NEVADA LEGISLATURE

THE TWENTY-FOURTH DAY

Carson City (Friday), July 18, 2003

Senate called to order at 10:47 a.m.

President Pro Tempore Amodei presiding.

Roll called.

All present except Senators Nolan, Schneider and Tiffany, who were excused.

Prayer by the Chaplain, Pastor Albert Tilstra.

Lord, the decision these leaders make today will be tomorrow’s reality. Their laws and regulations, their every act, are stones thrown into an ocean that ripples to every shore. God, bless these men and women of the Senate and guide them in every decision, no matter how small. Let my prayers and the prayers of others fill them with wisdom and foresight. Each one was elected in trust. Help them honor our trust, hold firm to our faith in them and look to You as the final judge of what is good and right and true.

Amen.

Pledge of allegiance to the Flag.

Senator Raggio moved that further reading of the Journal be dispensed with, and the President and Secretary be authorized to make the necessary corrections and additions.

Motion carried.

MESSAGES FROM THE ASSEMBLY

Assembly Chamber, Carson City, July 17, 2003

To the Honorable the Senate:

I have the honor to inform your honorable body that the Assembly amended, and on this day passed, as amended, Senate Bill No. 2, Amendment No. 10, and respectfully requests your honorable body to concur in said amendment.

Diane Keetch

Assistant Chief Clerk of the Assembly

UNFINISHED BUSINESS

Consideration of Assembly Amendments

Senate Bill No. 2.

The following Assembly amendment was read:

Amendment No. 10.

Amend sec. 14, page 10, line 30, by deleting “this session,” and inserting:

“the 72nd Session of the Nevada Legislature,”.

Amend sec. 14, page 10, line 38, by deleting “this session,” and inserting:

“the 72nd Session of the Nevada Legislature,”.

Amend sec. 42, page 28, line 31, by deleting “this session,” and inserting:

“the 72nd Session of the Nevada Legislature,”.

Amend sec. 42, page 28, line 39, by deleting “this session,” and inserting:

“the 72nd Session of the Nevada Legislature,”.

Amend sec. 208, page 138, by deleting lines 4 through 28 and inserting:

“Sec. 208. 1. This section and sections 189 to 195, inclusive, and 203 of this act become effective on September 1, 2003.

2. Sections 1 to 188, inclusive, 196 to 202, inclusive, and 204 to 207, inclusive, of this act become effective:

(a) Except as otherwise provided in paragraph (b) or (c), on November 1, 2003.

(b) On January 1, 2004, for the purpose of requiring a resident agent who desires to resign to file a statement of resignation for each artificial person formed, organized, registered or qualified pursuant to the provisions of title 7 of NRS for which the resident agent is unwilling to continue to act as the resident agent for the service of process.

(c) On January 1, 2004, for the purpose of requiring a resident agent to file a certificate of name change of resident agent if the name of the resident agent is changed as a result of a merger, conversion, exchange, sale, reorganization or amendment.”.

Senator Raggio moved that the Senate concur in the Assembly amendment to Senate Bill No. 2.

Remarks by Senator Raggio.

Motion carried by a constitutional majority.

Bill ordered enrolled.

(See Nevada Supreme Court case Hon. Kenny C. Guinn, Governor of the State of Nevada, v. The Legislature of the State of Nevada, Case No. 41679, July 10, 2003.)

(See United State District Court, District of Nevada, Hon. Sharron E. Angle, et al., v. Legislature of State of Nevada, Case No. CV‑N‑03‑0371, D. Nev. July 18, 2003, en banc.)

remarks from the floor

Senator Titus requested that her remarks be entered in the Journal.

As you will recall, the last time the Senate met as a Committee of the Whole, the good Chairman of the Senate Committee on Commerce requested that Mr. Hettrick be invited to come before us and present his list of proposed budget cuts and the details of a tax plan he will support. The Majority Leader agreed to do so and an invitation was issued.

Then yesterday on this floor, the Majority Leader reported that Mr. Hettrick could not be contacted, but he had a copy of Mr. Hettrick’s proposed cuts and would seek his permission to distribute it to us.

When asked by the media about this turn of events, I commented that dealing with Mr. Hettrick is “like negotiating with a ghost.” I further lamented that it is impossible to ever reach a compromise when the other party will not come to the table.

Mr. Hettrick responded to my comments, and you may have seen this on Channel 2 News, last night, by calling me a liar—and he used those words. He said he was tired of “all the lies Mrs. Titus has been telling.”

This language offends me greatly and makes me angry, and I challenge Mr. Hettrick to come with any example of a lie I have told.

The injustice done to me personally, however, is insignificant compared to the harm Mr. Hettrick has done to this institution. In over a decade that I have served in this Senate, there have been some fierce disagreements and some strong feelings on various issues, but a certain decorum was always maintained. I never called anyone a liar, and no one ever called me a liar nor presented any evidence that I was lying. Even in this special session, when we are all stressed and tired and strongly committed to our positions, we have treated one another with respect in this Senate.

By calling me a liar, Mr. Hettrick has reduced our proceedings to the level of a bar room brawl. He has diminished the stature of the Legislature, further tarnished our reputation and undermined any dignity we might have left. What a reckless and foolish thing to have done.

I will never forget nor forgive Mr. Hettrick’s words, but for now, I will put them aside because I believe it is more important to focus on the business of the State than on one individual’s bad behavior.

So I ask you, Mr. Majority Leader, may I have a copy of Mr. Hettrick’s list of proposed cuts so I can see if there are any I can support or if there is any room for negotiation. Because while I have heard rumors about what is on the list, I have not seen it, and that is not a lie.

Remarks by Senators Raggio, Coffin, Neal and Washington.

Senator Coffin requested that his remarks be entered in the Journal.

Thank you, Mr. President pro Tempore. I saw part of the news as it was related in the newspapers, and I recall that Mr. Hettrick has been called a ghost before because he does move swiftly. It is like the old-time photographs when exposure was so slow you could appear at one end of the photograph and then at the other end of the photograph being caught twice in the same picture. I believe that photograph resembles the list the Assembly Minority Leader keeps waiving before us about the proposed cuts in large county budgets he proposes. I have not seen them, only heard about them. He has no cuts for his own areas. I am wondering what is on that list. I have speculations.

My Minority Leader is not a liar. She has not lied to me.

A few bad items have come out in the news during the past 24 hours we should discuss while we wait for the Assembly to act. Yesterday, the Nye County School District announced they are going to delay the start of their school year which has been caused by the delays of the action of the Legislature. That is a shame. Many people commute from Clark County to Nye County into Pahrump. Nye County is the largest county in the State. It is represented by a distinguished member who is no doubt upset that this has happened.

This morning at 11 o’clock, the Clark County School District is announcing they are going to make permanent the reassignment of 411 specialists from the Gifted and Talented Education Program (GATE), a program this body created at the request of our constituents. Those 411 specialists are highly trained, highly qualified and are proud of their work. The entire county and all of us are proud of what they have done. Cuts can be made in other counties too, but I speak only for mine. I am disgusted by the delays. Further delays are being contemplated, and some may be announced today. They were hoping the District Court was going to render an opinion soon. The District Court had stated there would be an opinion as soon as possible, the next day or the day after. However, they have not rendered that opinion. That is why the school district did not make permanent these shifts on Wednesday. The plaintiffs have filed a letter with the District Court. Some members of this body are plaintiffs. You may not be aware that your counsel requested the temporary restraining order against our action be continued until Monday. I do not know if you individually wish to join in the additional delays or if you know your attorneys have done that. I advise you to talk to your attorneys to determine whether you still want to stay on this case. Each day you stay as a plaintiff, you participate in the problems of the school boards. In Clark County, we still have 300 positions to fill. We are being rejected by 28 percent of those to whom we offer jobs. That is the highest in Clark County’s history with 70 percent of the State’s population. History says that in the week or two prior to school starting we lose another 150 teachers who do not renew. That means an additional problem for us. As long as this delay proceeds, we are falling farther behind. I do not know what else is going to be said by Clark County today at 11:00 a.m. in their announcement.

In a letter most of us received yesterday, the Nevada Association of School Boards recited the problems other rural counties are facing. I am certain Washoe County has some of the same problems too. The dilatory actions we are experiencing because of this lawsuit are hurting all of our constituents. Those parents are not going to be happy. I am glad I am not a participant in that lawsuit and am proud to be a defendant.

Senator Cegavske requested that her remarks be entered in the Journal.

Thank you. I wish to clarify what was asked of Assemblyman Hettrick. I was asked by our Majority Leader to contact him to ask him to give a presentation. I did. He said, “yes.” There are several of us here that know he did say yes. He was prepared. He had the information. I do not know what the breakdown was. He did communicate with several of us that he was going to be here. I wanted that on the record.

I also wish to note his presentation was given before the Senate Committee on Taxation during the 72nd Legislative Session. He has held meetings. Several reporters have said they have seen it. They know about it. All I can ask of my colleagues is whether or not you have asked him personally to see if you can see what he is presenting or what he has discussed. He has been more than happy to share the list with anyone.

Senator Raggio moved that the Senate recess subject to the call of the Chair.

Motion carried.

Senate in recess at 11:09 a.m.

SENATE IN SESSION

At 1:06 p.m.

President Hunt presiding.

Quorum present.

MESSAGES FROM THE ASSEMBLY

Assembly Chamber, Carson City, July 18, 2003

To the Honorable the Senate:

I have the honor to inform your honorable body that the Assembly on this day passed Assembly Bill No. 4.

Diane Keetch

Assistant Chief Clerk of the Assembly

INTRODUCTION, FIRST READING AND REFERENCE

Assembly Bill No. 4.

Senator Raggio moved that the bill be referred to the Committee of the Whole.

Motion carried.

MOTIONS, RESOLUTIONS AND NOTICES

Senator Raggio moved that the Senate resolve itself into a Committee of the Whole for the purpose of considering Assembly Bill No. 4.

Motion carried.

IN COMMITTEE OF THE WHOLE

At 1:07 p.m.

Senator Raggio presiding.

Assembly Bill No. 4 considered.

The Committee of the Whole was addressed by Senator Raggio; Jan Needham, Principal Deputy Legislative Counsel; Gary L. Ghiggeri, Senate Fiscal Analyst; Senator Neal and Senator Care.

Senator Raggio:

Before us, at this time, is Assembly Bill No. 4, which has been referred to the Committee of the Whole. I am asking Fiscal staff and Legal staff to give us a brief explanation of the bill. There is an amendment to be considered.

Jan Needham (Principal Deputy Legislative Counsel):

Thank you, Mr. Chairman. This bill has been previously referred to as a passive-revenue generator. It allows for the electronic submission of payment of taxes and fees to the Department of Taxation. It reduces certain collection allowances for cigarette taxes, liquor taxes and the sales and use tax. It requires a business that purchases tangible personal property to register with the Department of Taxation when it obtains its business license so that the use tax may be collected on that property. It requires an executive agency to submit to the Chief of the Budget Division vacant positions so they can know whether those positions are necessary or if they need to be filled.

The bill includes fees that are now in the administrative code. We codify those in this bill.

Senator Raggio:

What is the impact of this with relation to revenue?

Gary L. Ghiggeri (Senate Fiscal Analyst):

The impact will result in an additional $31 million over the 2003-2005 biennium based on the reduction of the collection allowances for cigarettes, other tobacco, liquor and sales tax. The estimates on the various scenarios provided to the Committee during the past few weeks have included Secretary of State fee increases. Included in the Secretary of State fee increases is $2 million per year which is raised by moving those fees currently in NAC to the NRS and for increasing those fees.

Senator Raggio:

Do you have the amounts for each of these reductions in collection allowances and the results in respect to the impact to the General Fund?

Mr. Ghiggeri:

The cigarette stamp reduction is estimated to provide in fiscal year 2004 approximately $2.7 million and $3 million in fiscal year 2005. The tobacco allowance reduction is estimated to generate approximately $100,000 in each year of the biennium. The liquor tax allowance reduction is estimated to generate approximately $700,000 in fiscal year 2004 and $800,000 in fiscal year 2005.

The sales tax allowance reduction is estimated to generate approximately $11.4 million in fiscal year 2004 and $12.1 million in 2005. The sales tax allowance funding that will go to the General Fund is about $6 million each year of the biennium and will flow into the Distributive School Account (DSA) which will reduce the need for a general fund appropriation in the DSA. That is the result of increased revenue for the local school support tax. The cigarette stamp and liquor tax allowances are based upon an increase in the cigarette tax by 50 cents and the liquor tax at 75 percent. If those amounts change, then the estimated revenue for the reduction of the collection of allowances will fluctuate accordingly.

Senator Raggio:

We will discuss Amendment No. 11 for Assembly Bill No. 4. This bill passed the Assembly with more than a two-thirds vote, 38 in favor, 3 absent and 1 excused. What is the reason for the proposed amendment?

Ms. Needham:

The amendment is in regard to section 28 of Senate Bill No. 2. It adjusts the effective dates to make the new sections added in this bill effective on September 1, 2003. We have changed some of the effective dates of the provisions of the bill so that the reductions of the allowances for the cigarette taxes are effective on August 1, 2003. The reduction allowance for sales and use tax becomes effective on passage and approval and applies retroactively to July 1, 2003.

Senator Raggio:

Is this correct now?

Ms. Needham:

Yes, Mr. Chairman.

Senator Raggio:

What is the urgency for the enactment of this measure?

Mr. Ghiggeri:

The Department of Taxation will be sending out the tax returns on July 22, 2003, for sales and use tax collections for the quarter for July through September 30, 2003. They are planning to print those forms Monday, and the collection allowance rate has to be on those forms prior to mailing. I am told by the Department of Taxation if they do not do that, we would lose a quarter of the revenue for fiscal year 2003 of the sales and use tax which would result in a loss of approximately $3 million.

Senator Raggio:

Prompt action by the Legislature would enable the Governor to sign the measure in time for that to occur.

Mr. Ghiggeri:

That is correct.

Senator Neal:

Are the litanies of taxes and fees you have mentioned included in the bill?

Mr. Ghiggeri:

The cigarette and liquor tax increases are not included in the bill, just the reduction of the collection allowance. The Legislature has not determined at which rates to increase those taxes. They are not included in this legislation.

Senator Raggio:

It is the Chair’s understanding this bill addresses only the reductions in the existing collection allowances for each of these components.

Senator Care:

In section 18, which applies to any inspection of records conducted pursuant to NRS 90.410, what is the inspection for?

Ms. Needham:

I do not know, but I can find that out. What these sections do is to codify what is already in that administrative code.

Senator Care:

That was to be my next question. I do not recall when we met as a Committee of the Whole or in bills considered earlier, these precise fees being put before us. Am I to understand that all of these fees proposed in section 18 are already in existence? Are we just putting those into statute?

