AB517

requires two-thirds majority vote (§§ 11, 13, 14, 42, 43, 44, 45)

A.B. 517

Assembly Bill No. 517–Committee on Taxation

March 24, 2003

____________

Referred to Committee on Taxation

SUMMARY—Imposes tax on financial institutions for privilege of doing business in state. (BDR 32‑1029)

FISCAL NOTE: Effect on Local Government: Yes.

Effect on the State: Yes.

EXPLANATION – Matter in bolded italics is new; matter between brackets [~~omitted material]~~ is material to be omitted.

Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

AN ACT relating to taxation; providing for the imposition and administration of a tax on financial institutions for the privilege of doing business in this state; providing penalties; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. Title 32 of NRS is hereby amended by adding

1-2 thereto a new chapter to consist of the provisions set forth as

1-3 sections 2 to 26, inclusive, of this act.

1-4 Sec. 2. As used in this chapter, unless the context otherwise

1-5 requires, the words and terms defined in sections 3 to 7, inclusive,

1-6 of this act have the meanings ascribed to them in those sections.

1-7 Sec. 3. “Commission” means the Nevada Tax Commission.

1-8 Sec. 4. “Financial institution” means an institution licensed,

1-9 registered or otherwise authorized to do business in this state

1-10 pursuant to the provisions of chapter 604, 645B, 645E or 649 of

1-11 NRS or title 55 or 56 of NRS, or a similar institution chartered or

1-12 licensed pursuant to federal law.

1-13 Sec. 5. 1. “Gross income” means all gains, profits and

1-14 other income earned by a financial institution from its operation

1-15 as a financial institution including, without limitation:

1-16 (a) All rents, compensation for services, commissions and

1-17 brokerage and other fees;

2-1 (b) All gains or profits from the sale or other disposition of any

2-2 real or personal property; and

2-3 (c) All recoveries on losses sustained in the ordinary course of

2-4 business.

2-5 2. The term does not include any income which this state is

2-6 prohibited from taxing pursuant to the laws or Constitution of the

2-7 United States or the Nevada Constitution.

2-8 Sec. 6. “Net income” means gross income minus all ordinary

2-9 and necessary expenses paid or incurred by a financial institution

2-10 to carry on its business, including, without limitation:

2-11 1. Salaries and other compensation for personal services

2-12 actually rendered;

2-13 2. Bad debts;

2-14 3. All interest paid or accrued on the indebtedness of the

2-15 financial institution;

2-16 4. The cost of insurance and advertising;

2-17 5. Losses sustained and not compensated for by insurance or

2-18 otherwise;

2-19 6. All taxes on real or personal property paid to the United

2-20 States, this state or any political subdivision of this state, except

2-21 the tax imposed by this chapter;

2-22 7. All payments or contributions to or under any pension or

2-23 retirement fund or plan for the officers and employees of the

2-24 financial institution;

2-25 8. Reasonable allowances for depreciation and depletion; and

2-26 9. Amortization of premiums on bonds, debentures, notes or

2-27 other securities or evidences of indebtedness.

2-28 Sec. 7. “Taxpayer” means any person liable for a tax

2-29 imposed pursuant to this chapter.

2-30 Sec. 8. The Legislature hereby finds and declares that the tax

2-31 imposed pursuant to this chapter on a financial institution must

2-32 not be construed as a tax upon the customers of the financial

2-33 institution, but as a tax which is imposed upon and collectible

2-34 from the financial institution and which constitutes part of the

2-35 operating overhead of the financial institution.

2-36 Sec. 9. The Department shall:

2-37 1. Administer and enforce the provisions of this chapter, and

2-38 may adopt such regulations as it deems appropriate for that

2-39 purpose.

2-40 2. Deposit all taxes, interest and penalties it receives pursuant

2-41 to this chapter in the State Treasury for credit to the State General

2-42 Fund.

2-43 Sec. 10. 1. Each person responsible for maintaining the

2-44 records of a financial institution shall:

3-1 (a) Keep such records as may be necessary to determine the

3-2 amount of its liability pursuant to the provisions of this chapter;

3-3 (b) Preserve those records for 4 years or until any litigation or

3-4 prosecution pursuant to this chapter is finally determined,

3-5 whichever is longer; and

3-6 (c) Make the records available for inspection by the

3-7 Department upon demand at reasonable times during regular

3-8 business hours.

3-9 2. Any person who violates the provisions of subsection 1 is

3-10 guilty of a misdemeanor.

3-11 Sec. 11. 1. To verify the accuracy of any return filed or, if

3-12 no return is filed by a financial institution, to determine the

3-13 amount required to be paid, the Department, or any person

3-14 authorized in writing by the Department, may examine the books,

3-15 papers and records of any person or financial institution that may

3-16 be liable for the tax imposed by this chapter.

3-17 2. Any person or financial institution which may be liable for

3-18 the tax imposed by this chapter and which keeps outside of this

3-19 state its books, papers and records relating thereto, shall pay to the

3-20 Department an amount equal to the allowance provided for state

3-21 officers and employees generally while traveling outside of the

3-22 State for each day or fraction thereof during which an employee

3-23 of the Department is engaged in examining those documents, plus

3-24 any other actual expenses incurred by the employee while he is

3-25 absent from his regular place of employment to examine those

3-26 documents.

3-27 Sec. 12. 1. Except as otherwise provided in this section and

3-28 NRS 360.250, the records and files of the Department concerning

3-29 the administration of this chapter are confidential and privileged.

3-30 The Department, and any employee engaged in the administration

3-31 of this chapter or charged with the custody of any such records or

3-32 files, shall not disclose any information obtained from the records

3-33 or files of the Department or from any examination, investigation

3-34 or hearing authorized by the provisions of this chapter. Neither

3-35 the Department nor any employee of the Department may be

3-36 required to produce any of the records, files and information for

3-37 the inspection of any person or for use in any action or

3-38 proceeding.

3-39 2. The records and files of the Department concerning the

3-40 administration of this chapter are not confidential and privileged

3-41 in the following cases:

3-42 (a) Testimony by a member or employee of the Department

3-43 and production of records, files and information on behalf of the

3-44 Department or a taxpayer in any action or proceeding pursuant to

3-45 the provisions of this chapter if that testimony or the records, files

4-1 or information, or the facts shown thereby, are directly involved in

4-2 the action or proceeding.

4-3 (b) Delivery to a taxpayer or his authorized representative of a

4-4 copy of any return or other document filed by the taxpayer

4-5 pursuant to this chapter.

4-6 (c) Publication of statistics so classified as to prevent the

4-7 identification of a particular financial institution or document.

4-8 (d) Exchanges of information with the Internal Revenue

4-9 Service in accordance with compacts made and provided for in

4-10 such cases.

