(REPRINTED WITH ADOPTED AMENDMENTS)
FIRST REPRINT A.B. 433
Assembly Bill No. 433–Assemblyman Neighbors
March 19, 2001
____________
Referred to Committee on Taxation
SUMMARY—Makes various changes relating to property taxes. (BDR 32‑1140)
FISCAL NOTE: Effect on Local Government: No.
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EXPLANATION
– Matter in bolded italics is new; matter
between brackets [omitted material] is material to be omitted.
Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).
AN ACT relating to taxation; providing guidelines for determining the amount of time a person leases or uses certain property for the purpose of determining the amount of tax to be levied on such lease or use; clarifying the exemption from taxation of certain property used for housing and related facilities by persons with low incomes; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
1-1 Section 1. Chapter 361 of NRS is hereby amended by adding thereto a
1-2 new section to read as follows:
1-3 1. For purposes of NRS 361.157, 361.159 and 361.227, except as
1-4 otherwise provided in subsection 2, property is leased or used by a
1-5 natural person or entity at all times the natural person or entity has
1-6 possession of, claim to or right to the possession of the property that is
1-7 independent, durable and exclusive of rights held by others in the
1-8 property, other than the rights held by the owner.
1-9 2. Property is not leased or used by a natural person or entity who
1-10 possesses or occupies the property solely for the purpose of holding the
1-11 property for another natural person or entity.
1-12 3. As used in this section:
1-13 (a) “Durable” means for a determinable period with a reasonable
1-14 certainty that the use, possession or claim with respect to the property
1-15 will continue for that period.
1-16 (b) “Exclusive” means the enjoyment of a beneficial use of property,
1-17 together with the ability to exclude from occupancy persons or entities
1-18 other than the owner who may interfere with that enjoyment.
1-19 (c) “Independent” means the ability to exercise authority and exert
1-20 control over the management or operation of the property pursuant to the
1-21 terms and provisions of the contract with the owner. A possession or use
1-22 is independent if the possession or use of the property is sufficiently
2-1 autonomous under the terms and provisions of the contract with the
2-2 owner to constitute more than a mere agency.
2-3 Sec. 1.5. NRS 361.082 is hereby amended to read as follows:
2-4 361.082 1. [Real] That portion of real property and tangible
2-5 personal property which is used for housing and related facilities for
2-6 persons with low incomes [are] is exempt from taxation if the portion of
2-7 property qualifies as a low-income unit and is part of a qualified low-
2-8 income housing project that is funded in part by federal money
2-9 appropriated pursuant to 42 U.S.C. §§ 12701 et seq. for the year in which
2-10 the exemption applies.
2-11 2. The portion of a qualified low-income housing project that is
2-12 entitled to the property tax exemption pursuant to subsection 1 must be
2-13 determined by dividing the total assessed value of the housing project and
2-14 the land upon which it is situated into the assessed value of the low-income
2-15 units and related facilities that are occupied or used exclusively by persons
2-16 with low incomes.
2-17 3. The Nevada tax commission shall, by regulation, prescribe a form
2-18 for an application for the exemption described in subsection 1.
2-19 4. As used in this section, the terms “low-income unit” and “qualified
2-20 low-income housing project” have the meanings ascribed to them in
2-21 26 U.S.C. § 42 . [, as it existed on July 1, 1991.]
2-22 Sec. 2. NRS 361.157 is hereby amended to read as follows:
2-23 361.157 1. When any real estate or portion of real estate which for
2-24 any reason is exempt from taxation is leased, loaned or otherwise made
2-25 available to and used by a natural person, association, partnership or
2-26 corporation in connection with a business conducted for profit or as a
2-27 residence, or both, the leasehold interest, possessory interest, beneficial
2-28 interest or beneficial use of the lessee or user of the property is subject to
2-29 taxation to the extent the:
2-30 (a) Portion of the property leased or used; and
2-31 (b) Percentage of time during the fiscal year that the property is leased
2-32 by the lessee or used by the user, in accordance with section 1 of
2-33 this act,
2-34 can be segregated and identified. The taxable value of the interest or use
2-35 must be determined in the manner provided in subsection 3 of NRS
2-36 361.227[.] and in accordance with section 1 of this act.