Ms. Needham:

That is my understanding.

Senator Care:

In section 19, those existing fees, and we are doubling those, had we talked about these fees in any testimony where we increased filing fees? Do you recall if we have considered these before?

Ms. Needham:

I am not aware that these were discussed.

Senator Raggio:

Is section 19 a reference to Senate Bill No. 2?

Ms. Needham:

Yes, this is a section contained in Senate Bill No. 2, and it has already passed.

Senator Townsend moved to adopt Amendment No. 11, and do pass Assembly Bill No. 4.

Senator Titus seconded the motion.

The motion passed unanimously.

On the motion of Senator Coffin, the committee did rise, and report back to the Senate.

SENATE IN SESSION

At 1:20 p.m.

President Hunt presiding.

Quorum present.

REPORTS OF COMMITTEES

Madam President:

Your Committee of the Whole, to which was referred Assembly Bill No. 4, has had the same under consideration, and begs leave to report the same back with the recommendation: Amend, and do pass as amended.

William J. Raggio, Chairman

GENERAL FILE AND THIRD READING

Assembly Bill No. 4.

Bill read third time.

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

Amendment No. 11.

Amend the bill as a whole by renumbering sections 21 and 22 as sections 22 and 23 and adding a new section designated sec. 21, following sec. 20, to read as follows:

“Sec. 21. Section 208 of Senate Bill No. 2 of the 20th Special Session of the Nevada Legislature is hereby amended to read as follows:

Sec. 208. 1. This section and sections 188.1 to 195, inclusive, and 203 of this act become effective on September 1, 2003.

2. Sections 1 to 188, inclusive, 196 to 202, inclusive, and 204 to 207, inclusive, of this act become effective:

(a) Except as otherwise provided in paragraph (b) or (c), on November 1, 2003.

Amend sec. 22, page 11, by deleting lines 10 through 12 and inserting:

“Sec. 23. 1. This section and sections 1, 2, 3, 8, 9, 10, 12, 13, 15, 16, 17 and 22 of this act become effective upon passage and approval.

2. Sections 11 and 14 of this act become effective upon passage and approval and apply retroactively to July 1, 2003.

3. Sections 4 to 7, inclusive, of this act become effective on August 1, 2003.

4. Sections 18 to 21, inclusive, of this act become effective upon”.

Senator Raggio moved the adoption of the amendment.

Amendment adopted.

Bill ordered reprinted, engrossed and to third reading.

UNFINISHED BUSINESS

Consideration of Assembly Amendments

Senate Bill No. 6.

The following Assembly amendments were read:

Amendment No. 3.

Amend sec. 4, page 2, by deleting lines 14 and 15 and inserting:

“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).”.

Amend sec. 11, page 4, line 22, by deleting “1” and inserting “0.6”.

Amend sec. 27, page 17, by deleting line 43 and inserting:

“seats that are permanently mounted and cannot be, or are not intended to be, removed temporarily for any single performance of live entertainment.”.

Amend sec. 30, page 18, by deleting lines 10 and 11 and inserting:

“(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 type of entity that engages in business.”.

Amend sec. 34, page 18, by deleting lines 29 through 32 and inserting:

“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”.

Amend sec. 36, page 19, by deleting lines 17 and 18 and inserting:

“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. §”.

Amend sec. 36, page 19, between lines 23 and 24 by inserting:

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

Amend the bill as a whole by adding new sections designated sections 58.10 through 58.80, following sec. 58, to read as follows:

“Sec. 58.10. Title 32 of NRS is hereby amended by adding thereto a new chapter to consist of the provisions set forth as sections 58.12 to 58.80, inclusive, of this act.

Sec. 58.12. As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 58.14 to 58.28, inclusive, of this act have the meanings ascribed to them in those sections.

Sec. 58.14. “Business” means any activity engaged in or caused to be engaged in with the object of gain, benefit or advantage, either direct or indirect, to any person or governmental entity.

Sec. 58.16. 1. “Business entity” 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 type of entity that engages in business; and

(b) A natural person engaging in business if he is deemed to be a business entity pursuant to section 58.42 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), unless the organization has any taxable income for the purposes of federal income taxation from any unrelated trade or business, as defined in 26 U.S.C. § 513; or

(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.

Sec. 58.18. “Commission” means the Nevada Tax Commission.

Sec. 58.20. “Engaging in business” means commencing, conducting or continuing a business, the exercise of corporate or franchise powers regarding a business, and the liquidation of a business entity which is or was engaging in a business when the liquidator holds itself out to the public as conducting that business.

Sec. 58.22. “Gross revenue” means the total amount received or receivable on the use, sale or exchange of property or capital or for the performance of services, from any transaction involving a business entity, without any reduction for the basis of property sold, the cost of goods or services sold, or any other expense of the business entity.

Sec. 58.24. 1. “Pass-through revenue” means revenue received by a business entity solely on behalf of another in a disclosed agency capacity, including revenue received as a broker, bailee, consignee or auctioneer, notwithstanding that the business entity may incur liability, primarily or secondarily, in a transaction in its capacity as an agent.

2. “Pass-through revenue” includes reimbursement for advances made by a business entity on behalf of a customer or client, other than with respect to services rendered or with respect to purchases of goods by the business entity in carrying out the business in which it engages.

Sec. 58.26. “Total amount received or receivable” means the total sum of any money and the fair market value of any other property or services received or receivable, including, without limitation, rents, royalties, interest and dividends, and aggregate net gains realized from the sale or exchange of stocks, bonds, asset-backed securities, investment and trading assets and other evidence of indebtedness.

Sec. 58.28. “Total revenue” means gross revenue minus:

1. Any revenue which this state is prohibited from taxing pursuant to the Constitution, laws or treaties of the United States or the Nevada Constitution.

2. Any revenue received by a natural person from the rental of not more than four residential units.

3. Any revenue from the sale of agricultural products at wholesale.

4. If a business entity pays a tax on premiums pursuant to title 57 of NRS, the gross revenue of the business entity derived from direct premiums written.

5. If a business entity pays a license fee pursuant to NRS 463.370, the total sum of all amounts specifically included by statute in and all amounts specifically excluded by statute from the calculation of that fee for the business entity.

6. If a business entity pays a tax on the net proceeds of minerals pursuant to chapter 362 of NRS, the gross yield of the business entity from which those net proceeds are determined.

7. Any operating revenue of a public utility for the provision of electric, gas, water or sewer service which is operated or regulated by a governmental entity.

8. Any revenue of a nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C. § 501(c), except the gross revenue of the organization from an unrelated trade or business, as defined in 26 U.S.C. § 513.

9. Any revenue from the operation of a vending stand pursuant to NRS 426.640.

10. Any revenue received by a certified disadvantaged business enterprise.

Sec. 58.30. The Legislature hereby finds and declares that the fee imposed by this chapter on a business entity must not be construed as a fee or tax upon the customers of the business entity, but as a fee which is imposed upon and collectible from the business entity and which constitutes part of the operating overhead of the business entity.

Sec. 58.32. The Department shall:

1. Administer and enforce the provisions of this chapter, and may adopt such regulations as it deems appropriate for that purpose.

2. Deposit all fees, interest and penalties it receives pursuant to this chapter in the State Treasury for credit to the State General Fund.

Sec. 58.34. 1. Each person responsible for maintaining the records of a business entity shall:

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

(b) Preserve those records for 4 years 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 Department upon demand at reasonable times during regular business hours.

2. For the purposes of this section, “record” includes any federal income tax return filed by a business entity with the Internal Revenue Service.

3. Any person who violates the provisions of subsection 1 is guilty of a misdemeanor.

Sec. 58.36. 1. To verify the accuracy of any return filed or, if no return is filed by a business entity, to determine the amount required to be paid, the Department, or any person authorized in writing by the Department, may examine the books, papers and records of any person or business entity that may be liable for the fee imposed by this chapter.

2. Any person or business entity which may be liable for the fee imposed by this chapter and which keeps outside of this state its books, papers and records relating thereto shall pay to the Department an amount equal to the allowance provided for state officers and employees generally while traveling outside of the State for each day or fraction thereof during which an employee of the Department is engaged in examining those documents, plus any other actual expenses incurred by the employee while he is absent from his regular place of employment to examine those documents.

Sec. 58.38. The Executive Director may request from any other governmental agency or officer such information as he deems necessary to carry out the provisions of this chapter. If the Executive Director obtains any confidential information pursuant to such a request, he shall maintain the confidentiality of that information in the same manner and to the same extent as provided by law for the agency or officer from whom the information was obtained.

Sec. 58.40. 1. Except as otherwise provided in this section and NRS 360.250, the records and files of the Department concerning the administration of this chapter are confidential and privileged. The Department, and any employee engaged in the administration of this chapter or charged with the custody of any such records or files, shall not disclose any information obtained from the Department’s records or files or from any examination, investigation or hearing authorized by the provisions of this chapter. Neither the Department nor any employee of the Department may be required to produce any of the records, files and information for the inspection of any person or for use in any action or proceeding.

2. The records and files of the Department concerning the administration of this chapter are not confidential and privileged in the following cases:

(a) Testimony by a member or employee of the Department and production of records, files and information on behalf of the Department or the business entity that paid the fee in any action or proceeding pursuant to the provisions of this chapter if that testimony or the records, files or information, or the facts shown thereby, are directly involved in the action or proceeding.

(b) Delivery to the person who paid the fee or his authorized representative of a copy of any return or other document filed by him pursuant to this chapter.

(c) Publication of statistics so classified as to prevent the identification of a particular business entity or document.

(d) Exchanges of information with the Internal Revenue Service in accordance with compacts made and provided for in such cases.

(e) Disclosure in confidence to the Governor or his agent in the exercise of the Governor’s general supervisory powers, or to any person authorized to audit the accounts of the Department in pursuance of an audit, or to the Attorney General or other legal representative of the State in connection with an action or proceeding pursuant to this chapter, or to any agency of this or any other state charged with the administration or enforcement of laws relating to taxation.

(f) Exchanges of information pursuant to subsection 3.

3. The Commission may agree with any county fair and recreation board or the governing body of any county, city or town for the continuing exchange of information concerning taxpayers.

Sec. 58.42. A natural person engaging in business shall be deemed to be a business entity 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), Profit or Loss From Farming Form, or its equivalent or successor form, for the business.

Sec. 58.44. 1. A quarterly franchise fee is hereby imposed upon each business entity for the privilege of engaging in business in this state at the rate of:

Annual Total Revenue...................................................... Franchise Fee per

of Business Entity............................................................... Calendar Quarter

More than $0 but less than $100,000........................................................ $0

$100,000 or more but less than $200,000.............................................. $30

$200,000 or more but less than $300,000.............................................. $60

$300,000 or more but less than $400,000.............................................. $90

$400,000 or more but less than $500,000............................................ $120

$500,000 or more but less than $750,000............................................ $175

$750,000 or more but less than $1,000,000........................................ $240

$1,000,000 or more but less than $1,500,000..................................... $350

$1,500,000 or more but less than $2,000,000..................................... $480

$2,000,000 or more but less than $2,500,000..................................... $620

$2,500,000 or more but less than $3,000,000..................................... $750

$3,000,000 or more but less than $4,000,000..................................... $950

$4,000,000 or more but less than $5,000,000.................................. $1,200

$5,000,000 or more but less than $7,500,000.................................. $1,700

$7,500,000 or more but less than $10,000,000............................... $2,400

$10,000,000 or more but less than $20,000,000............................. $3,500

$20,000,000 or more............................................................................. $7,000

plus $3,500 for each additional $10,000,000

2. The fee for each calendar quarter is due on the last day of the quarter and must be paid on or before the last day of the month immediately following the quarter. The business entity shall estimate its annual total revenue for the fiscal year in which the franchise fee is being paid for the purposes of determining the amount of the franchise fee that is due.

3. Upon determination of the actual annual total revenue of the business entity for that fiscal year, the business entity shall reconcile the amount due from franchise fees for the year. If the amount of franchise fees paid exceeds the amount actually due from the business entity, the excess fees must be credited against future franchise fees payable by the business entity. If the amount of franchise fees paid was less than the amount due, the amount due remaining unpaid shall be deemed, for the purposes of NRS 360.417, to constitute a failure to pay the fee within the time required pursuant to this section.

4. Each business entity engaging in business in this state shall file with the Department a return on a form prescribed by the Department, together with the remittance of any fee due pursuant to this chapter, on or before the last day of the month immediately following the calendar quarter for which the payment is being made. The form must provide each business entity with an opportunity for account reconciliation.

Sec. 58.46. 1. Except as otherwise provided in this section, the total revenue of a business entity in this state must be computed for each fiscal year based upon the accounting method used by the business entity to compute its income for the purposes of federal income taxation. If a business entity does not regularly use a single accounting method, or if the Department determines that the accounting method used by the business entity does not clearly reflect the total revenue of the business entity in this state, the calculation of that revenue must be made on the basis of such an accounting method as, in the opinion of the Department, clearly reflects the total revenue of the business entity in this state.

2. If a business entity is engaged in more than one type of business, the business entity:

(a) May, in computing its total revenue in this state, use a different accounting method for each of those types of business; and

(b) Shall compute its total revenue in this state for each of those types of business based upon the accounting method used by the business entity to compute its income for that type of business for the purposes of federal income taxation.

3. If a business entity changes the accounting method upon which it computes its income for the purposes of federal income taxation, the business entity shall, before using that method to compute its total revenue in this state, provide the Department with written notification of the change in its accounting method. If:

(a) The business entity or any of its owners, officers, employees, agents or representatives are required, on behalf of the business entity, to obtain the consent of the Internal Revenue Service to the change in its accounting method, the business entity shall include a notarized copy of that consent in its written notification to the Department; or

(b) The business entity is not required to obtain the consent of the Internal Revenue Service to the change in its accounting method, the business entity shall obtain the consent of the Department to the change in its accounting method before using that method to compute its total revenue in this state.

4. If a business entity fails to comply with the provisions of subsections 1 and 2, any required change in the accounting method does not affect the imposition and calculation of any penalty, or the calculation of any additional amount of franchise fees due, pursuant to this chapter.

Sec. 58.48. In calculating the franchise fee of a business entity pursuant to this chapter, the business entity is entitled to deduct from its total revenue:

1. Any revenue upon which this state is prohibited from imposing a franchise fee pursuant to the Constitution or laws of the United States or the Nevada Constitution.

2. The amount of any federal, state or local governmental fuel taxes collected by the business entity.

3. Any revenue of the business entity attributable to interest upon any bonds or securities of the Federal Government, the State of Nevada or a political subdivision of this state.

4. Any pass-through revenue of the business entity.

5. Any revenue received as dividends or distributions by a parent organization from the capital account of a subsidiary entity of the parent organization.