4-11 (e) Disclosure in confidence to the Governor or his agent in

4-12 the exercise of the Governor’s general supervisory powers, or to

4-13 any person authorized to audit the accounts of the Department in

4-14 pursuance of an audit, or to the Attorney General or other legal

4-15 representative of the State in connection with an action or

4-16 proceeding pursuant to this chapter, or to any agency of this or

4-17 any other state charged with the administration or enforcement of

4-18 laws relating to taxation.

4-19 (f) Exchanges of information pursuant to subsection 3.

4-20 3. The Commission may agree with the Commissioner of

4-21 Financial Institutions for the continuing exchange of information

4-22 concerning taxpayers. The Commissioner shall, at the request of

4-23 the Commission, provide such information as is necessary to carry

4-24 out the provisions of this chapter.

4-25 Sec. 13. 1. An excise tax is hereby imposed upon each

4-26 financial institution for the privilege of doing business in this state

4-27 at the rate of 14 percent of the amount of the net income of the

4-28 financial institution derived from business conducted by it within

4-29 this state for the preceding calendar quarter.

4-30 2. If the net income of a financial institution is derived from

4-31 business conducted within and outside this state, the net income of

4-32 the financial institution derived from business conducted by it in

4-33 this state must be determined in accordance with regulations

4-34 adopted by the Commission.

4-35 3. Each financial institution shall file with the Department a

4-36 return on a form prescribed by the Department, together with the

4-37 remittance of any tax due pursuant to this chapter for that

4-38 calendar quarter, on or before the last day of the month

4-39 immediately following that calendar quarter. With the prior

4-40 approval of the Department, a financial institution that operates

4-41 more than one office or branch office in this state may file one

4-42 return.

4-43 Sec. 14. Upon written application made before the date on

4-44 which payment must be made, the Department may for good cause

4-45 extend by 30 days the time within which a financial institution is

5-1 required to pay the tax imposed by this chapter. If the tax is paid

5-2 during the period of extension, no penalty or late charge may be

5-3 imposed for failure to pay at the time required, but the financial

5-4 institution shall pay interest at the rate most recently established

5-5 pursuant to NRS 99.040 for each month, or fraction of a month,

5-6 from the last day of the month following the date on which the

5-7 amount would have been due without the extension until the date

5-8 of payment, unless otherwise provided in NRS 360.232 or 360.320.

5-9 Sec. 15. The remedies of the State provided for in this

5-10 chapter are cumulative, and no action taken by the Department or

5-11 the Attorney General constitutes an election by the State to pursue

5-12 any remedy to the exclusion of any other remedy for which

5-13 provision is made in this chapter.

5-14 Sec. 16. If the Department determines that any tax, penalty

5-15 or interest has been paid more than once or has been erroneously

5-16 or illegally collected or computed, the Department shall set forth

5-17 that fact in the records of the Department and certify to the State

5-18 Board of Examiners the amount collected in excess of the amount

5-19 legally due and the financial institution or person from whom it

5-20 was collected or by whom it was paid. If approved by the State

5-21 Board of Examiners, the excess amount collected or paid must be

5-22 credited on any amounts then due from the person or financial

5-23 institution under this chapter, and the balance refunded to the

5-24 person or financial institution, or its successors, administrators or

5-25 executors.

5-26 Sec. 17. 1. Except as otherwise provided in NRS 360.235

5-27 and 360.395:

5-28 (a) No refund may be allowed unless a claim for refund is filed

5-29 with the Department within 3 years after the last day of the month

5-30 following the close of the calendar quarter for which the

5-31 overpayment was made.

5-32 (b) No credit may be allowed after the expiration of the period

5-33 specified for filing claims for refund unless a claim for credit is

5-34 filed with the Department within that period.

5-35 2. Each claim must be in writing and must state the specific

5-36 grounds upon which the claim is founded.

5-37 3. Failure to file a claim within the time prescribed in this

5-38 chapter constitutes a waiver of any demand against the State on

5-39 account of overpayment.

5-40 4. Within 30 days after rejecting any claim in whole or in

5-41 part, the Department shall serve notice of its action on the

5-42 claimant in the manner prescribed for service of notice of a

5-43 deficiency determination.

5-44 Sec. 18. 1. Except as otherwise provided in this section and

5-45 NRS 360.320, interest must be paid upon any overpayment of any

6-1 amount of the tax imposed by this chapter at the rate of 0.50

6-2 percent per month, or fraction thereof, from the last day of the

6-3 calendar month following the calendar quarter for which the

6-4 overpayment was made. No refund or credit may be made of any

6-5 interest imposed upon the person or financial institution making

6-6 the overpayment with respect to the amount being refunded or

6-7 credited.

6-8 2. The interest must be paid:

6-9 (a) In the case of a refund, to the last day of the calendar

6-10 month following the date upon which the person making the

6-11 overpayment, if he has not already filed a claim, is notified by

6-12 the Department that a claim may be filed or the date upon which

6-13 the claim is certified to the State Board of Examiners, whichever is

6-14 earlier.

6-15 (b) In the case of a credit, to the same date as that to which

6-16 interest is computed on the tax or amount against which the credit

6-17 is applied.

6-18 3. If the Department determines that any overpayment has

6-19 been made intentionally or by reason of carelessness, it shall not

6-20 allow any interest on the overpayment.

6-21 Sec. 19. 1. No injunction, writ of mandate or other legal or

6-22 equitable process may issue in any suit, action or proceeding in

6-23 any court against this state or against any officer of the State to

6-24 prevent or enjoin the collection under this chapter of the tax

6-25 imposed by this chapter or any amount of tax, penalty or interest

6-26 required to be collected.

6-27 2. No suit or proceeding may be maintained in any court for

6-28 the recovery of any amount alleged to have been erroneously or

6-29 illegally determined or collected unless a claim for refund or credit

6-30 has been filed.

6-31 Sec. 20. 1. Within 90 days after a final decision upon a

6-32 claim filed pursuant to this chapter is rendered by the

6-33 Commission, the claimant may bring an action against the

6-34 Department on the grounds set forth in the claim in a court of

6-35 competent jurisdiction in Carson City, the county of this state

6-36 where the claimant resides or maintains his principal place of

6-37 business or a county in which any relevant proceedings were

6-38 conducted by the Department, for the recovery of the whole or any

6-39 part of the amount with respect to which the claim has been

6-40 disallowed.

6-41 2. Failure to bring an action within the time specified

6-42 constitutes a waiver of any demand against the State on account of

6-43 alleged overpayments.

6-44 Sec. 21. 1. If the Department fails to mail notice of action

6-45 on a claim within 6 months after the claim is filed, the claimant

7-1 may consider the claim disallowed and file an appeal with the

7-2 Commission within the 30 days after the last day of the 6-month

7-3 period. If the claimant is aggrieved by the decision of the

7-4 Commission rendered on appeal, he may, within 90 days after the

7-5 decision is rendered, bring an action against the Department on

7-6 the grounds set forth in the claim for the recovery of the whole or

7-7 any part of the amount claimed as an overpayment.

