SB 394 — Revises provisions governing abatements and partial abatements of certain taxes. (BDR 32-603)

(1) The business will have 10 or more full-time employees on the payroll of the business by the eighth calendar quarter following the calendar quarter in which the abatement becomes effective who will be employed at the location of the business in that county or city until at least the date which is 5 years after the date on which the abatement becomes effective.

(2) Establishing the business will require the business to make, not later than the date which is 2 years after the date on which the abatement becomes effective, a capital investment of at least $250,000 in this State in capital assets that will be retained at the location of the business in that county or city until at least the date which is 5 years after the date on which the abatement becomes effective.

(h) If the business is an existing business, the business meets at least one of the following requirements:

(1) For a business in:

- *SB394_R1* – 4 – (I) Except as otherwise provided in sub-subparagraph (II), a county whose population is 100,000 or more or a city whose population is 60,000 or more, the business will, by the eighth calendar quarter following the calendar quarter in which the abatement becomes effective, increase the number of employees on its payroll in that county or city by 10 percent more than it employed in the fiscal year immediately preceding the fiscal year in which the abatement becomes effective or by twenty-five employees, whichever is greater, who will be employed at the location of the business in that county or city until at least the date which is 5 years after the date on which the abatement becomes effective;

or (II) A county whose population is less than 100,000, an area of a county whose population is 100,000 or more that is located within the geographic boundaries of an area that is designated as rural by the United States Department of Agriculture and at least 20 miles outside of the geographic boundaries of an area designated as urban by the United States Department of Agriculture, or a city whose population is less than 60,000, the business will, by the eighth calendar quarter following the calendar quarter in which the abatement becomes effective, increase the number of employees on its payroll in that county or city by 10 percent more than it employed in the fiscal year immediately preceding the fiscal year in which the abatement becomes effective or by six employees, whichever is greater, who will be employed at the location of the business in that county or city until at least the date which is 5 years after the date on which the abatement becomes effective.

(2) The business will expand by making a capital investment in this State, not later than the date which is 2 years after the date on which the abatement becomes effective, in an amount equal to at least 20 percent of the value of the tangible property possessed by the business in the fiscal year immediately preceding the fiscal year in which the abatement becomes effective, and the capital investment will be in capital assets that will be retained at the location of the business in that county or city until at least the date which is 5 years after the date on which the abatement becomes effective.

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.

(i) The applicant has provided in the application an estimate of the total number of new employees which the business anticipates hiring in this State by the eighth calendar quarter following the - *SB394_R1* – 5 – calendar quarter in which the abatement becomes effective if the Office approves the application.

3.

Notwithstanding the provisions of subsection 2, the Office of Economic Development:

(a) Shall not consider an application for a partial abatement pursuant to this section unless the Office has requested a letter of acknowledgment of the request for the abatement from any affected county, school district, city or town.

(b) Shall consider the level of health care benefits provided by the business to its employees, the projected economic impact of the business and the projected tax revenue of the business after deducting projected revenue from the abated taxes.

(c) May, if the Office determines that such action is necessary:

(1) Approve an application for a partial abatement pursuant to this section by a business that does not meet the requirements set forth in paragraph (f), (g) or (h) of subsection 2;

(2) Make any of the requirements set forth in paragraphs (d) to (h), inclusive, of subsection 2 more stringent;

or (3) Add additional requirements that a business must meet to qualify for a partial abatement pursuant to this section.

4.

Notwithstanding any other provision of law, the Office of Economic Development shall not approve an application for a partial abatement pursuant to this section if:

(a) The applicant intends to locate or expand in a county in which the rate of unemployment is 7 percent or more and the average hourly wage that will be paid by the applicant to its new employees in this State is less than 70 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) The applicant intends to locate or expand in a county in which the rate of unemployment is less than 7 percent and the average hourly wage that will be paid by the applicant to its new employees in this State is less than 85 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.

(c) The applicant intends to locate in a county but has already received a partial abatement pursuant to this section for locating that business in that county.

(d) The applicant intends to expand in a county but has already received a partial abatement pursuant to this section for expanding that business in that county.

(e) The applicant has changed the name or identity of the business to evade the provisions of paragraph (c) or (d).

- *SB394_R1* – 6 – 5.

Notwithstanding any other provision of law, if the Office of Economic Development approves an application for a partial abatement pursuant to this section, in determining the types of taxes imposed on a new or expanded business for which the partial abatement will be approved and the amount of the partial abatement:

(a) If the new or expanded business is located in a county in which the rate of unemployment is 7 percent or more and the average hourly wage that will be paid by the business to its new employees in this State is less than 85 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, the Office shall not:

(1) Approve an abatement of the taxes imposed pursuant to chapter 361 of NRS which exceeds 25 percent of the taxes on personal property payable by the business each year.

(2) Approve an abatement of the taxes imposed pursuant to chapter 363B of NRS which exceeds 25 percent of the amount of tax otherwise due pursuant to NRS 363B.110.

(b) If the new or expanded business is located in a county in which the rate of unemployment is less than 7 percent and the average hourly wage that will be paid by the business to its new employees in this State is less than 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, the Office shall not:

(1) Approve an abatement of the taxes imposed pursuant to chapter 361 of NRS which exceeds 25 percent of the taxes on personal property payable by the business each year.

(2) Approve an abatement of the taxes imposed pursuant to chapter 363B of NRS which exceeds 25 percent of the amount of tax otherwise due pursuant to NRS 363B.110.

(c) The Office shall not approve a partial abatement pursuant to this section which exceeds $500,000.

6.

If the Office of Economic Development approves an application for a partial abatement pursuant to this section, the Office 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.

7.

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 Office of Economic Development, furnish the Executive Director with copies - *SB394_R1* – 7 – of all records necessary to verify that the applicant meets the requirements of subsection 2.

8.

If an applicant for a partial abatement pursuant to this section fails to execute the agreement described in paragraph (b) of subsection 2 within 1 year after the date on which the application was received by the Office, the applicant shall not be approved for a partial abatement pursuant to this section unless the applicant submits a new application.

9.

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 partial abatement 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 partial abatement 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.

10.

A county treasurer:

(a) Shall deposit any money that he or she receives pursuant to subsection 9 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.

11.

The Office of Economic Development may adopt such regulations as the Office of Economic Development determines to be necessary to carry out the provisions of this section and NRS 360.755.

12.

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 (f) 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.

- *SB394_R1* – 8 – (b) May adopt such other regulations as the Nevada Tax Commission determines to be necessary to carry out the provisions of this section and NRS 360.755.

13.

An applicant for a partial abatement pursuant to this section who is aggrieved by a final decision of the Office of Economic Development may petition for judicial review in the manner provided in chapter 233B of NRS.

14.

For the purposes of this section, an employee is a “full-time employee” if he or she is in a permanent position of employment and works an average of 30 hours per week during the applicable period set forth in subsection 2.

1.NRS 360.753 is hereby amended to read as follows:

In360.753 addition1. to all other taxes imposed on property in a county, the board of county commissioners of each county shall levy a tax of 10 cents on each $100 of assessed valuation of taxable property within the county for the support of the public schools.

An owner of a business or a person who intends to locate or expand a business in this State may apply to the Office of Economic Development pursuant to this section for a partial abatement of one or more of:

(a) The personal property taxes imposed on an aircraft and the personal property used to own, operate, manufacture, service, maintain, test, repair, overhaul or assemble an aircraft or any component of an aircraft;

and (b) The local sales and use taxes imposed on the purchase of tangible personal property used to operate, manufacture, service, maintain, test, repair, overhaul or assemble an aircraft or any component of an aircraft.

TheNotwithstanding taxthe collectedprovisions pursuantof to subsection 1 on any assessedlaw valuation attributable to the netcontrary proceedsand ofexcept mineralsas mustotherwise notprovided bein consideredsubsections as3 availableand to4, paythe liabilitiesOffice of theEconomic fiscalDevelopment yearshall inapprove whichan theapplication taxfor isa collectedpartial butabatement mustif bethe deferredOffice formakes use in the subsequentfollowing fiscaldeterminations: year.