6. Any revenue received by a hospital or provider of health care from a governmental entity.

7. Any cash discounts the business entity allows a purchaser of property, rights or services.

8. Any indebtedness to the business entity that is impossible or impracticable to collect and which is written off by the business entity as a bad debt for purposes of federal income taxation.

9. Any counterfeit currency received by the business entity for which the business entity is not reimbursed.

10. The amount of any payments received by the business entity upon claims for health, casualty or life insurance.

11. The cost of all payments made to contractors and subcontractors by a business entity that is in the business of developing improved real property and who sells that improved real property to a person who is not in the business of developing real property. The amount of the deduction must not exceed the gross revenue for the transaction.

12. Any promotional allowances by the business entity.

13. The gross revenue attributable to damaged or returned merchandise.

Sec. 58.50. 1. The Department shall adopt regulations providing for the allocation or apportionment of the liability for franchise fees pursuant to this chapter of business entities engaging in a business both within and outside of this state. The regulations must:

(a) Except as otherwise provided in this section, be consistent with the methods of dividing income contained in the Uniform Division of Income for Tax Purposes Act.

(b) If the business consists of financial activity, as defined in the Uniform Division of Income for Tax Purposes Act, be consistent with the Recommended Formula for the Apportionment and Allocation of Net Income of Financial Institutions.

2. As used in this section:

(a) “Recommended Formula for the Apportionment and Allocation of Net Income of Financial Institutions” means the provisions of the Recommended Formula for the Apportionment and Allocation of Net Income of Financial Institutions adopted by the Multistate Tax Commission, as those provisions existed on July 1, 2003.

(b) “Uniform Division of Income for Tax Purposes Act” means the provisions of the Uniform Division of Income for Tax Purposes Act approved by the National Conference of Commissioners on Uniform State Laws, as those provisions existed on July 1, 2003.

Sec. 58.52. The Department shall, upon application by a business entity engaging in a business both within and outside of this state, reduce the liability of the business entity for franchise fees pursuant to this chapter to the extent required by the Constitution or laws of the United States or the Nevada Constitution, as a result of the tax liability of the business entity to other states and their political subdivisions.

Sec. 58.54. 1. If the Department determines, after notice and hearing, that:

(a) A business entity and one or more of its affiliated business entities are engaged in the same or a similar type of business; and

(b) The primary or a substantial purpose for engaging in that type of business through affiliated business entities is to avoid or to reduce liability for the franchise fees imposed by this chapter,

the Department shall require the business entity and one or more of its affiliated business entities to file a consolidated return for the purposes of this chapter.

2. For the purposes of this section:

(a) “Affiliated business entity” means a business entity that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, another specified business entity.

(b) “Control,” as used in the terms “controls,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a business entity, whether through the ownership of voting securities, by contract or otherwise.

Sec. 58.56. Upon written application made before the date on which payment must be made, the Department may for good cause extend by 30 days the time within which a business entity is required to pay the franchise fee imposed by this chapter. If the franchise fee is paid during the period of extension, no penalty or late charge may be imposed for failure to pay at the time required, but the business entity shall pay interest at the rate of 1 percent per month from the date on which the amount would have been due without the extension until the date of payment, unless otherwise provided in NRS 360.232 or 360.320.

Sec. 58.58. The remedies of the State provided for in this chapter are cumulative, and no action taken by the Department or the Attorney General constitutes an election by the State to pursue any remedy to the exclusion of any other remedy for which provision is made in this chapter.

Sec. 58.60. If the Department determines that any franchise fee, penalty or interest has been paid more than once or has been erroneously or illegally collected or computed, the Department shall set forth that fact in the records of the Department and certify to the State Board of Examiners the amount collected in excess of the amount legally due and the business entity or person from which it was collected or by whom it was paid. If approved by the State Board of Examiners, the excess amount collected or paid must be credited on any amounts then due from the person or business entity under this chapter, and the balance refunded to the person or business entity, or its successors, administrators or executors.

Sec. 58.62. 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 the Department within 3 years after the last day of the month immediately following the calendar quarter 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 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 Department shall serve notice of its action on the claimant in the manner prescribed for service of notice of a deficiency determination.

Sec. 58.64. 1. Except as otherwise provided in this section and NRS 360.320, interest must be paid upon any overpayment of any amount of the franchise fee imposed by this chapter at the rate of 0.5 percent per month, or fraction thereof, from the last day of the month immediately following the calendar quarter for which the overpayment was made. No refund or credit may be made of any interest imposed upon the person or business entity making the overpayment with respect to the amount being refunded or credited.

2. 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 franchise fee or the amount against which the credit is applied.

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

Sec. 58.66. 1. No injunction, writ of mandate or other legal or equitable process may issue in any suit, action or proceeding in any court against this state or against any officer of the State to prevent or enjoin the collection under this chapter of the franchise fee imposed by this chapter or any amount of the franchise fee, penalty or interest required to be collected.

2. No suit or proceeding may be maintained in any court for the recovery of any amount alleged to have been erroneously or illegally determined or collected unless a claim for refund or credit has been filed.

Sec. 58.68. 1. Within 90 days after a final decision upon a claim filed pursuant to this chapter is rendered by the Commission, the claimant may bring an action against the Department on the grounds set forth in the claim in a court of competent jurisdiction in Carson City, the county of this state where the claimant resides or maintains his principal place of business or a county in which any relevant proceedings were conducted by the Department, for the recovery of the whole or any part of the amount with respect to which the claim has been disallowed.

2. Failure to bring an action within the time specified constitutes a waiver of any demand against the State on account of alleged overpayments.

Sec. 58.70. 1. If the Department fails to mail notice of action on a claim within 6 months after the claim is filed, the claimant may consider the claim disallowed and file an appeal with the Commission within 30 days after the last day of the 6-month period. If the claimant is aggrieved by the decision of the Commission rendered on appeal, the claimant may, within 90 days after the decision is rendered, bring an action against the Department on the grounds set forth in the claim for the recovery of the whole or any part of the amount claimed as an overpayment.

2. If judgment is rendered for the plaintiff, the amount of the judgment must first be credited towards any franchise fees due from the plaintiff.

3. The balance of the judgment must be refunded to the plaintiff.

Sec. 58.72. In any judgment, interest must be allowed at the rate of 6 percent per annum upon the amount found to have been illegally collected from the date of payment of the amount to the date of allowance of credit on account of the judgment, or to a date preceding the date of the refund warrant by not more than 30 days. The date must be determined by the Department.

Sec. 58.74. A judgment may not be rendered in favor of the plaintiff in any action brought against the Department to recover any amount paid when the action is brought by or in the name of an assignee of the business entity paying the amount or by any person other than the person or business entity which paid the amount.

Sec. 58.76. 1. The Department may recover a refund or any part thereof which is erroneously made and any credit or part thereof which is erroneously allowed in an action brought in a court of competent jurisdiction in Carson City or Clark County in the name of the State of Nevada.

2. The action must be tried in Carson City or Clark County unless the court, with the consent of the Attorney General, orders a change of place of trial.

3. The Attorney General shall prosecute the action, and the provisions of NRS, the Nevada Rules of Civil Procedure and the Nevada Rules of Appellate Procedure relating to service of summons, pleadings, proofs, trials and appeals are applicable to the proceedings.

Sec. 58.78. 1. If any amount in excess of $25 has been illegally determined, either by the Department or by the person filing the return, the Department shall certify this fact to the State Board of Examiners, and the latter shall authorize the cancellation of the amount upon the records of the Department.

2. If an amount not exceeding $25 has been illegally determined, either by the Department or by the person or business entity filing the return, the Department, without certifying this fact to the State Board of Examiners, shall authorize the cancellation of the amount upon the records of the Department.

Sec. 58.80. 1. A person shall not:

(a) Make, cause to be made or permit to be made any false or fraudulent return or declaration or false statement in any return or declaration with intent to defraud the State or to evade payment of the franchise fee or any part of the franchise fee imposed by this chapter.

(b) Make, cause to be made or permit to be made any false entry in books, records or accounts with intent to defraud the State or to evade the payment of the franchise fee or any part of the franchise fee imposed by this chapter.

(c) Keep, cause to be kept or permit to be kept more than one set of books, records or accounts with intent to defraud the State or to evade the payment of the franchise fee or any part of the franchise fee imposed by this chapter.

2. Any person who violates the provisions of subsection 1 is guilty of a gross misdemeanor.”.

Amend sec. 62, page 28, by deleting lines 29 and 30 and inserting:

“partnership, business trust and their equivalents organized under the laws of this state or another jurisdiction and any other person that”.

Amend sec. 62, page 28, by deleting lines 38 and 39 and inserting:

“to 26 U.S.C. § 501(c), unless the organization has any taxable income for the purposes of federal income taxation from any unrelated trade or business, as”.

Amend sec. 62, page 28, by deleting lines 43 through 45 and inserting:

“annual wage, as computed for the preceding calendar year pursuant to chapter 612 of NRS and rounded to the nearest hundred dollars.”.

Amend sec. 62, page 29, by deleting line 1 and inserting:

“(d) A business whose primary purpose is to create or produce motion pictures. As”.

Amend sec. 65, page 29, line 43, by deleting “Business,” and inserting “Business Form,”.

Amend sec. 65, page 29, line 45, by deleting “Loss,” and inserting “Loss Form,”.

Amend sec. 65, page 30, line 1, by deleting “Farming,” and inserting “Farming Form,”.

Amend sec. 70, page 32, by deleting lines 16 through 45 and inserting:

“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, franchise fee, contribution or premium or amount of tax, franchise fee, 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, 24.12 to 24.74, inclusive, or 58.12 to 58.80, 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.”.

Amend the bill as a whole by adding a new section designated sec. 70.5, following sec. 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, franchise fee, contribution or premium or amount of tax, franchise fee, 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, 24.12 to 24.74, inclusive, or 58.12 to 58.80, 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.

Amend sec. 71, page 33, by deleting lines 1 through 17 and inserting:

“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 or franchise fee provided for in chapter 362, 364A, 369, 370, 372, 374, 377, 377A, 444A or 585 of NRS, or sections 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, 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.”.

Amend the bill as a whole by adding a new section designated sec. 71.5, following sec. 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 or franchise fee provided for in chapter 362, ~~[364A,]~~ 369, 370, 372, 374, 377, 377A, 444A or 585 of NRS, or sections 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, 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.”.

Amend sec. 72, page 33, by deleting lines 18 through 37 and inserting:

“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 or franchise fee 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 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, 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.”.

Amend the bill as a whole by adding a new section designated sec. 72.5, following sec. 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 or franchise fee 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, 24.12 to 24.74, inclusive, or 58.12 to 58.80, 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.

Amend sec. 73, page 35, by deleting lines 6 through 8 and inserting:

“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, 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act”.

Amend the bill as a whole by adding a new section designated sec. 73.5, following sec. 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

(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 2 to 24, inclusive, 24.12 to 24.74, inclusive, or 58.12 to 58.80, 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.”.

Amend sec. 75.7, page 40, by deleting lines 10 through 13 and inserting:

“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”.

Amend sec. 77, page 41, line 21, by deleting “$3.72” and inserting “$3.45”.

Amend sec. 78, page 41, line 28, by deleting “$3.87” and inserting “$3.60”.

Amend sec. 78, page 41, line 30, by deleting “$1.42” and inserting “$1.30”.

Amend sec. 78, page 41, line 33, by deleting “76” and inserting “70”.

Amend sec. 78, page 41, line 36, by deleting “17” and inserting “16”.

Amend sec. 80, page 42, line 22, by deleting “45” and inserting “40”.

Amend the bill as a whole by adding a new section designated sec. 80.5, following sec. 80, to read as follows:

“Sec. 80.5. 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 ~~[40]~~ 45 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.”.

Amend sec. 82, page 43, line 8, by deleting “40” and inserting “35”.

Amend the bill as a whole by adding a new section designated sec. 82.5, following sec. 82, to read as follows:

“Sec. 82.5. 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 ~~[35]~~ 40 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.”.

Amend sec. 83, page 43, line 25, by deleting “45” and inserting “40”.

Amend the bill as a whole by adding a new section designated sec. 83.5, following sec. 83, to read as follows:

“Sec. 83.5. 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 ~~[40]~~ 45 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.”.

Amend sec. 95, page 46, by deleting lines 9 through 15 and inserting:

“4. The county recorder of a county may deduct and withhold from the taxes collected 0.2 percent of those taxes to reimburse the county for the cost of collecting the tax.”.

Amend the bill as a whole by deleting sec. 102 and inserting:

“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 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.]”.

Amend the bill as a whole by deleting sections 126 through 131 and adding new sections designated sections 126 through 131, following sec. 125, to read as follows:

“Sec. 126. As used in sections 126 to 131, inclusive, of this act, “Committee” means the Legislative Committee on Taxation, Public Revenue and Tax Policy.

Sec. 127. 1. There is hereby established a Legislative Committee on Taxation, Public Revenue and Tax Policy consisting of:

(a) The Speaker of the Assembly, or a member of the Assembly designated by the Speaker of the Assembly;

(b) The Minority Leader of the Assembly, or a member of the Assembly designated by the Minority Leader of the Assembly;

(c) The Majority Leader of the Senate, or a member of the Senate designated by the Majority Leader of the Senate;

(d) The Minority Leader of the Senate, or a member of the Senate designated by the Minority Leader of the Senate;

(e) Two members appointed by the Speaker of the Assembly who were members of the Assembly Committee on Taxation during the immediately preceding legislative session; and

(f) Two members appointed by the Majority Leader of the Senate who were members of the Senate Committee on Taxation during the immediately preceding legislative session.

2. The members of the Committee shall elect a Chairman and Vice Chairman from among their members. The Chairman must be elected from one house of the Legislature and the Vice Chairman from the other house. After the initial election of a Chairman and Vice Chairman, each of those officers holds office for a term of 2 years commencing on July 1 of each odd-numbered year. If a vacancy occurs in the Chairmanship or Vice Chairmanship, the members of the Committee shall elect a replacement for the remainder of the unexpired term.

3. Any member of the Committee who is not a candidate for reelection or who is defeated for reelection continues to serve until the convening of the next session of the Legislature.

4. Vacancies on the Committee must be filled in the same manner as the original appointments.

Sec. 128. 1. The members of the Committee shall meet throughout each year at the times and places specified by a call of the Chairman or a majority of the Committee.

2. The Director of the Legislative Counsel Bureau or his designee shall act as the nonvoting recording Secretary.

3. The Committee shall prescribe regulations for its own management and government.

4. Except as otherwise provided in subsection 5, five voting members of the Committee constitute a quorum.

5. Any recommended legislation proposed by the Committee must be approved by a majority of the members of the Senate and by a majority of the members of the Assembly serving on the Committee.