7-8 2. If judgment is rendered for the plaintiff, the amount of the

7-9 judgment must first be credited towards any tax due from the

7-10 plaintiff.

7-11 3. The balance of the judgment must be refunded to the

7-12 plaintiff.

7-13 Sec. 22. In any judgment, interest must be allowed at the

7-14 rate of 6 percent per annum upon the amount found to have been

7-15 illegally collected from the date of payment of the amount to the

7-16 date of allowance of credit on account of the judgment, or to a

7-17 date preceding the date of the refund warrant by not more than 30

7-18 days. The date must be determined by the Department.

7-19 Sec. 23. A judgment may not be rendered in favor of the

7-20 plaintiff in any action brought against the Department to recover

7-21 any amount paid when the action is brought by or in the name of

7-22 an assignee of the financial institution paying the amount or by

7-23 any person other than the person or financial institution which

7-24 paid the amount.

7-25 Sec. 24. 1. The Department may recover a refund or any

7-26 part thereof which is erroneously made and any credit or part

7-27 thereof which is erroneously allowed in an action brought in a

7-28 court of competent jurisdiction in Carson City or Clark County in

7-29 the name of the State of Nevada.

7-30 2. The action must be tried in Carson City or Clark County

7-31 unless the court, with the consent of the Attorney General, orders

7-32 a change of place of trial.

7-33 3. The Attorney General shall prosecute the action, and the

7-34 provisions of NRS, the Nevada Rules of Civil Procedure and the

7-35 Nevada Rules of Appellate Procedure relating to service of

7-36 summons, pleadings, proofs, trials and appeals are applicable to

7-37 the proceedings.

7-38 Sec. 25. 1. If any amount in excess of $25 has been

7-39 illegally determined, either by the person or financial institution

7-40 filing the return or by the Department, the Department shall

7-41 certify this fact to the State Board of Examiners, and the latter

7-42 shall authorize the cancellation of the amount upon the records of

7-43 the Department.

7-44 2. If an amount not exceeding $25 has been illegally

7-45 determined, either by the person or financial institution filing a

8-1 return or by the Department, the Department, without certifying

8-2 this fact to the State Board of Examiners, shall authorize the

8-3 cancellation of the amount upon the records of the Department.

8-4 Sec. 26. 1. A person shall not:

8-5 (a) Make, cause to be made or permit to be made any false or

8-6 fraudulent return or declaration or false statement in any return

8-7 or declaration, with intent to defraud the State or to evade

8-8 payment of the tax or any part of the tax imposed by this chapter.

8-9 (b) Make, cause to be made or permit to be made any false

8-10 entry in books, records or accounts with intent to defraud the State

8-11 or to evade the payment of the tax or any part of the tax imposed

8-12 by this chapter.

8-13 (c) Keep, cause to be kept or permit to be kept more than one

8-14 set of books, records or accounts with intent to defraud the State

8-15 or to evade the payment of the tax or any part of the tax imposed

8-16 by this chapter.

8-17 2. Any person who violates the provisions of subsection 1 is

8-18 guilty of a gross misdemeanor.

8-19 Sec. 27. NRS 360.300 is hereby amended to read as follows:

8-20 360.300 1. If a person fails to file a return or the Department

8-21 is not satisfied with the return or returns of any tax, contribution or

8-22 premium or amount of tax, contribution or premium required to be

8-23 paid to the State by any person, in accordance with the applicable

8-24 provisions of this chapter, chapter 362, 364A, 369, 370, 372, 372A,

8-25 374, 377, 377A or 444A of NRS, NRS 482.313, or chapter 585 or

8-26 680B of NRS or sections 2 to 26, inclusive, of this act, as

8-27 administered or audited by the Department, it may compute and

8-28 determine the amount required to be paid upon the basis of:

8-29 (a) The facts contained in the return;

8-30 (b) Any information within its possession or that may come into

8-31 its possession; or

8-32 (c) Reasonable estimates of the amount.

8-33 2. One or more deficiency determinations may be made with

8-34 respect to the amount due for one or for more than one period.

8-35 3. In making its determination of the amount required to be

8-36 paid, the Department shall impose interest on the amount of tax

8-37 determined to be due, calculated at the rate and in the manner set

8-38 forth in NRS 360.417, unless a different rate of interest is

8-39 specifically provided by statute.

8-40 4. The Department shall impose a penalty of 10 percent in

8-41 addition to the amount of a determination that is made in the case of

8-42 the failure of a person to file a return with the Department.

8-43 5. When a business is discontinued, a determination may be

8-44 made at any time thereafter within the time prescribed in NRS

8-45 360.355 as to liability arising out of that business, irrespective of

9-1 whether the determination is issued before the due date of the

9-2 liability.

9-3 Sec. 28. NRS 360.417 is hereby amended to read as follows:

9-4 360.417 Except as otherwise provided in NRS 360.232 and

9-5 360.320, and unless a different penalty or rate of interest is

9-6 specifically provided by statute, any person who fails to pay any tax

9-7 provided for in chapter 362, 364A, 369, 370, 372, 374, 377, 377A,

9-8 444A or 585 of NRS, or sections 2 to 26, inclusive, of this act, or

9-9 the fee provided for in NRS 482.313, to the State or a county within

9-10 the time required, shall pay a penalty of not more than 10 percent

9-11 of the amount of the tax or fee which is owed, as determined by the

9-12 Department, in addition to the tax or fee, plus interest at the rate of 1

9-13 percent per month, or fraction of a month, from the last day of the

9-14 month following the period for which the amount or any portion of

9-15 the amount should have been reported until the date of payment.

9-16 The amount of any penalty imposed must be based on a graduated

9-17 schedule adopted by the Nevada Tax Commission which takes into

9-18 consideration the length of time the tax or fee remained unpaid.

9-19 Sec. 29. NRS 360.419 is hereby amended to read as follows:

9-20 360.419 1. If the Executive Director or a designated hearing

9-21 officer finds that the failure of a person to make a timely return or

9-22 payment of a tax imposed pursuant to NRS 361.320 or [chapter

9-23 361A, 376A, 377 or 377A of NRS, or by] chapter 361A, 362, 364A,

9-24 369, 370, 372, 372A, 374, 375A , [or] 375B , 376A, 377 or 377A of

9-25 NRS, or sections 2 to 26, inclusive, of this act, is the result of

9-26 circumstances beyond his control and occurred despite the exercise

9-27 of ordinary care and without intent, the Department may relieve him

9-28 of all or part of any interest or penalty or both.

9-29 2. A person seeking this relief must file with the Department a

9-30 statement under oath setting forth the facts upon which he bases his

9-31 claim.