(a) Not later than 1 year after the date on which the application was received by the Office, the applicant has executed an agreement with the Office which:

(1) Complies with the requirements of NRS 360.755;

(2) States the date on which the abatement becomes effective, as agreed to by the applicant and the Office, which must not be earlier than the date on which the Office received the application and not later than 1 year after the date on which the Office approves the application;

(3) States that the business will, after the date on which a certificate of eligibility for the partial abatement is issued pursuant to subsection 5, continue in operation in this State for a period specified by the Office, which must be not less than 5 years, and will continue to meet the eligibility requirements set forth in this subsection;

and (4) Binds any successor in interest of the applicant for the specified period;

- *SB394_R1* – 9 – (b) The business is registered pursuant to the laws of this State or the applicant commits to obtaining a valid business license and all other permits required by the county, city or town in which the business operates;

(c) The business owns, operates, manufactures, services, maintains, tests, repairs, overhauls or assembles an aircraft or any component of an aircraft;

(d) The average hourly wage that will be paid by the business to its employees in this State during the period of partial abatement is not less than 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;

(e) The business will, by the eighth calendar quarter following the calendar quarter in which the abatement becomes effective, offer a health insurance plan for all employees that includes an option for health insurance coverage for dependents of the employees, and the health care benefits the business offers to its employees in this State will meet the minimum requirements for health care benefits established by the Office;

(f) If the business is:

(1) A new business, that it will have five or more full-time employees on the payroll of the business within 1 year after receiving its certificate of eligibility for a partial abatement;

or (2) An existing business, that it will increase its number of full-time employees on the payroll of the business in this State by 3 percent or three employees, whichever is greater, within 1 year after receiving its certificate of eligibility for a partial abatement;

(g) The business meets at least one of the following requirements:

(1) The business will make a new capital investment of at least $250,000 in this State within 1 year after receiving its certificate of eligibility for a partial abatement;

(2) The business will maintain and possess in this State tangible personal property having a value of not less than $5,000,000 during the period of partial abatement;

(3) The business develops, refines or owns a patent or other intellectual property, or has been issued a type certificate by the Federal Aviation Administration pursuant to 14 C.F.R.

Part 21;

and (h) If the application is for the partial abatement of the taxes imposed by the Local School Support Tax Law, the application has been approved by a vote of at least two-thirds of the members of the Board of Economic Development created by NRS 231.033.

The taxOffice collected pursuant to subsection 1 and any interest earned from the investment of theEconomic proceedsDevelopment: of that tax must be remitted by the county treasurer to the State Treasurer for credit to the State Education Fund.

- *SB394_R1* – 10 – (a) Shall approve or deny an application submitted pursuant to this section and notify the applicant of its decision not later than 45 days after receiving the application.

(b) Must not:

(1) Consider an application for a partial abatement unless the Office has requested a letter of acknowledgment of the request for the partial abatement from any affected county, school district, city or town and has complied with the requirements of NRS 360.757;

[or] (2) Approve a partial abatement for any applicant for a period of more than 10 years [.] ;

or (3) Approve a partial abatement pursuant to this section which exceeds $500,000.

ForThe theOffice firstof fiscalEconomic yearDevelopment inmust whichnot approve a taxpartial isabatement leviedof pursuantpersonal toproperty thistaxes section,for thea taxbusiness iswhose exemptphysical fromproperty eachis partialcollectively abatementvalued fromand taxationcentrally providedassessed pursuant to NRS 361.4722,361.320 361.4723 and 361.4724.361.3205.

For each fiscal year after the first fiscal year in which a tax is levied pursuant to this section, the tax must be included in the calculations of the partial abatements from taxation provided pursuant to NRS 361.4722, 361.4723 and 361.7424.

TheIf ratethe Office of anyEconomic taxDevelopment leviedapproves pursuantan toapplication subsectionfor 1a mustpartial notabatement bepursuant includedto inthis section, the totalOffice adshall valoremimmediately taxforward levya forcertificate the purposes of theeligibility applicationfor of the limitationpartial inabatement NRSto: 361.453.

(a) The Department;

(b) The Nevada Tax Commission;

and (c) If the partial abatement is from personal property taxes, the appropriate 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 Office of 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 an applicant for a partial abatement pursuant to this section fails to execute the agreement described in paragraph (a) of subsection 2 within 1 year after the date on which the application was received by the Office, the applicant shall not be approved for a partial abatement pursuant to this section unless the applicant submits a new application.

8.

If a business whose partial abatement has been approved pursuant to this section and whose partial abatement 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 (a) of subsection 2,  the business shall repay to the Department or, if the partial abatement was from personal property taxes, to the appropriate - *SB394_R1* – 11 – county treasurer, the amount of the partial abatement 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 partial abatement required to be repaid 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.

9.

The Office of Economic Development may adopt such regulations as the Office determines to be necessary to carry out the provisions of this section.

10.

The Nevada Tax Commission may adopt such regulations as the Commission determines are necessary to carry out the provisions of this section.

11.

An applicant for a partial abatement who is aggrieved by a final decision of the Office of Economic Development may petition a court of competent jurisdiction to review the decision in the manner provided in chapter 233B of NRS.

12.

As used in this section:

(a) “Aircraft” means any fixed-wing, rotary-wing or unmanned aerial vehicle.

(b) “Component of an aircraft” means any:

(1) Element that makes up the physical structure of an aircraft, or is affixed thereto;

(2) Mechanical, electrical or other system of an aircraft, including, without limitation, any component thereof;

and (3) Raw material or processed material, part, machinery, tool, chemical, gas or equipment used to operate, manufacture, service, maintain, test, repair, overhaul or assemble an aircraft or component of an aircraft.

(c) “Full-time employee” means a person who is in a permanent position of employment and works an average of 30 hours per week during the applicable period set forth in subparagraph (3) of paragraph (a) of subsection 2.

(d) “Local sales and use taxes” means any taxes imposed on the gross receipts of any retailer from the sale of tangible personal property sold at retail, or stored, used or otherwise consumed, in any political subdivision of this State, except the taxes imposed by the Sales and Use Tax Act.

- *SB394_R1* – 12 – (e) “Personal property taxes” means any taxes levied on personal property by the State or a local government pursuant to chapter 361 of NRS.

Each ex officio tax receiver of a county which has levied a tax pursuant to NRS 387.195360.754 oris sectionhereby 2amended of this act shall, on each individual tax bill issued to aread propertyas ownerfollows: pursuant to NRS 361.480:

360.754 1.

A person who intends to locate or expand a data center in this State separately:may apply to the Office of Economic Development pursuant to this section for a partial abatement , not to exceed $500,000, of one or more of the taxes imposed on the new or expanded data center pursuant to chapter 361 or 374 of NRS.

(a)2. The rate of tax imposed pursuant to NRS 387.195;

(b) The rateOffice of taxEconomic imposedDevelopment shall approve an application for a partial abatement pursuant to this section 2if ofthe thisOffice act;makes the following determinations:

(c)(a) The amountapplication ofis consistent with the taxState liabilityPlan resultingfor fromEconomic Development developed by the taxExecutive leviedDirector of the Office of Economic Development pursuant to subsection 2 of NRS 387.195;231.053 and any guidelines adopted by the Executive Director of the Office to implement the State Plan for Economic Development.

and(b) (d)Not Thelater amountthan of1 year after the taxdate liabilityon resultingwhich fromthe application was received by the taxOffice, leviedthe pursuantapplicant tohas sectionexecuted 2an agreement with the Office of thisEconomic act.Development which must:

-(1) *SB394*Comply –with 3the –requirements 2.of NRS 360.755;

Identify(2) State the proceedsdate ofon which the taxesabatement imposedbecomes pursuanteffective, as agreed to NRSby 387.195the applicant and sectionthe 2Office of thisEconomic actDevelopment, aswhich beingmust dedicatednot forbe earlier than the supportdate ofon which the publicOffice schools.received the application and not later than 1 year after the date on which the Office approves the application;

(3) State that the data center will, after the date on which the abatement becomes effective, continue in operation in this State for a period specified by the Office of Economic Development, which must be at least 10 years, and will continue to meet the eligibility requirements set forth in this subsection;

and (4) Bind the successors in interest of the applicant for the specified period.

(c) The applicant 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 each county, city or town in which the data center operates.

