or more deficiency determinations may be made with respect to the amount due for one or for more than one period.

3. In making its determination of the amount required to be paid, the Department shall impose interest on the amount of tax determined to be due, calculated at the rate and in the manner set forth in NRS 360.417, unless a different rate of interest is specifically provided by statute.

4. The Department shall impose a penalty of 10 percent in addition to the amount of a determination that is made in the case of the failure of a person to file a return with the Department.

5. When a business is discontinued, a determination may be made at any time thereafter within the time prescribed in NRS 360.355 as to liability arising out of that business, irrespective of whether the determination is issued before the due date of the liability.

Sec. 31. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto a new section to be designated as section 70.5, following section 70, to read as follows:

Sec. 70.5. NRS 360.300 is hereby amended to read as follows:

360.300 1. If a person fails to file a return or the Department is not satisfied with the return or returns of any tax, contribution or premium or amount of tax, contribution or premium required to be paid to the State by any person, in accordance with the applicable provisions of this chapter, chapter 362, ~~[364A,]~~ 369, 370, 372, 372A, 374, 377, 377A or 444A of NRS, NRS 482.313, or chapter 585 or 680B of NRS, or sections 2 to 24, inclusive, or 24.12 to 24.74, inclusive, of this act, as administered or audited by the Department, it may compute and determine the amount required to be paid upon the basis of:

(a) The facts contained in the return;

(b) Any information within its possession or that may come into its possession; or

2. One or more deficiency determinations may be made with respect to the amount due for one or for more than one period.

4. The Department shall impose a penalty of 10 percent in addition to the amount of a determination that is made in the case of the failure of a person to file a return with the Department.

Sec. 32. Section 71 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 71. NRS 360.417 is hereby amended to read as follows:

360.417 Except as otherwise provided in NRS 360.232 and 360.320, and unless a different penalty or rate of interest is specifically provided by statute, any person who fails to pay any tax provided for in chapter 362, 364A, 369, 370, 372, 374, 377, 377A, 444A or 585 of NRS, or sections 24.12 to 24.74, inclusive, of this act, or the fee provided for in NRS 482.313, to the State or a county within the time required, shall pay a penalty of not more than 10 percent of the amount of the tax or fee which is owed, as determined by the Department, in addition to the tax or fee, plus interest at the rate of 1 percent per month, or fraction of a month, from the last day of the month following the period for which the amount or any portion of the amount should have been reported until the date of payment. The amount of any penalty imposed must be based on a graduated schedule adopted by the Nevada Tax Commission which takes into consideration the length of time the tax or fee remained unpaid.

Sec. 33. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto a new section to be designated as section 71.5, following section 71, to read as follows:

Sec. 71.5. NRS 360.417 is hereby amended to read as follows:

360.417 Except as otherwise provided in NRS 360.232 and 360.320, and unless a different penalty or rate of interest is specifically provided by statute, any person who fails to pay any tax provided for in chapter 362, ~~[364A,]~~ 369, 370, 372, 374, 377, 377A, 444A or 585 of NRS, or sections 2 to 24, inclusive, or 24.12 to 24.74, inclusive, of this act, or the fee provided for in NRS 482.313, to the State or a county within the time required, shall pay a penalty of not more than 10 percent of the amount of the tax or fee which is owed, as determined by the Department, in addition to the tax or fee, plus interest at the rate of 1 percent per month, or fraction of a month, from the last day of the month following the period for which the amount or any portion of the amount should have been reported until the date of payment. The amount of any penalty imposed must be based on a graduated schedule adopted by the Nevada Tax Commission which takes into consideration the length of time the tax or fee remained unpaid.

Sec. 34. Section 72 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 72. NRS 360.419 is hereby amended to read as follows:

360.419 1. If the Executive Director or a designated hearing officer finds that the failure of a person to make a timely return or payment of a tax imposed pursuant to NRS 361.320 or ~~[chapter 361A, 376A, 377 or 377A of NRS, or by]~~ chapter 361A, 362, 364A, 369, 370, 372, 372A, 374, 375A , ~~[or]~~ 375B , 376A, 377 or 377A of NRS, or sections 24.12 to 24.74, inclusive, of this act, is the result of circumstances beyond his control and occurred despite the exercise of ordinary care and without intent, the Department may relieve him of all or part of any interest or penalty , or both.

2. A person seeking this relief must file with the Department a statement under oath setting forth the facts upon which he bases his claim.

3. The Department shall disclose, upon the request of any person:

(a) The name of the person to whom relief was granted; and

(b) The amount of the relief.

4. The Executive Director or a designated hearing officer shall act upon the request of a taxpayer seeking relief pursuant to NRS 361.4835 which is deferred by a county treasurer or county assessor.

Sec. 35. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto a new section to be designated as section 72.5, following section 72, to read as follows:

Sec. 72.5. NRS 360.419 is hereby amended to read as follows:

360.419 1. If the Executive Director or a designated hearing officer finds that the failure of a person to make a timely return or payment of a tax imposed pursuant to NRS 361.320 or chapter 361A, 362, ~~[364A,]~~ 369, 370, 372, 372A, 374, 375A, 375B, 376A, 377 or 377A of NRS, or sections 2 to 24, inclusive, or 24.12 to 24.74, inclusive, of this act, is the result of circumstances beyond his control and occurred despite the exercise of ordinary care and without intent, the Department may relieve him of all or part of any interest or penalty , or both.

2. A person seeking this relief must file with the Department a statement under oath setting forth the facts upon which he bases his claim.

3. The Department shall disclose, upon the request of any person:

(a) The name of the person to whom relief was granted; and

(b) The amount of the relief.

4. The Executive Director or a designated hearing officer shall act upon the request of a taxpayer seeking relief pursuant to NRS 361.4835 which is deferred by a county treasurer or county assessor.

Sec. 36. Section 73 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 73. NRS 360.510 is hereby amended to read as follows:

360.510 1. If any person is delinquent in the payment of any tax or fee administered by the Department or if a determination has been made against him which remains unpaid, the Department may:

(a) Not later than 3 years after the payment became delinquent or the determination became final; or

(b) Not later than 6 years after the last recording of an abstract of judgment or of a certificate constituting a lien for tax owed, give a notice of the delinquency and a demand to transmit personally or by registered or certified mail to any person, including, without limitation, any officer or department of this state or any political subdivision or agency of this state, who has in his possession or under his control any credits or other personal property belonging to the delinquent, or owing any debts to the delinquent or person against whom a determination has been made which remains unpaid, or owing any debts to the delinquent or that person. In the case of any state officer, department or agency, the notice must be given to the officer, department or agency before the Department presents the claim of the delinquent taxpayer to the State Controller.