9-32 3. The Department shall disclose, upon the request of any

9-33 person:

9-34 (a) The name of the person to whom relief was granted; and

9-35 (b) The amount of the relief.

9-36 4. The Executive Director or a designated hearing officer shall

9-37 act upon the request of a taxpayer seeking relief pursuant to NRS

9-38 361.4835 which is deferred by a county treasurer or county assessor.

9-39 Sec. 30. NRS 360.510 is hereby amended to read as follows:

9-40 360.510 1. If any person is delinquent in the payment of any

9-41 tax or fee administered by the Department or if a determination has

9-42 been made against him which remains unpaid, the Department may:

9-43 (a) Not later than 3 years after the payment became delinquent

9-44 or the determination became final; or

10-1 (b) Not later than 6 years after the last recording of an abstract

10-2 of judgment or of a certificate constituting a lien for tax

10-3 owed,

10-4 give a notice of the delinquency and a demand to transmit

10-5 personally or by registered or certified mail to any person,

10-6 including, without limitation, any officer or department of this state

10-7 or any political subdivision or agency of this state, who has in his

10-8 possession or under his control any credits or other personal

10-9 property belonging to the delinquent, or owing any debts to the

10-10 delinquent or person against whom a determination has been made

10-11 which remains unpaid, or owing any debts to the delinquent or that

10-12 person. In the case of any state officer, department or agency, the

10-13 notice must be given to the officer, department or agency before

10-14 the Department presents the claim of the delinquent taxpayer to the

10-15 State Controller.

10-16 2. A state officer, department or agency which receives such a

10-17 notice may satisfy any debt owed to it by that person before it

10-18 honors the notice of the Department.

10-19 3. After receiving the demand to transmit, the person notified

10-20 by the demand may not transfer or otherwise dispose of the credits,

10-21 other personal property, or debts in his possession or under his

10-22 control at the time he received the notice until the Department

10-23 consents to a transfer or other disposition.

10-24 4. Every person notified by a demand to transmit shall, within

10-25 10 days after receipt of the demand to transmit, inform the

10-26 Department of, and transmit to the Department all such credits,

10-27 other personal property, or debts in his possession, under his control

10-28 or owing by him within the time and in the manner requested by the

10-29 Department. Except as otherwise provided in subsection 5, no

10-30 further notice is required to be served to that person.

10-31 5. If the property of the delinquent taxpayer consists of a series

10-32 of payments owed to him, the person who owes or controls the

10-33 payments shall transmit the payments to the Department until

10-34 otherwise notified by the Department. If the debt of the delinquent

10-35 taxpayer is not paid within 1 year after the Department issued the

10-36 original demand to transmit, the Department shall issue another

10-37 demand to transmit to the person responsible for making the

10-38 payments informing him to continue to transmit payments to the

10-39 Department or that his duty to transmit the payments to

10-40 the Department has ceased.

10-41 6. If the notice of the delinquency seeks to prevent the transfer

10-42 or other disposition of a deposit in a bank or credit union or other

10-43 credits or personal property in the possession or under the control of

10-44 a bank, credit union or other depository institution, the notice must

10-45 be delivered or mailed to any branch or office of the bank, credit

11-1 union or other depository institution at which the deposit is carried

11-2 or at which the credits or personal property is held.

11-3 7. If any person notified by the notice of the delinquency

11-4 makes any transfer or other disposition of the property or debts

11-5 required to be withheld or transmitted, to the extent of the value of

11-6 the property or the amount of the debts thus transferred or paid, he is

11-7 liable to the state for any indebtedness due pursuant to this chapter,

11-8 [or] chapter 362, 364A, 369, 370, 372, 372A, 374, 377, 377A or

11-9 444A of NRS, NRS 482.313[,] or chapter 585 or 680B of NRS or

11-10 sections 2 to 26, inclusive, of this act, from the person with respect

11-11 to whose obligation the notice was given if solely by reason of the

11-12 transfer or other disposition the State is unable to recover the

11-13 indebtedness of the person with respect to whose obligation

11-14 the notice was given.

11-15 Sec. 31. NRS 645B.060 is hereby amended to read as follows:

11-16 645B.060 1. Subject to the administrative control of the

11-17 Director of the Department of Business and Industry, the

11-18 Commissioner shall exercise general supervision and control over

11-19 mortgage brokers doing business in this state.

11-20 2. In addition to the other duties imposed upon him by law, the

11-21 Commissioner shall:

11-22 (a) Adopt any regulations that are necessary to carry out the

11-23 provisions of this chapter, except as to loan brokerage fees.

11-24 (b) Conduct such investigations as may be necessary to

11-25 determine whether any person has violated any provision of this

11-26 chapter, a regulation adopted pursuant to this chapter or an order of

11-27 the Commissioner.

11-28 (c) Conduct an annual examination of each mortgage broker

11-29 doing business in this state. The annual examination must include,

11-30 without limitation, a formal exit review with the mortgage broker.

11-31 The Commissioner shall adopt regulations prescribing:

11-32 (1) Standards for determining the rating of each mortgage

11-33 broker based upon the results of the annual examination; and

11-34 (2) Procedures for resolving any objections made by the

11-35 mortgage broker to the results of the annual examination. The

11-36 results of the annual examination may not be opened to public

11-37 inspection pursuant to NRS 645B.090 until any objections made by

11-38 the mortgage broker have been decided by the Commissioner.

11-39 (d) Conduct such other examinations, periodic or special audits,

11-40 investigations and hearings as may be necessary and proper for the

11-41 efficient administration of the laws of this state regarding mortgage

11-42 brokers and mortgage agents. The Commissioner shall adopt

11-43 regulations specifying the general guidelines that will be followed

11-44 when a periodic or special audit of a mortgage broker is conducted

11-45 pursuant to this chapter.

12-1 (e) Classify as confidential certain records and information

12-2 obtained by the Division when those matters are obtained from a

12-3 governmental agency upon the express condition that they remain

12-4 confidential. This paragraph does not limit examination by [the] :

12-5 (1) The Legislative Auditor[.] ; or

12-6 (2) The Department of Taxation if necessary to carry out

12-7 the provisions of sections 2 to 26, inclusive, of this act.

12-8 (f) Conduct such examinations and investigations as are

12-9 necessary to ensure that mortgage brokers meet the requirements of

12-10 this chapter for obtaining a license, both at the time of the

12-11 application for a license and thereafter on a continuing basis.

12-12 3. For each special audit, investigation or examination, a

12-13 mortgage broker shall pay a fee based on the rate established

12-14 pursuant to NRS 658.101.