(d) If the applicant is seeking a partial abatement for a period of not more than 10 years, the applicant meets the following requirements:

(1) The data center will, by not later than the date that is 5 years after the date on which the abatement becomes effective, have or have added 10 or more full-time employees who are residents of Nevada and who will be employed at the data center and will continue to employ 10 or more full-time employees who are - *SB394_R1* – 13 – residents of Nevada at the data center until at least the date which is 10 years after the date on which the abatement becomes effective.

(2) Establishing or expanding the data center will require the data center or any combination of the data center and one or more colocated businesses to make in each county in this State in which the data center is located, by not later than the date which is 5 years after the date on which the abatement becomes effective, a cumulative capital investment of at least $25,000,000 in capital assets that will be used or located at the data center.

(3) The average hourly wage that will be paid by the data center 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 data center will, by not later than the date which is 2 years after the date on which the abatement becomes effective, provide a health insurance plan for all employees employed at the data center that includes an option for health insurance coverage for dependents of the employees;

and (II) The health care benefits provided to employees employed at the data center will meet the minimum requirements for health care benefits established by the Office of Economic Development by regulation pursuant to subsection 13.

(4) At least 50 percent of the employees engaged in the construction of the data center are residents of Nevada, unless waived by the Executive Director of the Office of Economic Development upon proof satisfactory to the Executive Director of the Office of Economic Development that there is an insufficient number of residents of Nevada available and qualified for such employment.

(e) If the applicant is seeking a partial abatement for a period of 10 years or more but not more than 20 years, the applicant meets the following requirements:

(1) The data center will, by not later than the date that is 5 years after the date on which the abatement becomes effective, have or have added 50 or more full-time employees who are residents of Nevada and who will be employed at the data center and will continue to employ 50 or more full-time employees who are residents of Nevada at the data center until at least the date which is 20 years after the date on which the abatement becomes effective.

(2) Establishing or expanding the data center will require the data center or any combination of the data center and one or more colocated businesses to make in each county in this State in which the data center is located, by not later than the date which is 5 years after the date on which the abatement becomes effective, a - *SB394_R1* – 14 – cumulative capital investment of at least $100,000,000 in capital assets that will be used or located at the data center.

(3) The average hourly wage that will be paid by the data center 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 data center will, by not later than the date which is 2 years after the date on which the abatement becomes effective, provide a health insurance plan for all employees employed at the data center that includes an option for health insurance coverage for dependents of the employees;

and (II) The health care benefits provided to employees employed at the data center will meet the minimum requirements for health care benefits established by the Office of Economic Development by regulation pursuant to subsection 13.

(4) At least 50 percent of the employees engaged in the construction of the data center are residents of Nevada, unless waived by the Executive Director of the Office of Economic Development upon proof satisfactory to the Executive Director of the Office of Economic Development that there is an insufficient number of residents of Nevada available and qualified for such employment.

(f) The applicant has provided in the application an estimate of the total number of new employees which the data center anticipates hiring in this State if the Office of Economic Development approves the application.

(g) If the applicant is seeking a partial abatement of the taxes imposed by the Local School Support Tax Law, the application has been approved by a vote of at least two-thirds of the members of the Board of Economic Development created by NRS 231.033.

3.

Notwithstanding the provisions of subsection 2, the Office of Economic Development:

(a) Shall not consider an application for a partial abatement pursuant to this section unless the Office of Economic Development has requested a letter of acknowledgment of the request for the abatement from each affected county, school district, city or town.

(b) Shall consider the level of health care benefits provided to employees employed at the data center, the projected economic impact of the data center and the projected tax revenue of the data center after deducting projected revenue from the abated taxes.

(c) May, if the Office of Economic Development determines that such action is necessary:

- *SB394_R1* – 15 – (1) Approve an application for a partial abatement pursuant to this section by a data center that does not meet the requirements set forth in paragraph (d) or (e) of subsection 2;

(2) Make the requirements set forth in paragraphs (d) and (e) of subsection 2 more stringent;

or (3) Add additional requirements that an applicant must meet to qualify for a partial abatement pursuant to this section.

4.

If the Office of Economic Development approves an application for a partial abatement pursuant to this section, the Office 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 of each county in which the data center is or will be located.

5.

If the Office of Economic Development approves an application for a partial abatement pursuant to this section, the Office may also approve a partial abatement of taxes for each colocated business that enters into a contract to use or occupy, for a period of at least 2 years, all or a portion of the new or expanded data center.

Each such colocated business shall obtain a state business license issued by the Secretary of State.

The percentage amount of a partial abatement approved for a colocated business pursuant to this subsection must not exceed the percentage amount of the partial abatement approved for the data center.

The total amount of a partial abatement approved for a colocated business pursuant to this subsection must not exceed $500,000.

The duration of a partial abatement approved for a colocated business pursuant to this subsection must not exceed the duration of the contract or contracts entered into between the colocated business and the data center, including the duration of any contract or contracts extended or renewed by the parties.

If a colocated business ceases to meet the requirements set forth in this subsection, the colocated business shall repay the amount of the abatement that was allowed in the same manner in which a data center is required by subsection 8 to repay the Department or a county treasurer.

If a data center ceases to meet the requirements of subsection 2 or ceases operation before the time specified in the agreement described in paragraph (b) of subsection 2, any partial abatement approved for a colocated business ceases to be in effect, but the colocated business is not required to repay the amount of the abatement that was allowed before the date on which the abatement ceases to be in effect.

A data center shall provide the Executive Director of the Office and the Department with a list of the colocated businesses - *SB394_R1* – 16 – that are qualified to receive a partial abatement pursuant to this subsection and shall notify the Executive Director within 30 days after any change to the list.

The Executive Director shall provide the list and any updates to the list to the Department and the county treasurer of each affected county.

6.

An applicant for a partial abatement pursuant to this section or a data center whose partial abatement is in effect shall, upon the request of the Executive Director of the Office of 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 an applicant for a partial abatement pursuant to this section fails to execute the agreement described in paragraph (b) of subsection 2 within 1 year after the date on which the application was received by the Office, the applicant shall not be approved for a partial abatement pursuant to this section unless the applicant submits a new application.

8.

If a data center 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 data center 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 partial abatement that was allowed pursuant to this section before the failure of the data center to comply unless the Nevada Tax Commission determines that the data center has substantially complied with the requirements of this section.

Except as otherwise provided in NRS 360.232 and 360.320, the data center shall, in addition to the amount of the partial abatement required to be repaid 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.

9.

A county treasurer:

(a) Shall deposit any money that he or she receives pursuant to subsection 5 or 8 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.

- *SB394_R1* – 17 – 10.

An applicant for a partial abatement pursuant to this section who is aggrieved by a final decision of the Office of Economic Development may petition for judicial review in the manner provided in chapter 233B of NRS.

11.

For an employee to be considered a resident of Nevada for the purposes of this section, a data center must maintain the following documents in the personnel file of the employee:

(a) A copy of the current and valid Nevada driver’s license of the employee or a current and valid identification card for the employee issued by the Department of Motor Vehicles;

(b) If the employee is a registered owner of one or more motor vehicles in Nevada, a copy of the current motor vehicle registration of at least one of those vehicles;

(c) Proof that the employee is a full-time employee;

and (d) Proof that the employee is covered by the health insurance plan which the data center is required to provide pursuant to sub- subparagraph (I) of subparagraph (3) of paragraph (d) of subsection 2 or sub-subparagraph (I) of subparagraph (3) of paragraph (e) of subsection 2.

12.

For the purpose of obtaining from the Executive Director of the Office of Economic Development any waiver of the requirements set forth in subparagraph (4) of paragraph (d) of subsection 2 or subparagraph (4) of paragraph (e) of subsection 2, a data center must submit to the Executive Director of the Office of Economic Development written documentation of the efforts to meet the requirements and documented proof that an insufficient number of Nevada residents is available and qualified for employment.

13.

The Office of Economic Development:

(a) Shall adopt regulations relating to the minimum level of health care benefits that a data center must provide to its employees to meet the requirement set forth in paragraph (d) or (e) of subsection 2;

(b) May adopt such other regulations as the Office determines to be necessary to carry out the provisions of this section;

and (c) Shall not approve any application for a partial abatement submitted pursuant to this section which is received on or after January 1, 2036.