2. A state officer, department or agency which receives such a notice may satisfy any debt owed to it by that person before it honors the notice of the Department.

3. After receiving the demand to transmit, the person notified by the demand may not transfer or otherwise dispose of the credits, other personal property, or debts in his possession or under his control at the time he received the notice until the Department consents to a transfer or other disposition.

4. Every person notified by a demand to transmit shall, within 10 days after receipt of the demand to transmit, inform the Department of ~~[,]~~ and transmit to the Department all such credits, other personal property ~~[,]~~ or debts in his possession, under his control or owing by him within the time and in the manner requested by the Department. Except as otherwise provided in subsection 5, no further notice is required to be served to that person.

5. If the property of the delinquent taxpayer consists of a series of payments owed to him, the person who owes or controls the payments shall transmit the payments to the Department until otherwise notified by the Department. If the debt of the delinquent taxpayer is not paid within 1 year after the Department issued the original demand to transmit, the Department shall issue another demand to transmit to the person responsible for making the payments informing him to continue to transmit payments to the Department or that his duty to transmit the payments to the Department has ceased.

6. If the notice of the delinquency seeks to prevent the transfer or other disposition of a deposit in a bank or credit union or other credits or personal property in the possession or under the control of a bank, credit union or other depository institution, the notice must be delivered or mailed to any branch or office of the bank, credit union or other depository institution at which the deposit is carried or at which the credits or personal property is held.

7. If any person notified by the notice of the delinquency makes any transfer or other disposition of the property or debts required to be withheld or transmitted, to the extent of the value of the property or the amount of the debts thus transferred or paid, he is liable to the State for any indebtedness due pursuant to this chapter, or chapter 362, 364A, 369, 370, 372, 372A, 374, 377, 377A or 444A of NRS, NRS 482.313, or chapter 585 or 680B of NRS , or sections 24.12 to 24.74, inclusive, of this act from the person with respect to whose obligation the notice was given if solely by reason of the transfer or other disposition the State is unable to recover the indebtedness of the person with respect to whose obligation the notice was given.

Sec. 37. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto a new section to be designated as section 73.5, following section 73, to read as follows:

Sec. 73.5. NRS 360.510 is hereby amended to read as follows:

360.510 1. If any person is delinquent in the payment of any tax or fee administered by the Department or if a determination has been made against him which remains unpaid, the Department may:

(a) Not later than 3 years after the payment became delinquent or the determination became final; or

2. A state officer, department or agency which receives such a notice may satisfy any debt owed to it by that person before it honors the notice of the Department.

4. Every person notified by a demand to transmit shall, within 10 days after receipt of the demand to transmit, inform the Department of and transmit to the Department all such credits, other personal property or debts in his possession, under his control or owing by him within the time and in the manner requested by the Department. Except as otherwise provided in subsection 5, no further notice is required to be served to that person.

7. If any person notified by the notice of the delinquency makes any transfer or other disposition of the property or debts required to be withheld or transmitted, to the extent of the value of the property or the amount of the debts thus transferred or paid, he is liable to the State for any indebtedness due pursuant to this chapter, or chapter 362, ~~[364A,]~~ 369, 370, 372, 372A, 374, 377, 377A or 444A of NRS, NRS 482.313, or chapter 585 or 680B of NRS, or sections 2 to 24, inclusive, or 24.12 to 24.74, inclusive, of this act from the person with respect to whose obligation the notice was given if solely by reason of the transfer or other disposition the State is unable to recover the indebtedness of the person with respect to whose obligation the notice was given.

Sec. 38. Section 75 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 75. (Deleted by amendment.)

Sec. 39. Section 75.3 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 75.3. NRS 364A.020 is hereby amended to read as follows:

364A.020 1. “Business” includes:

(a) A corporation, partnership, proprietorship, limited-liability company, business association , joint venture, limited-liability partnership, business trust and their equivalents organized under the laws of this state or another jurisdiction and any other ~~[similar]~~ organization that conducts an activity for profit;

(b) The activities of a natural person which are deemed to be a business pursuant to NRS 364A.120; and

(c) A trade show or convention held in this state in which a business described in paragraph (a) or (b) takes part, or which a person who conducts such a business attends, for a purpose related to the conduct of the business.

2. ~~[The term includes an independent contractor.~~

~~3. ]~~ The term does not include:

(a) A nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C. § 501(c);

(b) A governmental entity; ~~[or]~~

(d) A business that creates or produces motion pictures. As used in this paragraph, “motion pictures” has the meaning ascribed to it in NRS 231.020.

Sec. 40. Section 75.7 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 75.7. NRS 364A.120 is hereby amended to read as follows:

364A.120 The activity or activities conducted by a natural person shall be deemed to be a business that is subject to the provisions of this chapter if the person files with the Internal Revenue Service a Schedule C (Form 1040), Profit or Loss from Business Form, or its equivalent or successor form, a Schedule E (Form 1040), Supplemental Income and Loss Form, or its equivalent or successor form, or a Schedule F (Form 1040), Farm Income and Expenses Form, or its equivalent or successor form, for the activity or activities.

Sec. 40.5. Section 76 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 76. NRS 364A.130 is hereby amended to read as follows:

364A.130 1. Except as otherwise provided in subsection ~~[6,]~~ 8, a person shall not conduct a business in this state unless he has a business license issued by the Department.

2. ~~[The]~~ An application for a business license must:

(a) Be made upon a form prescribed by the Department;

(b) Set forth the name under which the applicant transacts or intends to transact business and the location of his place or places of business;

(d) Be accompanied by a fee of ~~[$25;]~~ $125; and

(e) Include any other information that the Department deems necessary.

3. The application must be signed by:

(a) The owner, if the business is owned by a natural person;

(b) A member or partner, if the business is owned by an association or partnership; or

(c) An officer or some other person specifically authorized to sign the application, if the business is owned by a corporation.

4. If the application is signed pursuant to paragraph (c) of subsection 3, written evidence of the signer’s authority must be attached to the application.