6. Except during a regular or special session of the Legislature, the members of the Committee are entitled to receive the compensation provided for a majority of the members of the Legislature during the first 60 days of the preceding regular session, the per diem allowance provided for state officers and employees generally and the travel expenses provided pursuant to NRS 218.2207 for each day or portion of a day of attendance at a meeting of the Committee and while engaged in the business of the Committee. The salaries and expenses paid pursuant to this subsection and the expenses of the Committee must be paid from the Legislative Fund.

Sec. 129. The Committee may:

1. Review and study:

(a) The specific taxes collected in this state;

(b) The implementation of any taxes, fees and other methods for generating public revenue in this state;

(c) The impact of any changes to taxes, fees and other methods for generating public revenue that result from legislation enacted by the Legislature on the residents of this state and on the businesses located in this state, doing business in this state or considering locating in this state;

(d) The fiscal effects of any taxes, fees and other methods for generating public revenue;

(e) Broad issues of tax policy and fiscal policy relevant to the future of the State of Nevada; and

(f) Any other issues related to taxation, the generation of public revenue, tax policy or fiscal policy which affect this state.

2. Conduct investigations and hold hearings in connection with its powers pursuant to this section.

3. Contract with one or more consultants to obtain technical advice concerning its review and study.

4. Apply for any available grants and accept any gifts, grants or donations and use any such gifts, grants or donations to aid the Committee in exercising its powers pursuant to this section.

5. Request that the Legislative Counsel Bureau assist in the research, investigations, hearings, studies and reviews of the Committee.

6. Recommend to the Legislature, as a result of its review and study, any appropriate legislation.

Sec. 130. 1. If the Committee conducts investigations or holds hearings pursuant to subsection 2 of section 129 of this act:

(a) The Secretary of the Committee or, in his absence, a member designated by the Committee may administer oaths;

(b) The Secretary or Chairman of the Committee may cause the deposition of witnesses, residing either within or outside of this state, to be taken in the manner prescribed by rule of court for taking depositions in civil actions in the district courts; and

(c) The Chairman of the Committee may issue subpoenas to compel the attendance of witnesses and the production of books and papers.

2. If a witness refuses to attend or testify or produce books or papers as required by the subpoena, the Chairman of the Committee may report to the district court by a petition which sets forth that:

(a) Due notice has been given of the time and place of attendance of the witness or the production of the books or papers;

(b) The witness has been subpoenaed by the Committee pursuant to this section; and

(c) The witness has failed or refused to attend or produce the books or papers required by the subpoena before the Committee that is named in the subpoena, or has refused to answer questions propounded to him.

The petition may request an order of the court compelling the witness to attend and testify or produce the books and papers before the Committee.

3. Upon such a petition, the court shall enter an order directing the witness to appear before the court at a time and place to be fixed by the court in its order, the time to be not more than 10 days after the date of the order, and to show cause why he has not attended or testified or produced the books or papers before the Committee. A certified copy of the order must be served upon the witness.

4. If it appears to the court that the subpoena was regularly issued by the Committee, the court shall enter an order that the witness appear before the Committee at the time and place fixed in the order and testify or produce the required books or papers. Failure to obey the order constitutes contempt of court.

Sec. 131. Each witness who appears before the Committee by its order, except a state officer or employee, is entitled to receive for his attendance the fees and mileage provided for witnesses in civil cases in the courts of record of this state. The fees and mileage must be audited and paid upon the presentation of proper claims sworn to by the witness and approved by the Secretary and Chairman of the Committee.”.

Amend the bill as a whole by deleting sec. 134 and adding:

“Sec. 134. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sections 136 through 140 and adding:

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

Amend the bill as a whole by deleting sections 142 and 143 and adding:

“Secs. 142 and 143. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sec. 148 and inserting:

“Sec. 148. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sec. 160 and inserting:

“Sec. 160. NRS 353.288 is hereby amended to read as follows:

353.288 1. The Fund to Stabilize the Operation of the State Government is hereby created as a special revenue fund. Except as otherwise provided in subsections 2 and 3, ~~[each year after the close of the fiscal year and before the issuance of the Controller’s annual report the State Controller shall deposit to the credit of the Fund 40 percent of]~~ if the unrestricted balance of the State General Fund, as of the close of the fiscal year, ~~[which remains after subtracting an amount]~~ is equal to ~~[10]~~ 5 percent or more of all appropriations made from the State Government and for the funding of schools ~~[.]~~ , the Chief of the Budget Division of the Department of Administration shall recommend to the State Board of Examiners an amount of money that should be transferred from the State General Fund to the Fund to Stabilize the Operation of the State Government. The State Board of Examiners shall consider the recommendation and shall, if it finds that such a transfer should be made, recommend an amount to be transferred to the Interim Finance Committee. If the Interim Finance Committee, after independent determination, finds that such a transfer should and may lawfully be made, the Committee shall by resolution establish the amount and direct the State Controller to transfer that amount from the State General Fund to the Fund to Stabilize the Operation of the State Government. The State Controller shall thereupon make the transfer.

2. The balance in the Fund must not exceed ~~[10]~~ 15 percent of the total of all appropriations from the State General Fund for the operation of all departments, institutions and agencies of the State Government and for the funding of schools and authorized expenditures from the State General Fund for the regulation of gaming for the fiscal year in which that revenue will be deposited in the Fund.

3. Except as otherwise provided in this subsection and NRS 353.2735, beginning with the fiscal year that begins on July 1, ~~[1999,]~~ 2003, the State Controller shall, at the end of each quarter of a fiscal year, transfer from the State General Fund to the Disaster Relief ~~[Fund]~~ Account created pursuant to NRS 353.2735 an amount equal to ~~[one-half of the interest earned on money]~~ not more than 10 percent of the aggregate balance in the Fund to Stabilize the Operation of the State Government during the previous quarter. The State Controller shall not transfer more than $500,000 for any quarter pursuant to this subsection.

4. Money from the Fund to Stabilize the Operation of the State Government may be appropriated only:

(a) If the total actual revenue of the State falls short by 5 percent or more of the total anticipated revenue for the biennium in which the appropriation is made; or

(b) If the Legislature and the Governor declare that a fiscal emergency exists.”.

Amend the bill as a whole by deleting sections 161 through 165 and adding:

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

Amend the bill as a whole by adding new sections designated sections 165.2, 165.4 and 165.6, following sec. 165, to read as follows:

“Sec. 165.2. Chapter 387 of NRS is hereby amended by adding thereto a new section to read as follows:

1. On or before July 1 of each year, the Department, in consultation with the Budget Division of the Department of Administration and the Fiscal Analysis Division of the Legislative Counsel Bureau, shall develop or revise, as applicable, a formula for determining the minimum amount of money that each school district is required to expend each fiscal year for textbooks, instructional supplies and instructional hardware. The formula must be used only to develop expenditure requirements and must not be used to alter the distribution of money for basic support to school districts.

2. Upon approval of the formula pursuant to subsection 1, the Department shall provide written notice to each school district within the first 30 days of each fiscal year that sets forth the required minimum combined amount of money that the school district must expend for textbooks, instructional supplies and instructional hardware for that fiscal year.

3. On or before January 1 of each year, the Department shall determine whether each school district has expended, during the immediately preceding fiscal year, the required minimum amount of money set forth in the notice provided pursuant to subsection 2. In making this determination, the Department shall use the report submitted by the school district pursuant to NRS 387.303.

4. Except as otherwise provided in subsection 5, if the Department determines that a school district has not expended the required minimum amount of money set forth in the notice provided pursuant to subsection 2, a reduction must be made from the basic support allocation otherwise payable to that school district in an amount that is equal to the difference between the actual combined expenditure for textbooks, instructional supplies and instructional hardware and the minimum required combined expenditure set forth in the notice provided pursuant to subsection 2. A reduction in the amount of the basic support allocation pursuant to this subsection:

(a) Does not reduce the amount that the school district is required to expend on textbooks, instructional supplies and instructional hardware in the current fiscal year; and

(b) Must not exceed the amount of basic support that was provided to the school district for the fiscal year in which the minimum expenditure amount was not satisfied.

5. If the actual enrollment of pupils in a school district is less than the enrollment included in the projections used in the school district’s biennial budget submitted pursuant to NRS 387.303, the required expenditure for textbooks, instructional supplies and instructional hardware pursuant to this section must be reduced proportionately.

Sec. 165.4. NRS 387.205 is hereby amended to read as follows:

387.205 1. Subject to the limitations set forth in NRS 387.207 ~~[,]~~ and section 165.2 of this act, money on deposit in the county school district fund or in a separate account, if the board of trustees of a school district has elected to establish such an account pursuant to the provisions of NRS 354.603, must be used for:

(a) Maintenance and operation of the public schools controlled by the county school district.

(b) Payment of premiums for Nevada industrial insurance.

(d) Construction, furnishing or rental of teacherages, when approved by the Superintendent of Public Instruction.

(e) Transportation of pupils, including the purchase of new buses.

(f) Programs of nutrition, if such expenditures do not curtail the established school program or make it necessary to shorten the school term, and each pupil furnished lunch whose parent or guardian is financially able so to do pays at least the actual cost of the lunch.

(g) Membership fees, dues and contributions to an interscholastic activities association.

(h) Repayment of a loan made from the State Permanent School Fund pursuant to NRS 387.526.

2. Subject to the limitations set forth in NRS 387.207 ~~[,]~~ and section 165.2 of this act, money on deposit in the county school district fund, or in a separate account, if the board of trustees of a school district has elected to establish such an account pursuant to the provisions of NRS 354.603, when available, may be used for:

(a) Purchase of sites for school facilities.

(b) Purchase of buildings for school use.

Sec. 165.6. NRS 387.207 is hereby amended to read as follows:

387.207 1. Except as otherwise provided in this section, in each school year a school district shall spend for ~~[textbooks,]~~ library books and ~~[supplies and materials relating to instruction, including, without limitation,]~~ software for computers ~~[,]~~ an amount of money, expressed as an amount per pupil, that is at least equal to the average of the total amount of money that was expended per year by the school district for those items in the immediately preceding 3 years.

2. Except as otherwise provided in this section, in each school year a school district shall spend for the purchase of equipment relating to instruction, including, without limitation, equipment for telecommunications and for the purchase of equipment relating to the transportation of pupils, an amount of money, expressed as an amount per pupil, that is at least equal to the average of the total amount of money that was expended per year by the school district for those items in the immediately preceding 3 years.

3. Except as otherwise provided in this section, in each school year a school district shall spend for the maintenance and repair of equipment, vehicles, and buildings and facilities an amount of money, expressed as an amount per pupil, that is at least equal to the average of the total amount of money that was expended per year by the school district for those items in the immediately preceding 3 years, excluding any amount of money derived from the proceeds of bonds.

4. A school district may satisfy the expenditures required by subsections 1, 2 and 3 if the school district spends an aggregate amount of money for all the items identified in those subsections that is at least equal to the average of the total amount of money expended by the school district per year for all those items in the immediately preceding 3 years.

5. A school district is not required to satisfy the expenditures required by this section for a school year in which:

(a) The total number of pupils who are enrolled in public schools within the school district has declined from the immediately preceding school year; or

(b) The total revenue available in the general fund of the school district has declined from the immediately preceding school year.”.

Amend sec. 166, page 98, line 20, by deleting “and”.

Amend sec. 166, page 98, by deleting lines 22 through 25 and inserting:

“records public and open to inspection pursuant to NRS 239.010; and

Amend the bill as a whole by adding new sections designated sections 166.2 and 166.4, following sec. 166, to read as follows:

“Sec. 166.2. NRS 391.165 is hereby amended to read as follows:

391.165 1. Except as otherwise provided in subsection 3 ~~[of this section]~~ and except as otherwise required as a result of NRS 286.537, the board of trustees of a school district shall pay the cost for a licensed teacher to purchase one-fifth of a year of service pursuant to subsection 2 of NRS 286.300 if:

(a) The teacher is a member of the Public Employees’ Retirement System and has at least 5 years of service;

(b) The teacher has been employed as a licensed teacher in this state for at least 5 consecutive school years, regardless of whether the employment was with one or more school districts in this state;

(c) Each evaluation of the teacher conducted pursuant to NRS 391.3125 is at least satisfactory for the years of employment required by paragraph (b); and

(d) In addition to the years of employment required by paragraph (b), the teacher has been employed as a licensed teacher for ~~[1 school year]~~ 2 school years at a school within the school district ~~[which, for that school year, carries]~~ during his employment at the school:

(1) Which carried the designation of demonstrating need for improvement ~~[pursuant to NRS 385.367.]~~ ; or

(2) At which at least 65 percent of the pupils who are enrolled in the school are children who are at risk.

The provisions of this paragraph do not require consecutive years of employment or employment at the same school within the school district.

2. Except as otherwise provided in subsection 3, the board of trustees of a school district shall pay the cost for a licensed teacher to purchase one-fifth of a year of service for each year that a teacher ~~[is employed as a teacher at a school within the school district that is described in paragraph (d)]~~ satisfies the requirements of subsection 1.

3. In no event may the years of service purchased by a licensed teacher as a result of subsection 2 of NRS 286.300 exceed 5 years.

4. The board of trustees of a school district shall not:

(a) Assign or reassign a licensed teacher to circumvent the requirements of this section.

(b) Include ~~[,]~~ as part of a teacher’s salary ~~[,]~~ the costs of paying the teacher to purchase service pursuant to this section.

5. As used in this section ~~[, “service”]~~ :

(a) A child is “at risk” if he is eligible for free or reduced-price lunches pursuant to 42 U.S.C. §§ 1751 et seq.

(b) “Service” has the meaning ascribed to it in NRS 286.078.

Sec. 166.4. NRS 391.165 is hereby amended to read as follows:

391.165 1. Except as otherwise provided in subsection 3 and except as otherwise required as a result of NRS 286.537, the board of trustees of a school district shall pay the cost for a licensed teacher or licensed school psychologist to purchase one-fifth of a year of service pursuant to subsection 2 of NRS 286.300 if:

(a) The teacher or school psychologist is a member of the Public Employees’ Retirement System and has at least 5 years of service;

(b) The teacher or school psychologist has been employed as a licensed teacher or licensed school psychologist in this state for at least 5 consecutive school years, regardless of whether the employment was with one or more school districts in this state;

(c) Each evaluation of the teacher or school psychologist conducted pursuant to NRS 391.3125 is at least satisfactory for the years of employment required by paragraph (b); and

(d) In addition to the years of employment required by paragraph (b) ~~[, the]~~ :

(1) The teacher has been employed as a licensed teacher for 2 school years at a school within the school district during his employment at the school:

~~[(1)]~~ (I) Which carried the designation of demonstrating need for improvement; or

~~[(2)]~~ (II) At which at least 65 percent of the pupils who are enrolled in the school are children who are at risk ~~[.]~~ ;

(2) The teacher holds an endorsement in the field of mathematics, science, special education or English as a second language and has been employed for at least 1 school year to teach in the subject area for which he holds an endorsement; or

(3) The school psychologist has been employed as a licensed school psychologist for at least 1 school year.