14.

The Nevada Tax Commission:

(a) Shall adopt regulations regarding:

(1) The capital investment necessary to meet the requirement set forth in paragraph (d) or (e) of subsection 2;

and (2) Any security that a data center is required to post to qualify for a partial abatement pursuant to this section.

- *SB394_R1* – 18 – (b) May adopt such other regulations as the Nevada Tax Commission determines to be necessary to carry out the provisions of this section.

15.

As used in this section, unless the context otherwise requires:

(a) “Colocated business” means a person who enters into a contract with a data center that is qualified to receive an abatement pursuant to this section to use or occupy all or part of the data center.

(b) “Data center” means one or more buildings located at one or more physical locations in this State which house a group of networked server computers for the purpose of centralizing the storage, management and dissemination of data and information pertaining to one or more businesses and includes any modular or preassembled components, associated telecommunications and storage systems and, if the data center includes more than one building or physical location, any network or connection between such buildings or physical locations.

(c) “Full-time employee” means a person who is in a permanent position of employment and works an average of 30 hours per week during the applicable period set forth in paragraph (d) or (e) of subsection 2.

NRS 387.1212274.310 is hereby amended to read as follows:

387.1212274.310 1.

TheA Stateperson Educationwho Fundintends isto herebylocate created as a specialbusiness revenue fund to be administered by the Superintendent of Public Instruction for the purpose of supporting the operation of the public schools in this State.State within:

The(a) interestA andhistorically incomeunderutilized earnedbusiness onzone, theas moneydefined in the15 Fund,U.S.C. excluding the direct legislative appropriation from the State General Fund required by subsection 3, must, after deducting any applicable charges, be credited to the Fund.

§ 632;

(b) A redevelopment area created pursuant to chapter 279 of NRS;

(c) An area eligible for a community development block grant pursuant to 24 C.F.R.

Part 570;

or (d) An enterprise community established pursuant to 24 C.F.R.

Part 597,  may submit a request to the governing body of the county, city or town in which the business would operate for an endorsement of an application by the person to the Office of Economic Development for a partial abatement of one or more of the taxes imposed pursuant to chapter 361 of NRS or the local sales and use taxes.

The governing body of the county, city or town shall provide notice of the request to the board of trustees of the school district in which the business would operate.

The notice must set forth the date, time and location of the hearing at which the governing body will consider whether to endorse the application.

As used in this subsection, “local sales and use taxes” means the taxes imposed on the gross receipts of any retailer from the sale of tangible personal property - *SB394_R1* – 19 – sold at retail, or stored, used or otherwise consumed, in the political subdivision in which the business is located, except the taxes imposed by the Sales and Use Tax Act and the Local School Support Tax Law.

MoneyThe whichgoverning mustbody beof depositeda forcounty, creditcity toor thetown Stateshall Educationdevelop Fundprocedures includes,for: without limitation:

(a) AllEvaluating moneywhether derivedsuch froman interestabatement onwould thebe Statebeneficial Permanentfor Schoolthe Fund,economic asdevelopment providedof inthe NRScounty, 387.030;city or town.

(b) TheIssuing proceedsa certificate of theendorsement taxfor imposedan pursuantapplication tofor NRSsuch 244.33561an andabatement anythat applicableis penaltyfound orto interest,be lessbeneficial any amount retained by the county treasurer for the actualeconomic costdevelopment of collectingthe andcounty, administeringcity theor tax;town.

(c) The proceeds of the tax imposed pursuant to subsection 1 of NRS 387.195;

(d) The money identified in subsection 8 of NRS 120A.610;

(e) The portion of the money in each special account created pursuant to subsection 1 of NRS 179.1187 which is identified in paragraph (d) of subsection 2 of NRS 179.1187;

(f) The money identified in paragraph (d) of subsection 6 of NRS 278C.250;

(g) The money identified in subsection 1 of NRS 328.450;

(h) The money identified in subsection 1 of NRS 328.460;

(i) The money identified in paragraph (a) of subsection 2 of NRS 360.850;

(j) The money identified in paragraph (a) of subsection 2 of NRS 360.855;

(k) The money required to be transferred to the State Education Fund pursuant to NRS 362.100;

(l) The money required to be paid over to the State Treasurer for deposit to the credit of the State Education Fund pursuant to subsection 4 of NRS 362.170;

(m) The portion of the proceeds of the tax imposed pursuant to subsection 1 of NRS 372A.290 identified in paragraph (b) of subsection 4 of NRS 372A.290;

(n) The proceeds of the tax imposed pursuant to subsection 3 of NRS 372A.290;

- *SB394* – 4 – (o) The proceeds of the fees, taxes, interest and penalties imposed pursuant to chapter 374 of NRS, as transferred pursuant to subsection 3 of NRS 374.785;

(p) The money identified in subsection 5 of NRS 445B.640;

(q) The money identified in paragraph (b) of subsection 4 of NRS 678B.390;

(r) The portion of the proceeds of the excise tax imposed pursuant to subsection 1 of NRS 463.385 identified in paragraph (c) of subsection 5 of NRS 463.385;

(s) The money required to be distributed to the State Education Fund pursuant to subsection 3 of NRS 482.181;

(t) The portion of the proceeds of the fee imposed pursuant to NRS 488.075 identified in subsection 2 of NRS 488.075;

(u) The portion of the net profits of the grantee of a franchise, right or privilege identified in NRS 709.110;

(v) The portion of the net profits of the grantee of a franchise identified in NRS 709.230;

(w) The portion of the net profits of the grantee of a franchise identified in NRS 709.270;

(x) The money required to be distributed to the State Education Fund pursuant to NRS 363D.290;

[and] (y) The proceeds of the tax imposed pursuant to subsection 1 of section 2 of this act;

and (z) The direct legislative appropriation from the State General Fund required by subsection 3.

InA additionperson towhose moneyapplication fromhas anybeen otherendorsed source provided by law, support for the Stategoverning Educationbody Fundof must be provided by direct legislative appropriation from the Statecounty, Generalcity Fundor intown, anas amountapplicable, determinedpursuant by the Legislature to be sufficient to fund the operation of the public schools in this Statesection formay kindergartensubmit through grade 12 for the nextapplication ensuingto biennium for the populationOffice reasonablyof estimatedEconomic forDevelopment. that biennium.

MoneyThe inOffice theshall Stateapprove Education Fund does not revert to the Stateapplication Generalif Fund at the endOffice ofmakes a fiscal year, and the balancefollowing indeterminations: the State Education Fund must be carried forward to the next fiscal year.

(a) The business is consistent with:

(1) The State Plan for Economic Development developed by the Administrator pursuant to subsection 2 of NRS 231.053;

and (2) Any guidelines adopted by the Administrator to implement the State Plan for Economic Development.

(b) Not later than 1 year after the date on which the application was received by the Office, the applicant has executed an agreement with the Office which states:

(1) The date on which the abatement becomes effective, as agreed to by the applicant and the Office, which must not be earlier than the date on which the Office received the application and not later than 1 year after the date on which the Office approves the application;

and (2) That the business will, after the date on which the abatement becomes effective:

(I) Commence operation and continue in operation in the historically underutilized business zone, as defined in 15 U.S.C.

§ 632, redevelopment area created pursuant to chapter 279 of NRS, area eligible for a community development block grant pursuant to 24 C.F.R.

Part 570 or enterprise community established pursuant to 24 C.F.R.

Part 597 for a period specified by the Office, which must be at least 5 years;

and (II) Continue to meet the eligibility requirements set forth in this subsection.

 The agreement must bind 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 - *SB394_R1* – 20 – other permits required by the county, city or town in which the business will operate.

(d) The applicant invested or commits to invest a minimum of $500,000 in capital assets that will be retained at the location of the business in the historically underutilized business zone, as defined in 15 U.S.C.

§ 632, redevelopment area created pursuant to chapter 279 of NRS, area eligible for a community development block grant pursuant to 24 C.F.R.

Part 570 or enterprise community established pursuant to 24 C.F.R.

Part 597 until at least the date which is 5 years after the date on which the abatement becomes effective.