7. For the purposes of this chapter, a person shall be deemed to conduct a business in this state if a business for which the person is responsible:

(a) Is ~~[incorporated]~~ organized pursuant to ~~[chapter 78 or 78A]~~ title 7 of NRS ~~[;]~~ , other than a business organized pursuant to chapter 82 or 84 of NRS;

(b) Has an office or other base of operations in this state; or

(c) Pays wages or other remuneration to a natural person who performs in this state any of the duties for which he is paid.

~~[6.]~~ 8. A person who takes part in a trade show or convention held in this state for a purpose related to the conduct of a business is not required to obtain a business license specifically for that event.

Sec. 41. Section 77 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 77. NRS 369.174 is hereby amended to read as follows:

369.174 Each month, the State Controller shall transfer to the Tax on Liquor Program Account in the State General Fund, from the tax on liquor containing more than 22 percent of alcohol by volume, the portion of the tax which exceeds ~~[$1.90]~~ $2.93 per wine gallon.

Sec. 42. Section 78 of Senate Bill No. 6 of the 20th Special Session is hereby amended to read as follows:

Sec. 78. NRS 369.330 is hereby amended to read as follows:

369.330 Except as otherwise provided in this chapter, an excise tax is hereby levied and must be collected respecting all liquor and upon the privilege of importing, possessing, storing or selling liquor, according to the following rates and classifications:

1. On liquor containing more than 22 percent of alcohol by volume, ~~[$2.05]~~ $3.08 per wine gallon or proportionate part thereof.

2. On liquor containing more than 14 percent up to and including 22 percent of alcohol by volume, ~~[75 cents]~~ $1.13 per wine gallon or proportionate part thereof.

3. On liquor containing from one-half of 1 percent up to and including 14 percent of alcohol by volume, ~~[40]~~ 60 cents per wine gallon or proportionate part thereof.

4. On all malt beverage liquor brewed or fermented and bottled in or outside this state, ~~[9]~~ 14 cents per gallon.

Sec. 43. Section 79 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 79. (Deleted by amendment.)

Sec. 43.5. Section 80 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 80. NRS 370.165 is hereby amended to read as follows:

370.165 There is hereby levied a tax upon the purchase or possession of cigarettes by a consumer in the State of Nevada at the rate of ~~[17.5]~~ 42.5 mills per cigarette. The tax may be represented and precollected by the affixing of a revenue stamp or other approved evidence of payment to each package, packet or container in which cigarettes are sold. The tax must be precollected by the wholesale or retail dealer, and must be recovered from the consumer by adding the amount of the tax to the selling price. Each person who sells cigarettes at retail shall prominently display on his premises a notice that the tax is included in the selling price and is payable under the provisions of this chapter.

Sec. 44. Section 81 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 81. (Deleted by amendment.)

Sec. 44.3. Section 82 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 82. NRS 370.260 is hereby amended to read as follows:

370.260 1. All taxes and license fees imposed by the provisions of NRS 370.001 to 370.430, inclusive, less any refunds granted as provided by law, must be paid to the Department in the form of remittances payable to the Department.

2. The Department shall:

(a) As compensation to the State for the costs of collecting the taxes and license fees, transmit each month the sum the Legislature specifies from the remittances made to it pursuant to subsection 1 during the preceding month to the State Treasurer for deposit to the credit of the Department. The deposited money must be expended by the Department in accordance with its work program.

(b) From the remittances made to it pursuant to subsection 1 during the preceding month, less the amount transmitted pursuant to paragraph (a), transmit each month the portion of the tax which is equivalent to ~~[12.5]~~ 37.5 mills per cigarette to the State Treasurer for deposit to the credit of the Account for the Tax on Cigarettes in the State General Fund.

(c) Transmit the balance of the payments each month to the State Treasurer for deposit in the Local Government Tax Distribution Account created by NRS 360.660.

(d) Report to the State Controller monthly the amount of collections.

3. The money deposited pursuant to paragraph (c) of subsection 2 in the Local Government Tax Distribution Account is hereby appropriated to Carson City and to each of the counties in proportion to their respective populations and must be credited to the respective accounts of Carson City and each county.

Sec. 44.7. Section 83 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 83. NRS 370.350 is hereby amended to read as follows:

370.350 1. Except as otherwise provided in subsection 3, a tax is hereby levied and imposed upon the use of cigarettes in this state.

2. The amount of the use tax is ~~[17.5]~~ 42.5 mills per cigarette.

3. The use tax does not apply where:

(a) Nevada cigarette revenue stamps have been affixed to cigarette packages as required by law.

(b) Tax exemption is provided for in this chapter.

Sec. 45. Sections 84 to 88, inclusive, of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature are hereby amended to read as follows:

Secs. 84-88. (Deleted by amendment.)

Sec. 46. Sections 90 to 93, inclusive, of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature are hereby amended to read as follows:

Secs. 90-93. (Deleted by amendment.)

Sec. 47. Section 102 of Senate Bill No. 6 of the 20th Special Session is hereby amended to read as follows:

Sec. 102. NRS 375.090 is hereby amended to read as follows:

375.090 The ~~[tax]~~ taxes imposed by NRS 375.020 ~~[does]~~ and section 95 of this act do not apply to:

1. A mere change in [identity, form or place of organization, such as a transfer between a corporation and its parent corporation, a subsidiary or an affiliated corporation if the affiliated corporation has identical common ownership.] the name of the owner of the property without a change in the ownership interest of the property.

2. A transfer of title to the United States, any territory or state or any agency, department, instrumentality or political subdivision thereof.

3. A transfer of title recognizing the true status of ownership of the real property.

4. A transfer of title without consideration from one joint tenant or tenant in common to one or more remaining joint tenants or tenants in common.

5. ~~[A transfer of title to community property without consideration when held in the name of one spouse to both spouses as joint tenants or tenants in common, or as community property.~~

~~6.]~~ A transfer of title between spouses, including gifts [.

~~7. A transfer of title between spouses]~~ , or to effect a property settlement agreement or between former spouses in compliance with a decree of divorce.

~~[8.]~~ 6. A transfer of title to or from a trust ~~[, if the transfer is made]~~ without consideration ~~[, and is made to or from:~~

~~(a) The trustor of the trust;~~

~~(b) The trustor’s legal representative; or~~

~~(c) A person related to the trustor in the first degree of consanguinity.~~

~~As used in this subsection, “legal representative” has the meaning ascribed to it in NRS 167.020.~~

~~9.]~~ if a certificate of trust is presented at the time of transfer.

