Senate Bill No. 473–Committee on Taxation
CHAPTER..........
AN ACT relating to economic development; making various changes to the provisions governing the abatement of taxes for new or expanded businesses; extending the prospective expiration of certain amendments to those provisions; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. NRS 360.750 is hereby amended to read as follows:
360.750 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 of one or more of the taxes
imposed on the new or expanded business pursuant to chapter 361,
364A or 374 of NRS.
2. The Commission on Economic Development shall approve
an application for a partial abatement if the Commission makes the
following determinations:
(a) The business is consistent with:
(1) The state plan for industrial development and
diversification that is developed by the Commission pursuant to
NRS 231.067; and
(2) Any guidelines adopted pursuant to the state plan.
(b) The applicant has executed an agreement with the
Commission which states that the business will, after the date on
which a certificate of eligibility for the abatement is issued pursuant
to subsection 5, continue in operation in this state for a period
specified by the Commission, which must be at least 5 years, and
will continue to meet the eligibility requirements set forth in this
subsection. The agreement must bind the successors in interest of
the business for the specified period.
(c) 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.
(d) Except as otherwise provided in NRS 361.0687, if the
business is a new business in a county whose population is 100,000
or more or a city whose population is 60,000 or more, the business
meets at least two of the following requirements:
(1) The business will have 75 or more full-time employees
on the payroll of the business by the fourth quarter that it is in
operation.
(2) Establishing the business will require the business to
make a capital investment of at least $1,000,000 in this state.
(3) The average hourly wage that will be paid by the new
business to its employees in this state is at least 100 percent of the
average statewide hourly wage as established by the Employment
Security Division of the Department of Employment, Training and
Rehabilitation on July 1 of each fiscal year and:
(I) The business will provide a health insurance plan for
all employees that includes an option for health insurance coverage
for dependents of the employees; and
(II) 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 by
regulation pursuant to subsection 9.
(e) Except as otherwise provided in NRS 361.0687, if the
business is a new business in a county whose population is less than
100,000 or a city whose population is less than 60,000, the business
meets at least two of the following requirements:
(1) The business will have [25] 15 or more full-time
employees on the payroll of the business by the fourth quarter that it
is in operation.
(2) Establishing the business will require the business to
make a capital investment of at least $250,000 in this state.
(3) The average hourly wage that will be paid by the new
business to its employees in this state is at least 100 percent of the
average statewide hourly wage as established by the Employment
Security Division of the Department of Employment, Training and
Rehabilitation on July 1 of each fiscal year and:
(I) The business will provide a health insurance plan for
all employees that includes an option for health insurance coverage
for dependents of the employees; and
(II) 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 by
regulation pursuant to subsection 9.
(f) If the business is an existing business, the business meets at
least two of the following requirements:
(1) The business will increase the number of employees on
its payroll by 10 percent more than it employed in the immediately
preceding fiscal year or by six employees, whichever is greater.
(2) The business will expand by making a capital investment
in this state in an amount equal to at least 20 percent of the value of
the tangible property possessed by the business in the immediately
preceding fiscal year. The determination of the value of the tangible
property possessed by the business in the immediately preceding
fiscal year must be made by the:
(I) County assessor of the county in which the business
will expand, if the business is locally assessed; or
(II) Department, if the business is centrally assessed.
(3) The average hourly wage that will be paid by the existing
business to its new employees in this state is at least 100 percent of
the average statewide hourly wage as established by the
Employment Security Division of the Department of Employment,
Training and Rehabilitation on July 1 of each fiscal year and:
(I) The business will provide a health insurance plan for
all new employees that includes an option for health insurance
coverage for dependents of the employees; and
(II) The cost to the business for the benefits the business
provides to its new employees in this state will meet the minimum
requirements for benefits established by the Commission by
regulation pursuant to subsection 9.
(g) In lieu of meeting the requirements of paragraph (d), (e) or
(f), if the business furthers the development and refinement of
intellectual property, a patent or a copyright into a commercial
product, the business meets at least two of the following
requirements:
(1) The business will have 10 or more full-time employees
on the payroll of the business by the fourth quarter that it is in
operation.
(2) Establishing the business will require the business to
make a capital investment of at least $500,000 in this state.