12-15 Sec. 32. NRS 645B.670 is hereby amended to read as follows:

12-16 645B.670 Except as otherwise provided in NRS 645B.690:

12-17 1. For each violation committed by an applicant, whether or

12-18 not he is issued a license, the Commissioner may impose upon the

12-19 applicant an administrative fine of not more than $10,000, if the

12-20 applicant:

12-21 (a) Has knowingly made or caused to be made to the

12-22 Commissioner any false representation of material fact;

12-23 (b) Has suppressed or withheld from the Commissioner any

12-24 information which the applicant possesses and which, if submitted

12-25 by him, would have rendered the applicant ineligible to be licensed

12-26 pursuant to the provisions of this chapter; or

12-27 (c) Has violated any provision of this chapter, a regulation

12-28 adopted pursuant to this chapter or an order of the Commissioner in

12-29 completing and filing his application for a license or during the

12-30 course of the investigation of his application for a license.

12-31 2. For each violation committed by a licensee, the

12-32 Commissioner may impose upon the licensee an administrative fine

12-33 of not more than $10,000, may suspend, revoke or place conditions

12-34 upon his license, or may do both, if the licensee, whether or not

12-35 acting as such:

12-36 (a) Is insolvent;

12-37 (b) Is grossly negligent or incompetent in performing any act for

12-38 which he is required to be licensed pursuant to the provisions of this

12-39 chapter;

12-40 (c) Does not conduct his business in accordance with law or has

12-41 violated any provision of this chapter, a regulation adopted pursuant

12-42 to this chapter or an order of the Commissioner;

12-43 (d) Is in such financial condition that he cannot continue in

12-44 business with safety to his customers;

13-1 (e) Has made a material misrepresentation in connection with

13-2 any transaction governed by this chapter;

13-3 (f) Has suppressed or withheld from a client any material facts,

13-4 data or other information relating to any transaction governed by the

13-5 provisions of this chapter which the licensee knew or, by the

13-6 exercise of reasonable diligence, should have known;

13-7 (g) Has knowingly made or caused to be made to the

13-8 Commissioner any false representation of material fact or has

13-9 suppressed or withheld from the Commissioner any information

13-10 which the licensee possesses and which, if submitted by him, would

13-11 have rendered the licensee ineligible to be licensed pursuant to the

13-12 provisions of this chapter;

13-13 (h) Has failed to account to persons interested for all money

13-14 received for a trust account;

13-15 (i) Has refused to permit an examination by the Commissioner

13-16 of his books and affairs or has refused or failed, within a reasonable

13-17 time, to furnish any information or make any report that may be

13-18 required by the Commissioner pursuant to the provisions of this

13-19 chapter or a regulation adopted pursuant to this chapter;

13-20 (j) Has been convicted of, or entered a plea of nolo contendere

13-21 to, a felony or any crime involving fraud, misrepresentation or

13-22 moral turpitude;

13-23 (k) Has refused or failed to pay, within a reasonable time, any

13-24 fees, assessments, costs or expenses that the licensee is required to

13-25 pay pursuant to this chapter or a regulation adopted pursuant to this

13-26 chapter;

13-27 (l) Has failed to satisfy a claim made by a client which has been

13-28 reduced to judgment;

13-29 (m) Has failed to account for or to remit any money of a client

13-30 within a reasonable time after a request for an accounting or

13-31 remittal;

13-32 (n) Has commingled the money or other property of a client

13-33 with his own or has converted the money or property of others to his

13-34 own use;

13-35 (o) Has engaged in any other conduct constituting a deceitful,

13-36 fraudulent or dishonest business practice;

13-37 (p) Has repeatedly violated the policies and procedures of the

13-38 mortgage broker;

13-39 (q) Has failed to exercise reasonable supervision over the

13-40 activities of a mortgage agent as required by NRS 645B.460;

13-41 (r) Has instructed a mortgage agent to commit an act that would

13-42 be cause for the revocation of the license of the mortgage broker,

13-43 whether or not the mortgage agent commits the act;

13-44 (s) Has employed a person as a mortgage agent or authorized a

13-45 person to be associated with the licensee as a mortgage agent at a

14-1 time when the licensee knew or, in light of all the surrounding facts

14-2 and circumstances, reasonably should have known that the person:

14-3 (1) Had been convicted of, or entered a plea of nolo

14-4 contendere to, a felony or any crime involving fraud,

14-5 misrepresentation or moral turpitude; or

14-6 (2) Had a financial services license or registration suspended

14-7 or revoked within the immediately preceding 10 years; [or]

14-8 (t) Has failed to pay the tax imposed pursuant to the provisions

14-9 of sections 2 to 26, inclusive, of this act; or

14-10 (u) Has not conducted verifiable business as a mortgage broker

14-11 for 12 consecutive months, except in the case of a new applicant.

14-12 The Commissioner shall determine whether a mortgage broker is

14-13 conducting business by examining the monthly reports of activity

14-14 submitted by the licensee or by conducting an examination of the

14-15 licensee.

14-16 Sec. 33. NRS 645E.300 is hereby amended to read as follows:

14-17 645E.300 1. Subject to the administrative control of the

14-18 Director of the Department of Business and Industry, the

14-19 Commissioner shall exercise general supervision and control over

14-20 mortgage companies doing business in this state.

14-21 2. In addition to the other duties imposed upon him by law, the

14-22 Commissioner shall:

14-23 (a) Adopt any regulations that are necessary to carry out the

14-24 provisions of this chapter, except as to loan fees.

14-25 (b) Conduct such investigations as may be necessary to

14-26 determine whether any person has violated any provision of this

14-27 chapter, a regulation adopted pursuant to this chapter or an order of

14-28 the Commissioner.

14-29 (c) Conduct an annual examination of each mortgage company

14-30 doing business in this state.

14-31 (d) Conduct such other examinations, periodic or special audits,

14-32 investigations and hearings as may be necessary and proper for the

14-33 efficient administration of the laws of this state regarding mortgage

14-34 companies.

14-35 (e) Classify as confidential certain records and information

14-36 obtained by the Division when those matters are obtained from a

14-37 governmental agency upon the express condition that they remain

14-38 confidential. This paragraph does not limit examination by [the] :

14-39 (1) The Legislative Auditor[.] ; or

14-40 (2) The Department of Taxation if necessary to carry out

14-41 the provisions of sections 2 to 26, inclusive, of this act.

14-42 (f) Conduct such examinations and investigations as are

14-43 necessary to ensure that mortgage companies meet the requirements

14-44 of this chapter for obtaining a license, both at the time of the

14-45 application for a license and thereafter on a continuing basis.

15-1 3. For each special audit, investigation or examination, a

15-2 mortgage company shall pay a fee based on the rate established

15-3 pursuant to NRS 658.101.

