Assembly Bill No. 462-Assemblymen Buckley, Goldwater, Perkins, Giunchigliani, Herrera, Williams, Manendo, Freeman, Amodei, Lee, Koivisto, Braunlin, Lambert, Bache, Hettrick, Ernaut, Collins, Chowning, Mortenson, Sandoval, Krenzer, Price, Cegavske, Evans, Hickey, Tiffany, Segerblom, Marvel, Neighbors, de Braga, Berman, Arberry and Anderson
May 7, 1997
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Referred to Committee on Taxation
SUMMARY--Provides for credit against certain gaming fees for gaming licensees who develop affordable housing and clarifies that certain transfers of gaming devices are not taxable transactions. (BDR 41-229)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: Yes.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to gaming; providing for a credit against certain gaming fees for certain gaming licensees who develop affordable housing for persons of low income; requiring the housing division of the department of business and industry and the gaming commission to adopt certain regulations; clarifying that certain transfers of gaming devices are not taxable transactions; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
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Section 1 Chapter 463 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 12, inclusive, of this act.
Sec. 2 As used in sections 2 to 12, inclusive, of this act:
1. "Division" means the housing division of the department of business and industry.
2. "Nonrestricted licensee" means a person who holds a nonrestricted license.
3. "Persons of low income" has the meaning ascribed to it in NRS 315.260.
Sec. 3 1. A nonrestricted licensee may apply to the division for a credit against the fees imposed pursuant to NRS 463.370. Such application must be submitted no later than March 1 of the calendar year immediately preceding the calendar year in which the applicant will apply a credit pursuant to subsection 1 of section 9 of this act.
2. An applicant for a credit against the fees imposed pursuant to NRS 463.370 shall:
(a) Provide proof satisfactory to the division that the applicant intends to develop, own or sponsor the construction and completion within 2 years of a housing project which includes dwellings that are affordable to persons of low income;
(b) Provide a description of the housing project;
(c) Specify the number of dwellings in the housing project that will be occupied by persons of low income, which number must be at least one-third of the total number of dwellings in the housing project;
(d) Specify the amount of monthly rent or other payments that persons of low income will be required to pay to occupy dwellings within the housing project; and
(e) Provide other information concerning the housing project as requested by the division.
3. The division shall make a determination as to the sufficiency of each such application no later than June 1 of the year in which the division received the application. From the applications received, the division shall, within the limits set forth in section 5 of this act, select one or more of the proposed housing projects that the division determines are appropriate to assist the division in evaluating the effectiveness of sections 2 to 12, inclusive, of this act in providing affordable housing for persons of low income.
Sec. 4 1. If the division determines that such an application is appropriate and qualifies for eligibility for a credit against the fees imposed pursuant to NRS 463.370, the division shall, no later than July 1 of the year in which the division received the application:
(a) Provide written notice of its determination to the nonrestricted licensee who submitted the application; and
(b) Transmit to the commission a certificate of eligibility which authorizes the nonrestricted licensee to apply a credit against the fees imposed pursuant to NRS 463.370.
2. Not more than 30 days after a nonrestricted licensee receives written notice from the division pursuant to paragraph (a) of subsection 1, the nonrestricted licensee shall provide to the commission a written estimate of liability which provides an estimate of the total amount of fees that the nonrestricted licensee will owe pursuant to NRS 463.370 for the next succeeding calendar year. If the nonrestricted licensee has been operating for at least 12 calendar months, the written estimate of liability must be based upon the total amount of fees that the nonrestricted licensee paid to the commission pursuant to NRS 463.370 for the immediately preceding 12 calendar months. If the nonrestricted licensee has been operating for fewer than 12 calendar months, the written estimate of liability must be based upon the total amount of fees that the nonrestricted licensee has paid pursuant to NRS 463.370 for each month that he has been in operation.
