Amendment No. 688

Senate Amendment to Senate Bill No. 537 (BDR 32-708)

Proposed by: Committee on Taxation

Amendment Box: Replaces Amendment No. 590.

Resolves Conflicts with: N/A

Amends: Summary: Title: Preamble: Joint Sponsorship:

ASSEMBLY ACTION Initial and Date | SENATE ACTION Initial and Date

Adopted Lost | Adopted Lost

Concurred In Not | Concurred In Not

Receded Not | Receded Not

Amend section 1, page 2, by deleting line 3 and inserting:

"must be at least 5 years, and will continue to".

Amend section 1, page 2, line 11, after "county" by inserting "or city".

Amend section 1, page 2, line 19, by deleting "industrial".

Amend section 1, page 2, line 22 by deleting:

"and pay for".

Amend section 1, page 2, line 30, after "county" by inserting "or city".

Amend section 1, page 2, line 38, by deleting "industrial".

Amend section 1, page 2, line 41, by deleting:

"and pay for".

Amend section 1, page 3, line 21, by deleting "industrial".

Amend section 1, page 3 line 24, by deleting:

"and pay for".

Amend section 1, pages 3 and 4, by deleting lines 41 through 43 on page 3 and lines 1 through 5 on page 4, and inserting:

"4. If a person submits an application to the commission on economic development pursuant to subsection 1, the commission shall provide notice to the governing body of the county and the city or town, if any, in which the person intends to locate or expand a business. The notice required pursuant to this subsection must set forth the date, time and location of the hearing at which the commission will consider the application.

Amend sec. 2, page 8, line 30, after "county" by inserting "or city".

Amend sec. 2, page 8, line 38, by deleting "industrial".

Amend sec. 2, page 8, line 41, after "county" by inserting "or city".

Amend sec. 2, page 9, line 7, by deleting "industrial".

Amend the bill as a whole by renumbering sec. 3 as sec. 8 and adding new sections designated sections 3 through 7, following sec. 2, to read as follows:

"Sec. 3. NRS 364A.170 is hereby amended to read as follows:

364A.170 1. A [proposed] business that qualifies pursuant to the provisions of [this] section 1 of this act is entitled to an exemption of:

(a) Eighty percent of the amount of tax otherwise due pursuant to NRS 364A.140 during the first 4 quarters of its operation;

(b) Sixty percent of the amount of tax otherwise due pursuant to NRS 364A.140 during the second 4 quarters of its operation;

(c) Forty percent of the amount of tax otherwise due pursuant to NRS 364A.140 during the third 4 quarters of its operation; and

(d) Twenty percent of the amount of tax otherwise due pursuant to NRS 364A.140 during the fourth 4 quarters of its operation.

2. [A proposed business is entitled to the exemption pursuant to subsection 1 if:

(a) In a county whose population is 35,000 or more:

(1) The business will have 75 or more full-time employees on the payroll of the business by the fourth quarter that it is in operation;

(2) Establishing the business will require the business to make a capital investment of $1,000,000 in Nevada; and

(3) The exemption is approved by the commission on economic development pursuant to subsection 3.

(b) In a county whose population is less than 35,000:

(1) The business will have 25 or more full-time employees on the payroll of the business by the fourth quarter that it is in operation;

(2) Establishing the business will require the business to make a capital investment of $250,000 in Nevada; and

(3) The exemption is approved by the commission on economic development pursuant to subsection 3.

3. A proposed business must apply to the commission on economic development to obtain the exemption authorized pursuant to this section. The commission shall certify a business’s eligibility for the exemption pursuant to this section if:

(a) The proposed business commits to the requirements of subparagraphs (1) and (2) of paragraph (a) or (b) of subsection 2, whichever is applicable; and

(b) The proposed business is consistent with the commission’s plan for economic diversification and development.

Upon certification, the commission shall immediately forward the certificate of eligibility for the exemption to the Nevada tax commission.

4. Upon receipt of such a certificate, the Nevada tax commission shall include the exemption in the calculation of the tax paid by the business. A business for which an exemption is approved that does not:

(a) Have the required number of full-time employees on the payroll of the business by the fourth quarter that it is in operation; or

(b) Make the required capital investment in Nevada in the course of establishing the business,

is required to repay to the department the amount of the exemption that was allowed pursuant to this section before the business’s failure to comply unless the Nevada tax commission determines that the business has substantially complied with the requirements of this section. The business is also required to 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 exemption not been granted until the date of payment of the tax.

5. The commission on economic development shall adopt regulations governing the determination made pursuant to subsection 3 of a proposed business’s eligibility for the exemption provided in this section.

6. The Nevada tax commission:

(a) Shall adopt regulations governing the investments that qualify for the purposes of the required capital investment pursuant to subparagraph (2) of paragraph (a) or (b) of subsection 2.

(b) May adopt such other regulations as are necessary to carry out the provisions of this section.] If a partial abatement from the taxes otherwise due pursuant to NRS 364A.140 is approved by the commission on economic development pursuant to section 1 of this act, the partial abatement must be administered and carried out in the manner set forth in section 1 of this act.

Sec. 4. NRS 374.357 is hereby amended to read as follows:

374.357 1. A person who maintains a business or intends to locate a business in this state may , pursuant to section 1 of this act, apply to the commission on economic development for an abatement from the taxes imposed by this chapter on the gross receipts from the sale, and the storage, use or other consumption, of eligible machinery or equipment for use by a business which has been approved for an abatement pursuant to [subsection 2.

2. The commission on economic development may approve an application for an abatement if:

(a) The goals of the business are consistent with the goals of the commission concerning industrial development and diversification;

(b) The commission determines that the abatement is a significant factor in the decision of the applicant to locate or expand a business in this state;

(c) The average hourly wage paid by the business to its employees in this state is at least equal to the average statewide industrial hourly wage as established by the employment security division of the department of employment, training and rehabilitation on July 1 of each fiscal year;

(d) The business provides a health insurance plan for its employees that includes an option for health insurance coverage for dependents of employees;

(e) 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;

(f) The business will provide at least 10 full-time, permanent jobs in Nevada by the fourth quarter that it is in operation; and

(g) The applicant commits to maintaining his business in this state for at least 5 years.

3. An applicant shall, upon the request of the executive director of the commission on economic development, furnish to the director copies of all records necessary for the director to verify that the applicant meets the requirement of paragraph (c) of subsection 2.

4. The commission on economic development may approve an application for an abatement which does not meet the requirements of subsection 2 if the commission determines that such an approval is warranted.

5.] section 1 of this act.

2. If an application for an abatement is approved [, the] pursuant to section 1 of this act:

(a) The taxpayer is eligible for an abatement from the tax imposed by this chapter for not more than 2 years.

[6. If an application for an abatement is approved, the commission on economic development shall immediately forward a certificate of eligibility for the abatement to the Nevada tax commission.

7. If a business for which an abatement has been approved is not maintained in this state for at least 5 years after the commission on economic development approved the abatement, the person who applied for the abatement shall repay to the department the amount of the 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. The person who applied for the abatement shall 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 abatement not been granted until the date of the actual payment of the tax.

8. The commission on economic development shall adopt regulations which it considers necessary to carry out the provisions of this section.

9.] (b) The abatement must be administered and carried out in the manner set forth in section 1 of this act.

3. As used in this section, unless the context otherwise requires, "eligible machinery or equipment" means machinery or equipment for which a deduction is authorized pursuant to 26 U.S.C. § 179. The term does not include:

(a) Buildings or the structural components of buildings;

(b) Equipment used by a public utility;

(c) Equipment used for medical treatment;

(d) Machinery or equipment used in mining; or

(e) Machinery or equipment used in gaming.

Sec. 5. Chapter 231 of NRS is hereby amended by adding thereto a new section to read as follows:

The commission on economic development shall, on or before January 15 of each odd-numbered year, prepare and submit to the director of the legislative counsel bureau for transmission to the legislature a report concerning the abatements from taxation that the commission approved pursuant to section 1 of this act. The report must set forth, for each abatement from taxation that the commission approved in the 2-year period immediately preceding the submission of the report:

1. The dollar amount of the abatement;

2. The location of the business for which the abatement was approved;

3. The number of employees that the business for which the abatement was approved employs or will employ;

4. Whether the business for which the abatement was approved is a new business or an existing business; and

5. Any other information that the committee determines to be useful.

Sec. 6. NRS 231.020 is hereby amended to read as follows:

231.020 As used in NRS [231.030] 231.020 to 231.130, inclusive, and section 5 of this act, unless the context otherwise requires, "motion pictures" includes feature films, movies made for broadcast on television and programs made for broadcast on television in episodes.

Sec. 7. The amendatory provisions of this act apply only to an abatement from taxation for which a person applies on or after the effective date of this act.".

Amend the title of the bill, first line, by deleting:

"in skeleton form".