15-4 Sec. 34. NRS 645E.670 is hereby amended to read as follows:

15-5 645E.670 1. For each violation committed by an applicant,

15-6 whether or not he is issued a license, the Commissioner may impose

15-7 upon the applicant an administrative fine of not more than $10,000,

15-8 if the applicant:

15-9 (a) Has knowingly made or caused to be made to the

15-10 Commissioner any false representation of material fact;

15-11 (b) Has suppressed or withheld from the Commissioner any

15-12 information which the applicant possesses and which, if submitted

15-13 by him, would have rendered the applicant ineligible to be licensed

15-14 pursuant to the provisions of this chapter; or

15-15 (c) Has violated any provision of this chapter, a regulation

15-16 adopted pursuant to this chapter or an order of the Commissioner in

15-17 completing and filing his application for a license or during the

15-18 course of the investigation of his application for a license.

15-19 2. For each violation committed by a licensee, the

15-20 Commissioner may impose upon the licensee an administrative fine

15-21 of not more than $10,000, may suspend, revoke or place conditions

15-22 upon his license, or may do both, if the licensee, whether or not

15-23 acting as such:

15-24 (a) Is insolvent;

15-25 (b) Is grossly negligent or incompetent in performing any act for

15-26 which he is required to be licensed pursuant to the provisions of this

15-27 chapter;

15-28 (c) Does not conduct his business in accordance with law or has

15-29 violated any provision of this chapter, a regulation adopted pursuant

15-30 to this chapter or an order of the Commissioner;

15-31 (d) Is in such financial condition that he cannot continue in

15-32 business with safety to his customers;

15-33 (e) Has made a material misrepresentation in connection with

15-34 any transaction governed by this chapter;

15-35 (f) Has suppressed or withheld from a client any material facts,

15-36 data or other information relating to any transaction governed by the

15-37 provisions of this chapter which the licensee knew or, by the

15-38 exercise of reasonable diligence, should have known;

15-39 (g) Has knowingly made or caused to be made to the

15-40 Commissioner any false representation of material fact or has

15-41 suppressed or withheld from the Commissioner any information

15-42 which the licensee possesses and which, if submitted by him, would

15-43 have rendered the licensee ineligible to be licensed pursuant to the

15-44 provisions of this chapter;

16-1 (h) Has failed to account to persons interested for all money

16-2 received for a trust account;

16-3 (i) Has refused to permit an examination by the Commissioner

16-4 of his books and affairs or has refused or failed, within a reasonable

16-5 time, to furnish any information or make any report that may be

16-6 required by the Commissioner pursuant to the provisions of this

16-7 chapter or a regulation adopted pursuant to this chapter;

16-8 (j) Has been convicted of, or entered a plea of nolo contendere

16-9 to, a felony or any crime involving fraud, misrepresentation or

16-10 moral turpitude;

16-11 (k) Has refused or failed to pay, within a reasonable time, any

16-12 fees, assessments, costs or expenses that the licensee is required to

16-13 pay pursuant to this chapter or a regulation adopted pursuant to this

16-14 chapter;

16-15 (l) Has failed to pay the tax imposed pursuant to the provisions

16-16 of sections 2 to 26, inclusive, of this act;

16-17 (m) Has failed to satisfy a claim made by a client which has

16-18 been reduced to judgment;

16-19 [(m)] (n) Has failed to account for or to remit any money of a

16-20 client within a reasonable time after a request for an accounting or

16-21 remittal;

16-22 [(n)] (o) Has commingled the money or other property of a

16-23 client with his own or has converted the money or property of others

16-24 to his own use; or

16-25 [(o)] (p) Has engaged in any other conduct constituting a

16-26 deceitful, fraudulent or dishonest business practice.

16-27 Sec. 35. NRS 649.395 is hereby amended to read as follows:

16-28 649.395 1. The Commissioner may impose an administrative

16-29 fine, not to exceed $500 for each violation, or suspend or revoke the

16-30 license of a collection agency, or both impose a fine and suspend or

16-31 revoke the license, by an order made in writing and filed in his

16-32 office and served on the licensee by registered or certified mail at

16-33 the address shown in the records of the Commissioner, if:

16-34 (a) The licensee is adjudged liable in any court of law for breach

16-35 of any bond given under the provisions of this chapter; [or]

16-36 (b) After notice and hearing, the licensee is found guilty of:

16-37 (1) Fraud or misrepresentation;

16-38 (2) An act or omission inconsistent with the faithful

16-39 discharge of his duties and obligations; or

16-40 (3) A violation of any provision of this chapter[.] ; or

16-41 (c) The Commissioner determines that the licensee has failed

16-42 to pay the tax imposed pursuant to the provisions of sections 2 to

16-43 26, inclusive, of this act.

16-44 2. The Commissioner may suspend or revoke the license of a

16-45 collection agency without notice and hearing if:

17-1 (a) The suspension or revocation is necessary for the immediate

17-2 protection of the public; and

17-3 (b) The licensee is afforded a hearing to contest the suspension

17-4 or revocation within 20 days after the written order of suspension or

17-5 revocation is served upon the licensee.

17-6 3. Upon revocation of his license, all rights of the licensee

17-7 under this chapter terminate, and no application may be received

17-8 from any person whose license has once been revoked.

17-9 Sec. 36. NRS 658.151 is hereby amended to read as follows:

17-10 658.151 1. The Commissioner may forthwith take possession

17-11 of the business and property of any depository institution to which

17-12 this title or title 56 of NRS applies when it appears that the

17-13 depository institution:

17-14 (a) Has violated its charter or any laws applicable thereto.

17-15 (b) Is conducting its business in an unauthorized or unsafe

17-16 manner.

17-17 (c) Is in an unsafe or unsound condition to transact its business.

17-18 (d) Has an impairment of its stockholders’ or members’ equity.

17-19 (e) Has refused to pay its depositors in accordance with the

17-20 terms on which such deposits were received, or has refused to pay

17-21 its holders of certificates of indebtedness or investment in

17-22 accordance with the terms upon which those certificates of

17-23 indebtedness or investment were sold.

17-24 (f) Has become otherwise insolvent.

17-25 (g) Has neglected or refused to comply with the terms of a

17-26 lawful order of the Commissioner.

17-27 (h) Has refused, upon proper demand, to submit its records,

17-28 affairs and concerns for inspection and examination of an appointed

17-29 or authorized examiner of the Commissioner.

17-30 (i) Has made a voluntary assignment of its assets to trustees.

17-31 (j) Has failed to pay the tax imposed pursuant to the provisions

17-32 of sections 2 to 26, inclusive, of this act.

17-33 2. The Commissioner also may forthwith take possession of the

17-34 business and property of any depository institution to which this title

17-35 or title 56 of NRS applies when it appears that the officers of the

17-36 depository institution have refused to be examined upon oath

17-37 regarding its affairs.