3. Upon receipt of a written estimate of liability from a nonrestricted licensee and a certificate of eligibility issued by the division for that nonrestricted licensee, the commission shall, on or before November 1 of the calendar year in which the division received the certificate of eligibility, determine the total amount of credit, specified as a percentage, it will grant to the nonrestricted licensee who may apply the credit against the fees imposed pursuant to NRS 463.370. The percentage specified by the commission must be:
(a) Based upon the total amount of credits available in that calendar year, as set forth in section 5 of this act; and
(b) Equal to or less than 25 percent of the nonrestricted licensee's written estimate of liability.
4. The commission shall provide written notice to the nonrestricted licensee and the division of its determination.
Sec. 5 The commission shall not grant more than $1,000,000 in credits pursuant to section 4 of this act in one calendar year. The commission shall allocate the credits available in one calendar year to each nonrestricted licensee for whom the commission has received a certificate of eligibility from the division on or before July 1 of that calendar year.
Sec. 6 1. Upon receipt of written notice from the commission pursuant to section 4 of this act, the nonrestricted licensee may enter into a written agreement with the division, no later than December 31 of the calendar year in which the division approved the application of the nonrestricted licensee. The written agreement must include:
(a) The amount of the credit granted to the nonrestricted licensee pursuant to section 4 of this act;
(b) The number of dwellings in the housing project that will be occupied by persons of low income, which number must equal at least one-third of the total number of dwellings in the housing project;
(c) The minimum period for which the dwellings specified in paragraph (b) must be occupied only by persons of low income;
(d) The amount of monthly rent or other payments that persons of low income will be required to pay to occupy dwellings within the housing project;
(e) The term of the agreement; and
(f) The signatures of the administrator of the division and the nonrestricted licensee.
2. A written agreement entered into pursuant to subsection 1 becomes effective on January 1 of the calendar year immediately succeeding the date on which the division and the nonrestricted licensee entered into the agreement.
Sec. 7 The division shall oversee and monitor the progress of a housing project that is covered by a written agreement entered into pursuant to section 6 of this act. The division may provide assistance to a nonrestricted licensee to ensure that a housing project is completed within 2 years after the effective date of the written agreement.
Sec. 8 1. If a housing project is completed by a nonrestricted licensee and approved by the division, the division shall conduct a review to ensure that the housing project of the nonrestricted licensee complies with the conditions set forth in the written agreement entered into pursuant to section 6 of this act. The nonrestricted licensee shall comply with all requests for information by the division that are related to the review. A review must be conducted at least annually for the term of the written agreement.
2. If, as a result of a review, the division determines that a nonrestricted licensee has violated a condition of the written agreement, the division shall provide written notice of the violation to the nonrestricted licensee. The written notice must prescribe a period, not fewer than 30 days, for the nonrestricted licensee to correct the violation. If the nonrestricted licensee does not correct the violation within the prescribed period, the division shall provide written notice of the violation to the commission. Upon receipt of a written notice of such a violation, the commission shall issue to the nonrestricted licensee a written order to repay, in accordance with subsection 2 of section 10 of this act, the full amount of the credit that the nonrestricted licensee applied pursuant to section 9 of this act.
Sec. 9 If a nonrestricted licensee has entered into a written agreement pursuant to section 6 of this act, the nonrestricted licensee may:
1. In the year in which the written agreement becomes effective, apply a credit against the fees imposed pursuant to NRS 463.370 in an amount which is less than or equal to 60 percent of the total credit that was specified in the written agreement pursuant to paragraph (a) of subsection 1 of section 6 of this act. The credit must be applied in accordance with the regulations adopted by the commission pursuant to section 12 of this act.
2. If the housing project is completed by the nonrestricted licensee and approved by the division within 2 years after the effective date of the written agreement, apply a credit against the fees imposed pursuant to NRS 463.370 for the 12 months immediately succeeding the approval of the housing project in an amount which is equal to the remaining balance of the total credit that was specified in the written agreement pursuant to paragraph (a) of subsection 1 of section 6 of this act. The credit must be applied in accordance with the regulations adopted by the commission pursuant to section 12 of this act.