MoneyIf in the FundOffice mustof beEconomic paidDevelopment outapproves onan claimsapplication asfor othera claimspartial againstabatement, the StateOffice areshall paid.immediately forward a certificate of eligibility for the abatement to:

(a) The Department of Taxation;

(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 of the county in which the business will be located.

5.

If the Office of Economic Development approves an application for a partial abatement pursuant to this section:

(a) The partial abatement must be for a duration of not less than 1 year but not more than 5 years.

(b) If the abatement is from the property tax imposed pursuant to chapter 361 of NRS, the partial abatement must not exceed 75 percent of the taxes on personal property payable by a business each year pursuant to that chapter.

(c) The amount of the partial abatement must not exceed $500,000.

6.

If an applicant for a partial abatement pursuant to this section fails to execute the agreement described in paragraph (b) of subsection 3 within 1 year after the date on which the application was received by the Office, the applicant shall not be approved for a partial abatement pursuant to this section unless the applicant submits a new request pursuant to subsection 1.

7.

If a business whose partial abatement has been approved pursuant to this section and is in effect ceases:

(a) To meet the eligibility requirements for the partial abatement;

or (b) Operation before the time specified in the agreement described in paragraph (b) of subsection 3,  the business shall repay to the Department of Taxation 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 partial abatement that was allowed pursuant to this section before the failure of the business to comply unless the Nevada Tax - *SB394_R1* – 21 – 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 partial abatement 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.

The Office of Economic Development may adopt such regulations as the Office determines to be necessary or advisable to carry out the provisions of this section.

9.

An applicant for an abatement who is aggrieved by a final decision of the Office of Economic Development may petition for judicial review in the manner provided in chapter 233B of NRS.

NRS 278C.250274.320 is hereby amended to read as follows:

278C.250274.320 1.

AfterA theperson effectivewho dateintends ofto theexpand ordinancea adoptedbusiness pursuantin tothis NRSState 278C.220:within:

(a) AnyA taxeshistorically leviedunderutilized uponbusiness taxablezone, propertyas defined in the15 taxU.S.C. increment area each year by or for the benefit of the State, the municipality and any public body must be divided as follows:

(1)§ That632; portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for each of those - *SB394* – 5 – taxing agencies upon the total sum of the assessed value of the taxable property in the tax increment area as shown upon the last equalized assessment roll used in connection with the taxation of the property by the taxing agency, must be allocated to and when collected must be paid into the funds of the respective taxing agencies as taxes by or for the taxing agencies on all other property are paid.

(2)(b) ExceptA asredevelopment otherwisearea providedcreated in this section, the portion of the taxes levied each year in excess of the amount determined pursuant to subparagraphchapter (1)279 must be allocated to, and when collected must be paid into, the tax increment account pertaining to the undertaking to pay the bond requirements of loans,NRS; money advanced to, or indebtedness, whether funded, refunded, assumed or otherwise, incurred by the municipality to finance or refinance, in whole or in part, the undertaking.

Unless(c) theAn total assessed valuation of the taxable property in the tax increment area exceedseligible thefor totala assessedcommunity valuedevelopment ofblock thegrant taxablepursuant property in the area as shown by the last equalized assessment roll referred to in24 thisC.F.R. subsection, all of the taxes levied and collected upon the taxable property in the area must be paid into the funds of the respective taxing agencies.

WhenPart the570; loans, advances and indebtedness, if any, and interest thereon, have been paid, all money thereafter received from taxes upon the taxable property in the tax increment area must be paid into the funds of the respective taxing agencies as taxes on all other property are paid.

(b) If the undertaking is a natural resources project or a(d) railAn projectenterprise forcommunity whichestablished the municipality has received approval from the Interim Finance Committee pursuant to NRS24 278C.157,C.F.R. any taxes levied upon the sale or use of tangible personal property in the tax increment area each year by or for the benefit of the State, the municipality and any public body must be divided as follows:

(1)Part That597, portion ofmay thesubmit taxesa thatrequest wouldto be produced by the rategoverning uponbody whichof the taxcounty, iscity levied each year by or fortown eachin ofwhich those taxing agencies upon the totalbusiness sumoperates offor thean salesendorsement and use of tangiblean personalapplication propertyby in the taxperson incrementto area in the fiscalOffice year immediately preceding the effective date of theEconomic ordinanceDevelopment adoptedfor pursuanta topartial NRSabatement 278C.220, must be allocated to and when collected must be paid into the funds of the respectivelocal taxingsales agenciesand asuse taxes byimposed or for the taxing agencies on allcapital otherequipment. sales of tangible personal property are paid.

(2)The Exceptgoverning asbody otherwise provided in this section, of the portioncounty, ofcity theor taxestown leviedshall eachprovide yearnotice in excess of the amountrequest determined pursuant to subparagraphthe (1),board 50 percent of thattrustees amount must be allocated to, and when collected must be paid into the tax increment account pertaining to the undertaking to pay the bond requirements of loans, money advanced to, or indebtedness, whether - *SB394* – 6 – funded, refunded, assumed or otherwise, incurred by the municipalityschool todistrict finance or refinance, in wholewhich or in part, the undertaking.business operates.

The remainingnotice 50must percentset offorth thatthe amountdate, musttime be allocated to and whenlocation collected must be paid into the funds of the respectivehearing taxingat agencieswhich as taxes by or for the taxinggoverning agenciesbody onwill allconsider otherwhether salesto ofendorse tangiblethe personalapplication. property are paid.

UnlessAs theused totalin amountthis ofsubsection, the“local taxessales imposed on the sale and use oftaxes” tangiblemeans personal property in the taxtaxes incrementimposed areaon exceeds the totalgross amountreceipts of theany taxesretailer imposedfrom on the sale and use of tangible personal property insold theat taxretail, incrementor areastored, inused theor fiscalotherwise yearconsumed, immediatelyin preceding the effectivepolitical datesubdivision ofin which the ordinancebusiness adoptedis pursuantlocated, toexcept NRS 278C.220, all of the taxes leviedimposed andby collected upon the saleSales orand useUse ofTax tangibleAct personaland property in the taxLocal incrementSchool areaSupport mustTax beLaw. paid into the funds of the respective taxing agencies.

When the loans, advances and indebtedness, if any, and interest thereon, have been paid, all money thereafter received from taxes upon the sale or use of tangible personal property in the tax increment area must be paid into the funds of the respective taxing agencies as taxes on all other taxes on the sale or use of tangible personal property are paid.

(c) If the undertaking is a natural resources project or a rail project for which the municipality has received approval from the Interim Finance Committee pursuant to NRS 278C.157, any taxes imposed pursuant to NRS 363A.130 or 363B.110 on employers located in the tax increment area must be divided as follows:

(1) That portion of the taxes that would be produced by the rate upon which the tax is imposed each year by the Department of Taxation in the fiscal year immediately preceding the effective date of the ordinance adopted pursuant to NRS 278C.220, must be allocated to and when collected must be paid to the Department of Taxation as all other taxes imposed pursuant to NRS 363A.130 and 363B.110 are paid.

(2) Except as otherwise provided in this section, of the portion of the taxes imposed each year in excess of the amount determined pursuant to subparagraph (1), 50 percent of that amount must be allocated to, and when collected must be paid into, the tax increment account pertaining to the undertaking to pay the bond requirements of loans, money advanced to, or indebtedness, whether funded, refunded, assumed or otherwise, incurred by the municipality to finance or refinance, in whole or in part, the undertaking.

The remaining 50 percent of that amount must be allocated to and when collected must be paid to the Department of Taxation as all other taxes imposed pursuant to NRS 363A.130 and 363B.110 are paid.

Unless the total amount of the taxes imposed pursuant to NRS 363A.130 and 363B.110 on employers located in the tax increment area exceeds the total amount of the taxes imposed - *SB394* – 7 – on employers located in the tax increment area in the fiscal year immediately preceding the effective date of the ordinance adopted pursuant to NRS 278C.220, all of the taxes imposed on employers located in the tax increment area must be paid to the Department of Taxation.