The provisions of this paragraph do not require consecutive years of employment or employment at the same school within the school district.

2. Except as otherwise provided in subsection 3, the board of trustees of a school district shall pay the cost for a licensed teacher or school psychologist to purchase one-fifth of a year of service for each year that a teacher or school psychologist satisfies the requirements of subsection 1. If, in 1 school year, a teacher satisfies the criteria set forth in both subparagraphs (1) and (2) of paragraph (d) of subsection 1, the school district in which the teacher is employed is not required to pay for more than one-fifth of a year of service pursuant to subsection 2 of NRS 286.300 for that school year.

3. In no event may the years of service purchased by a licensed teacher or school psychologist as a result of subsection 2 of NRS 286.300 exceed 5 years.

4. The board of trustees of a school district shall not:

(a) Assign or reassign a licensed teacher or school psychologist to circumvent the requirements of this section.

(b) Include ~~[,]~~ as part of a teacher’s or school psychologist’s salary ~~[,]~~ the costs of paying the teacher or school psychologist to purchase service pursuant to this section.

5. As used in this section:

(a) A child is “at risk” if he is eligible for free or reduced-price lunches pursuant to 42 U.S.C. §§ 1751 et seq.

(b) “Service” has the meaning ascribed to it in NRS 286.078.”.

Amend sec. 167, page 99, by deleting lines 1 through 3 and inserting:

“(c) Is exempt from the tax on transfers of real property pursuant to subsection ~~[14]~~ 12 of NRS 379.090; and

(d) May allow a president or an administrator of the university”.

Amend the bill as a whole by deleting sec. 178 and adding:

“Sec. 178. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sec. 180 and adding:

“Sec. 180. (Deleted by amendment.)”.

Amend the bill as a whole by deleting sections 184 and 185 and adding:

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

Amend the bill as a whole by deleting sec. 186 and adding:

“Sec. 186. (Deleted by amendment.)”.

Amend sec. 186.3, page 128, by deleting lines 15 through 17 and inserting:

“2. The provisions of subsection 1 do not apply to a franchise fee imposed pursuant to the provisions of sections 58.12 to 58.80, inclusive, of this act.”.

Amend the bill as a whole by adding a new section designated sec. 186.4, following sec. 186.3, to read as follows:

“Sec. 186.4. NRS 680B.037 is hereby amended to read as follows:

680B.037 1. Except as otherwise provided in subsection 2, payment by an insurer of the tax imposed by NRS 680B.027 is in lieu of all taxes imposed by the State or any city, town or county upon premiums or upon income of insurers and of franchise, privilege or other taxes measured by income of the insurer.

2. The provisions of subsection 1 do not apply to a franchise tax or franchise fee imposed pursuant to the provisions of sections 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act.”.

Amend sec. 186.5, page 128, by deleting lines 24 and 25 and inserting:

“2. A franchise fee imposed pursuant to sections 58.12 to 58.80, inclusive, of this act.”.

Amend the bill as a whole by adding a new section designated sec. 186.6, following sec. 186.5, to read as follows:

“Sec. 186.6. NRS 687A.130 is hereby amended to read as follows:

687A.130 The Association is exempt from payment of all fees and all taxes levied by this state or any of its subdivisions, except:

1. Taxes levied on real or personal property.

2. A franchise tax or franchise fee imposed pursuant to sections 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act.”.

Amend sec. 186.7, page 129, by deleting lines 24 and 25 and inserting:

“for a franchise fee imposed pursuant to the provisions of sections 58.12 to 58.80, inclusive, of this act and ad valorem taxes”.

Amend the bill as a whole by adding new sections designated sections 186.8 and 186.9, following sec. 186.7, to read as follows:

“Sec. 186.8. NRS 694C.450 is hereby amended to read as follows:

694C.450 1. Except as otherwise provided in this section, a captive insurer shall pay to the Division, not later than March 1 of each year, a tax at the rate of:

(a) Two-fifths of 1 percent on the first $20,000,000 of its net direct premiums;

(b) One-fifth of 1 percent on the next $20,000,000 of its net direct premiums; and

2. Except as otherwise provided in this section, a captive insurer shall pay to the Division, not later than March 1 of each year, a tax at a rate of:

(a) Two hundred twenty-five thousandths of 1 percent on the first $20,000,000 of revenue from assumed reinsurance premiums;

(b) One hundred fifty thousandths of 1 percent on the next $20,000,000 of revenue from assumed reinsurance premiums; and

The tax on reinsurance premiums pursuant to this subsection must not be levied on premiums for risks or portions of risks which are subject to taxation on a direct basis pursuant to subsection 1. A captive insurer is not required to pay any reinsurance premium tax pursuant to this subsection on revenue related to the receipt of assets by the captive insurer in exchange for the assumption of loss reserves and other liabilities of another insurer that is under common ownership and control with the captive insurer, if the transaction is part of a plan to discontinue the operation of the other insurer and the intent of the parties to the transaction is to renew or maintain such business with the captive insurer.

3. If the sum of the taxes to be paid by a captive insurer calculated pursuant to subsections 1 and 2 is less than $5,000 in any given year, the captive insurer shall pay a tax of $5,000 for that year.

4. Two or more captive insurers under common ownership and control must be taxed as if they were a single captive insurer.

5. Notwithstanding any specific statute to the contrary, except as otherwise provided in this subsection, the tax provided for by this section constitutes all the taxes collectible pursuant to the laws of this state from a captive insurer, and no occupation tax or other taxes may be levied or collected from a captive insurer by this state or by any county, city or municipality within this state, except for a franchise tax or franchise fee imposed pursuant to the provisions of sections 24.12 to 24.74, inclusive, or 58.12 to 58.80, inclusive, of this act and ad valorem taxes on real or personal property located in this state used in the production of income by the captive insurer.

6. Ten percent of the revenues collected from the tax imposed pursuant to this section must be deposited with the State Treasurer for credit to the Account for the Regulation and Supervision of Captive Insurers created pursuant to NRS 694C.460. The remaining 90 percent of the revenues collected must be deposited with the State Treasurer for credit to the State General Fund.

7. As used in this section, unless the context otherwise requires:

(a) “Common ownership and control” means:

(1) In the case of a stock insurer, the direct or indirect ownership of 80 percent or more of the outstanding voting stock of two or more corporations by the same member or members.

(2) In the case of a mutual insurer, the direct or indirect ownership of 80 percent or more of the surplus and the voting power of two or more corporations by the same member or members.

(b) “Net direct premiums” means the direct premiums collected or contracted for on policies or contracts of insurance written by a captive insurer during the preceding calendar year, less the amounts paid to policyholders as return premiums, including dividends on unabsorbed premiums or premium deposits returned or credited to policyholders.

Sec. 186.9. Section 58.16 of this act is hereby amended to read as follows:

Sec. 58.16. 1. “Business entity” includes:

(b) A natural person engaging in business if he is deemed to be a business entity pursuant to section 58.42 of this act.

2. The term does not include:

(a) A governmental entity;

(d) A financial institution that is required to pay a franchise tax pursuant to section 24.38 of this act.”.

Amend sec. 189, page 131, line 19, after “353.272,” by inserting “364A.160,”.

Amend sec. 189, page 131, line 25, by deleting “364A.160,”.

Amend the bill as a whole by adding new sections designated sections 191.3 and 191.5, following sec. 191, to read as follows:

“Sec. 191.3. 1. The Legislative Auditor shall conduct a performance audit of the school districts in this state with more than 5,000 enrolled students. The performance audit must include issues relating to operational accountability, including, without limitation:

(a) Financial management;

(b) Facilities management;

(d) District organization;

(e) Employee health plans;

(f) Transportation;

(g) Alignment of the organization with the needs and expectations of the public;

(h) Training and development of management staff;

(i) Establishment of benchmarks for productivity and performance; and

(j) Examination of unusual or dramatic changes in specific budgetary line items, including, without limitation, legal expenses.

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

3. 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 audit conducted pursuant to this section. For the purposes of this subsection, the Clark County School District, Washoe County School District, Carson City School District, Douglas County School District, Elko County School District, Lyon County School District and Nye County School District shall be deemed to be agencies of the State.

4. Upon the request of the Legislative Auditor or his authorized representative, the officers and employees of the Clark County School District, Washoe County School District, Carson City School District, Douglas County School District, Elko County School District, Lyon County School District and Nye 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. 191.5. 1. The Board of Trustees of the Clark County School District, Washoe County School District, Carson City School District, Douglas County School District, Elko County School District, Lyon County School District and Nye County School District shall, on or before February 15, 2005, give public notice of its intention to form a Business Advisory Council on or before May 15, 2005. Each Board of Trustees shall accept nominations and applications for membership on the Business Advisory Council during the period from March 1 to March 31, 2005.

2. On or before May 15, 2005, each Board of Trustees shall, form a Business Advisory Council. The Board of Trustees shall, from the nominations and applications received, select the members of its Business Advisory Council, appoint the members to terms of 2 years, designate a Chairman and Vice-Chairman from among the members, and designate an employee of the school district to serve as secretary for the Business Advisory Council. The members of the Council shall serve without salary or reimbursement for per diem or travel expenses.

3. The Council shall comply with the provisions of chapter 241 of NRS.

4. The meetings of each such Business Advisory Council must be held at a location within the respective school district and at the date and time determined by the Chairman. In no event may the Chairman set a meeting of the Council during regular school hours within the school district. Each such Business Advisory Council shall:

(a) Review the results of the performance audit conducted by the Legislative Auditor pursuant to section 191.3 of this act, particularly in regards to the school district for which the Council has been appointed.

(b) Work with the appropriate fiscal and administrative staff of the school district to form recommendations based upon the findings of the Legislative Auditor.

(c) On or before January 9, 2007, submit a written report of its findings and recommendations to the Board of Trustees of the school district, and to the Director of the Legislative Counsel Bureau for compilation and transmittal to the Legislature.

5. On or before May 15, 2007, the Board of Trustees of the Clark County School District, Washoe County School District, Carson City School District, Douglas County School District, Elko County School District, Lyon County School District and Nye County School District shall, if appropriate, provide for the continuation of the activities of its Business Advisory Council. The Board of Trustees may thereafter revise the duties of the Council and provide for its membership as it deems appropriate.”.

Amend sec. 193, page 132, line 41, by deleting “19th” and inserting “20th”.

Amend the bill as a whole by deleting sec. 194 and inserting:

“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 129 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.”.

Amend the bill as a whole by adding new sections designated sections 194.10 to 194.66, 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 94.14 of this act, a sufficient number of teachers must 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. The basic support guarantee for school districts for operating purposes for the 2003-2004 Fiscal Year is an estimated weighted average of $4,295 per pupil. For each respective school district, the basic support guarantee per pupil for the 2003-2004 Fiscal Year is:

Carson City................................................................................................ $4,923

Churchill County...................................................................................... $5,418

Clark County............................................................................................. $4,127

Douglas County....................................................................................... $4,541

Elko County............................................................................................... $5,307

Esmeralda County.................................................................................... $9,169

Eureka County.......................................................................................... $3,495

Humboldt County..................................................................................... $5,362

Lander County.......................................................................................... $4,836

Lincoln County......................................................................................... $7,943

Lyon County............................................................................................. $5,553

Mineral County......................................................................................... $6,012

Nye County............................................................................................... $5,561

Pershing County....................................................................................... $6,385

Storey County........................................................................................... $7,082

Washoe County....................................................................................... $4,161

White Pine County................................................................................... $6,164

Sec. 194.24. 1. The basic support guarantee for school districts for operating purposes for the 2004-2005 Fiscal Year is an estimated weighted average of $4,424 per pupil.

2. On or before April 1, 2004, the Department of Taxation shall provide a certified estimate of the assessed valuation for each school district for the 2004-2005 Fiscal Year. The assessed valuation for each school district must be that which is taxable for purposes of providing revenue to school districts, including any assessed valuation attributable to the net proceeds of minerals derived from within the boundaries of the district.

3. Pursuant to NRS 362.115, on or before April 25 of each year, the Department of Taxation shall provide an estimate of the net proceeds of minerals based upon statements required of mine operators.

4. For purposes of establishing the basic support guarantee, the estimated basic support guarantees for each school district for the 2004-2005 Fiscal Year for operating purposes are:

Basic Estimated

Support Basic

Guarantee Estimated Support

Before Ad Valorem Guarantee

School District Adjustment Adjustment as Adjusted

Carson City $4,462 $643 $5,105

Churchill County $5,094 $514 $5,608

Clark County $3,328 $921 $4,249

Douglas County $3,196 $1,451 $4,647

Elko County $5,004 $508 $5,512

Esmeralda County $6,596 $2,987 $9,583

Eureka County $(5,236) $9,304 $4,068

Humboldt County $5,006 $642 $5,648

Lander County $3,741 $1,328 $5,069

Lincoln County $7,519 $664 $8,183

Lyon County $5,149 $593 $5,742

Mineral County $5,792 $473 $6,265

Nye County $4,888 $877 $5,765

Pershing County $5,714 $949 $6,663

Storey County $5,559 $1,848 $7,407

Washoe County $3,393 $908 $4,301

White Pine County $5,915 $482 $6,397

5. The ad valorem adjustment may be made only to take into account the difference in the assessed valuation and the estimated enrollment of the school district between the amount estimated as of April 1, 2003, and the amount estimated as of April 1, 2004, for the 2004-2005 Fiscal Year. Estimates of net proceeds of minerals received from the Department of Taxation on or before April 25 pursuant to subsection 3 must be taken into consideration in determining the adjustment.

6. Upon receipt of the certified estimates of assessed valuations as of April 1, 2004, from the Department of Taxation, the Department of Education shall recalculate the amount of ad valorem adjustment and the tentative basic support guarantee for operating purposes for the 2004‑2005 Fiscal Year by April 15, 2004. The final basic support guarantee for each school district for the 2004-2005 Fiscal Year is the amount, which is recalculated for the 2004-2005 Fiscal Year pursuant to this section, taking into consideration estimates of net proceeds of minerals received from the Department of Taxation on or before April 25, 2004. The basic support guarantee recalculated pursuant to this section must be calculated before May 31, 2004.

Sec. 194.26. 1. The basic support guarantee for each special education program unit that is maintained and operated for at least 9 months of a school year is $31,811 in the 2003-2004 Fiscal Year and $32,447 in the 2004‑2005 Fiscal Year, except as limited by subsection 2.