2-37 2. Subsection 1 does not apply to:
2-38 (a) Property located upon a public airport, park, market or fairground ,
2-39 or any property owned by a public airport, unless the property owned by
2-40 the public airport is not located upon the public airport and the property is
2-41 leased, loaned or otherwise made available for purposes other than for the
2-42 purposes of a public airport, including, without limitation, residential,
2-43 commercial or industrial purposes;
2-44 (b) Federal property for which payments are made in lieu of taxes in
2-45 amounts equivalent to taxes which might otherwise be lawfully assessed;
2-46 (c) Property of any state-supported educational institution;
2-47 (d) Property leased or otherwise made available to and used by a natural
2-48 person, private association, private corporation, municipal corporation,
2-49 quasi-municipal corporation or a political subdivision under the provisions
3-1 of the Taylor Grazing Act or by the United States Forest Service or the
3-2 Bureau of Reclamation of the United States Department of the Interior;
3-3 (e) Property of any Indian or of any Indian tribe, band or community
3-4 which is held in trust by the United States or subject to a restriction against
3-5 alienation by the United States;
3-6 (f) Vending stand locations and facilities operated by blind persons
3-7 under the auspices of the bureau of services to the blind and visually
3-8 impaired of the rehabilitation division of the department of employment,
3-9 training and rehabilitation, whether or not the property is owned by the
3-10 federal, state or a local government;
3-11 (g) Leases held by a natural person, corporation, association, municipal
3-12 corporation, quasi-municipal corporation or political subdivision for
3-13 development of geothermal resources, but only for resources which have
3-14 not been put into commercial production;
3-15 (h) The use of exempt property that is leased, loaned or made available
3-16 to a public officer or employee, incident to or in the course of public
3-17 employment;
3-18 (i) A parsonage owned by a recognized religious society or corporation
3-19 when used exclusively as a parsonage;
3-20 (j) Property owned by a charitable or religious organization all , or a
3-21 portion of which , is made available to and is used as a residence by a
3-22 natural person in connection with carrying out the activities of the
3-23 organization;
3-24 (k) Property owned by a governmental entity and used to provide
3-25 shelter at a reduced rate to elderly persons or persons having low incomes;
3-26 (l) The occasional rental of meeting rooms or similar facilities for
3-27 periods of less than 30 consecutive days; or
3-28 (m) The use of exempt property to provide day care for children if the
3-29 day care is provided by a nonprofit organization.
3-30 3. Taxes must be assessed to lessees or users of exempt real estate and
3-31 collected in the same manner as taxes assessed to owners of other real
3-32 estate, except that taxes due under this section do not become a lien against
3-33 the property. When due, the taxes constitute a debt due from the lessee or
3-34 user to the county for which the taxes were assessed and, if unpaid, are
3-35 recoverable by the county in the proper court of the county.
3-36 Sec. 3. NRS 361.159 is hereby amended to read as follows:
3-37 361.159 1. Except as otherwise provided in subsection 3, when
3-38 personal property, or a portion of personal property, which for any reason
3-39 is exempt from taxation is leased, loaned or otherwise made available to
3-40 and used by a natural person, association or corporation in connection with
3-41 a business conducted for profit, the leasehold interest, possessory interest,
3-42 beneficial interest or beneficial use of any such lessee or user of the
3-43 property is subject to taxation to the extent the:
3-44 (a) Portion of the property leased or used; and
3-45 (b) Percentage of time during the fiscal year that the property is leased
3-46 to the lessee or used by the user, in accordance with section 1 of
3-47 this act,
4-1 can be segregated and identified. The taxable value of the interest or use
4-2 must be determined in the manner provided in subsection 3 of NRS
4-3 361.227[.] and in accordance with section 1 of this act.
4-4 2. Taxes must be assessed to lessees or users of exempt personal
4-5 property and collected in the same manner as taxes assessed to owners of
4-6 other personal property, except that taxes due under this section do not
4-7 become a lien against the personal property. When due, the taxes constitute
4-8 a debt due from the lessee or user to the county for which the taxes were
4-9 assessed and , if unpaid , are recoverable by the county in the proper court
4-10 of the county.
4-11 3. The provisions of this section do not apply to personal property:
4-12 (a) Used in vending stands operated by blind persons under the auspices
4-13 of the bureau of services to the blind and visually impaired of the
4-14 rehabilitation division of the department of employment, training and
4-15 rehabilitation.
4-16 (b) Owned by a public airport.