When the loans, advances and indebtedness, if any, and interest thereon, have been paid, all money thereafter received from taxes imposed pursuant to NRS 363A.130 or 363B.110 on employers located in the tax increment area must be paid to the Department of Taxation as all other taxes imposed pursuant to NRS 363A.130 and 363B.110 are paid.

ExceptThe as otherwise provided in subsection 2 of NRS 360.991, the amount of the taxes levied each year which are paid into the tax increment account pursuant to subparagraph (2) of paragraph (a) of subsection 1, subparagraph (2) of paragraph (b) of subsection 1 and subparagraph (2) of paragraph (c) of subsection 1 must be limited by the governing body to an amount not to exceed the combined total amount required for annual debt service of ora anycounty, outstandingcity advances of money or unfundedtown costsshall associateddevelop withprocedures thefor: project or projects acquired, improved or equipped, or any combination thereof, as part of the undertaking.

(a) Evaluating whether such an abatement would be beneficial for the economic development of the county, city or town.

- *SB394_R1* – 22 – (b) Issuing a certificate of endorsement for an application for such an abatement that is found to be beneficial for the economic development of the county, city or town.

AnyA revenuesperson generatedwhose withinapplication thehas taxbeen incrementendorsed areaby inthe excessgoverning body of the amountcounty, referencedcity inor subsectiontown, 2,as ifapplicable, any,pursuant willto bethis paidsection intomay thesubmit funds of the respectiveapplication taxingto agencies in the sameOffice proportionof asEconomic theirDevelopment. base amount was distributed.

The Office shall approve the application if the Office makes the following determinations:

(a) The business is consistent with:

(1) The State Plan for Economic Development developed by the Administrator pursuant to subsection 2 of NRS 231.053;

and (2) Any guidelines adopted by the Administrator to implement the State Plan for Economic Development.

(b) Not later than 1 year after the date on which the application was received by the Office, the applicant has executed an agreement with the Office which states:

(1) The date on which the abatement becomes effective, as agreed to by the applicant and the Office, which must not be earlier than the date on which the Office received the application and not later than 1 year after the date on which the Office approves the application;

and (2) That the business will, after the date on which the abatement becomes effective:

(I) Continue in operation in the historically underutilized business zone, as defined in 15 U.S.C.

§ 632, redevelopment area created pursuant to chapter 279 of NRS, area eligible for a community development block grant pursuant to 24 C.F.R.

Part 570 or enterprise community established pursuant to 24 C.F.R.

Part 597 for a period specified by the Office, which must be at least 5 years;

and (II) Continue to meet the eligibility requirements set forth in this subsection.

 The agreement must bind 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) The applicant invested or commits to invest a minimum of $250,000 in capital equipment that will be retained at the location of the business in the historically underutilized business zone, as defined in 15 U.S.C.

§ 632, redevelopment area created pursuant to chapter 279 of NRS, area eligible for a community development block grant pursuant to 24 C.F.R.

Part 570 or enterprise community established pursuant to 24 C.F.R.

Part 597 until at least the date - *SB394_R1* – 23 – which is 5 years after the date on which the abatement becomes effective.

ExceptIf as otherwise provided in this subsection, in any fiscal year, the totalOffice revenue paid to a tax increment area pursuant to subparagraph (2) of paragraphEconomic (a)Development ofapproves subsectionan 1application infor combinationa withpartial abatement, the totalOffice revenueshall paidimmediately toforward any other tax increment areas and any redevelopment agencies of a municipality,certificate other than any revenues paid to any other tax increment areas pursuant to subparagraph (2) of paragrapheligibility (b)for ofthe subsectionabatement 1to: and subparagraph (2) of paragraph (c) of subsection 1, must not exceed:

(a) InThe aDepartment county whose population is 100,000 or more or a city whose population is 150,000 or more, an amount equal to the combined tax rates of theTaxation; taxing agencies for that fiscal year multiplied by 10 percent of the total assessed valuation of the municipality.

and (b) InThe aNevada countyTax whoseCommission. population is less than 100,000 or a city whose population is less than 150,000, an amount equal to the combined tax rates of the taxing agencies for that fiscal year multiplied by 15 percent of the total assessed valuation of the municipality.

 Notwithstanding the provisions of this subsection, if a county has a population of less than 100,000 or if a city has a population of less than 150,000 at the time the municipality issues securities for a tax - *SB394* – 8 – increment area pursuant to NRS 278C.280, the revenue limitation set forth in paragraph (b) must remain the revenue limitation for the tax increment area until such time as the securities issued for that tax increment area pursuant to NRS 278C.280 have been paid in full, including any securities issued to refund those securities, regardless of whether the population of the municipality reaches or exceeds 100,000 after the issuance of those securities.

If the revenueOffice paid to a tax increment area must be limited pursuant to paragraph (a) or (b) of subsectionEconomic 4Development andapproves thean municipalityapplication hasfor morea thanpartial oneabatement redevelopmentpursuant agency or tax increment area, or one of each, the municipality shall determine the allocation to eachthis agencysection: and area.

Any(a) revenueThe thatpartial wouldabatement must be allocatedfor to a taxduration increment area but for the provisions of thisnot sectionless mustthan be1 paidyear intobut thenot fundsmore ofthan the5 respectiveyears. taxing agencies.

(b) If the abatement is from the property tax imposed pursuant to chapter 361 of NRS, the partial abatement must not exceed 75 percent of the taxes on personal property payable by a business each year pursuant to that chapter.

(c) The total amount of the partial abatement must not exceed $500,000.

TheIf portionan ofapplicant thefor taxesa leviedpartial eachabatement yearpursuant into excessthis ofsection thefails amountto determinedexecute pursuantthe toagreement subparagraphdescribed (1)in of paragraph (a)(b) of subsection 3 within 1 year after the date on which isthe attributableapplication was received by the Office, the applicant shall not be approved for a partial abatement pursuant to anythis taxsection rateunless leviedthe byapplicant submits a taxingnew agency:request pursuant to subsection 1.

(a) To produce revenue in an amount sufficient to make annual repayments of the principal of, and the interest on, any bonded indebtedness that was approved by a majority of the registered voters within the area of the taxing agency voting upon the question, must be allocated to, and when collected must be paid into, the debt service fund of that taxing agency.

(b) In excess of any tax rate of that taxing agency applicable to the last taxation of the property before the effective date of the ordinance, if that additional rate was approved by a majority of the registered voters within the area of the taxing agency voting upon the question, must be allocated to, and when collected must be paid into, the appropriate fund of that taxing agency.

(c) Pursuant to NRS 387.3285 or 387.3287, if that rate was approved by a majority of the registered voters within the area of the taxing agency voting upon the question, must be allocated to, and when collected must be paid into, the appropriate fund of that taxing agency.

(d) For the support of the public schools within a county school district pursuant to NRS 387.195, or section 2 of this act, must be allocated to, and when collected must be paid into, the State Education Fund.

TheIf provisionsa ofbusiness paragraphwhose (a)partial ofabatement subsectionhas 6been include, without limitation, a tax rate approved for bonds of a county school district issued pursuant to NRSthis 350.020,section including,and withoutis limitation, amounts necessary for a reserve account in theeffect debtceases: service fund.

-(a) *SB394*To –meet 9the –eligibility 8.requirements for the partial abatement;

Asor used(b) inOperation thisbefore section,the time specified in the termagreement “lastdescribed equalizedin assessmentparagraph roll”(b) meansof subsection 3,  the assessmentbusiness rollshall inrepay existenceto onthe Department of Taxation the 15thamount dayof the partial abatement that was allowed pursuant to this section before the failure of Marchthe immediatelybusiness precedingto comply unless the effectiveNevada dateTax ofCommission determines that the ordinance.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 partial abatement 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.

The Office of Economic Development may adopt such regulations as the Office determines to be necessary or advisable to carry out the provisions of this section.

- *SB394_R1* – 24 – 9.

An applicant for an abatement who is aggrieved by a final decision of the Office of Economic Development may petition for judicial review in the manner provided in chapter 233B of NRS.

NRS 279.676274.330 is hereby amended to read as follows:

279.676274.330 1.