7. Transfers, assignments or conveyances of unpatented mines or mining claims.

[10. A transfer, assignment or other conveyance of real property to a corporation or other business organization if the person conveying the property owns 100 percent of the corporation or organization to which the conveyance is made.

~~11.]~~ 8. A transfer, assignment or other conveyance of real property if the owner of the property is related to the person to whom it is conveyed within the first degree of consanguinity.

~~[12.]~~ 9. The making, delivery or filing of conveyances of real property to make effective any plan of reorganization or adjustment:

(a) Confirmed under the Bankruptcy Act, as amended, 11 U.S.C. §§ 101 et seq.;

(b) Approved in an equity receivership proceeding involving a railroad, as defined in the Bankruptcy Act; or

if the making, delivery or filing of instruments of transfer or conveyance occurs within 5 years after the date of the confirmation, approval or change.

~~[13.]~~ 10. The making or delivery of conveyances of real property to make effective any order of the Securities and Exchange Commission if:

(a) The order of the Securities and Exchange Commission in obedience to which the transfer or conveyance is made recites that the transfer or conveyance is necessary or appropriate to effectuate the provisions of section 11 of the Public Utility Holding Company Act of 1935, 15 U.S.C. § 79k;

(b) The order specifies and itemizes the property which is ordered to be transferred or conveyed; and

~~[14.]~~ 11. A transfer to an educational foundation. As used in this subsection, “educational foundation” has the meaning ascribed to it in subsection 3 of NRS 388.750.

~~[15.]~~ 12. A transfer to a university foundation. As used in this subsection, “university foundation” has the meaning ascribed to it in subsection 3 of NRS 396.405.

[16. A transfer, assignment or other conveyance of real property to a corporation sole from another corporation sole. As used in this subsection, “corporation sole” means a corporation which is organized pursuant to the provisions of chapter 84 of NRS.]

Sec. 48. Section 126 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 126. The Nevada Legislature hereby finds and declares that:

1. The 20th Special Session of the Nevada Legislature has responded to concerns for the provision of additional state revenue by enacting several measures that affect the burden on taxpayers in this state.

2. The Nevada Legislature must continue to be responsive to the requirements of a growing school population and the needs of the people of this state, and in order to accomplish these goals must provide itself with timely and accurate information regarding the effects of the measures it has enacted.

3. It is the intent of the Nevada Legislature to create a legislative committee to study the effects of the measures it has enacted with regard to both the resulting revenue and the resulting expenses, and to report the information it obtains for use at the next regular session of the Nevada Legislature.

Sec. 49. Section 134 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 134. (Deleted by amendment.)

Sec. 50. Sections 136 to 140, inclusive, of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature are hereby amended to read as follows:

Secs. 136-140. (Deleted by amendment.)

Sec. 51. Sections 142, 143 and 144 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature are hereby amended to read as follows:

Secs. 142-144. (Deleted by amendment.)

Sec. 52. Sections 146, 147 and 148 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature are hereby amended to read as follows:

Secs. 146-148. (Deleted by amendment.)

Sec. 53. (Deleted.)

Sec. 54. Sections 161 to 165, inclusive, of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature are hereby amended to read as follows:

Secs. 161-165. (Deleted by amendment.)

Sec. 55. Section 166 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 166. NRS 388.750 is hereby amended to read as follows:

388.750 1. An educational foundation:

(a) Shall comply with the provisions of chapter 241 of NRS;

(b) Except as otherwise provided in subsection 2, shall make its records public and open to inspection pursuant to NRS 239.010; and

2. An educational foundation is not required to disclose the names of the contributors to the foundation or the amount of their contributions. The educational foundation shall, upon request, allow a contributor to examine, during regular business hours, any record, document or other information of the foundation relating to that contributor.

3. As used in this section, “educational foundation” means a nonprofit corporation, association or institution or a charitable organization that is:

(a) Organized and operated exclusively for the purpose of supporting one or more kindergartens, elementary schools, junior high or middle schools or high schools, or any combination thereof;

(b) Formed pursuant to the laws of this state; and

Sec. 56. Section 167 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 167. NRS 396.405 is hereby amended to read as follows:

396.405 1. A university foundation:

(a) Shall comply with the provisions of chapter 241 of NRS;

(b) Except as otherwise provided in subsection 2, shall make its records public and open to inspection pursuant to NRS 239.010;

(d) May allow a president or an administrator of the university or community college which it supports to serve as a member of its governing body.

2. A university foundation is not required to disclose the name of any contributor or potential contributor to the university foundation, the amount of his contribution or any information which may reveal or lead to the discovery of his identity. The university foundation shall, upon request, allow a contributor to examine, during regular business hours, any record, document or other information of the foundation relating to that contributor.

3. As used in this section, “university foundation” means a nonprofit corporation, association or institution or a charitable organization that is:

(a) Organized and operated exclusively for the purpose of supporting a university or a community college;

(b) Formed pursuant to the laws of this state; and

Sec. 57. Section 174 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 174. NRS 463.401 is hereby amended to read as follows:

463.401 1. In addition to any other license fees and taxes imposed by this chapter, a casino entertainment tax equivalent to 10 percent of all amounts paid for admission, food, refreshments and merchandise is hereby levied, except as otherwise provided in subsection 2, upon each licensed gaming establishment in this state where ~~[music and dancing privileges or any other]~~ live entertainment is provided to the patrons ~~[in a cabaret, nightclub, cocktail lounge or casino showroom in connection with the serving or selling of food or refreshments or the selling of any merchandise.]~~ of the licensed gaming establishment. Amounts paid for gratuities directly or indirectly remitted to employees of the licensee or for service charges, including those imposed in connection with use of credit cards or debit cards, that are collected and retained by persons other than the licensee are not taxable pursuant to this section.

2. A licensed gaming establishment is not subject to tax pursuant to this section if:

(a) The establishment is licensed for less than 51 slot machines, less than six games, or any combination of slot machines and games within those respective limits [;

~~(b) The entertainment is presented in a facility that would not have been subject to taxation pursuant to 26 U.S.C. § 4231(6) as that provision existed in 1965;~~

~~(c) The entertainment is presented in a facility that would have been subject to taxation pursuant to 26 U.S.C. § 4231(1), (2), (3), (4) or (5) as those provisions existed in 1965; or~~

~~(d) In other cases, if:~~

~~(1) No distilled spirits, wine or beer is served or permitted to be consumed;~~

~~(2) Only light refreshments are served;~~

~~(3) Where space is provided for dancing, no charge is made for dancing; and~~

~~(4) Where music is provided or permitted, the music is provided without any charge to the owner, lessee or operator of the establishment or to any concessionaire.]~~ ; or

(b) The facility in which the live entertainment is provided has a maximum seating capacity that is at least 7,500.