17-38 Sec. 37. NRS 665.133 is hereby amended to read as follows:

17-39 665.133 1. The records and information described in NRS

17-40 665.130 may be disclosed to:

17-41 (a) An agency of the Federal Government or of another state

17-42 which regulates the financial institution which is the subject of the

17-43 records or information;

17-44 (b) The Director of the Department of Business and Industry for

17-45 his confidential use;

18-1 (c) The State Board of Finance for its confidential use, if the

18-2 report or other information is necessary for the State Board of

18-3 Finance to perform its duties under this title;

18-4 (d) The Department of Taxation for its use in carrying out the

18-5 provisions of sections 2 to 26, inclusive, of this act;

18-6 (e) An entity which insures or guarantees deposits;

18-7 [(e)] (f) A public officer authorized to investigate criminal

18-8 charges in connection with the affairs of the depository institution;

18-9 [(f)] (g) A person preparing a proposal for merging with or

18-10 acquiring an institution or holding company, but only after notice of

18-11 the disclosure has been given to the institution or holding company;

18-12 [(g)] (h) Any person to whom the subject of the report has

18-13 authorized the disclosure;

18-14 [(h)] (i) Any other person if the Commissioner determines, after

18-15 notice and opportunity for hearing, that disclosure is in the public

18-16 interest and outweighs any potential harm to the depository

18-17 institution and its stockholders, members, depositors and creditors;

18-18 and

18-19 [(i)] (j) Any court in a proceeding initiated by the

18-20 Commissioner concerning the financial institution.

18-21 2. All the reports made available pursuant to this section

18-22 remain the property of the Division of Financial Institutions, and no

18-23 person, agency or authority to whom the reports are made available,

18-24 or any officer, director or employee thereof, may disclose any of the

18-25 reports or any information contained therein, except in published

18-26 statistical material that does not disclose the affairs of any natural

18-27 person or corporation.

18-28 Sec. 38. NRS 673.484 is hereby amended to read as follows:

18-29 673.484 The Commissioner may after notice and hearing

18-30 suspend or revoke the charter of any association for [repeated] :

18-31 1. Repeated failure to abide by the provisions of this chapter or

18-32 the regulations adopted thereunder.

18-33 2. Failure to pay the tax imposed pursuant to the provisions

18-34 of sections 2 to 26, inclusive, of this act.

18-35 Sec. 39. NRS 675.440 is hereby amended to read as follows:

18-36 675.440 1. If the Commissioner has reason to believe that

18-37 grounds for revocation or suspension of a license exist, he shall give

18-38 20 days’ written notice to the licensee stating the contemplated

18-39 action and, in general, the grounds therefor and set a date for a

18-40 hearing.

18-41 2. At the conclusion of a hearing, the Commissioner shall:

18-42 (a) Enter a written order either dismissing the charges, revoking

18-43 the license, or suspending the license for a period of not more than

18-44 60 days, which period must include any prior temporary suspension.

19-1 A copy of the order must be sent by registered or certified mail to

19-2 the licensee.

19-3 (b) Impose upon the licensee a fine of $500 for each violation by

19-4 the licensee of any provision of this chapter or any lawful regulation

19-5 adopted under it.

19-6 (c) If a fine is imposed pursuant to this section, enter such order

19-7 as is necessary to recover the costs of the proceeding, including his

19-8 investigative costs and attorney’s fees.

19-9 3. The grounds for revocation or suspension of a license are

19-10 that:

19-11 (a) The licensee has failed to pay the annual license fee;

19-12 (b) The licensee, either knowingly or without any exercise of

19-13 due care to prevent it, has violated any provision of this chapter or

19-14 any lawful regulation adopted under it;

19-15 (c) The licensee has failed to pay the tax imposed pursuant to

19-16 the provisions of sections 2 to 26, inclusive, of this act;

19-17 (d) Any fact or condition exists which would have justified the

19-18 Commissioner in denying the licensee’s original application for a

19-19 license hereunder; or

19-20 [(d)] (e) The applicant failed to open an office for the conduct

19-21 of the business authorized under this chapter within 120 days from

19-22 the date the license was issued, or has failed to remain open for the

19-23 conduct of the business for a period of 120 days without good cause

19-24 therefor.

19-25 4. Any revocation or suspension applies only to the license

19-26 granted to a person for the particular office for which grounds for

19-27 revocation or suspension exist.

19-28 5. An order suspending or revoking a license becomes effective

19-29 5 days after being entered unless the order specifies otherwise or a

19-30 stay is granted.

19-31 Sec. 40. NRS 676.290 is hereby amended to read as follows:

19-32 676.290 1. The Commissioner may, pursuant to the

19-33 procedure provided in this chapter, deny, suspend or revoke any

19-34 license for which application has been made or which has been

19-35 issued under the provisions of this chapter if he finds, as to the

19-36 licensee, its associates, directors or officers, grounds for action.

19-37 2. Any one of the following grounds may provide the requisite

19-38 grounds for denial, suspension or revocation:

19-39 (a) Conviction of a felony or of a misdemeanor involving moral

19-40 turpitude.

19-41 (b) Violation of any of the provisions of this chapter or

19-42 regulations of the Commissioner.

19-43 (c) Fraud or deceit in procuring the issuance of the license.

19-44 (d) Continuous course of unfair conduct.

20-1 (e) Insolvency, filing in bankruptcy, receivership or assigning

20-2 for the benefit of creditors by any licensee or applicant for a license

20-3 under this chapter.

20-4 (f) Failure to pay the tax imposed pursuant to the provisions of

20-5 sections 2 to 26, inclusive, of this act.

20-6 (g) Failure to pay the fee for renewal or reinstatement of a

20-7 license.

20-8 3. The Commissioner shall, after notice and hearing, impose

20-9 upon the licensee a fine of $500 for each violation by the licensee of

20-10 any of the provisions of this chapter or regulations of the

20-11 Commissioner. If a fine is imposed pursuant to this section, the

20-12 costs of the proceeding, including investigative costs and attorney’s

20-13 fees, may be recovered by the Commissioner.

20-14 Sec. 41. NRS 677.510 is hereby amended to read as follows:

20-15 677.510 1. If the Commissioner has reason to believe that

20-16 grounds for revocation or suspension of a license exist, he shall give

20-17 20 days’ written notice to the licensee stating the contemplated

20-18 action and, in general, the grounds therefor and set a date for a

20-19 hearing.

20-20 2. At the conclusion of a hearing, the Commissioner shall:

20-21 (a) Enter a written order either dismissing the charges, or

20-22 revoking the license, or suspending the license for a period of not

20-23 more than 60 days, which period must include any prior temporary

20-24 suspension. A copy of the order must be sent by registered or

20-25 certified mail to the licensee.

20-26 (b) Impose upon the licensee a fine of $500 for each violation by

20-27 the licensee of any provision of this chapter or any lawful regulation

20-28 adopted pursuant thereto.

20-29 (c) If a fine is imposed pursuant to this section, enter such order

20-30 as is necessary to recover the costs of the proceeding, including his

20-31 investigative costs and attorney’s fees.