Sec. 10 1. If a housing project is not completed by a nonrestricted licensee and approved by the division within 2 years after the effective date of the written agreement, the nonrestricted licensee shall repay to the commission the amount of the credit that he applied pursuant to subsection 1 of section 9 of this act. The nonrestricted licensee shall pay interest on the amount due at the rate most recently established pursuant to NRS 99.040 for each month, or portion thereof, from the last day of the month following the period for which the payment would have been made had the credit on the fees not been granted until the date of the actual payment of the fees.
2. If a nonrestricted licensee receives a written order to repay from the commission pursuant to subsection 2 of section 8 of this act, the nonrestricted licensee shall repay to the commission the amount of the credit that he applied pursuant to section 9 of this act. The nonrestricted licensee shall pay interest on the amount due at the rate most recently established pursuant to NRS 99.040 for each month, or portion thereof, from the last day of the month following the period for which the payment would have been made had the credit on the fees not been granted until the date of the actual payment of the fees.
Sec. 11 1. The division shall adopt regulations that:
(a) Set forth the criteria for approval of:
(1) An application for a credit against the fees imposed pursuant to NRS 463.370; and
(2) A housing project, including, without limitation, a requirement that a nonrestricted licensee demonstrate to the satisfaction of the division that the number of dwellings specified in the written agreement pursuant to paragraph (b) of subsection 1 of section 6 of this act will be occupied by persons of low income;
(b) Ensure that a licensee who receives a credit pursuant to sections 2 to 12, inclusive, of this act offers affordable housing for persons of low income for a time deemed acceptable by the division; and
(c) Prescribe the manner in which the division will:
(1) Oversee and monitor a housing project pursuant to section 7 of this act; and
(2) Conduct a review pursuant to section 8 of this act.
2. The division may adopt regulations necessary to carry out the provisions of sections 3, 6, 7 and 8 of this act.
Sec. 12 1. The commission shall adopt regulations that prescribe:
(a) The formula that the commission will use to determine the total amount of credit against the fees imposed pursuant to NRS 463.370 that will be granted to an applicant pursuant to section 4 of this act. The formula must grant to a licensee an equal amount of credit for each dollar that he spends on the project, up to the maximum amount of credit that he is allowed in 1 year.
(b) The manner in which the credit may be applied by the licensee against his monthly payment of the fees imposed pursuant to NRS 463.370.
2. The commission may adopt regulations necessary to carry out the provisions of sections 4, 5, 9 and 10 of this act.
Sec. 13 NRS 463.370 is hereby amended to read as follows:
463.370 1. Except as otherwise provided in NRS 463.373 [,] and sections 2 to 12, inclusive, of this act, the commission shall charge and collect from each licensee a license fee based upon all the gross revenue of the licensee as follows:
Three percent of all the gross revenue of the licensee which does not exceed $50,000 per calendar month;
Four percent of all the gross revenue of the licensee which exceeds $50,000 per calendar month and does not exceed $134,000 per calendar month; and
Six and one-quarter percent of all the gross revenue of the licensee which exceeds $134,000 per calendar month.
2. Unless the licensee has been operating for less than a full calendar month, the commission shall charge and collect the fee prescribed in subsection 1, based upon the gross revenue for the preceding calendar month, on or before the 24th day of the following month. Except for the fee based on the first full month of operation, the fee is an estimated payment of the license fee for the third month following the month whose gross revenue is used as its basis.
3. When a licensee has been operating for less than a full calendar month, the commission shall charge and collect the fee prescribed in subsection 1, based on the gross revenue received during that month, on or before the 24th day of the following calendar month of operation. After the first full calendar month of operation, the commission shall charge and collect the fee based on the gross revenue received during that month, on or before the 24th day of the following calendar month. The payment of the fee due for the first full calendar month of operation must be accompanied by the payment of a fee equal to three times the fee for the first full calendar month. This additional amount is an estimated payment of the license fees for the next three calendar months. Thereafter, each license fee must be paid in the manner described in subsection 2. Any deposit held by the commission on July 1, 1969, must be treated as an advance estimated payment.
