Senate Bill No. 233

Senate Bill No. 233-Committee on Taxation

CHAPTER

662

AN ACT relating to taxation; authorizing a partial abatement of the property taxes on the personal property of certain new or expanded businesses; requiring the department of taxation to investigate certain persons claiming certain abatements, exemptions or deferrals of taxes; and providing other matters properly relating thereto.

[Approved July 17, 1997]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Chapter 360 of NRS is hereby amended by adding thereto a new section to read as follows:
1. During the course of an investigation undertaken pursuant to NRS 360.130 of a person claiming:
(a) A partial abatement of property taxes pursuant to section 4 of this act;
(b) An exemption from taxes upon the privilege of doing business in this state pursuant to NRS 364A.170;
(c) A deferral of the payment of taxes on the sale of capital goods pursuant to NRS 372.397 or 374.402; or
(d) An abatement of taxes on the gross receipts from the sale, storage, use or other consumption of eligible machinery or equipment pursuant to NRS 374.357,
the department shall investigate whether the person meets the eligibility requirements for the abatement, partial abatement, exemption or deferral that the person is claiming.
2. If the department finds that the person does not meet the eligibility requirements for the abatement, exemption or deferral which the person is claiming, the department shall report its findings to the commission on economic development and take any other necessary actions.
Sec. 2. Chapter 361 of NRS is hereby amended by adding thereto the provisions set forth as sections 3 and 4 of this act.
Sec. 3. It is hereby declared to be the purpose and policy of the legislature in enacting section 4 of this act:
1. To encourage employers whose goals are consistent with the goals of the commission and the community concerning industrial development and diversification and who provide an opportunity to employees to earn higher paying salaries to locate and expand their businesses in this state by providing a partial abatement from taxes imposed on personal property that encourages industrial development and investment;
2. To expand the economic diversification of this state;
3. To provide for the proper evaluation of the impact of such an abatement in order to ensure that the communities in which such businesses expand or relocate are not adversely affected by the costs of services associated with the relocation and expansion of those businesses; and
4. To attract industry that utilizes innovations, processes or practices that have a positive impact on the conservation, preservation or protection of the environment and the natural resources of the area.
Sec. 4. 1. A person who intends to locate or expand a business in this state may apply to the commission on economic development for a partial abatement from the taxes imposed by this chapter on the personal property of the new or expanded business.
2. The commission on economic development may approve an application for a partial abatement if the commission makes the following determinations:
(a) The goals of the business are consistent with the goals of the commission and the community concerning industrial development and diversification.
(b) The abatement is a significant factor in the decision of the applicant to locate or expand a business in this state or the appropriate affected local government determines that the abatement will be beneficial to the economic development of the community.
(c) The average hourly wage which will be paid by the new or expanded business to its employees in this state is at least 125 percent of the average statewide industrial hourly wage as established by the employment security division of the department of employment, training and rehabilitation on July 1 of each fiscal year.
(d) The business will provide a health insurance plan for all employees that includes an option for health insurance coverage for dependents of the employees.
(e) The cost to the business for the benefits the business provides to its employees in this state will meet the minimum requirements for benefits established by the commission pursuant to subsection 8.
(f) A capital investment for personal property will be made to locate or expand the business in Nevada which is at least:
(1) If the personal property directly related to the establishment of the business in this state is primarily located in a county whose population:
(I) Is 100,000 or more, $50,000,000.
(II) Is less than 100,000, $20,000,000.
(2) If the personal property directly related to the expansion of the business is primarily located in a county whose population:
(I) Is 100,000 or more, $10,000,000.
(II) Is less than 100,000, $4,000,000.
(g) The business will create at least the following number of new, full-time and permanent jobs in the State of Nevada by the fourth quarter that it is in operation:
(1) If a new business will be primarily located in a county whose population:
(I) Is 100,000 or more, 100 jobs.
(II) Is less than 100,000, 35 jobs.
(2) If an expanded business will be primarily located in a county whose population:
(I) Is 100,000 or more, and the business has at least 100 employees in this state, 20 jobs. An expanded business primarily located in such a county that has less than 100 employees is not eligible for a partial abatement pursuant to this section.
(II) Is less than 100,000, and the business has at least 35 employees in this state, 10 jobs. An expanded business primarily located in such a county that has less than 35 employees is not eligible for a partial abatement pursuant to this section.
(h) For the expansion of a business primarily located in a county whose population:
(1) Is 100,000 or more, the book value of the assets of the business in this state is at least $20,000,000.
(2) Is less than 100,000, the book value of the assets of the business in this state is at least $5,000,000.
(i) The business is registered pursuant to the laws of this state or the applicant commits to obtain a valid business license and all other permits required by the county, city or town in which the business operates.
(j) The proposed abatement has been approved by the governing body of the appropriate affected local government as determined pursuant to the regulations adopted pursuant to subsection 8. In determining whether to approve a proposed abatement, the governing body shall consider whether the taxes to be paid by the business are sufficient to pay for any investment required to be made by the local government for services associated with the relocation or expansion of the business, including, without limitation, costs related to the construction and maintenance of roads, sewer and water services, fire and police protection and the construction and maintenance of schools.
(k) The applicant has executed an agreement with the commission which states that the business will continue in operation in Nevada for 10 or more years after the date on which a certificate of eligibility for the abatement is issued pursuant to subsection 5 and will continue to meet the eligibility requirements contained in this subsection. The agreement must bind the sucessors in interest of the business for the required period.
3. An applicant shall, upon the request of the executive director of the commission on economic development, furnish him with copies of all records necessary to verify that the applicant meets the requirements of subsection 2.
4. The percentage of the abatement must be 50 percent of the taxes payable each year.
5. If an application for a partial abatement is approved, the commission on economic development shall immediately forward a certificate of eligibility for the abatement to:
(a) The department; and
(b) The county assessor of each county in which personal property directly related to the establishment or expansion of the business will be located.
6. Upon receipt by the department of taxation of the certificate of eligibility, the taxpayer is eligible for an abatement from the tax imposed by this chapter for 10 years:
(a) For the expansion of a business, on all personal property of the business that is located in Nevada and directly related to the expansion of the business in this state.
(b) For a new business, on all personal property of the business that is located in Nevada and directly related to the establishment of the business in this state.
7. If a business for which an abatement has been approved is not maintained in this state in accordance with the agreement required in subsection 2, for at least 10 years after the commission on economic development approved the abatement, the person who applied for the abatement shall repay to the county treasurer or treasurers who would have received the taxes but for the abatement the total amount of all taxes that were abated pursuant to this section. The person who applied for the abatement shall pay interest on the amount due at the rate of 10 percent per annum for each month, or portion thereof, from the last day of the month following the period for which the payment would have been made if the abatement had not been granted until the date of the actual payment of the tax.
8. A county treasurer:
(a) Shall deposit any money that he receives pursuant to subsection 7 in one or more of the funds established by a local government of the county pursuant to NRS 354.611, 354.6113 or 354.6115; and
(b) May use the money deposited pursuant to paragraph (a) only for the purposes authorized by NRS 354.611, 354.6113 and 354.6115.
9. The commission on economic development shall adopt regulations necessary to carry out the provisions of this section. The regulations must include, but not be limited to:
(a) A method for determining the appropriate affected local government to approve a proposed abatement and the procedure for obtaining such approval; and
(b) Minimum requirements for benefits that a business applying for a partial abatement must offer to its employees to be approved for the partial abatement.
10. The department of taxation shall adopt regulations concerning how county assessors shall administer partial abatements approved pursuant to this section.
11. An applicant for an abatement who is aggrieved by a final decision of the commission on economic development may petition for judicial review in the manner provided in chapter 233B of NRS.
Sec. 5. This act becomes effective upon passage and approval for the purpose of adopting regulations and on July 1, 1997, for all other purposes.
________