(3) The average hourly wage that will be paid by the new
business to its employees in this state is at least 100 percent of the
average statewide hourly wage as established by the Employment
Security Division of the Department of Employment, Training and
Rehabilitation on July 1 of each fiscal year and:
(I) The business will provide a health insurance plan for
all employees that includes an option for health insurance
coverage for dependents of the employees; and
(II) The cost to the business for the benefits the business
provides to its employees in this state will meet with minimum
requirements established by the Commission by regulation
pursuant to subsection 9.
3. Notwithstanding the provisions of subsection 2, the
Commission on Economic Development may:
(a) Approve an application for a partial abatement by a business
that does not meet the requirements set forth in paragraph (d), (e) ,
[or] (f) or (g) of subsection 2;
(b) Make the requirements set forth in paragraph (d), (e) , [or]
(f) or (g) of subsection 2 more stringent; or
(c) Add additional requirements that a business must meet to
qualify for a partial abatement,
if the Commission determines that such action is necessary.
4. If a person submits an application to the Commission on
Economic Development pursuant to subsection 1, the Commission
shall provide notice to the governing body of the county and the city
or town, if any, in which the person intends to locate or expand a
business. The notice required pursuant to this subsection must set
forth the date, time and location of the hearing at which the
Commission will consider the application.
5. If the Commission on Economic Development approves an
application for a partial abatement, the Commission shall
immediately forward a certificate of eligibility for the abatement to:
(a) The Department;
(b) The Nevada Tax Commission; and
(c) If the partial abatement is from the property tax imposed
pursuant to chapter 361 of NRS, the county treasurer.
6. An applicant for a partial abatement pursuant to this section
or an existing business whose partial abatement is in effect shall,
upon the request of the Executive Director of the Commission on
Economic Development, furnish the Executive Director with copies
of all records necessary to verify that the applicant meets the
requirements of subsection 2.
7. If a business whose partial abatement has been approved
pursuant to this section and is in effect ceases:
(a) To meet the requirements set forth in subsection 2; or
(b) Operation before the time specified in the agreement
described in paragraph (b) of subsection 2,
the business shall repay to the Department or, if the partial
abatement was from the property tax imposed pursuant to chapter
361 of NRS, to the county treasurer, the amount of the exemption
that was allowed pursuant to this section before the failure of the
business to comply unless the Nevada Tax Commission determines
that the business has substantially complied with the requirements of
this section. Except as otherwise provided in NRS 360.232 and
360.320, the business shall, in addition to the amount of the
exemption required to be paid pursuant to this subsection, 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 partial abatement not been approved
until the date of 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 354.6113 or 354.6115;
and
(b) May use the money deposited pursuant to paragraph (a) only
for the purposes authorized by NRS 354.6113 and 354.6115.
9. The Commission on Economic Development:
(a) Shall adopt regulations relating to:
(1) The minimum level of benefits that a business must
provide to its employees if the business is going to use benefits paid
to employees as a basis to qualify for a partial abatement; and
(2) The notice that must be provided pursuant to
subsection 4.
(b) May adopt such other regulations as the Commission on
Economic Development determines to be necessary to carry out the
provisions of this section.
10. The Nevada Tax Commission:
(a) Shall adopt regulations regarding:
(1) The capital investment that a new business must make to
meet the requirement set forth in paragraph (d) , [or] (e) or (g) of
subsection 2; and
(2) Any security that a business is required to post to qualify
for a partial abatement pursuant to this section.
(b) May adopt such other regulations as the Nevada Tax
Commission determines to be necessary to carry out the provisions
of 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. 2. NRS 361.0687 is hereby amended to read as follows:
361.0687 1. A person who intends to locate or expand a
business in this state may, pursuant to NRS 360.750, apply to the
Commission on Economic Development for a partial abatement
from the taxes imposed by this chapter.
2. For a business to qualify pursuant to NRS 360.750 for a
partial abatement from the taxes imposed by this chapter, the
Commission on Economic Development must determine that, in
addition to meeting the other requirements set forth in subsection 2
of that section:
(a) If the business is a new business in a county whose
population is 100,000 or more or a city whose population is 60,000
or more:
(1) The business will make a capital investment in the county
of at least $50,000,000 if the business is an industrial or
manufacturing business or at least [$5,000,000] $2,000,000 if the
business is not an industrial or manufacturing business; and
(2) The average hourly wage that will be paid by the new
business to its employees in this state is at least 100 percent of the
average statewide hourly wage as established by the Employment
Security Division of the Department of Employment, Training and
Rehabilitation on July 1 of each fiscal year.