4. All revenue received from any game or gaming device which is operated on the premises of a licensee, regardless of whether any portion of the revenue is shared with any other person, must be attributed to the licensee for the purposes of this section and counted as part of the gross revenue of the licensee. Any other person who is authorized to receive a share of the revenue is liable to the licensee for his proportionate share of the license fees paid pursuant to this section.
5. Any person required to pay a fee pursuant to this section shall file with the commission, on or before the 24th day of each calendar month, a report showing the amount of all gross revenue received during the preceding calendar month. Each report must be accompanied by:
(a) The fee due based on the revenue of the month covered by the report; and
(b) An adjustment for the difference between the estimated fee previously paid for the month covered by the report, if any, and the fee due for the actual gross revenue earned in that month. If the adjustment is less than zero, a credit must be applied to the estimated fee due with that report.
6. If the amount of license fees required to be reported and paid pursuant to this section is later determined to be greater or less than the amount actually reported and paid, the commission shall:
(a) Charge and collect the additional license fees determined to be due, with interest thereon until paid; or
(b) Refund any overpayment to the person entitled thereto pursuant to this chapter, with interest thereon.
Interest must be computed at the rate prescribed in NRS 17.130 from the first day of the first month following either the due date of the additional license fees or the date of overpayment until paid.
7. Failure to pay the fees provided for in this section shall be deemed a surrender of the license at the expiration of the period for which the estimated payment of fees has been made, as established in subsection 2.
8. Except as otherwise provided in NRS 463.386, the amount of the fee prescribed in subsection 1 must not be prorated.
9. Except as otherwise provided in NRS 463.386, if a licensee ceases operation, the commission shall:
(a) Charge and collect the additional license fees determined to be due with interest; or
(b) Refund any overpayment, with interest thereon, to the licensee,
based upon the gross revenue of the licensee during the last 3 months immediately preceding the cessation of operation, or portions of those last 3 months.
10. If in any month, the amount of gross revenue is less than zero, the licensee may offset the loss against gross revenue in succeeding months until the loss has been fully offset.
11. If in any month, the amount of the license fee due is less than zero, the licensee is entitled to receive a credit against any license fees due in succeeding months until the credit has been fully offset.
Sec. 14. Chapter 372 of NRS is hereby amended by adding thereto a new section to read as follows:
1. In administering the provisions of this chapter, the department shall not consider the transfer or exchange of a gaming device between a licensee and an affiliate or affiliated company of that licensee, or between an affiliate and an affiliated company of a licensee, as a taxable sale or purchase pursuant to the provisions of this chapter.
2. As used in this section:
(a) "Affiliate" has the meaning ascribed to it in NRS 463.0133.
(b) "Affiliated company" has the meaning ascribed to it in NRS 463.4825.
(c) "Gaming device" has the meaning ascribed to it in NRS 463.0155.
(d) "Licensee" has the meaning ascribed to it in NRS 463.0171.
Sec. 15. Chapter 374 of NRS is hereby amended by adding thereto a new section to read as follows:
1. In administering the provisions of this chapter, the department shall not consider the transfer or exchange of a gaming device between a licensee and an affiliate or affiliated company of that licensee, or between an affiliate and an affiliated company of a licensee, as a taxable sale or purchase pursuant to the provisions of this chapter.
2. As used in this section:
(a) "Affiliate" has the meaning ascribed to it in NRS 463.0133.
(b) "Affiliated company" has the meaning ascribed to it in NRS 463.4825.
(c) "Gaming device" has the meaning ascribed to it in NRS 463.0155.
(d) "Licensee" has the meaning ascribed to it in NRS 463.0171.