3. The tax imposed by this section does not apply to ~~[merchandise]~~ :

(a) Live entertainment that this state is prohibited from taxing under the Constitution, laws or treaties of the United States or the Nevada Constitution.

(b) Merchandise sold outside the facility in which the live entertainment is presented, unless the purchase of the merchandise entitles the purchaser to admission to the entertainment.

(c) Any live entertainment that is provided by or entirely for the benefit of a nonprofit organization that is recognized as exempt from taxation pursuant to 26 U.S.C. § 501(c).

(d) Live entertainment that is provided at a trade show.

(e) Music performed by musicians who move constantly through the audience if no other form of live entertainment is afforded to the patrons.

(f) Any boxing contest or exhibition governed by the provisions of chapter 467 of NRS.

(g) Live entertainment that is provided or occurs at private meetings or dinners attended by members of a particular organization or by a casual assemblage and the purpose of the event is not primarily for entertainment.

(h) Live entertainment presented in a common area of a shopping mall, unless the entertainment is provided in a facility located within the mall.

4. The tax imposed by this section must be paid by the licensee of the establishment.

5. As used in this section, “live entertainment” means any activity provided for pleasure, enjoyment, recreation, relaxation, diversion or other similar purpose by a person or persons who are physically present when providing that activity to a patron or group of patrons who are physically present.

Sec. 58. Section 178 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 178. (Deleted by amendment.)

Sec. 59. Section 180 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 180. (Deleted by amendment.)

Sec. 60. Sections 184 and 185 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature are hereby amended to read as follows:

Secs. 184 and 185. (Deleted by amendment.)

Sec. 61. Section 186 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 186. (Deleted by amendment.)

Sec. 62. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto a new section to be designated as section 186.9, following section 186.7, to read as follows:

Sec. 186.9. Section 11 of this act is hereby amended to read as follows:

Sec. 11. 1. There is hereby imposed an excise tax on each employer at the rate of ~~[0.85]~~ 0.65 percent of the wages, as defined in NRS 612.190, paid by the employer during a calendar quarter with respect to employment.

2. The tax imposed by this section must not be deducted, in whole or in part, from any wages of persons in the employment of the employer.

3. Each employer shall, on or before the last day of the month immediately following each calendar quarter for which the employer is required to pay a contribution pursuant to NRS 612.535:

(a) File with the Department:

(1) A return on a form prescribed by the Department; and

(b) Remit to the Department any tax due pursuant to this chapter for that calendar quarter.

(b) The premiums for a policy of health insurance or reinsurance for a health benefit plan for its employees.

(c) Any amounts paid by an employer to a Taft-Hartley trust formed pursuant to 29 U.S.C. § 186(c)(5) for participation in an employee welfare benefit plan.

(d) Such other similar payments for health care or insurance for health care for employees as are authorized by the Department.

5. An employer may not deduct from the wages upon which the excise tax is imposed pursuant this section:

(b) Any payments made by employees for health care or health insurance or amounts deducted from the wages of employees for such care or insurance.

7. As used in this section, “employee welfare benefit plan” has the meaning ascribed to it in 29 U.S.C. § 1002.

Sec. 62.5. Section 187 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 187. Section 66 of this act is hereby amended to read as follows:

Sec. 66. 1. Except as otherwise provided in subsection 8, a person shall not conduct a business in this state unless he has a business license issued by the Department.

2. An application for a business license must:

(a) Be made upon a form prescribed by the Department;

(b) Set forth the name under which the applicant transacts or intends to transact business and the location of his place or places of business;

(d) Be accompanied by a fee of $125; and

(e) Include any other information that the Department deems necessary.

3. The application must be signed by:

(a) The owner, if the business is owned by a natural person;

(b) A member or partner, if the business is owned by an association or partnership; or

(c) An officer or some other person specifically authorized to sign the application, if the business is owned by a corporation.

4. If the application is signed pursuant to paragraph (c) of subsection 3, written evidence of the signer’s authority must be attached to the application.

7. For the purposes of sections 61 to 66, inclusive, of this act, a person shall be deemed to conduct a business in this state if a business for which the person is responsible:

(a) Is organized pursuant to title 7 of NRS, other than a business organized pursuant to chapter 82 or 84 of NRS:

(b) Has an office or other base of operations in this state; or

(c) Pays wages or other remuneration to a natural person who performs in this state any of the duties for which he is paid.

Sec. 63. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto a new sections to be designated as sections 188.3, 188.5 and 188.7, following section 188, to read as follows:

Sec. 188.3. Section 58 of Assembly Bill No. 553 of the 72nd Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 58. 1. If projections of the ending balance of the State General Fund fall below the amount estimated by the ~~[2003]~~ Nevada Legislature for Fiscal Year 2003-2004 or 2004-2005, the Director of the Department of Administration shall report this information to the State Board of Examiners.

2. If the State Board of Examiners determines that the ending balance of the State General Fund is projected to be less than $60,000,000 for Fiscal Year 2003-2004 or 2004-2005, the Governor, pursuant to NRS 353.225, may direct the Director of the Department of Administration to require the State Controller or the head of each department, institution or agency to set aside a reserve of not more than 15 percent of the total amount of operating expenses or other appropriations and money otherwise available to the department, institution or agency.

3. A reserve must not be set aside pursuant to this section unless:

(a) The Governor, on behalf of the State Board of Examiners, submits a report to the Legislature, or, if the Legislature is not in session, to the Interim Finance Committee, stating the reasons why a reserve is needed and indicating each department, institution or agency that will be required to set aside a reserve; and

(b) The Legislature or Interim Finance Committee approves the setting aside of the reserve.

Sec. 188.5. Section 61 of Assembly Bill No. 553 of the 72nd Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 61. 1. There is hereby appropriated from the State General Fund to the Interim Finance Committee the sum of $12,500,000 in Fiscal Year 2003-2004 and ~~[$20,000,000]~~ $15,000,000 in Fiscal Year 2004-2005 for information technology and additional operational costs that may be required by the Department of Taxation or other state agency to implement or modify the collections of State General Fund revenues . approved by the 72nd Session of the Nevada Legislature.