(b) If the business is a new business in a county whose
population is less than 100,000 or a city whose population is less
than 60,000:
(1) The business will make a capital investment in the county
of at least [$5,000,000 if the business is an industrial or
manufacturing business or at least $500,000 if the business is not an
industrial or manufacturing business;] $500,000; and
(2) The average hourly wage that will be paid by the new
business to its employees in this state is at least 100 percent of the
average statewide hourly wage as established by the Employment
Security Division of the Department of Employment, Training and
Rehabilitation on July 1 of each fiscal year.
3. Except as otherwise provided in NRS 361.0685 and
subsection 4, if a partial abatement from the taxes imposed by this
chapter is approved by the Commission on Economic Development
pursuant to NRS 360.750:
(a) The partial abatement must:
(1) Be for a duration of at least 1 year but not more than 10
years;
(2) Not exceed 50 percent of the taxes on personal property
payable by a business each year pursuant to this chapter; and
(3) Be administered and carried out in the manner set forth in
NRS 360.750.
(b) The Executive Director of the Commission on Economic
Development shall notify the county assessor of the county in which
the business is located of the approval of the partial abatement,
including, without limitation, the duration and percentage of the
partial abatement that the Commission granted. The Executive
Director shall, on or before April 15 of each year, advise the county
assessor of each county in which a business qualifies for a partial
abatement during the current fiscal year as to whether the business is
still eligible for the partial abatement in the next succeeding fiscal
year.
4. If a partial abatement from the taxes imposed by this chapter
is approved by the Commission on Economic Development
pursuant to NRS 360.750 for a facility for the generation of
electricity from renewable energy[:] or a facility for the production
of an energy storage device:
(a) The partial abatement must be:
(1) For a duration of 10 years;
(2) Equal to 50 percent of the taxes on real and personal
property payable by the facility each year pursuant to this chapter;
and
(3) Administered and carried out in the manner set forth in
NRS 360.750.
(b) The Executive Director of the Commission on Economic
Development shall:
(1) Notify the county assessor of the county in which the
facility is located of the approval of the partial abatement; and
(2) Advise the county assessor of the county in which the
facility is located as to the dates on which the partial abatement will
begin and end.
5. As used in this section:
(a) “Biomass” means any organic matter that is available on a
renewable basis, including, without limitation:
(1) Agricultural crops and agricultural wastes and residues;
(2) Wood and wood wastes and residues;
(3) Animal wastes;
(4) Municipal wastes; and
(5) Aquatic plants.
(b) “Energy storage device” means a device for use and
storage of electrical energy that alleviates the consumption of
fossil fuel and does not produce fossil fuel emissions.
(c) “Facility for the generation of electricity from renewable
energy” means a facility for the generation of electricity that:
(1) Uses renewable energy as its primary source of energy;
and
(2) Has a generating capacity of at least 10 kilowatts.
The term includes all the machinery and equipment that is used
in the facility to collect and store the renewable energy and to
convert the renewable energy into electricity. The term does not
include a facility that is located on residential property.
[(c)] (d) “Industrial or manufacturing business” does not
include a facility for the generation of electricity from renewable
energy.
[(d)] (e) “Renewable energy” means:
(1) Biomass;
(2) Solar energy; or
(3) Wind.
The term does not include coal, natural gas, oil, propane or any
other fossil fuel, or nuclear energy.
Sec. 3. NRS 364A.170 is hereby amended to read as follows:
364A.170 1. A business that qualifies pursuant to the
provisions of NRS 360.750 is entitled to an exemption of[:
(a) Eighty] 50 percent of the amount of tax otherwise due
pursuant to NRS 364A.140 during the first 4 [quarters of its
operation;
(b) Sixty percent of the amount of tax otherwise due pursuant to
NRS 364A.140 during the second 4 quarters of its operation;
(c) Forty percent of the amount of tax otherwise due pursuant to
NRS 364A.140 during the third 4 quarters of its operation; and
(d) Twenty percent of the amount of tax otherwise due pursuant
to NRS 364A.140 during the fourth 4 quarters] years of its
operation.