2. The maximum number of units and amount of basic support for special education program units within each of the school districts, before any reallocation pursuant to NRS 387.1221, for the Fiscal Years 2003-2004 and 2004-2005 are:

Allocation of Special Education Units

2003-2004 2004-2005

DISTRICT Units Amount Units Amount

Carson City 82 $2,608,502 84 $2,725,548

Churchill County 45 $1,431,495 46 $1,492,562

Clark County 1,594 $50,706,734 1,661 $53,894,467

Douglas County 64 $2,035,904 65 $2,109,055

Elko County 80 $2,544,880 80 $2,595,760

Esmeralda County 2 $63,622 2 $64,894

Eureka County 4 $127,244 4 $129,788

Humboldt County 30 $954,330 30 $973,410

Lander County 12 $381,732 12 $389,364

Lincoln County 17 $540,787 17 $551,599

Lyon County 56 $1,781,416 57 $1,849,479

Mineral County 12 $381,732 12 $389,364

Nye County 47 $1,495,117 50 $1,622,350

Pershing County 14 $445,354 14 $454,258

Storey County 8 $254,488 8 $259,576

Washoe County 491 $15,619,201 510 $16,547,970

White Pine County 17 $540,787 16 $519,152

Subtotal 2,575 $81,913,325 2,668 $86,568,596

Reserved by State

Board of Education 40 $1,272,440 40 $1,297,880

TOTAL 2,615 $83,185,765 2,708 $87,866,476

3. The State Board of Education shall reserve 40 special education program units in each fiscal year of the 2003-2005 biennium, to be allocated to school districts by the State Board of Education to meet additional needs that cannot be met by the allocations provided in subsection 2 to school districts for that fiscal year. In addition, charter schools in this state are authorized to apply directly to the Department of Education for the reserved special education program units, which may be allocated upon approval of the State Board of Education.

4. Notwithstanding the provisions of subsections 2 and 3, the State Board of Education is authorized to spend from the State Distributive School Account up to $181,067 in the Fiscal Year 2003-2004 for 5.69 special education program units and $190,877 in the Fiscal Year 2004-2005 for 5.88 special education program units for instructional programs incorporating educational technology for gifted and talented pupils. Any school district may submit a written application to the Department of Education requesting one or more of the units for gifted and talented pupils. For each fiscal year of the 2003-2005 biennium, the Department will award the units for gifted and talented pupils based on a review of applications received from school districts.

Sec. 194.28. 1. There is hereby appropriated from the State General Fund to the State Distributive School Account in the State General Fund created pursuant to NRS 387.030:

For the 2003-2004 Fiscal Year...................................................... $637,789,627

For the 2004-2005 Fiscal Year...................................................... $767,086,697

2. The money appropriated by subsection 1 must be:

(a) Expended in accordance with NRS 353.150 to 353.245, inclusive, concerning the allotment, transfer, work program and budget; and

(b) Work-programmed for the 2 separate Fiscal Years 2003-2004 and 2004-2005, as required by NRS 353.215. Work programs may be revised with the approval of the Governor upon the recommendation of the Chief of the Budget Division of the Department of Administration.

3. Transfers to and from allotments must be allowed and made in accordance with NRS 353.215 to 353.225, inclusive, after separate considerations of the merits of each request.

4. The sums appropriated by subsection 1 are available for either fiscal year or may be transferred to Fiscal Year 2002-2003. Money may be transferred from one fiscal year to another with the approval of the Governor upon the recommendation of the Chief of the Budget Division of the Department of Administration. If funds appropriated by subsection 1 are transferred to Fiscal Year 2002-2003, any remaining funds in the State Distributive School Account after all obligations have been met that are not subject to reversion to the State General Fund must be transferred back to Fiscal Year 2003-2004. Any amount transferred back to Fiscal Year 2003‑2004 must not exceed the amount originally transferred to Fiscal Year 2002-2003.

5. Any remaining balance of the appropriation made by subsection 1 for the 2003-2004 Fiscal Year must be transferred and added to the money appropriated for the 2004-2005 Fiscal Year and may be expended as that money is expended.

6. Any remaining balance of the appropriation made by subsection 1 for the 2004-2005 Fiscal Year, including any money added thereto pursuant to the provisions of subsections 3 and 5, 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. 194.30. 1. Expenditure of $203,448,548 by the Department of Education from money in the State Distributive School Account that was not appropriated from the State General Fund is hereby authorized during the fiscal year beginning July 1, 2003.

2. Expenditure of $142,024,404 by the Department of Education from money in the State Distributive School Account that was not appropriated from the State General Fund is hereby authorized during the fiscal year beginning July 1, 2004.

3. For purposes of accounting and reporting, the sums authorized for expenditure by subsections 1 and 2 are considered to be expended before any appropriation is made to the State Distributive School Account from the State General Fund.

4. The money authorized to be expended by subsections 1 and 2 must be expended in accordance with NRS 353.150 to 353.245, inclusive, concerning the allotment, transfer, work program and budget. Transfers to and from allotments must be allowed and made in accordance with NRS 353.215 to 353.225, inclusive, after separate consideration of the merits of each request.

5. The Chief of the Budget Division of the Department of Administration may, with the approval of the Governor, authorize the augmentation of the amounts authorized for expenditure by the Department of Education, in subsections 1 and 2, for the purpose of meeting obligations of the State incurred under chapter 387 of NRS with amounts from any other state agency, from any agency of local government, from any agency of the Federal Government or from any other source that he determines is in excess of the amount taken into consideration by this act. The Chief of the Budget Division of the Department of Administration shall reduce any authorization whenever he determines that money to be received will be less than the amount authorized in subsections 1 and 2.

Sec. 194.32. During each of the Fiscal Years 2003-2004 and 2004-2005, whenever the State Controller finds that current claims against the State Distributive School Account in the State General Fund exceed the amount available in the Account to pay those claims, he may advance temporarily from the State General Fund to the State Distributive School Account the amount required to pay the claims, but not more than the amount expected to be received in the current fiscal year from any source authorized for the State Distributive School Account. No amount may be transferred unless requested by the Chief of the Budget Division of the Department of Administration.

Sec. 194.34. The Department of Education is hereby authorized to spend from the State Distributive School Account the sums of $16,926,569 for the 2003-2004 Fiscal Year and $17,843,596 for the 2004-2005 Fiscal Year for the support of courses which are approved by the Department of Education as meeting the course of study for an adult standard high school diploma as approved by the State Board of Education. In each fiscal year of the 2003‑2005 biennium, the sum authorized must be allocated among the various school districts in accordance with a plan or formula developed by the Department of Education to ensure the money is distributed equitably and in a manner that permits accounting for the expenditures of school districts.

Sec. 194.36. The Department of Education is hereby authorized to provide from the State Distributive School Account the sum of $50,000 to each of the 17 school districts in each fiscal year of the 2003-2005 biennium to support special counseling services for elementary school pupils at risk of failure.

Sec. 194.38. The amounts of the guarantees set forth in sections 194.22 and 194.24 of this act may be reduced to effectuate a reserve required pursuant to NRS 353.225.

Sec. 194.40. 1. The Department of Education shall transfer from the State Distributive School Account to the school districts specified in this section the following sums for Fiscal Years 2003-2004 and 2004-2005:

School District 2003-2004 2004-2005

Douglas County School District $1,146,374 $1,175,848

Clark County School District $4,532,532 $4,552,361

Elko County School District $1,291,907 $1,295,158

Washoe County School District $1,847,128 $1,913,468

$8,817,941 $8,936,835

2. A school district that receives an allocation pursuant to subsection 1 shall:

(a) Use the money to maintain and continue the operation of a regional training program for the professional development of teachers and administrators established by the school district pursuant to NRS 391.512; and

(b) Use the money to maintain and continue the operation of the Nevada Early Literacy Intervention Program through the regional training program established pursuant to paragraph (a).

3. Any remaining balance of the transfers made by subsection 1 for the 2003-2004 Fiscal Year must be added to the money received by the school districts for the 2004-2005 Fiscal Year and may be expended as that money is expended. Any remaining balance of the transfers made by subsection 1 for the 2004-2005 Fiscal Year, including any money added from the transfer for the previous fiscal year, must not be committed for expenditure after June 30, 2005, and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.42. 1. The Legislative Bureau of Educational Accountability and Program Evaluation is hereby authorized to receive from the State Distributive School Account to spend for an evaluation of the regional training programs for the professional development of teachers and administrators established pursuant to NRS 391.512:

For Fiscal Year 2003-2004 ................................................................... $100,000

For Fiscal Year 2004-2005 ................................................................... $100,000

2. Any remaining balance of the sums authorized for expenditure by subsection 1 for the 2003-2004 Fiscal Year must be added to the money authorized for expenditure for the 2004-2005 Fiscal Year and may be expended as that money is expended. Any remaining balance of the sums authorized for expenditure pursuant to subsection 1 for the 2004-2005 Fiscal Year, including any money added from the authorization for the previous fiscal year, must not be committed for expenditure after June 30, 2005, and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.44. 1. The Department of Education shall transfer from the State Distributive School Account to the Statewide Council for the Coordination of the Regional Training Programs created by NRS 391.516 the sum of $80,000 in each Fiscal Year 2003-2004 and 2004-2005 for additional training opportunities for educational administrators in Nevada.

2. The Statewide Council shall use the money:

(a) To support the goals of Nevada Project LEAD (Leadership in Educational Administration Development), as established through the Department of Educational Leadership in the College of Education, located at the University of Nevada, Reno. In supporting the goals of Nevada Project LEAD, the Statewide Council shall:

(1) Disseminate research-based knowledge related to effective educational leadership behaviors and skills; and

(2) Develop, support and maintain on-going activities, programs, training and networking opportunities.

(b) For purposes of providing additional training for educational administrators, including, without limitation, paying:

(1) Travel expenses of administrators who attend the training program;

(2) Travel and per-diem expenses for any consultants contracted to provide additional training; and

(3) Any charges to obtain a conference room for the provision of the additional training.

(c) To supplement and not replace the money that the school district, Nevada Project LEAD or the regional training program would otherwise expend for training for administrators as described in this section.

3. Any remaining balance of the transfers made by subsection 1 for the 2003-2004 Fiscal Year must be added to the money received by the Statewide Council for the 2004-2005 Fiscal Year and may be expended as that money is expended. Any remaining balance of the transfers made by subsection 1 for the 2004-2005 Fiscal Year, including any money added from the transfer for the previous fiscal year, must not be committed for expenditure after June 30, 2005, and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.46. 1. The Department of Education shall transfer from the State Distributive School Account the following sums for remedial education programs for certain schools:

For Fiscal Year 2003-2004................................................................. $5,179,109

For Fiscal Year 2004-2005 ................................................................ $5,013,874

The money allocated must be used to provide remedial education programs that have been approved by the Department as being effective in improving pupil achievement.

2. A school may submit an application to the Department of Education on or before November 1 of each fiscal year for transmission to the State Board of Examiners for an allocation from the amount authorized by subsection 1 if the school:

(a) Receives a designation as demonstrating need for improvement.

(b) Did not receive a designation as demonstrating need for improvement, but the school failed to meet adequate yearly progress; or

(c) Did not receive a designation as demonstrating need for improvement, but more than 40 percent of the pupils enrolled in the school received an average score below the 26th percentile on all four subjects tested pursuant to NRS 389.015.

3. The Department of Education shall, in consultation with the Budget Division of the Department of Administration and the Legislative Bureau of Educational Accountability and Program Evaluation, develop a form for such applications. The form must include, without limitation, a notice that money received by a school to implement or continue remedial education programs that have been approved by the Department as being effective in improving pupil achievement will be used to implement or continue the programs in a manner that has been approved by the vendor of the remedial program.

4. Upon receipt of an application submitted pursuant to subsection 2, the Department of Education shall review the application jointly with the Budget Division of the Department of Administration and the Legislative Bureau of Educational Accountability and Program Evaluation. The Department of Education shall transmit the application to the State Board of Examiners with the recommendation of the Department of Education concerning the allocation of money based upon each application so received. The State Board of Examiners, or the Clerk of the Board if authorized by the Board to act on its behalf, shall consider each such application and, if it finds that an allocation should be made, recommend the amount of the allocation to the Interim Finance Committee. The Interim Finance Committee shall consider each such recommendation, but is not bound to follow the recommendation of the State Board of Examiners when determining the allocation to be received by a school. In determining the amount of the allocation, the State Board of Examiners and the Interim Finance Committee shall consider:

(a) The total number of pupils enrolled in the school who failed to meet adequate yearly progress;

(b) The percentage of pupils enrolled in the school who failed to meet adequate yearly progress;

(c) The total number of subgroups of pupils, as prescribed by the No Child Left Behind Act of 2001, 20 U.S.C. §§ 6301 et seq., enrolled in the school who failed to meet adequate yearly progress; and

(d) The financial need of the particular school.

5. In addition to the considerations set forth in subsection 4, in determining whether to approve an application for a school that has received an allocation in the immediately preceding year and in determining the amount of the allocation for such a school, the State Board of Examiners and the Interim Finance Committee shall consider whether the school has carried out the program of remedial study for which it received an allocation in a manner that has been approved by the vendor of the remedial program and whether the program has been successful, as measured by the academic achievement of the pupils enrolled in the school on the examinations administered pursuant to NRS 389.015 or 389.550 and any assessments related to the program of remedial study.

6. A school that receives an allocation of money pursuant to this section shall use the money to:

(a) Pay the costs incurred by the school in providing the program of remedial study required by NRS 385.389. The money must first be applied to those pupils who failed to meet adequate yearly progress.

(b) Pay for the salaries, training or other compensation of teachers and other educational personnel to provide the program of remedial study, instructional materials required for the program of remedial study, equipment necessary to offer the program of remedial study and all other additional operating costs attributable to the program of remedial study, to the extent that the training, materials and equipment are those that are approved by the vendor of the remedial program.

7. Before a school amends a plan for expenditure of an allocation of money received pursuant to this section, the school district in which the school is located must submit the proposed amendment to the Department of Education to receive approval from the Department of Education, the Budget Division of the Department of Administration and the Legislative Bureau of Educational Accountability and Program Evaluation, or the Interim Finance Committee.

8. The sums authorized for expenditure in subsection 1 are available for either fiscal year. Any remaining balance of those sums must not be committed for expenditure after June 30, 2005, and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.48. 1. The Department of Education shall transfer from the State Distributive School Account the following sums for supplemental services or tutoring for pupils in non-Title I schools that failed to meet adequate yearly progress on the examinations administered pursuant to NRS 389.550:

For the Fiscal Year 2003-2004.......................................................... $1,000,000

For the Fiscal Year 2004-2005 ......................................................... $1,500,000

2. The supplemental services or tutoring for which money is provided pursuant to this section must:

(a) Be conducted before or after school, on weekends, during the summer or between sessions in schools with year-round school calendars; and

(b) Be selected by the Department as an approved provider in accordance with the No Child Left Behind Act of 2001, 20 U.S.C. §§ 6301 et seq.