2. If the Department of Taxation or other state agency determines that additional resources are necessary for information technology or additional operational costs related to subsection 1, the State Board of Examiners shall consider the request and recommend the amount of the allocation, if any, to the Interim Finance Committee.

3. The Interim Finance Committee is not required to approve the entire amount of an allocation recommended pursuant to subsection 2 or to allocate the entire amount appropriated in subsection 1.

4. The sums appropriated by subsection 1 are available for either fiscal year. Any balance of those sums must not be committed for expenditure after June 30, 2005, and reverts to the State General Fund as soon as all payments of money committed have been made.

Sec. 188.7. Section 1 of Senate Bill No. 243 of the 72nd Session of the Nevada Legislature is hereby amended to read as follows:

Section 1. ~~[1. There is hereby appropriated from the State General Fund to the Fund to Stabilize the Operation of State Government created by NRS 353.288 the sum of $30,000,000.~~

~~2.]~~ Notwithstanding the provisions of NRS 353.235:

~~[(a)]~~ 1. Upon receipt of the projections and estimates of the Economic Forum required by paragraph (d) of subsection 1 of NRS 353.228 to be reported on or before December 1, 2004, the Interim Finance Committee shall project the ending balance of the State General Fund for Fiscal Year 2004-2005, using all relevant information known to it.

~~[(b)]~~ 2. Except as otherwise provided in ~~[paragraph (c),]~~ subsection 3, there is hereby contingently appropriated from the State General Fund to the Fund to Stabilize the Operation of State Government created by NRS 353.288 the amount, if any, by which the projection required by ~~[paragraph (a)]~~ subsection 1 exceeds the amount of the ending balance of the State General Fund for Fiscal Year 2004-2005 as estimated by the ~~[2003 Legislature.~~

~~(c)]~~ Nevada Legislature.

3. The amount of any appropriation pursuant to ~~[paragraph (b)]~~ subsection 2 must not exceed ~~[$20,000,000.]~~ $50,000,000.

Sec. 64. Section 189 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 189. 1. NRS 353.272, 364.160, 375.025 and 375.075 are hereby repealed.

2. NRS 463.4001, 463.4002, 463.4004, 463.4006, 463.4008, 463.4009 and 463.4015 are hereby repealed.

3. NRS 364A.010, 364A.020, 364A.030, 364A.040, 364A.050, 364A.060, 364A.070, 364A.080, 364A.090, 364A.100, 364A.110, 364A.120, 364A.130, 364A.135, 364A.140, 364A.150, 364A.151, 364A.152, 364A.1525, 364A.170, 364A.175, 364A.180, 364A.190, 364A.230, 364A.240, 364A.250, 364A.260, 364A.270, 364A.280, 364A.290, 364A.300, 364A.310, 364A.320, 364A.330, 364A.340, 364A.350, 463.401, 463.402, 463.403, 463.404, 463.4045, 463.405, 463.4055 and 463.406 are hereby repealed.

Sec. 65. Section 190 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 190. Notwithstanding the provisions of NRS 353.288:

1. After the close of the 2003-2004 Fiscal Year and after the close of the 2004-2005 Fiscal Year, the Interim Finance Committee shall determine the amount, if any, by which the total revenue from all sources to the State General Fund, excluding reversions to the State General Fund, exceeds:

(a) One hundred seven percent of the total revenue from all sources to the State General Fund as projected by the Nevada Legislature for the applicable fiscal year; and

(b) The total amount of all applicable contingent appropriations enacted for the 2003-2004 Fiscal Year and the 2004-2005 Fiscal Year by the Nevada Legislature for which the conditions for the contingent appropriations were satisfied.

2. Any excess amount of revenue determined pursuant to subsection 1 must be used as follows:

(a) An amount estimated by the Interim Finance Committee to pay for expenditures that will occur in the next biennium for which the corresponding expenditures in the current biennium were paid or are to be paid from a source other than the State General Fund, but for which the alternative source of revenue likely will not be available or will not be received during the biennium, must be used to replace previously used nonrecurring revenue. This amount must be accounted for separately in the State General Fund.

(b) The remaining excess amount of revenue must be transferred to the Fund to Stabilize the Operation of the State Government created by NRS 353.288, in such an amount that does not cause the balance in the Fund to exceed the limitation on that balance set forth in NRS 353.288.

(c) Any remaining excess amount of revenue must be transferred to the Fund for Tax Accountability created pursuant to section 191 of this act.

Sec. 66. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto a new section designated sec. 191.3, following sec. 191, to read as follows:

Sec. 191.3. 1. The Legislative Auditor shall conduct a performance audit of the Clark County School District. The performance audit must include issues identified in the Preliminary Performance Audit Survey conducted pursuant to section 46 of chapter 570, Statutes of Nevada 2001, at page 2867. These issues include, but are not limited to:

(a) Financial management;

(b) Facilities management;

(d) District organization; and

(e) Employee health plans.

2. The Legislative Auditor shall conduct a performance audit of the Washoe County School District. The performance audit must include issues identified in the Preliminary Performance Audit Survey conducted pursuant to section 46 of chapter 570, Statutes of Nevada 2001, at page 2867. These issues include, but are not limited to:

(a) Financial management;

(b) Facilities management;

(d) Transportation.

3. The Legislative Auditor shall prepare a final written report for each of the audits conducted pursuant to subsections 1 and 2 and present the reports to the Audit Subcommittee of the Legislative Commission not later than February 7, 2005.

4. To the extent that the provisions of NRS 218.737 to 218.890, inclusive, are consistent with the requirements of this section, those provisions apply to the audits conducted pursuant to this section. For the purposes of this subsection, the Clark County School District and the Washoe County School District shall be deemed to be agencies of the State.

5. Upon the request of the Legislative Auditor or his authorized representative, the officers and employees of the Clark County School District and the Washoe County School District shall make available to the Legislative Auditor any of their books, accounts, claims, reports, vouchers or other records of information, confidential or otherwise and irrespective of their form or location, which the Legislative Auditor deems necessary to conduct the audits required by this section.

Sec. 67. Section 193 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 193. (Deleted by amendment.)