20-32 3. The grounds for revocation or suspension of a license are

20-33 that:

20-34 (a) The licensee has failed to pay the annual license fee;

20-35 (b) The licensee, either knowingly or without any exercise of

20-36 due care to prevent it, has violated any provision of this chapter, or

20-37 any lawful regulation adopted pursuant thereto;

20-38 (c) The licensee has failed to pay the tax imposed pursuant to

20-39 the provisions of sections 2 to 26, inclusive, of this act;

20-40 (d) Any fact or condition exists which would have justified the

20-41 Commissioner in denying the licensee’s original application for a

20-42 license hereunder; or

20-43 [(d)] (e) The applicant failed to open an office for the conduct

20-44 of the business authorized under this chapter within 120 days from

20-45 the date the license was issued, or has failed to remain open for the

21-1 conduct of the business for a period of 120 days without good cause

21-2 therefor.

21-3 4. Any revocation or suspension applies only to the license

21-4 granted to a person for the particular office for which grounds for

21-5 revocation or suspension exist.

21-6 5. An order suspending or revoking a license becomes effective

21-7 5 days after being entered unless the order specifies otherwise or a

21-8 stay is granted.

21-9 Sec. 42. NRS 680B.037 is hereby amended to read as follows:

21-10 680B.037 Payment by an insurer of the tax imposed by NRS

21-11 680B.027 is in lieu of all taxes imposed by the State or any city,

21-12 town or county upon premiums or upon income of insurers and of

21-13 franchise, privilege or other taxes measured by income of the insurer

21-14 [.] , except the excise tax on the privilege of doing business in this

21-15 state imposed pursuant to sections 2 to 26, inclusive, of this act.

21-16 Sec. 43. NRS 687A.130 is hereby amended to read as follows:

21-17 687A.130 The Association is exempt from payment of all fees

21-18 and all taxes levied by this state or any of its subdivisions, except

21-19 [taxes] :

21-20 1. Taxes levied on real or personal property.

21-21 2. The excise tax on the privilege of doing business in this

21-22 state imposed pursuant to sections 2 to 26, inclusive, of this act.

21-23 Sec. 44. NRS 694C.450 is hereby amended to read as follows:

21-24 694C.450 1. Except as otherwise provided in this section, a

21-25 captive insurer shall pay to the Division, not later than March 1 of

21-26 each year, a tax at the rate of:

21-27 (a) Two-fifths of 1 percent on the first $20,000,000 of its net

21-28 direct premiums;

21-29 (b) One-fifth of 1 percent on the next $20,000,000 of its net

21-30 direct premiums; and

21-31 (c) Seventy-five thousandths of 1 percent on each additional

21-32 dollar of its net direct premiums.

21-33 2. Except as otherwise provided in this section, a captive

21-34 insurer shall pay to the Division, not later than March 1 of each

21-35 year, a tax at a rate of:

21-36 (a) Two hundred twenty-five thousandths of 1 percent on the

21-37 first $20,000,000 of revenue from assumed reinsurance premiums;

21-38 (b) One hundred fifty thousandths of 1 percent on the next

21-39 $20,000,000 of revenue from assumed reinsurance premiums; and

21-40 (c) Twenty-five thousandths of 1 percent on each additional

21-41 dollar of revenue from assumed reinsurance premiums.

21-42 The tax on reinsurance premiums pursuant to this subsection must

21-43 not be levied on premiums for risks or portions of risks which are

21-44 subject to taxation on a direct basis pursuant to subsection 1. A

21-45 captive insurer is not required to pay any reinsurance premium tax

22-1 pursuant to this subsection on revenue related to the receipt of assets

22-2 by the captive insurer in exchange for the assumption of loss

22-3 reserves and other liabilities of another insurer that is under

22-4 common ownership and control with the captive insurer, if the

22-5 transaction is part of a plan to discontinue the operation of the other

22-6 insurer and the intent of the parties to the transaction is to renew or

22-7 maintain such business with the captive insurer.

22-8 3. If the sum of the taxes to be paid by a captive insurer

22-9 calculated pursuant to subsections 1 and 2 is less than $5,000 in any

22-10 given year, the captive insurer shall pay a tax of $5,000 for that

22-11 year.

22-12 4. Two or more captive insurers under common ownership and

22-13 control must be taxed as if they were a single captive insurer.

22-14 5. Notwithstanding any specific statute to the contrary and

22-15 except as otherwise provided in this subsection, the tax provided for

22-16 by this section constitutes all the taxes collectible pursuant to the

22-17 laws of this state from a captive insurer, and no occupation tax or

22-18 other taxes may be levied or collected from a captive insurer by this

22-19 state or by any county, city or municipality within this state, except

22-20 for [ad] :

22-21 (a) Ad valorem taxes on real or personal property located in this

22-22 state used in the production of income by the captive insurer[.] ;

22-23 and

22-24 (b) The excise tax on the privilege of doing business in this

22-25 state imposed pursuant to sections 2 to 26, inclusive, of this act.

22-26 6. Ten percent of the revenues collected from the tax imposed

22-27 pursuant to this section must be deposited with the State Treasurer

22-28 for credit to the Account for the Regulation and Supervision of

22-29 Captive Insurers created pursuant to NRS 694C.460. The remaining

22-30 90 percent of the revenues collected must be deposited with the

22-31 State Treasurer for credit to the State General Fund.

22-32 7. As used in this section, unless the context otherwise

22-33 requires:

22-34 (a) “Common ownership and control” means:

22-35 (1) In the case of a stock insurer, the direct or indirect

22-36 ownership of 80 percent or more of the outstanding voting stock of

22-37 two or more corporations by the same member or members.

22-38 (2) In the case of a mutual insurer, the direct or indirect

22-39 ownership of 80 percent or more of the surplus and the voting power

22-40 of two or more corporations by the same member or members.

22-41 (b) “Net direct premiums” means the direct premiums collected

22-42 or contracted for on policies or contracts of insurance written by a

22-43 captive insurer during the preceding calendar year, less the amounts

22-44 paid to policyholders as return premiums, including dividends on

23-1 unabsorbed premiums or premium deposits returned or credited to

23-2 policyholders.

23-3 Sec. 45. NRS 695A.550 is hereby amended to read as follows:

23-4 695A.550 Every society organized or licensed under this

23-5 chapter is hereby declared to be a charitable and benevolent

23-6 institution, and is exempt from every state, county, district,

23-7 municipal and school tax other than [taxes] :

23-8 1. Taxes on real property and office equipment[.] ; and

23-9 2. The excise tax on the privilege of doing business in this

23-10 state imposed pursuant to sections 2 to 26, inclusive, of this act.

23-11 Sec. 46. This act becomes effective upon passage and approval

23-12 for the purpose of adopting regulations and performing any other

23-13 preparatory administrative tasks that are necessary to carry out the

23-14 provisions of this act and on January 1, 2004, for all other purposes.

23-15 H