AnyA redevelopmentperson planwho mayowns contain a provisionbusiness thatwhich taxes,is iflocated any,within leviedan uponenterprise taxablecommunity propertyestablished inpursuant theto redevelopment24 areaC.F.R. each year by or for the benefit of the State, any city, county, district or other public corporation, after the effective date of the ordinance approving the redevelopment plan, must be divided as follows:

(a)Part That597 portionin ofthis theState taxesmay whichsubmit woulda berequest producedto by the rategoverning uponbody whichof the taxcounty, iscity levied each year by or fortown eachin ofwhich the taxingbusiness agenciesis uponlocated thefor totalan sumendorsement of thean assessedapplication valueby of the taxableperson propertyto in the redevelopmentOffice areaof asEconomic shownDevelopment uponfor thea assessmentpartial rollabatement used in connection with the taxation of theone propertyor bymore the taxing agency, last equalized before the effective date of the ordinance,taxes mustimposed bepursuant allocated to andchapter when361 collected must be paid into the funds of theNRS respective taxing agencies as taxes by or forthe suchlocal taxingsales agenciesand onuse alltaxes. other property are paid.

ToThe allocategoverning taxesbody levied by or for any taxing agency or agencies which did not include the territory in a redevelopment area on the effective date of the ordinancecounty, butcity to which the territory has been annexed or otherwisetown includedshall afterprovide thenotice effective date, the assessment roll of the countyrequest lastto equalized on the effectiveboard date of thetrustees ordinance must be used in determining the assessed valuation of the taxableschool propertydistrict in thewhich redevelopment area on the effectivebusiness date.operates.

IfThe propertynotice whichmust wasset shownforth on the assessmentdate, rolltime used to determine the amount of taxes allocated to the taxing agencies is transferred to the State and becomeslocation exempt from taxation, the assessed valuation of the exempthearing propertyat as shown on the assessment roll last equalized before the date on which the propertygoverning wasbody transferredwill toconsider thewhether State must be subtracted from the assessed valuation used to determineendorse the amountapplication. of revenue allocated to the taxing agencies.

(b)As Exceptused as otherwise provided in paragraphsthis (c),subsection, (d)“local andsales (e) and NRSuse 540A.265,taxes” thatmeans portion of the levied taxes eachimposed yearon in excess of the amountgross setreceipts forthof inany paragraphretailer (a)from mustthe besale allocatedof totangible andpersonal whenproperty collectedsold mustat beretail, paidor intostored, aused specialor fundotherwise ofconsumed, in the redevelopmentpolitical agencysubdivision toin paywhich the costsbusiness ofis redevelopmentlocated, andexcept to pay the principaltaxes ofimposed and interest on loans, money advanced to, or indebtedness, whether funded, refunded, assumed, or otherwise, incurred by the redevelopmentSales agencyand toUse financeTax orAct refinance,and inthe wholeLocal orSchool inSupport part,Tax redevelopment.Law.

Unless the total assessed valuation of the taxable property in a redevelopment area exceeds the total assessed value of the taxable property in the redevelopment area as shown by:

- *SB394* – 10 – (1) The assessment roll last equalized before the effective date of the ordinance approving the redevelopment plan;

or (2) The assessment roll last equalized before the effective date of an ordinance adopted pursuant to subsection 5,  whichever occurs later, less the assessed valuation of any exempt property subtracted pursuant to paragraph (a), all of the taxes levied and collected upon the taxable property in the redevelopment area must be paid into the funds of the respective taxing agencies.

When the redevelopment plan is terminated pursuant to the provisions of NRS 279.438 and 279.439 and all loans, advances and indebtedness, if any, and interest thereon, have been paid, all money thereafter received from taxes upon the taxable property in the redevelopment area must be paid into the funds of the respective taxing agencies as taxes on all other property are paid.

(c) That portion of the taxes in excess of the amount set forth in paragraph (a) that is attributable to a tax rate levied by a taxing agency to produce revenues in an amount sufficient to make annual repayments of the principal of, and the interest on, any bonded indebtedness that was approved by the voters of the taxing agency on or after November 5, 1996, must be allocated to and when collected must be paid into the debt service fund of that taxing agency.

(d) That portion of the taxes in excess of the amount set forth in paragraph (a) that is attributable to a new or increased tax rate levied by a taxing agency and was approved by the voters of the taxing agency on or after November 5, 1996, must be allocated to and when collected must be paid into the appropriate fund of the taxing agency.

(e) If an agency has adopted a resolution pursuant to subsection 8, that portion of the taxes in excess of the amount set forth in paragraph (a) that is attributable to a tax rate levied by a taxing agency:

(1) Pursuant to NRS 387.3285 or 387.3287, if that rate was approved by a majority of the registered voters within the area of the taxing agency voting upon the question, must be allocated to, and when collected paid into, the appropriate fund of that taxing agency.

(2) For the support of public schools within a county school district pursuant to NRS 387.195, or section 2 of this act, must be allocated to, and when collected paid into, the appropriate fund of that taxing agency.

ExceptThe asgoverning otherwisebody providedof ina subsectioncounty, 3,city inor anytown fiscalshall year,develop theprocedures totalfor: revenue paid to a redevelopment agency must not exceed:

(a) InEvaluating awhether countysuch whose population is 100,000 or more or a city whose population is 150,000 or more, an amountabatement equalwould tobe thebeneficial -for *SB394* – 11 – combined tax rates of the taxingeconomic agenciesdevelopment for that fiscal year multiplied by 10 percent of the totalcounty, assessedcity valuationor oftown. the municipality.

(b) InIssuing a countycertificate whoseof populationendorsement isfor 30,000an orapplication morefor butsuch lessan thanabatement 100,000that or a city whose population is 25,000found or more but less than 150,000, an amount equal to thebe combinedbeneficial taxfor rates of the taxingeconomic agenciesdevelopment for that fiscal year multiplied by 15 percent of the totalcounty, assessedcity valuationor oftown. the municipality.

(c) In a county whose population is less than 30,000 or a city whose population is less than 25,000, an amount equal to the combined tax rates of the taxing agencies for that fiscal year multiplied by 20 percent of the total assessed valuation of the municipality.

 If the revenue paid to a redevelopment agency must be limited pursuant to paragraph (a), (b) or (c) and the redevelopment agency has more than one redevelopment area, the redevelopment agency shall determine the allocation to each area.

Any revenue which would be allocated to a redevelopment agency but for the provisions of this section must be paid into the funds of the respective taxing agencies.

TheA taxingperson agencieswhose shallapplication continuehas tobeen payendorsed toby athe redevelopmentgoverning agencybody any amount which was being paid before July 1, 1987, and in anticipation of which the agencycounty, becamecity obligatedor beforetown, Julyas 1,applicable, 1987,pursuant to repaythis anysection bond,may loan,submit moneythe advancedapplication orto anythe otherOffice indebtedness,of whetherEconomic funded,Development. refunded, assumed or otherwise incurred.

The Office shall approve the application if the Office makes the following determinations:

(a) The business is consistent with:

(1) The State Plan for Economic Development developed by the Administrator pursuant to subsection 2 of NRS 231.053;

and (2) Any guidelines adopted by the Administrator to implement the State Plan for Economic Development.

(b) Not later than 1 year after the date on which the application was received by the Office, the applicant has executed an agreement with the Office which states:

(1) The date on which the abatement becomes effective, as agreed to by the applicant and the Office, which must not be earlier than the date on which the Office received the application and not - *SB394_R1* – 25 – later than 1 year after the date on which the Office approves the application;

and (2) That the business will, after the date on which the abatement becomes effective:

(I) Continue in operation in the enterprise community for a period specified by the Office, which must be at least 5 years;

and (II) Continue to meet the eligibility requirements set forth in this subsection.

 The agreement must bind 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) The business:

(1) Employs one or more dislocated workers who reside in the enterprise community;

and (2) Pays such employees a wage of not less than 100 percent of the federally designated level signifying poverty for a family of four persons and provides medical benefits to the employees and their dependents which meet the minimum requirements for medical benefits established by the Office.

ForIf the purposesOffice of thisEconomic section,Development theapproves assessmentan rollapplication lastfor equalizeda beforepartial theabatement, effective date of the ordinanceOffice approvingshall: the redevelopment plan is the assessment roll in existence on March 15 immediately preceding the effective date of the ordinance.