4-17 Sec. 4. NRS 361.227 is hereby amended to read as follows:
4-18 361.227 1. Any person determining the taxable value of real property
4-19 shall appraise:
4-20 (a) The full cash value of:
4-21 (1) Vacant land by considering the uses to which it may lawfully be
4-22 put, any legal or physical restrictions upon those uses, the character of the
4-23 terrain, and the uses of other land in the vicinity.
4-24 (2) Improved land consistently with the use to which the
4-25 improvements are being put.
4-26 (b) Any improvements made on the land by subtracting from the cost of
4-27 replacement of the improvements all applicable depreciation and
4-28 obsolescence. Depreciation of an improvement made on real property must
4-29 be calculated at 1.5 percent of the cost of replacement for each year of
4-30 adjusted actual age of the improvement, up to a maximum of 50 years.
4-31 2. The unit of appraisal must be a single parcel unless:
4-32 (a) The location of the improvements causes two or more parcels to
4-33 function as a single parcel;
4-34 (b) The parcel is one of a group of contiguous parcels which qualifies
4-35 for valuation as a subdivision pursuant to the regulations of the Nevada tax
4-36 commission; or
4-37 (c) In the professional judgment of the person determining the taxable
4-38 value, the parcel is one of a group of parcels which should be valued as a
4-39 collective unit.
4-40 3. The taxable value of a leasehold interest, possessory interest,
4-41 beneficial interest or beneficial use for the purpose of NRS 361.157 or
4-42 361.159 must be determined in the same manner as the taxable value of the
4-43 property would otherwise be determined if the lessee or user of the
4-44 property was the owner of the property and it was not exempt from
4-45 taxation, except that the taxable value so determined must be reduced by a
4-46 percentage of the taxable value that is equal to the:
4-47 (a) Percentage of the property that is not actually leased by the lessee or
4-48 used by the user during the fiscal year; and
5-1 (b) Percentage of time that the property is not actually leased by the
5-2 lessee or used by the user during the fiscal year[.] , which must be
5-3 determined in accordance with section 1 of this act.
5-4 4. The taxable value of other taxable personal property, except mobile
5-5 homes, must be determined by subtracting from the cost of replacement of
5-6 the property all applicable depreciation and obsolescence. Depreciation of
5-7 a billboard must be calculated at 1.5 percent of the cost of replacement for
5-8 each year after the year of acquisition of the billboard, up to a maximum of
5-9 50 years.
5-10 5. The computed taxable value of any property must not exceed its full
5-11 cash value. Each person determining the taxable value of property shall
5-12 reduce it if necessary to comply with this requirement. A person
5-13 determining whether taxable value exceeds full cash value or whether
5-14 obsolescence is a factor in valuation may consider:
5-15 (a) Comparative sales, based on prices actually paid in market
5-16 transactions.
5-17 (b) A summation of the estimated full cash value of the land and
5-18 contributory value of the improvements.
5-19 (c) Capitalization of the fair economic income expectancy or fair
5-20 economic rent, or an analysis of the discounted cash flow.
5-21 A county assessor is required to make the reduction prescribed in this
5-22 subsection if the owner calls to his attention the facts warranting it, if he
5-23 discovers those facts during physical reappraisal of the property or if he is
5-24 otherwise aware of those facts.
5-25 6. The Nevada tax commission shall , by regulation , establish:
5-26 (a) Standards for determining the cost of replacement of improvements
5-27 of various kinds.
5-28 (b) Standards for determining the cost of replacement of personal
5-29 property of various kinds. The standards must include a separate index of
5-30 factors for application to the acquisition cost of a billboard to determine its
5-31 replacement cost.
5-32 (c) Schedules of depreciation for personal property based on its
5-33 estimated life.
5-34 (d) Criteria for the valuation of two or more parcels as a subdivision.
5-35 7. In determining the cost of replacement of personal property for the
5-36 purpose of computing taxable value, the cost of all improvements of the
5-37 personal property, including any additions to or renovations of the personal
5-38 property , but excluding routine maintenance and repairs, must be added to
5-39 the cost of acquisition of the personal property.
5-40 8. The county assessor shall, upon the request of the owner, furnish
5-41 within 15 days to the owner a copy of the most recent appraisal of the
5-42 property.
5-43 9. The provisions of this section do not apply to property which is
5-44 assessed pursuant to NRS 361.320.
5-45 Sec. 5. This act becomes effective upon passage and approval.
5-46 H