Sec. 68. Section 194 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 194. 1. There is hereby appropriated from the State General Fund to the Interim Finance Committee for allocation to the Legislative Committee on Taxation, Public Revenue and Tax Policy to exercise its powers pursuant to section 130 of this act, including, without limitation, to hire a consultant:

For the Fiscal Year 2003-2004 $125,000

For the Fiscal Year 2004-2005 $125,000

2. The Interim Finance Committee may allocate to the Legislative Committee on Taxation, Public Revenue and Tax Policy all or any portion of the money appropriated by subsection 1.

3. The sums appropriated by subsection 1 are available for either fiscal year. Any balance of those sums must not be committed for expenditure after June 30, 2005, and reverts to the State General Fund as soon as all payments of money committed have been made.

Sec. 69. Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended by adding thereto new sections designated sections 194.10 through 194.22, following sec. 194, to read as follows:

Sec. 194.10. 1. There is hereby appropriated from the State General Fund to the State Distributive School Account the sum of $108,937,389 for distribution by the Superintendent of Public Instruction to the county school districts for Fiscal Year 2003-2004 which must, except as otherwise provided in sections 194.14 and 194.18 of this act, be used to employ teachers to comply with the required ratio of pupils to teachers, as set forth in NRS 388.700, in grades 1 and 2 and in selected kindergartens with pupils who are considered at risk of failure by the Superintendent of Public Instruction and to maintain the current ratio of pupils per teacher in grade 3. Expenditures for the class-size reduction program must be accounted for in a separate category of expenditure in the State Distributive School Account.

2. Except as otherwise provided in sections 194.14 and 194.18 of this act, the money appropriated by subsection 1 must be used to pay the salaries and benefits of not less than 1,887 teachers employed by school districts to meet the required pupil-teacher ratios in the 2003-2004 school year.

3. Any remaining balance of the sum appropriated by subsection 1 must not be committed for expenditure after June 30, 2004, and must be transferred and added to the money appropriated to the State Distributive School Account pursuant to section 194.12 of this act for the 2004-2005 Fiscal Year, and may be expended as that money is expended.

Sec. 194.12. 1. There is hereby appropriated from the State General Fund to the State Distributive School Account the sum of $117,142,553 for distribution by the Superintendent of Public Instruction to the county school districts for Fiscal Year 2004-2005 which must, except as otherwise provided in sections 194.14 and 194.18 of this act, be used to employ teachers to comply with the required ratio of pupils to teachers, as set forth in NRS 388.700, in grades 1 and 2 and in selected kindergartens with pupils who are considered at risk of failure by the Superintendent of Public Instruction and to maintain the current ratio of pupils per teacher in grade 3. Expenditures for the class-size reduction program must be accounted for in a separate category of expenditure in the State Distributive School Account.

2. Except as otherwise provided in sections 194.14 and 194.18 of this act, the money appropriated by subsection 1 must be used to pay the salaries and benefits of not less than 1,953 teachers employed by school districts to meet the required pupil-teacher ratios in the 2004-2005 school year.

3. Any remaining balance of the sum appropriated by subsection 1, including any money added thereto pursuant to section 194.10 of this act, must not be committed for expenditure after June 30, 2005, and reverts to the State General Fund as soon as all payments of money committed have been made.

Sec. 194.14. 1. Except as otherwise provided in subsection 2, the board of trustees of each county school district:

(a) Shall file a plan with the Superintendent of Public Instruction describing how the money appropriated by sections 194.10 and 194.12 of this act will be used to comply with the required ratio of pupils to teachers in kindergarten and grades 1, 2 and 3; or

(b) May, after receiving approval of the plan from the Superintendent of Public Instruction, use the money appropriated by sections 194.10 and 194.12 of this act to carry out an alternative program for reducing the ratio of pupils per teacher or to carry out programs of remedial education that have been found to be effective in improving pupil achievement in grades 1, 2 and 3, so long as the combined ratio of pupils per teacher in the aggregate of kindergarten and grades 1, 2 and 3 of the school district does not exceed the combined ratio of pupils per teacher in the aggregate of kindergarten and grades 1, 2 and 3 of the school district in the 2000-2001 school year. The plan approved by the Superintendent of Public Instruction must describe the method to be used by the school district to evaluate the effectiveness of the alternative program or remedial programs in improving pupil achievement.

2. In lieu of complying with subsection 1, the board of trustees of a school district that is located in a county whose population is less than 100,000 may, after receiving approval of the plan from the Superintendent of Public Instruction, use the money appropriated by sections 194.10 and 194.12 of this act to carry out a program in which alternative pupil-teacher ratios are carried out in grades 1 through 5 or grades 1 through 6, as applicable. Alternative ratios for grade 6 may only be approved for those school districts that include grade 6 in elementary school. The alternative pupil-teacher ratios shall not:

(a) Exceed 22 to 1 in grades 1, 2 and 3; and

(b) Exceed 25 to 1 in grades 4 and 5 or grades 4, 5 and 6, as applicable.

3. If a school district receives approval to carry out programs of remedial education pursuant to paragraph (b) of subsection 1 or to carry out alternative pupil-teacher ratios pursuant to subsection 2, the school district shall evaluate the effectiveness of the alternative program. The evaluation must include, without limitation, the effect of the alternative program on:

(a) Team teaching;

(b) Pupil discipline; and

4. A school district shall submit a written report of the results of the evaluation to the Superintendent of Public Instruction on or before December 1 of each year for the immediately preceding school year. The Superintendent of Public Instruction shall summarize the results of the evaluations and report the findings in an interim report to the Legislative Committee on Education on or before February 16, 2004.

5. On or before February 1, 2005, the Superintendent of Public Instruction shall submit a final written report of the results of the evaluations of alternative class-size reduction programs to the Legislative Bureau of Educational Accountability and Program Evaluation. On or before February 15, 2005, the Legislative Bureau of Educational Accountability and Program Evaluation shall submit a copy of the written report to the Director of the Legislative Counsel Bureau for transmission to the 73rd Session of the Nevada Legislature.

6. The interim report required pursuant to subsection 4 and the final written report required pursuant to subsection 5 must include, without limitation:

(a) The number of school districts for which an alternative class-size reduction program was approved;

(b) A description of the approved alternative class-size reduction programs; and

(1) Team teaching;

(2) Pupil discipline; and

(3) The academic achievement of pupils.