3. A school may submit an application to the Department of Education on or before November 1 of each fiscal year for transmission to the State Board of Examiners for an allocation from the amount authorized by subsection 1 if the school:

(a) Receives a designation as demonstrating need for improvement; and

(b) Is not receiving money from Title I, 20 U.S.C. §§ 6301 et seq.

4. The Department of Education shall, in consultation with the Budget Division of the Department of Administration and the Legislative Bureau of Educational Accountability and Program Evaluation, develop a form for such applications.

5. Upon receipt of an application submitted pursuant to subsection 3, the Department of Education shall review the application jointly with the Budget Division of the Department of Administration and the Legislative Bureau of Educational Accountability and Program Evaluation. The Department of Education shall transmit the application to the State Board of Examiners with the recommendation of the Department of Education concerning the allocation of money based upon each application so received. The State Board of Examiners, or the Clerk of the Board if authorized by the Board to act on its behalf, shall consider each such application and, if it finds that an allocation should be made, recommend the amount of the allocation to the Interim Finance Committee. The Interim Finance Committee shall consider each such recommendation, but is not bound to follow the recommendation of the State Board of Examiners when determining the allocation to be received by a school district.

6. A school that receives an allocation of money pursuant to this section shall use the money to:

(a) Provide supplemental services or tutoring that has been selected and approved by the Department of Education.

(b) Pay the costs incurred by the school in providing the supplemental services or tutoring. The money must be applied to those pupils who failed to meet adequate yearly progress.

(c) Pay for the salaries, training or other compensation of teachers and other educational personnel to provide the supplemental services or tutoring, instructional materials required for the program, equipment necessary to offer the program and all other additional operating costs attributable to the program.

(d) Supplement and not replace the money the school district would otherwise expend for supplemental services or tutoring.

8. The sums transferred pursuant to subsection 1 are available for either fiscal year. Any remaining balance of those sums must not be committed for expenditure after June 30, 2005, and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.50. 1. The Department of Education shall transfer from the State Distributive School Account the following sums for early childhood education:

For the Fiscal Year 2003-2004.......................................................... $2,896,583

For the Fiscal Year 2004-2005.......................................................... $2,896,583

2. Of the sums transferred pursuant to subsection 1, $301,000 in each fiscal year of the 2003-2005 biennium must be used for the Classroom on Wheels Program.

3. The remaining money transferred by subsection 1 must be used by the Department of Education for competitive state grants to school districts and community-based organizations for early childhood education programs.

4. To receive a grant of money pursuant to subsections 2 and 3, school districts, community-based organizations and the Classroom on Wheels Program must submit a comprehensive plan to the Department of Education that includes, without limitation:

(a) A detailed description of the proposed early childhood education program;

(b) A description of the manner in which the money will be used, which must supplement and not replace the money that would otherwise be expended for early childhood education programs; and

(c) A plan for the longitudinal evaluation of the program to determine the effectiveness of the program on the academic achievement of children who participate in the program.

5. A school district, community-based organization or Classroom on Wheels Program that receives a grant of money shall:

(a) Use the money to initiate or expand prekindergarten education programs that meet the criteria set forth in the publication of the Department of Education, entitled “August 2000 Public Support for Prekindergarten Education For School Readiness in Nevada.”

(b) Use the money to supplement and not replace the money that the school district, community-based organization or Classroom on Wheels Program would otherwise expend for early childhood education programs, as described in this section.

(c) Use the money to pay for the salaries and other items directly related to the instruction of pupils in the classroom.

(d) Submit a longitudinal evaluation of the program in accordance with the plan submitted pursuant to paragraph (c) of subsection 4.

The money must not be used to remodel classrooms or facilities or for playground equipment.

6. The Department of Education shall develop statewide performance and outcome indicators to measure the effectiveness of the early childhood education programs for which grants of money were awarded pursuant to this section. The indicators must include, without limitation:

(a) Longitudinal measures of the developmental progress of children before and after their completion of the program;

(b) Longitudinal measures of parental involvement in the program before and after completion of the program; and

7. The Department of Education shall review the evaluations of the early childhood education programs submitted by each school district, community-based organization and the Classroom on Wheels Program pursuant to paragraph (d) of subsection 5 and prepare a compilation of the evaluations for inclusion in the report submitted pursuant to subsection 8.

8. The Department of Education shall, on an annual basis, provide a written report to the Governor, Legislative Committee on Education and the Legislative Bureau of Educational Accountability and Program Evaluation regarding the effectiveness of the early childhood programs for which grants of money were received. The report must include, without limitation:

(a) The number of grants awarded;

(b) An identification of each school district, community-based organization and the Classroom on Wheels Program that received a grant of money and the amount of each grant awarded;

(c) For each school district, community based-organization and the Classroom on Wheels Program that received a grant of money:

(1) The number of children who received services through a program funded by the grant for each year that the program received funding from the State for early childhood programs; and

(2) The average per child expenditure for the program for each year the program received funding from the State for early childhood programs;

(d) A compilation of the evaluations reviewed pursuant to subsection 7 that includes, without limitation:

(1) A longitudinal comparison of the data showing the effectiveness of the different programs; and

(2) A description of the programs in this state that are the most effective; and

(e) Any recommendations for legislation.

9. Any balance of the sums transferred pursuant to subsection 1 remaining at the end of the respective fiscal years must not be committed for expenditure after June 30 of the respective fiscal years and reverts to the State Distributive School Account as soon as all payments of money committed have been made.

Sec. 194.52. 1. The Department of Education shall transfer from the State Distributive School Account the following sums to purchase one-fifth

of a year of service for certain teachers in accordance with NRS 391.165:

For the Fiscal Year 2003-2004.......................................................... $2,689,206

For the Fiscal Year 2004-2005.......................................................... $7,045,056

2. The Department of Education shall distribute the money appropriated by subsection 1 to the school districts to assist the school districts with paying for the retirement credit for certain teachers in accordance with NRS 391.165. The amount of money distributed to each school district must be proportionate to the total costs of paying for the retirement credit pursuant to NRS 391.165 for each fiscal year. If insufficient money is available from the appropriation to pay the total costs necessary to pay the retirement credit for each fiscal year, the school district shall pay the difference to comply with NRS 391.165.

3. Any balance of the sums appropriated by subsection 1 remaining at the end of the respective fiscal years must not be committed for expenditure after June 30 of the respective fiscal years and reverts to the State General Fund as soon as all payments of money committed have been made.

Sec. 194.54. 1. The Department of Education shall transfer from the State Distributive School Account the following sum to purchase one-fifth of a year of service for certain licensed educational personnel in accordance with NRS 391.165:

For the Fiscal Year 2004-2005.......................................................... $5,732,643

2. The Department of Education shall distribute the money appropriated by subsection 1 to the school districts to assist the school districts with paying for the retirement credit for certain licensed educational personnel in accordance with NRS 391.165. The amount of money distributed to each school district must be proportionate to the total costs of paying for the retirement credit pursuant to NRS 391.165 for each fiscal year. If insufficient money is available to pay the total costs necessary to pay the retirement credit for each fiscal year, the school district shall pay the difference to comply with NRS 391.165.

3. Any remaining balance of the appropriation made by subsection 1 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. 194.56. Of the amounts included in the basic support guarantee amounts enumerated in sections 194.22 and 194.24 of this act, $64,425,447 for Fiscal Year 2003-2004 and $66,721,434 for Fiscal Year 2004-2005 must be expended for the purchase of textbooks, instructional supplies and instructional hardware as prescribed in section 194.2 of this act.

Sec. 194.58. All funding remaining in the Fund for School Improvement at the close of Fiscal Year 2002-2003 shall be transferred to the budget for the State Distributive School Account and shall be authorized for expenditure in that account.

Sec. 194.60. The sums appropriated or authorized in sections 194.40 to 194.54, inclusive, of this act:

1. Must be accounted for separately from any other money received by the school districts of this state and used only for the purposes specified in the applicable section of this act.

2. May 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.

3. May not be used to adjust the district-wide schedules of salaries and benefits of the employees of a school district.

Sec. 194.62. 1. The Department of Education shall transfer from the State Distributive School Account the following sums for special transportation costs to school districts:

For the 2003-2004 school year.............................................................. $47,715

For the 2004-2005 school year.............................................................. $47,715

2. Pursuant to NRS 392.015, the Department of Education shall use the money transferred in subsection 1 to reimburse school districts for the additional costs of transportation for any pupil to a school outside the school district in which his residence is located.

Sec. 194.64. There is hereby appropriated from the State General Fund to the State Distributive School Account created by NRS 387.030 in the State General Fund the sum of $3,152,559 for an unanticipated shortfall in money in Fiscal Year 2002-2003. This appropriation is supplemental to that made by section 4 of chapter 565, Statutes of Nevada 2001, at page 2832 and to that made pursuant to Assembly Bill No. 253 of the 72nd Legislative Session.

Sec. 194.66. Each school district shall expend the revenue made available through this act, as well as other revenue from state, local and federal sources, in a manner that is consistent with NRS 288.150 and that is designed to attain the goals of the Legislature regarding educational reform in this state, especially with regard to assisting pupils in need of remediation and pupils who are not proficient in the English language. Materials and supplies for classrooms are subject to negotiation by employers with recognized employee organizations.”.

Amend sec. 195, page 133, line 13, by deleting:

“82, 83 and 89” and inserting:

“82 and 83”.

Amend sec. 195, page 133, between lines 20 and 21 by adding:

“5. Sections 80.5, 82.5 and 83.5 of this act do not apply to any taxes precollected pursuant to chapter 370 of NRS on or before June 30, 2004.”.

Amend the bill as a whole by deleting sec. 196.3 and adding a new section designated sec. 196.3, following sec. 196, to read as follows:

“Sec. 196.3. 1. Notwithstanding the provisions of sections 58.12 to 58.80, inclusive, of this act, a financial institution is exempt from the franchise fee imposed pursuant to section 58.44 of this act for the calendar quarter ending on December 31, 2003.

2. As used in this section, “financial institution” means 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, a similar institution chartered or licensed pursuant to federal law and doing business in this state or a person conducting loan or credit card processing activities in this state. 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.”.

Amend sec. 198, pages 134 and 135, by deleting lines 33 through 44 on page 134 and lines 1 through 23 on page 135, and inserting:

“Sec. 198. 1. This section and sections 190, 191, 191.3, 191.5, 194.58, 194.64, 194.66 and 196 of this act become effective upon passage and approval.

2. Sections 59, 60, 67, 69, 75 to 80, 81, 82, 83, 84 to 88, inclusive, 90 to 93, inclusive, 98, 101, 112, 114, 116, 125 to 132, inclusive, 144 to 165, inclusive, 168, 172 to 175, inclusive, 177, 178, 180, 184, 185, 186, 188 and 192 to 194, inclusive, 195 and 197 of this act and subsection 1 of section 189 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On July 1, 2003, for all other purposes.

3. Sections 58.10 to 58.80, inclusive, 70, 71, 72, 73, 186.3, 186.5, 186.7 and 196.3 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On October 1, 2003, for all other purposes.

4. Sections 1 to 58, inclusive, 61 to 66, inclusive, 68, 70.5, 71.5, 72.5, 73.5, 74, 89, 118 to 124, inclusive, 133, 135, 141, 169, 170, 171, 176, 179, 181, 182, 183, 185.30 to 185.50, inclusive, 186.4, 186.6, 186.8, 186.9 and 196.5 of this act and subsection 2 of section 189 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On January 1, 2004, for all other purposes.

5. Sections 94 to 97, inclusive, 99, 100, 102 to 111, inclusive, 166, 167 and 187 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On July 1, 2004, for all other purposes.

6. Sections 165.2, 165.4, 165.6, 166.2, 194.10, 194.14 to 194.56, inclusive, 194.60 and 194.62 of this act become effective on July 1, 2003.

7. Sections 134, 136 to 140, inclusive, 142 and 143 of this act become effective on August 1, 2003.

8. Sections 80.5, 82.5, 83.5, 166.4 and 194.12 of this act become effective on July 1, 2004.

9. Sections 113, 115 and 117 of this act become effective at 12:01 a.m. on October 1, 2029.

10. Sections 126 to 131, inclusive, of this act expire by limitation on June 30, 2005.

11. Sections 112, 114 and 116 of this act expire by limitation on September 30, 2029.”.

Amend the title of the bill to read as follows:

“AN ACT relating to state financial administration; providing for the imposition and administration of an excise tax on employers based on wages paid to their employees; providing for the imposition and administration of a tax on financial institutions for the privilege of doing business in this state; replacing the casino entertainment tax with a tax on all live entertainment; providing for the imposition and administration of a franchise fee on business entities for the privilege of doing business in this state; eliminating the tax imposed on the privilege of conducting business in this state; revising the taxes on liquor and cigarettes; imposing a state tax on the transfer of real property and revising the provisions governing the existing tax; revising the fees charged for certain gaming licenses; establishing the Legislative Committee on Taxation, Public Revenue and Tax Policy; requiring the Legislative Auditor to conduct performance audits of certain school districts; providing for the formation of Business Advisory Councils; requiring the Department of Education to prescribe a minimum amount of money that each school district must expend each year for textbooks, instructional supplies and instructional hardware; revising provisions governing the purchase of retirement credit for certain educational personnel; apportioning the State Distributive School Account in the State General Fund for the 2003‑2005 biennium; making appropriations to the State Distributive School Account for purposes relating to class-size reduction; making various other changes relating to state financial administration; authorizing certain expenditures; making an additional appropriation; providing penalties; and providing other matters properly relating thereto.”.

Amendment No. 4.

Amend sec. 58.24, page 29, line 41, by deleting “includes reimbursement” and inserting:

“includes:

(a) Revenue that a real estate broker receives pursuant to NRS 645.280 and is required by contract to pay to a licensed real estate broker, broker-salesman or salesman who performed services for that revenue.

(b) Reimbursement”.

Amend sec. 58.48, page 35, by deleting lines 35 through 39 and inserting:

“subcontractors for the portion of any materials or services provided in the development of improved real property, made by a business entity who is:

(a) A contractor or subcontractor; or

(b) In the business of developing improved real property.

The amount of the deduction must not exceed the gross revenue of the business entity from the transaction.”.

Amend sec. 58.48, page 35, between lines 42 and 43 by adding:

“14. Any revenue of the business entity upon which the business entity paid the tax imposed pursuant to section 95 of this act.”.

Amend sec. 80, page 58, line 4, by deleting “40” and inserting “42.5”.

Amend sec. 80.5, page 58, line 16, by deleting “~~[40]~~ 45” and inserting “~~[42.5]~~ 47.5”.