(a) Determine the percentage of employees of the business which meet the requirements of paragraph (d) of subsection 3 and grant a partial abatement equal to that percentage;

and (b) Immediately forward a certificate of eligibility for the abatement to:

(1) The Department of Taxation;

(2) The Nevada Tax Commission;

and (3) If the partial abatement is from the property tax imposed pursuant to chapter 361 of NRS, the county treasurer of the county in which the business is located.

If in any year the assessedOffice value of theEconomic taxableDevelopment propertyapproves in a redevelopment area located in a city in a county whose population is 700,000 or more as shown by the assessment roll most recently equalized has decreased by 10 percent or more from the assessed value of the taxable property in the redevelopment area as shown by the assessment roll last equalized before the effective date of the ordinance approving the redevelopment plan, the redevelopment agency may adopt an ordinanceapplication which provides that the total assessed value of the taxable property in the redevelopment area for thea purposespartial ofabatement paragraphs (a) and (b) of subsection 1 is the total assessed value of the taxable property in the redevelopment area as shown by the assessment roll last equalized before the effective date of the ordinance adopted pursuant to this subsection.section:

A(a) redevelopmentThe agencypartial mayabatement adoptmust anbe ordinancefor pursuanta toduration thisof -not *SB394*less –than 121 –year subsectionbut onlynot once,more andthan the5 electionyears. to adopt such an ordinance is irrevocable.

6.(b) If the abatement is from the property tax imposed pursuant to chapter 361 of NRS, the partial abatement must not exceed 75 percent of the taxes on personal property payable by a business each year pursuant to that chapter.

An(c) agencyThe whichtotal adoptsamount an ordinance pursuant to subsection 5 and which receives revenue pursuant to paragraph (b) of subsection 1 from taxes on the taxablepartial propertyabatement locatedmust innot theexceed redevelopment$500,000. area affected by the ordinance shall set aside 18 percent of that revenue received on and after the effective date of the ordinance to:

(a)- Increase,*SB394_R1* improve,– preserve26 or– enhance6. public educational facilities;

If an applicant for a partial abatement pursuant to this section fails to execute the agreement described in paragraph (b) Supportof publicsubsection educational3 activitieswithin and1 programs;year after the date on which the application was received by the Office, the applicant shall not be approved for a partial abatement pursuant to this section unless the applicant submits a new request pursuant to subsection 1.

or (c) Increase, improve, preserve or enhance public educational facilities and support public educational activities and programs,  which are located in or within 1 mile of the redevelopment area or which serve pupils who reside in or within 1 mile of the redevelopment area.

For each fiscal year, the agency shall prepare a written report concerning the amount of money expended for the purposes set forth in this subsection and shall, on or before November 30 of each year, submit a copy of the report to the Director of the Legislative Counsel Bureau for transmittal to the Legislative Commission, if the report is received during an odd- numbered year, or to the next session of the Legislature, if the report is received during an even-numbered year.

TheIf obligationa ofbusiness anwhose agencypartial pursuantabatement tohas subsectionbeen 6approved to set aside 18 percent of the revenue allocated to and received by the agency pursuant to paragraphthis (b)section ofand subsectionis 1 from taxes on the taxable property located in theeffect redevelopmentceases: area affected by the ordinance adopted by the agency pursuant to subsection 5 is subordinate to any existing obligations of the agency.

As(a) usedTo inmeet this subsection, “existing obligations” means the principaleligibility andrequirements interest,for when due, on any bonds, notes or other indebtedness whether funded, refunded, assumed or otherwise incurred by an agency before the effectivepartial dateabatement; of an ordinance adopted by the agency pursuant to subsection 5, to finance or refinance in whole or in part, the redevelopment of a redevelopment area.

Foror (b) Operation before the purposestime ofspecified thisin subsection,the obligationsagreement incurreddescribed byin anparagraph agency(b) onof orsubsection after3,  the effectivebusiness dateshall repay to the Department of anTaxation ordinanceor, adoptedif bythe partial abatement was from the agencyproperty tax imposed pursuant to subsectionchapter 5361 shallof beNRS, deemedto existingthe obligationscounty iftreasurer, the netamount proceedsof arethe usedpartial abatement that was allowed pursuant to refinancethis existingsection obligationsbefore the failure of the agency.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 partial abatement 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.

AnThe agencyOffice may adopt a resolution providing that the portion of theEconomic taxesDevelopment: in excess of the amount set forth in paragraph (a) of subsection 1 that is attributable to any tax rate levied by a taxing agency:

-(a) *SB394*Shall –adopt 13regulations –relating (a) Pursuant to NRSthe 387.3285minimum orlevel 387.3287,of ifbenefits that rate was approved by a majoritybusiness of the registered voters within the area of the taxing agency voting upon the question, must beprovide allocatedto to,its andemployees whento collectedqualify paidfor into,an theabatement appropriatepursuant fundto ofthis thatsection. taxing agency.

(b) ForMay theadopt supportsuch ofother publicregulations schoolsas withinthe aOffice countydetermines school district pursuant to NRSbe 387.195,necessary or sectionadvisable 2to ofcarry thisout act, must be allocated to, and when collected paid into, the appropriateprovisions fund of thatthis taxingsection. agency.

9.

An applicant for an abatement who is aggrieved by a final decision of the Office of Economic Development may petition for judicial review in the manner provided in chapter 233B of NRS.

10.

As used in this section, “dislocated worker” means a person who:

(a) Has been terminated, laid off or received notice of termination or layoff from employment;

(b) Is eligible for or receiving or has exhausted his or her entitlement to unemployment compensation;

(c) Has been dependent on the income of another family member but is no longer supported by that income;

- *SB394_R1* – 27 – (d) Has been self-employed but is no longer receiving an income from self-employment because of general economic conditions in the(e) Is currently unemployed and unable to return to a previous industry or occupation.

NRS 361.453 is hereby amended to read as follows:

361.453 1.

Except as otherwise provided in this section and NRS 354.705, 354.723, 387.3288 and 450.760, and section 2 of this act, the total ad valorem tax levy for all public purposes must not exceed $3.64 on each $100 of assessed valuation, or a lesser or greater amount fixed by the State Board of Examiners if the State Board of Examiners is directed by law to fix a lesser or greater amount for that fiscal year.

2.

Any levy imposed by the Legislature for the repayment of bonded indebtedness or the operating expenses of the State of Nevada and any levy imposed by the board of county commissioners pursuant to NRS 387.195 that is in excess of 50 cents on each $100 of assessed valuation of taxable property within the county must not be included in calculating the limitation set forth in subsection 1 on the total ad valorem tax levied within the boundaries of the county, city or unincorporated town, if, in a county whose population is less than 45,000, or in a city or unincorporated town located within that county:

(a) The combined tax rate certified by the Nevada Tax Commission was at least $3.50 on each $100 of assessed valuation on June 25, 1998;

(b) The governing body of that county, city or unincorporated town proposes to its registered voters an additional levy ad valorem above the total ad valorem tax levy for all public purposes set forth in subsection 1;

(c) The proposal specifies the amount of money to be derived, the purpose for which it is to be expended and the duration of the levy;

and (d) The proposal is approved by a majority of the voters voting on the question at a general election or a special election called for that purpose.

3.

The duration of the additional levy ad valorem levied pursuant to subsection 2 must not exceed 5 years.

The governing body of the county, city or unincorporated town may discontinue the levy before it expires and may not thereafter reimpose it in whole or in part without following the procedure required for its original imposition set forth in subsection 2.

- *SB394* – 14 – if the governing body of the county, city or unincorporated townnly determines, by a unanimous vote, that an emergency exists.

The determination made by the governing body is conclusive unless it is shown that the governing body acted with fraud or a gross abuse of discretion.

An action to challenge the determination made by the governing body must be commenced within 15 days after the governing body’s determination is final.

As used in this subsection, “emergency” means any unexpected occurrence or combination of occurrences which requires immediate action by the governing body of the county, city or unincorporated town to prevent or mitigate a substantial financial loss to the county, city or unincorporated town or to enable the governing body to provide an essential service to the residents of the county, city or unincorporated town.

Sec.

8.

H - *SB394**SB394_R1*