Sec. 194.16. 1. During the 2003-2005 biennium, a school district that is located in a county whose population is 100,000 or more shall study the current class-sizes in the school district for grades 1 to 5, inclusive, to determine whether alternative pupil-teacher ratios may:

(a) Improve the academic achievement of pupils;

(b) Decrease pupil discipline; or

2. In conducting the study, the school district shall consider the costs that would be associated with carrying out the alternative pupil-teacher ratios, including, without limitation, the:

(a) Number of additional classrooms needed; and

(b) Number of additional teachers needed.

3. On or before February 15, 2005, each school district that conducts a study of alternative pupil-teacher ratios pursuant to this section shall submit a written report of its findings concerning alternative pupil-teacher ratios to the:

(a) Director of the Legislative Counsel Bureau for transmission to the 73rd Session of the Nevada Legislature;

(b) Legislative Bureau of Educational Accountability and Program Evaluation; and

Sec. 194.18. 1. The money appropriated for class-size reduction pursuant to sections 194.10 and 194.12 of this act:

(a) May be applied first to pupils considered most at risk of failure.

(b) Must not be used to settle or arbitrate disputes between a recognized organization representing employees of a school district and the school district, or to settle any negotiations.

(c) Must not be used to adjust the district-wide schedules of salaries and benefits of the employees of a school district.

2. The money appropriated for class-size reduction pursuant to sections 194.10 and 194.12 of this act must not be distributed to a school district unless that school district has:

(a) Filed with the Department of Education a plan for achieving the required ratio set forth in NRS 388.700; and

(b) Demonstrated that, from resources of the school district other than allocations received from the State Distributive School Account for class-size reduction, a sufficient number of classroom teachers have been employed to maintain the average pupil-teacher ratio that existed for each grade for grades 1, 2 and 3, in that school district for the 3 school years immediately preceding the start of the class-size reduction program in the 1990-1991 school year. In addition, if a school district uses the allocations received from the State Distributive School Account for class-size reduction to carry out an alternative class-size reduction program as set forth in subsection 2 of section 194.14 of this act, a sufficient number of teachers have been employed to maintain the average pupil-teacher ratio that existed in each grade so reduced, in that school district for the 3 years immediately preceding the implementation of the alternative program.

Sec. 194.20. In no event may the alternative pupil-teacher ratios authorized pursuant to subsection 2 of section 194.14 of this act be carried out beyond the 2003-2005 biennium unless the 73rd Session of the Nevada Legislature determines that the alternative pupil-teacher ratios may be carried out after June 30, 2005.

Sec. 194.22. Notwithstanding the provisions of section 1 of this act, the Department of Education, the Budget Division of the Department of Administration and the Fiscal Analysis Division of the Legislative Counsel Bureau shall carry out the provisions of subsections 1 and 2 of that section for Fiscal Year 2003-2004 as soon as practicable after the effective date of that section.

Sec. 70. Section 195 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 195. The provisions of:

1. Section 173 of this act does not apply to any taxes precollected pursuant to chapter 463 of NRS on or before the effective date of that section.

2. Sections 80, 82 and 83 of this act do not apply to any taxes precollected pursuant to chapter 370 of NRS on or before the effective dates of those sections.

3. Sections 77, 78 and 172 of this act do not affect the amount of any license fees or taxes due for any period ending on or before July 31, 2003.

4. For a licensed gaming establishment that is exempt from the payment of the casino entertainment tax imposed by NRS 463.401 before September 1, 2003, but is required to pay that tax on and after that date, sections 174 and 175 of this act apply to any taxable receipts that are collected pursuant to those sections on and after September 1, 2003, and before January 1, 2004.

5. Sections 26 to 58, inclusive, of this act apply to any taxable receipts that are collected pursuant to the provisions of those sections on or after January 1, 2004.

6. Section 144 of this act do not apply to any contracts made before the effective date of that section.

Sec. 71. Section 196 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 196. The provisions of subsection 3 of section 189 of this act do not:

1. Affect any rights, duties or liability of any person relating to any taxes imposed pursuant to:

(a) Chapter 364A of NRS for any period ending before January 1, 2004.

(b) NRS 463.401 before January 1, 2004.

2. Apply to the administration, collection and enforcement of any taxes imposed pursuant to:

(a) Chapter 364A of NRS for any period ending before January 1, 2004.

(b) NRS 463.401 before January 1, 2004.

Sec. 72. Section 196.3 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 196.3. The Legislative Committee on Taxation, Public Revenue and Tax Policy established by the provisions of section 128 of this act shall:

1. Review and study:

(a) The impact, if any, that the imposition of the tax on live entertainment imposed pursuant to section 36 of this act has had on revenue received by the state and local governments from special events conducted in this state.

(b) Whether promoters of special events are contracting with entities in other states to hold the special events in those other states as a result of the imposition of the tax.

(d) The feasibility and need for exempting such special events from the tax.

(e) Standards and procedures that may be adopted for determining whether special events should be exempt from the tax and the qualifications for such an exemption.

2. Submit a report of the results of its review and any recommendations for legislation to the 73rd Session of the Nevada Legislature.

Sec. 73. Section 196.5 of Senate Bill No. 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 196.5. 1. The franchise tax imposed by section 24.38 of this act applies to any Nevada taxable income earned by a financial institution on or after November 1, 2003.

2. Notwithstanding the provisions of section 24.38 of this act, the tax return and remittance of the tax required pursuant to section 24.38 of this act for any taxable year ending before November 1, 2004, is due on January 15, 2005.

3. As used in this section:

(a) “Financial institution” has the meaning ascribed to it in section 24.18 of this act.

(b) “Nevada taxable income” has the meaning ascribed to it in section 24.22 of this act.

Sec. 74. Section 198 of Senate Bill No 6 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 198. 1. This section and sections 60, 67, 69, 75, 75.3, 75.7, 76, 79 to 88, inclusive, 90 to 93, inclusive, 98, 101, 112, 114, 116, 125 to 132, inclusive, 134, 136 to 140, inclusive, 142 to 165, inclusive, 168, 173, 178, 180, 184, 185, 186, 188 to 188.7, inclusive, 190 to 193, inclusive, 195, 196, 196.3 and 197 of this act and subsection 1 of section 189 of this act become effective upon passage and approval.

2. Sections 194, 194.10 and 194.14 to 194.22, inclusive, of this act become effective upon passage and approval and apply retroactively to July 1, 2003.

3. Sections 77, 78, 172 and 177 of this act become effective: