Nevada 2019 Regular Session Status: Enacted

AB 446 — Revises the Nevada New Markets Jobs Act. (BDR 18-1100)

Last action — Chapter 573.

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed Assembly
  4. ✓
    Passed Senate
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced March 25, 2019. Enacted.

Prognosis

Advancing 50% · moderate confidence

Where this bill stands today.

Odds of enactment

High

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  • Enacted

    Current position in the legislative process.

  • 1 sponsor

    1 primary, 0 co-sponsors signed on.

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Summary

AN ACT relating to economic development; revising the Nevada New Markets Jobs Act; revising provisions governing investments in, or loans to, qualified active low-income community businesses by certain qualified community development entities; authorizing an additional amount of investments to be made in qualified community development entities in exchange for certain tax credits; revising provisions governing the recapture of tax credits issued in exchange for an investment in a qualified community development entity; and providing other matters properly relating thereto.

Bill Text

What changed in the latest version

364 added · 375 removed

364 line(s) added, 375 removed.

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(Reprinted with amendments adopted on April 22, 2019) FIRST REPRINT A.B.
Assembly Bill No.
446 A SSEMBLY B ILLN O.
446–Committee on Taxation CHAPTER..........
446–COMMITTEE ON T AXATION M ARCH 25, 2019 ____________ Referred to Committee on Taxation SUMMARY—Revises the Nevada New Markets Jobs Act.
(BDR 18-1100) FISCAL NOTE:
Effect on Local Government:
No.
Effect on the State:
Yes.
~ EXPLANATION – Matter in bolded italics is new;
matter between brackets [omitted material] is material to be omitted.
(Chapter 231A of NRS) Under existing law, insurance companies are entitled to receive a credit against certain taxes imposed on insurance companies in exchange for making an qualified community development entity in which such an investment is made is required to use 85 percent of the investment to make capital or equity investments in, or loans to, qualified active low-income community businesses, which are defined as businesses that satisfy certain criteria related to conducting business in a low-income community.
(Chapter 231A of NRS) Under existing law, insurance companies are entitled to receive a credit against certain taxes imposed on insurance companies in exchange for making an investment in a qualified community development entity.
(NRS 231A.200) A qualified community development entity in which such an investment is made is required to use 85 percent of the investment to make capital or equity investments in, or loans to, qualified active low-income community businesses, which are low-income community.
26 investments in qualified community development entities which may be made inof exchange for a credit against certain taxes imposed on insurance companies;
26ting business in a U.S.C.
§ 45D) Section 2.5 of this bill:
(1) authorizes an additional amount of investments in qualified community development entities which may be made in exchange for a credit against certain taxes imposed on insurance companies;
- *AB446_R1* – 2 – Existing regulations prohibit a qualified active low-income community business from accepting investments from more than one qualified community development entity unless the qualified active low-income community business first obtains the approval of the Department of Business and Industry.
business from accepting investments from more than one qualified community development entity unless the qualified active low-income community business first obtains the approval of the Department of Business and Industry.
(NAC 231A.050) Section 1 of this bill authorizes a qualified community development income community business jointly with one or more other qualified communityactive low- development entities.
(NAC 231A.050) Section 1 of this bill authorizes a qualified community development entity to make a capital or equity investment in, or a loan to, a qualified active low- income community business jointly with one or more other qualified community development entities.
Section 1 also authorizes a qualified community development entity to make a capital or equity investment in, or a loan to, a qualified active low- income community business using money attributable to investments made in the qualified community development entity for which the entity received tax credits under existing state and federal law.
Section 1 also authorizes a qualified community development entity to make a capital or equity investment in, or a loan to, a qualified active low- qualified community development entity for which the entity received tax credits under existing state and federal law.
Under existing law, for the purpose of determining whether a qualified community development entity is making a capital or equity investment in, or a receiving certain abatements from taxation is not eligible to be considered as qualified active low-income community business.
Under existing law, for the purpose of determining whether a qualified community development entity is making a capital or equity investment in, or a loan to, a qualified active low-income community business, a business which is receiving certain abatements from taxation is not eligible to be considered a qualified active low-income community business.
(NRS 231A.170) Section 2 of this bill authorizes a business receiving such an abatement from taxation to be considered a qualified active low-income community business if the business waives the abatement and provides written notice of that waiver to the Office of Economic Development not later than the due date of the first payment of any tax that would be abated pursuant to the abatement from taxation.
(NRS 231A.170) Section 2 of this bill authorizes a business receiving such an abatement from taxation to be considered a qualified active low-income community business if the business - 80th Session (2019) – 2 – Economic Development not later than the due date of the first payment of any tax that would be abated pursuant to the abatement from taxation.
Section 2.7 of this bill requires a qualified community development entity that business to allow the business to apply to refinance the investment or loan if at least 4 years has passed since the investment or loan was made and the investment or loan has not previously been refinanced.
Section 2.7 of this bill requires a qualified community development entity that has made an investment in or a loan to a qualified active low-income community business to allow the business to apply to refinance the investment or loan if at least years has passed since the investment or loan was made and the investment or loanExisting law requires the Department of Business and Industry to recapture a tax credit provided under the Act from the business entity claiming the tax credit under certain circumstances, including, without limitation, if the qualified community development entity in which the business entity invested:
Existing law requires the Department of Business and Industry to recapture a tax credit provided under the Act from the business entity claiming the tax credit under certain circumstances, including, without limitation, if the qualified community development entity in which the business entity invested:
(NRS 231A.250) Existing regulations define “cash proceeds” for the purposes of these provisions as the amount paid by the business entity to the qualified community development entity for the investment in the qualified community development entity.
(NRS 231A.250) Existing regulations define “cash proceeds” for the purposes of these provisions as the amount paid by the business entity to the qualified community entity.
EXPLANATION – Matter in bolded italics is new;
matter between brackets [omitted material] is material to be omitted.
- *AB446_R1* – 3 – 2.
2.
For the purpose of NRS 231A.110, a qualified active low-income community business is limited to those businesses meeting the Small Business Administration size eligibility standards established in 13 C.F.R.
For the purpose of NRS 231A.110, a qualified active low-income community business is limited to those - 80th Session (2019) – 3 – businesses meeting the Small Business Administration size eligibility standards established in 13 C.F.R.
A business must be considered a qualified active low-income community business for the duration of the qualified community development entity’s investment in, or loan to, the business if the entity reasonably expects, at the time it makes the investment or loan, that the business will continue to satisfy the requirements for being a qualified active low-income community business, other than the Small Business Administration size sta2.ardExcept as otherwise provided in this subsection, the loan.
A business must be considered a qualified active low-income community business for the duration of the qualified community development entity’s investment in, or loan to, the business if the entity reasonably expects, at the time it makes the investment or loan, that the business will continue to satisfy the requirements for being a qualified active low-income community standards, throughout the entire period of the investment or loan.
businesses limited by this section do not include any business that revenue from the rental or sale of real estate.
2.
Except as otherwise provided in this subsection, the businesses limited by this section do not include any business that derives or projects to derive 15 percent or more of its annual revenue from the rental or sale of real estate.
(c) A business engaged in banking or lending.
(d) A massage parlor.d in banking or lending.
(d) A massage parlor.
- *AB446_R1* – 4 – (f) A tanning salon.
(f) A tanning salon.
A business that has received an abatement from taxation pursuant to NRS 274.310, 274.320, 274.330, 360.750, 360.753 or 360.754 is a qualified active low-income community business if the business elects to waive the abatement and provides written notice of the waiver of the abatement to the Office of Economic Development not later than the due date of the first payment of any tax which would be abated if the abatement became effective.
A business that has received an abatement from taxation pursuant to NRS 274.310, 274.320, 274.330, 360.750, 360.753 or 360.754 is a qualified active low-income community business if the business elects to waive the abatement and provides written notice of the waiver of the abatement to the Office of Economic - 80th Session (2019) – 4 – Development not later than the due date of the first payment of any tax which would be abated if the abatement became effective.
and;
and (2) The Office of Economic Development must forward a governmental entity or official to whom a copy of the certificate of eligibility for the abatement was forwarded.
(2) The Office of Economic Development must forward a copy of the written notice to the Department and each governmental entity or official to whom a copy of the certificate of eligibility for the abatement was forwarded.
(b) After the period required by this subsection has expired, the Office of Economic Development must provide written notice to the Department and the business that the abatement has not been waived and the business is not a qualified active low-income community business.
the Office of Economic Development must provide written noticed, to the Department and the business that the abatement has not community business.
Sec.
business is not a qualified active low-income Sec.
If an entity makes a qualified equity investment on or after July 1, 2019, the entity may not use any portion of the credit against the entity’s liability for insurance premium tax for any period beginning before July 1, 2021.
If an entity makes a qualified equity investment on or after July 1, 2019, the entity may not use premium tax for any period beginning before July 1, 2021.for insurance 2.
2.
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- *AB446_R1* – 5 – 3.
3.
If the insurance premium tax is eliminated or reduced below the level that was in effect on the first credit allowance date, the entity is entitled to a credit against any other taxes paid to the Department of Taxation in an amount equal to the difference between the amount the entity would have been able to claim against its insurance premium tax liability had the tax not been eliminated or reduced and the amount the entity was actually able to claim, if any.
If the insurance premium tax is eliminated or reduced below the level that was in effect on the first credit allowance date, the entity is entitled to a credit against any other taxes paid to the Department of Taxation in an amount equal to the difference between the amount the entity would have been able to claim - 80th Session (2019) – 5 – against its insurance premium tax liability had the tax not been eliminated or reduced and the amount the entity was actually able to claim, if any.
A qualified community development entity that seeks to have an equity investment or long-term debt security designated as a qualified equity investment and eligible for tax credits under this chapter must apply to the Department for that designation.
A qualified community development entity that designated as a qualified equity investment and eligible for tax credits under this chapter must apply to the Department for that designation.
community development entity.ant’s certification as a qualified (b) A copy of an allocation agreement executed by the applicant, Institutions Fund of the United States Department of the Treasuryl which includes the State of Nevada in the service area set forth in the allocation agreement.
(a) Evidence of the applicant’s certification as a qualified community development entity.
(b) A copy of an allocation agreement executed by the applicant, or its controlling entity, and the Community Development Financial Institutions Fund of the United States Department of the Treasury which includes the State of Nevada in the service area set forth in the allocation agreement.
(d) A description of the proposed amount, structure and purchaser of the qualified equity investment.
purchaser of the qualified equity investment.structure and (e) If known at the time of application, identifying information for any entity that will use the tax credits earned as a result of the issuance of the qualified equity investment.
(e) If known at the time of application, identifying information for any entity that will use the tax credits earned as a result of the issuance of the qualified equity investment.
(f) Examples of the types of qualified active low-income businesses in which the applicant, its controlling entity or the affiliates of its controlling entity have invested under the federal New Markets Tax Credit Program.
(f) Examples of the types of qualified active low-income businesses in which the applicant, its controlling entity or the - *AB446_R1* – 6 – affiliates of its controlling entity have invested under the federal New Markets Tax Credit Program.
(h) The refundable performance fee required by subsection 1 of NRS 231A.270.
- 80th Session (2019) – 6 – (h) The refundable performance fee required by subsection 1 of NRS 231A.270.
If the qualified community development entity provides any additional information required by the Department or otherwise completes its application within 15 days after the date of the notice of denial, the application must be considered complete as of the original date of submission.
If the qualified community development entity provides any completes its application within 15 days after the date of the notice of denial, the application must be considered complete as of the original date of submission.
the proposed equity investment or long-term debt security as aertify qualified equity investment that is eligible for tax credits under this Department shall provide written notice of the certification to the qualified community development entity.
3.
If the application is complete, the Department shall certify the proposed equity investment or long-term debt security as a qualified equity investment that is eligible for tax credits under this chapter, subject to the limitations contained in subsection 5.
The Department shall provide written notice of the certification to the qualified community development entity.
The Department shall certify qualified equity investments in the order applications are received by the Department.
The Department shall certify qualified equity investments in received on the same day shall be deemed to have been receivedtions simultaneously.
Applications received on the same day shall be deemed to have been received simultaneously.
- *AB446_R1* – 7 – 5.
5.
(b) Shall not certify any single qualified equity investment of less than [$5,000,000;] $8,000,000;
- 80th Session (2019) – 7 – (b) Shall not certify any single qualified equity investment of less than [$5,000,000;] $8,000,000;
If a pending request cannot be fully certified because of these limits, the Department shall certify the portion that may be certified unless the qualified community development entity elects to withdraw its request rather than receive partial certification.
If a pending request cannot be fully certified because of these limits, the Department shall certify the portion that may be certified unless the qualified community development entity elects to wit6.rawAn approved applicant may transfer all or a portion of its certified qualified equity investment authority to its controlling entity or any affiliate or partner of the controlling entity which is also a qualified community development entity, if the applicant provided the information required in the application with respect to the transferee and the applicant notifies the Department of the transfer within 30 days after the transfer.
6.
An approved applicant may transfer all or a portion of its certified qualified equity investment authority to its controlling entity or any affiliate or partner of the controlling entity which is also a qualified community development entity, if the applicant provided the information required in the application with respect to the transferee and the applicant notifies the Department of the transfer within 30 days after the transfer.
Within 30 days after the applicant receives notice of certification, the qualified community development entity or any investment and receive cash in the amount certified by theied equity Department.
Within 30 days after the applicant receives notice of certification, the qualified community development entity or any transferee pursuant to subsection 6 shall issue the qualified equity investment and receive cash in the amount certified by the Department.
The qualified community development entity or evidence of the receipt of the cash investment within 10 business days after receipt.
The qualified community development entity or transferee under subsection 6 must provide the Department with evidence of the receipt of the cash investment within 10 business days after receipt.
If the qualified community development entity or any transferee under subsection 6 does not receive the cash investment and issue the qualified equity investment within 30 days after receipt of the notice of certification, the certification lapses and the entity may not issue the qualified equity investment without reapplying to the Department for certification.
If the qualified community development entity or any transferee under subsection 6 does not receive the cash investment and issue the qualified equity investment within 30 days after receipt of the notice of certification, the certification lapses and the entity may not issue the qualified equity investment without revert back to the Department and must be reissued, first, pro rata to other applicants whose qualified equity investment allocations were reduced pursuant to subsection 4 and, thereafter, in accordance with requirements for submitting the application.
Lapsed certifications revert back to the Department and must be reissued, first, pro rata to other applicants whose qualified equity investment allocations were reduced pursuant to subsection 4 and, thereafter, in accordance with requirements for submitting the application.
A qualified community development entity which issues qualified equity investments under this chapter shall make qualified low-income community investments in businesses located in severely distressed census tracts, on a combined basis with all of its affiliated qualified community development entities - *AB446_R1* – 8 – that have issued qualified equity investments under this chapter, in an amount equal to at least 30 percent of the purchase price of all qualified equity investments issued by such entities.
A qualified community development entity which issues qualified equity investments under this chapter shall make qualified low-income community investments in businesses located in severely distressed census tracts, on a combined basis with all of its affiliated qualified community development entities that have issued qualified equity investments under this chapter, in - 80th Session (2019) – 8 – an amount equal to at least 30 percent of the purchase price of all qualified equity investments issued by such entities.
The Director may reduce the requirement in subsection 1 to 20 percent if the qualified community development entity uses its commercially reasonable best efforts to satisfy the requirements of subsection 1 and fails to do so within 9 months after its initial credit allowance date.
The Director may reduce the requirement in subsection 1 to percent if the qualified community development entity uses its commercially reasonable best efforts to satisfy the requirements of subsection 1 and fails to do so within 9 months after its initial credit allowance date.
A qualified community development entity which makes a qualified low-income community investment must allow the business in which the qualified low-income community investment is made to apply to refinance the qualified low-income investment if at least 4 years has passed since the qualified community development entity made the qualified low-income investment and the qualified low-income investment has not previously been refinanced.
A qualified community development entity which makes a qualified low-income community investment must allow the is made to apply to refinance the qualified low-income investment if at least 4 years has passed since the qualified community development entity made the qualified low-income investment and the qualified low-income investment has not previously been refinanced.
or (c) A rate of unemployment that was equal to or greater than 150Sec.
or (c) A rate of unemployment that was equal to or greater than percent of the national average.
3.t oNRS 231A.250 is hereby amended to read as follows:
Sec.
231A.250 Except as otherwise provided in NRS 231A.260, the on a return, the tax credit allowed under this chapter if:he credit 1.
3.
Any amount of a federal tax credit available with respect to a qualified equity investment that is eligible for a credit under this chapter is recaptured under section 45D of the Internal Revenue Code of 1986, 26 U.S.C.
NRS 231A.250 is hereby amended to read as follows:
231A.250 Except as otherwise provided in NRS 231A.260, the Department shall recapture, from the entity that claimed the credit on a return, the tax credit allowed under this chapter if:
1.
Any amount of a federal tax credit available with respect to a qualified equity investment that is eligible for a credit under this Code of 1986, 26 U.S.C.
The issuer fails to invest an amount equal to 85 percent of the purchase price of the qualified equity investment in qualified low-income community investments in this State within 12 months after the issuance of the qualified equity investment and maintain at least an 85-percent level of investment in qualified low-income - *AB446_R1* – 9 – community investments in the State until the last credit allowance date for the qualified equity investment.
The issuer fails to invest an amount equal to 85 percent of the purchase price of the qualified equity investment in qualified low-income community investments in this State within 12 months after the issuance of the qualified equity investment and maintain at - 80th Session (2019) – 9 – least an 85-percent level of investment in qualified low-income community investments in the State until the last credit allowance date for the qualified equity investment.
or (b) The date by which a qualified community development entity has made qualified low-income community investments with the proceeds of the qualified equity investment on a cumulative basis equal to at least 150 percent of those proceeds, in which case the qualified low-income community investment must be considered held by the issuer through the seventh anniversary of the qualified equity investment’s issuance.
or (b) The date by which a qualified community development entity has made qualified low-income community investments with the proceeds of the qualified equity investment on a cumulative basis equal to at least 150 percent of those proceeds, in which case the qualified low-income community investment must be considered equity investment’s issuance.e seventh anniversary of the qualified 4.
4.
H - *AB446_R1*
~~~~~ 19 - 80th Session (2019)
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Amendments

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Action History

  1. Chapter 573.

  2. Approved by the Governor.

  3. Enrolled and delivered to Governor.

  4. In Assembly. To enrollment.

  5. Read third time. Passed. Title approved. (Yeas: 21, Nays: None.) To Assembly.

  6. From committee: Do pass. Placed on Second Reading File. Read second time.

  7. Read third time. Passed, as amended. Title approved, as amended. (Yeas: 35, Nays: 5, Excused: 1, Vacant: 1.) To Senate. In Senate. Read first time. Referred to Committee on Revenue and Economic Development. To committee.

  8. From committee: Do pass, as amended. Placed on General File. Taken from General File. Placed on General File for next legislative day.

  9. From printer. To engrossment. Engrossed. First reprint. To committee.

  10. From committee: Amend, and do pass as amended. Placed on Second Reading File. Notice of eligibility for exemption. Read second time. Amended. (Amend. No. 408.) Rereferred to Committee on Ways and Means. Exemption effective. To printer.

  11. From printer. To committee.

  12. Read first time. Referred to Committee on Taxation. To printer.

Sponsors

  • Assembly Committee on Taxation · Primary

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 66 not signed on

Sponsors (1)

  • Assembly Committee on Taxation

Co-sponsors (0)

None.

Not signed on (66)

66 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Subjects

taxation
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Frequently asked questions

What does AB 446 do?
AN ACT relating to economic development; revising the Nevada New Markets Jobs Act; revising provisions governing investments in, or loans to, qualified active low-income community businesses by certain qualified community development entities; authorizing an additional amount of investments to be made in qualified community development entities in exchange for certain tax credits; revising provisions governing the recapture of tax credits issued in exchange for an investment in a qualified community development entity; and providing other matters properly relating thereto.
Who sponsors AB 446?
AB 446 is sponsored by Assembly Committee on Taxation.
What is the current status of AB 446?
This bill has been enacted into law. Introduced March 25, 2019. Enacted.
Where can I track AB 446?
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