2. If a partial abatement from the taxes otherwise due pursuant
to NRS 364A.140 is approved by the Commission on Economic
Development pursuant to NRS 360.750, the partial abatement must
be administered and carried out in the manner set forth in
NRS 360.750.
Sec. 4. NRS 374.357 is hereby amended to read as follows:
374.357 1. A person who maintains a business or intends to
locate a business in this state may, pursuant to NRS 360.750, apply
to the Commission on Economic Development for an abatement
from the taxes imposed by this chapter on the gross receipts from
the sale, and the storage, use or other consumption, of eligible
machinery or equipment for use by a business which has been
approved for an abatement pursuant to NRS 360.750.
2. Except as otherwise provided in subsection 3, if an
application for an abatement is approved pursuant to NRS 360.750:
(a) The taxpayer is eligible for an abatement from the tax
imposed by this chapter for not more than 2 years[.] for machinery
or equipment which is leased or purchased. In the case of
machinery or equipment that is leased, the lessee is the taxpayer
who is eligible for an abatement.
(b) The abatement must be administered and carried out in the
manner set forth in NRS 360.750.
3. If an application for an abatement is approved pursuant to
NRS 360.750 for a facility for the generation of electricity from
renewable energy[:] or a facility for the production of an energy
storage device:
(a) The taxpayer is eligible for an abatement from the tax
imposed by this chapter for 2 years.
(b) The abatement must be administered and carried out in the
manner set forth in NRS 360.750.
4. As used in this section, unless the context otherwise
requires:
(a) “Biomass” means any organic matter that is available on a
renewable basis, including, without limitation:
(1) Agricultural crops and agricultural wastes and residues;
(2) Wood and wood wastes and residues;
(3) Animal wastes;
(4) Municipal wastes; and
(5) Aquatic plants.
(b) “Eligible machinery or equipment” means:
(1) If the business that qualifies for the abatement is not a
facility for the generation of electricity from renewable energy,
machinery or equipment which is leased or purchased and for
which a deduction is authorized pursuant to 26 U.S.C. § 179. The
term does not include:
(I) Buildings or the structural components of buildings;
(II) Equipment used by a public utility;
(III) Equipment used for medical treatment;
(IV) Machinery or equipment used in mining; [or]
(V) Machinery or equipment used in gaming[.] or
(VI) Aircraft.
(2) If the business that qualifies for the abatement is a facility
for the generation of electricity from renewable energy, all the
machinery and equipment that is used in the facility to collect and
store the renewable energy and to convert the renewable energy into
electricity.
(c) “Energy storage device” means a device for use and
storage of electrical energy that alleviates the consumption of
fossil fuel and does not produce fossil fuel emissions.
(d) “Facility for the generation of electricity from renewable
energy” means a facility for the generation of electricity that:
(1) Uses renewable energy as its primary source of energy;
and
(2) Has a generating capacity of at least 10 kilowatts.
The term includes all the machinery and equipment that is used
in the facility to collect and store the renewable energy and to
convert the renewable energy into electricity. The term does not
include a facility that is located on residential property.
[(d)] (e) “Fuel cell” means a device or contrivance which,
through the chemical process of combining ions of hydrogen and
oxygen, produces electricity and water.
[(e)] (f) “Renewable energy” means a source of energy that
occurs naturally or is regenerated naturally, including, without
limitation:
(1) Biomass;
(2) Fuel cells;
(3) Geothermal energy;
(4) Solar energy;
(5) Waterpower; and
(6) Wind.
The term does not include coal, natural gas, oil, propane or any
other fossil fuel, or nuclear energy.
Sec. 5. Section 9 of chapter 335, Statutes of Nevada 2001, at
page 1585, is hereby amended to read as follows:
Sec. 9. 1. This section and sections 1, 2 and 4 to 8,
inclusive, of this act become effective on July 1, 2001.
2. Sections 2 and 5 of this act expire by limitation on
June 30, [2005.] 2009.
3. Section 3 of this act becomes effective on July 1,
[2005.] 2009.
Sec. 6. The amendatory provisions of this act apply only to an
abatement from taxation for which a person applies on or after
July 1, 2003.
Sec. 7. 1. This act becomes effective on July 1, 2003.
2. Sections 2 and 4 of this act expire by limitation on June 30,
2009.
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