Amend sec. 82, page 59, line 2, by deleting “35” and inserting “37.5”.

Amend sec. 82.5, page 59, line 30, by deleting “~~[35]~~ 40” and inserting “~~[37.5]~~ 42.5”.

Amend sec. 83, page 60, line 5, by deleting “40” and inserting “42.5”.

Amend sec. 83.5, page 60, line 14, by deleting “~~[40]~~ 45” and inserting “~~[42.5]~~ 47.5”.

Amendment No. 7.

Amend sec. 11, page 4, line 31, by deleting “0.6” and inserting “0.5”.

Amend sec. 24.18, page 8, by deleting lines 38 through 44 and inserting:

“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:”.

Amend sec. 24.18, page 9, line 1, by deleting “1.” and inserting “(a)”.

Amend sec. 24.18, page 9, line 3, by deleting “2.” and inserting “(b)”.

Amend sec. 24.20, page 9, by deleting lines 5 through 16 and inserting:

“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.”.

Amend sec. 24.38, page 11, line 25, by deleting “3” and inserting “4”.

Amend sec. 24.46, page 13, lines 38 and 40, by deleting “income” and inserting “revenue”.

Amend sec. 24.46, page 13, by deleting lines 41 and 42 and inserting:

“institution from its entire operation as a financial institution.”.

Amend sec. 27, page 18, by deleting lines 3 through 18 and inserting:

“Sec. 27. “Admission charge” means the total amount, expressed in terms of money, of consideration paid for the right or privilege to have access to a facility where live entertainment is provided.”.

Amend sec. 31, page 18, line 35, after “463.0169.” by inserting:

“The term does not include 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.”.

Amend sec. 36, page 19, by deleting lines 10 through 41 and inserting:

“Sec. 36. 1. Except as otherwise provided in this section, there is hereby imposed an excise tax on admission to any facility in this state where live entertainment is provided. If the live entertainment is provided at a facility with a maximum seating capacity that is:

(a) Less than 7,500, the rate of the tax is 10 percent of the admission charge to the facility plus 10 percent of any amounts paid for food, refreshments and merchandise purchased at the facility.

(b) At least 7,500, the rate of the tax is 5 percent of the admission charge to the facility.

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 that is less than 300.

(e) 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.

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

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

(h) 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.

(i) Live entertainment provided in the common area of a shopping mall.

6. As used in this section:

(a) “Facility” means any area or premises where live entertainment is provided and for which consideration is collected for the right or privilege of entering that area or premises.

(b) “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.”.

Amend sec. 38, page 20, lines 29 and 30, by deleting “shall, jointly,” and inserting:

“shall:

(a) Jointly,”.

Amend sec. 38, page 20, between lines 32 and 33, by inserting:

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

Amend sec. 39, page 20, line 33, by deleting “1. Each” and inserting:

“1. Except as otherwise provided in this section:

(a) Each”.

Amend sec. 39, page 20, line 38, by deleting “2.” and inserting “(b)”.

Amend sec. 39, page 20, between lines 41 and 42, by inserting:

“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.”.

Amend sec. 39, page 20, line 43, by deleting “month” and inserting “period”.

Amend sec. 41, page 21, by deleting line 19 and inserting:

“(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”.

Amend sec. 44, page 23, by deleting line 19 and inserting:

“establishment is taking any action”.

Amend sec. 44, page 23, by deleting lines 25 and 26 and inserting:

“licensed gaming establishment is taking any action with the intent to defraud the State or to evade”.

Amend sec. 44, page 23, line 30, by deleting:

“paid for live entertainment”.

Amend sec. 44, page 23, by deleting line 32 and inserting:

“upon the taxable liability of business entities that”.

Amend sec. 45, page 23, by deleting lines 36 and 37 and inserting:

“(a) Is unable to collect all or any part of an admission charge which was included in the taxable receipts reported”.

Amend sec. 45, page 24, by deleting lines 8 and 9 and inserting:

“3. If a taxpayer collects all or any part of an admission charge for which he claimed a credit on a return for a”.

Amend sec. 45, page 24, by deleting lines 12 and 13 and inserting:

“(a) The amount collected in the admission charges reported pursuant to paragraph (a) of subsection 1;”.

Amend sec. 48, page 25, line 20, by deleting “month” and inserting “reporting period”.

Amend sec. 49, page 25, line 37, by deleting “the month” and inserting:

“the reporting period”.

Amend sec. 57, page 28, line 13, by deleting “Any” and inserting “1. Any”.

Amend sec. 57, page 28, between lines 17 and 18 by inserting:

“2. As used in this section, “licensed gaming establishment” includes 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.”.

Amend sec. 58.16, page 29, by deleting lines 13 through 15 and inserting:

“to 26 U.S.C. § 501(c); or”.

Amend sec. 58.28, page 30, by deleting lines 33 through 38 and inserting:

“8. Any revenue from the operation of a vending stand”.

Amend sec. 58.28, page 30, line 40, by deleting “10.” and inserting “9.”.

Amend sec. 58.44, page 33, line 16, by deleting “$100,000” and inserting “$500,000”.

Amend sec. 58.44, page 33, by deleting lines 17 through 20.

Amend sec. 58.48, page 35, by deleting lines 23 through 25 and inserting:

“5. Any revenue received:

(a) As dividends or distributions by a parent organization from the capital account of a subsidiary entity of the parent organization; or

(b) As payments between:

(1) A parent organization and a wholly owned subsidiary entity of the parent organization; or

(2) The wholly owned subsidiary entities of a parent organization.”.

Amend sec. 58.48, page 36, between lines 5 and 6, by inserting:

“15. Any revenue of the business entity from the sale or distribution of gasoline or any other motor vehicle fuel.”.

Amend sec. 58.50, page 36, line 6, by deleting “1.”.

Amend sec. 58.50, page 36, by deleting lines 10 through 26 and inserting:

“regulations must be consistent with the methods of dividing income contained in the provisions of the Uniform Division of Income for Tax”.

Amend sec. 62, page 41, by deleting lines 20 through 22 and inserting:

“to 26 U.S.C. § 501(c).”.

Amend sec. 63, page 42, by deleting lines 13 and 14 and inserting “newspaper.”.

Amend the bill as a whole by adding 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.”.

Amend sec. 75.3, page 55, by deleting lines 25 through 27 and inserting:

“26 U.S.C. § 501(c);”.

Amend sec. 77, page 57, line 8, by deleting “$3.45” and inserting “$2.93”.

Amend sec. 78, page 57, line 15, by deleting “$3.60” and inserting “$3.08”.

Amend sec. 78, page 57, line 17, by deleting “$1.30” and inserting “$1.12”.

Amend sec. 78, page 57, line 20, by deleting “70” and inserting “60”.

Amend sec. 78, page 57, line 23, by deleting “16” and inserting “14”.

Amend sec. 80, page 58, line 9, by deleting “42.5” and inserting “40”.

Amend the bill as a whole by deleting sec. 80.5 and adding:

“Sec. 80.5. (Deleted by amendment.)”.

Amend sec. 82, page 59, line 7, by deleting “37.5” and inserting “35”.

Amend the bill as a whole by deleting sec. 82.5 and adding:

“Sec. 82.5. (Deleted by amendment.)”.

Amend sec. 83, page 60, line 7, by deleting “42.5” and inserting “40”.

Amend the bill as a whole by deleting sec. 83.5 and adding:

“Sec. 83.5. (Deleted by amendment.)”.

Amend sec. 95, page 62, line 39, after “of” by inserting “the”.

Amend sec. 95, page 62, by deleting lines 41 and 42 and inserting:

“4. The county recorder of a county:

(a) Whose population is 100,000 or more may deduct and withhold from the taxes collected 0.2 percent of those taxes to reimburse the county for the cost of collecting the tax.

(b) Whose population is less than 100,000 may deduct and withhold from the taxes collected 1 percent of those taxes to reimburse the”.

Amend sec. 167, page 111, line 33, by deleting “and”.

Amend sec. 174, page 118, by deleting lines 36 and 37 and inserting:

“pursuant to this section if:

(a) The establishment is licensed for less than 51 slot”.

Amend sec. 174, page 118, line 39, by deleting the italicized period.

Amend sec. 174, page 119, line 9, after the closed bracket by inserting:

“; or

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

Amend sec. 174, page 119, between lines 24 and 25 by inserting:

“(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.”.

Amend sec. 186.4, page 138, line 13, by deleting “or” and inserting “or”.

Amend sec. 186.9, page 142, by deleting lines 3 through 6 and inserting:

“pursuant to 26 U.S.C. § 501(c); ~~[or]~~”.

Amend the bill as a whole by adding new sections designated sections 188.3 through 188.7, following sec. 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 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.”.

Amend sec. 189, page 143, by deleting lines 28 through 31 and inserting:

“Sec. 189. 1. NRS 353.272, 364A.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,”.

Amend sec. 190, page 143, by deleting line 39 and inserting:

“Sec. 190. Notwithstanding the provisions of NRS 353.288:”.

Amend sec. 190, page 144, by deleting lines 2 through 20 and inserting:

“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.”.

Amend the bill as a whole by deleting sec. 193 and adding:

“Sec. 193. (Deleted by amendment.)”.

Amend sec. 194.56, page 165, line 16, by deleting “194.2” and inserting “165.2”.

Amend sec. 195, page 166, by deleting lines 13 through 26 and inserting:

“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 date 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. Sections 26 to 58, inclusive, of this act apply to any taxable admission charge that is collected pursuant to the provisions of those sections on or after January 1, 2004.

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

Amend sec. 196, page 166, line 27, by deleting “2” and inserting “3”.

Amend the bill as a whole by adding a new section designated sec. 196.1, following sec. 196, to read as follows:

“Sec. 196.1. Notwithstanding the provisions of section 165.2 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.”.

Amend sec. 196.3, page 166, by deleting lines 39 through 45 and inserting:

“2. As used in this section:

(a) Except as otherwise provided in paragraph (b), “financial institution” means:

(1) 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;

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

(3) 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.

(b) “Financial institution” does not include:”.

Amend sec. 196.3, page 167, line 1, by deleting “(a)” and inserting “(1)”.

Amend sec. 196.3, page 167, line 3, by deleting “(b)” and inserting “(2)”.

Amend sec. 196.5, page 167, by deleting line 7 and inserting:

“institution on or after November 1, 2003.”.

Amend sec. 196.5, page 167, line 13, after “(a)” by inserting:

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

(b)”.

Amend sec. 196.5, page 167, line 15, by deleting “(b)” and inserting “(c)”.

Amend the bill as a whole by adding a new section designated sec. 196.7, following sec. 196.5, to read as follows:

“Sec. 196.7. The Legislative Committee on Taxation, Public Revenue and Tax Policy established by the provisions of section 127 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.”.

Amend sec. 198, pages 167 and 168, by deleting lines 31 through 45 on page 167 and lines 1 through 31 on page 168, and inserting:

“Sec. 198. 1. This section and sections 59, 60, 67, 69, 75, 75.3, 75.7, 76, 80, 82, 83, 86, 87, 88, 90 to 93, inclusive, 98, 101, 112, 114, 116, 125 to 132, inclusive, 144 to 165, inclusive, 168, 173, 178, 188 to 188.7, inclusive, 190 to 193, inclusive, 194.10, 194.14 to 194.56, inclusive, 194.60, 194.62, 195, 196, 196.1, 196.7 and 197 of this act and subsection 1 of section 189 of this act become effective upon passage and approval.

2. Sections 194.58 and 194.64 of this act become effective upon passage and approval and apply retroactively to June 30, 2003.

3. Sections 165.2, 165.4, 165.6, 166.2, 194 and 194.66 of this act become effective upon passage and approval and apply retroactively to July 1, 2003.

4. Sections 77, 78, 79, 81, 84, 85, 172, 174, 175 and 177 of this act and subsection 2 of section 189 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On August 1, 2003, for all other purposes.

5. Sections 58.10 to 58.80, inclusive, 70, 71, 72, 73, 186.3, 186.5, 186.7 and 196.3 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On October 1, 2003, for all other purposes.

6. Sections 24.10 to 24.74, inclusive, 185.30 to 186, inclusive, 186.4, 186.6, 186.8, 186.9 and 196.5 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On November 1, 2003, for all other purposes.

7. Sections 1 to 24, inclusive, 25 to 58, inclusive, 61 to 66, inclusive, 68, 70.5, 71.5, 72.5, 73.5, 74, 89, 94 to 97, inclusive, 99, 100, 102 to 111, inclusive, 118 to 124, inclusive, 133 to 143, inclusive, 166, 167, 169, 170, 171, 176 and 179 to 185, inclusive, of this act and subsection 3 of section 189 of this act become effective:

(a) Upon passage and approval for the purpose of adopting regulations and performing any other preparatory administrative tasks that are necessary to carry out the provisions of this act; and

(b) On January 1, 2004, for all other purposes.

8. Sections 80.5, 82.5, 83.5, 166.4, 187 and 194.12 of this act become effective on July 1, 2004.

9. Sections 113, 115 and 117 of this act become effective at 12:01 a.m. on October 1, 2029.

10. Sections 126 to 131, inclusive, of this act expire by limitation on June 30, 2005.

11. Sections 112, 114 and 116 of this act expire by limitation”.

Senator Raggio moved that the Senate do not concur in the Assembly amendments to Senate Bill No. 6.

Remarks by Senator Raggio.

Motion carried.

Bill ordered transmitted to the Assembly.

GENERAL FILE AND THIRD READING

Assembly Bill No. 4.

Bill read third time.

Roll call on Assembly Bill No. 4:

Yeas—17.

Nays—None.

Absent—Amodei.

Excused—Nolan, Schneider, Tiffany—3.

Assembly Bill No. 4 having received a constitutional majority, Madam President declared it passed, as amended.

Bill ordered transmitted to the Assembly.

(See Nevada Supreme Court case Hon. Kenny C. Guinn, Governor of the State of Nevada, v. The Legislature of the State of Nevada, Case No. 41679, July 10, 2003.)

(See United State District Court, District of Nevada, Hon. Sharron E. Angle, et al., v. Legislature of State of Nevada, Case No. CV‑N‑03‑0371, D. Nev. July 18, 2003, en banc.)

Senator Raggio moved that the Senate recess subject to the call of the Chair.

Motion carried.

Senate in recess at 1:26 p.m.

SENATE IN SESSION

At 5:11 p.m.

President Hunt presiding.

Quorum present.

Senator Raggio moved that the Senate adjourn until Saturday, July 19, 2003 at 10 a.m.

Motion carried.

Senate adjourned at 5:12 p.m.

Approved: Lorraine T. Hunt

President of the Senate

Attest: Claire J. Clift

Secretary of the Senate