AB361

Assembly Bill No. 361–Committee on Taxation

CHAPTER..........

AN ACT relating to local governmental finances; requiring local governments that acquire certain public utilities or expand certain facilities for utility service to make certain payments or provide certain compensation in lieu of taxes and franchise fees; 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. Chapter 360 of NRS is hereby amended by adding

thereto the provisions set forth as sections 2 to 10, inclusive, of this

act.

Sec. 2. As used in sections 2 to 10, inclusive, of this act,

unless the context otherwise requires, the words and terms defined

in sections 3 to 6, inclusive, of this act have the meanings ascribed

to them in those sections.

Sec. 3. “Affected local government” means any local

government that will receive less money from state or local taxes

or franchise fees or from payments in lieu of those taxes or

franchise fees, or less compensation from another local

government pursuant to section 8 of this act, as a direct result of

the acquisition of any public utility or expansion of any facilities

by a local government as provided in section 8 of this act.

Sec. 4. “Local government” means any city, county, district

or other political subdivision of this state.

Sec. 5. “Public utility” means any privately, publicly or

cooperatively owned system for providing a utility service to the

public or a segment of the public.

Sec. 6. “Telecommunications service” has the meaning

ascribed to it in 47 U.S.C. § 153(46), as that section existed on

July 1, 2003.

Sec. 7. 1. Except as otherwise provided in this section, if on

or after July 1, 2003, a local government acquires from another

entity a public utility that provides electric service, natural gas

service, telecommunications service or community antenna

television service:

(a) The local government shall make payments in lieu of and

equal to all state and local taxes and franchise fees from which the

local government is exempt but for which the public utility would

be liable if the public utility was not owned by a governmental

entity; and

(b) The Nevada Tax Commission shall, solely for the purpose

set forth in this paragraph, annually determine and apportion the

assessed valuation of the property of the public utility. For the

purpose of calculating any allocation or apportionment of money

for distribution among local governments pursuant to a formula

required by state law which is based partially or entirely on the

assessed valuation of taxable property:

(1) The property of the public utility shall be deemed to

constitute taxable property to the same extent as if the public

utility was not owned by a governmental entity; and

(2) To the extent that the property of the public utility is

deemed to constitute taxable property pursuant to this paragraph:

(I) The assessed valuation of that property must be

included in that calculation as determined and apportioned by the

Nevada Tax Commission pursuant to this paragraph; and

(II) The payments required by paragraph (a) in lieu of

any taxes that would otherwise be required on the basis of the

assessed valuation of that property shall be deemed to constitute

payments of those taxes.

2. The payments in lieu of taxes and franchise fees required

by subsection 1 are due at the same time and must be collected,

accounted for and distributed in the same manner as those taxes

and franchise fees would be due, collected, accounted for and

distributed if the public utility was not owned by a governmental

entity, except that no lien attaches upon any property or money of

the local government by virtue of any failure to make all or any

part of those payments. The local government may contest the

validity and amount of any payment in lieu of a tax or franchise

fee to the same extent as if that payment was a payment of the tax

or franchise fee itself. The payments in lieu of taxes and franchise

fees must be reduced if and to the extent that such a contest is

successful.

3. The provisions of this section do not:

(a) Apply to the acquisition by a local government of a public

utility owned by another governmental entity, except a public

utility owned by another local government for which any payments

in lieu of state or local taxes or franchise fees was required before

its acquisition as provided in this section.

(b) Require a local government to make any payments in lieu

of taxes or franchise fees to the extent that the making of those

payments would cause a deficiency in the money available to the

local government to make required payments of principal of,

premium, if any, or interest on any bonds or other securities

issued to finance the acquisition of that public utility or to make

required payments to any funds established under the proceedings

under which those bonds or other securities were issued.

required pursuant to NRS 244A.755.

Sec. 8. 1. Except as otherwise provided in this section, if on

or after July 1, 2003, a local government:

(a) Acquires from another entity a public utility that provides

water service or sewer service; or

(b) Expands facilities for the provision of water service, sewer

service, electric service, natural gas service, telecommunications

service or community antenna television service, and the

expansion results in the local government serving additional retail

customers who were, before the expansion, retail customers of a

public utility which provided that service,

the local government shall enter into an interlocal agreement with

each affected local government to compensate the affected local

government each fiscal year, as nearly as practicable, for the

amount of any money from state and local taxes and franchise

fees and from payments in lieu of those taxes and franchise fees,

and for any compensation from a local government pursuant to

this section, the affected local government would be entitled to

receive but will not receive because of the acquisition of that

public utility or expansion of those facilities as provided in this

section.

2. An affected local government may waive any or all of the

compensation to which it may be entitled pursuant to subsection 1.

3. The provisions of this section do not require a:

(a) Local government to provide any compensation to an

affected local government to the extent that the provision of that

compensation would cause a deficiency in the money available to

the local government to make required payments of principal of,

premium, if any, or interest on any bonds or other securities

issued to finance the acquisition of that public utility or expansion

of those facilities, or to make required payments to any funds

established under the proceedings under which those bonds or

other securities were issued.

(b) County to duplicate any compensation an affected local

government receives from any payments in lieu of taxes required

pursuant to NRS 244A.755.

Sec. 9. 1. If a local government and an affected local

government cannot reach agreement pursuant to section 8 of this

act, either party may submit to the Executive Director its proposal

for the terms of an interlocal agreement, together with any

information it deems appropriate relating to such an agreement.

Within 30 days after the receipt of that proposal, the Executive

Director shall:

(a) Provide to the other party:

(1) A copy of the proposal and any information received

with the proposal; and

(2) An opportunity to submit its proposal for the terms of an

interlocal agreement and any information that party deems

appropriate relating to such an agreement;

(b) Review each proposal and any other information submitted

by the parties; and

his findings regarding the terms of a fair and equitable interlocal

agreement.

2. Within 30 days after the receipt of the findings of the

Executive Director pursuant to subsection 1, the Committee on

Local Government Finance shall:

(a) Review those findings; and

(b) Submit to the Nevada Tax Commission its

recommendations for the terms of a fair and equitable interlocal

agreement.

3. The Nevada Tax Commission shall schedule a public

hearing within 30 days after the Committee on Local Government

Finance submits its recommendations pursuant to subsection 2.

The Nevada Tax Commission shall provide public notice of the

hearing at least 10 days before the date on which the hearing will

be held. The Executive Director shall provide copies of all

documents relevant to the recommendations of the Committee on

Local Government Finance to each of the parties. After the

hearing, the Nevada Tax Commission shall notify the parties of its

determination of the terms of a fair and equitable interlocal

agreement.

4. Within 30 days after the parties receive notification of the

determination of the Nevada Tax Commission pursuant to

subsection 3, the parties shall enter into an interlocal agreement

in accordance with that determination.

Sec. 10. The Nevada Tax Commission shall adopt such

regulations as it deems appropriate to carry out the provisions of

sections 2 to 10, inclusive, of this act.

Sec. 11. This act becomes effective on July 1, 2003.

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