Existing law authorizes the Office of Economic Development to grant a partial abatement of property taxes, business taxes or sales and use taxes to a business that locates or expands in this State and meets certain qualifications for the partial abatement. (NRS 274.310, 274.320, 274.330, 360.750, 360.753, 360.754, 701A.210) Section 1 of this bill authorizes the owner of a business or a person who intends to locate or expand a business in this State to apply to the Office for a partial abatement of property taxes or local sales and use taxes, or an abatement of modified business taxes, imposed with respect to the construction, operation, manufacture, reconstruction, maintaining, repairing or laying of railroad tracks, railroad spurs and other physical infrastructure in this State necessary to provide rail service. Section 1 requires the Office to approve a partial abatement for a period of not more than 10 years if the Office makes certain determinations regarding the applicant, including that the applicant: (1) has entered into an agreement with the Office addressing certain matters; (2) will provide certain wages and other benefits to the applicant's employees; (3) will increase the number of full-time employees employed by the applicant in this State; and (4) will make certain new capital investments or maintain and possess tangible personal property in this State which exceeds a specified value. Section 2 of this bill requires the Department of Taxation to, during certain investigations of a person claiming an abatement of taxes pursuant to section 1, investigate whether the person meets the requirements for eligibility for the abatement. Section 3 of this bill requires the agreement between a business granted an abatement pursuant to section 1 and the Office to include an agreement: (1) to allow the Department of Taxation to audit the business in order to assess whether the business is in full compliance of the requirements for the abatement; and (2) to the public disclosure of an audit report, under certain conditions. Section 4 of this bill requires that the Office take any action on an application for a partial abatement of taxes pursuant to section 1 at a public meeting conducted for that purpose after providing notice of the public meeting not less than 30 days before the meeting. Section 5 of this bill requires the Office to issue a document to a business whose application for a partial abatement of sales and use taxes has been approved that: (1) can be presented to retailers who are responsible for collecting sales and use taxes; and (2) clearly states the rate of sales and use tax that the business is required to pay to the retailer. Existing law requires the Office to biennially prepare and submit to the Legislature a report containing certain information relating to the abatements from taxation that the Office has approved. (NRS 231.0685) Section 7 of this bill requires that information relating to partial abatements approved by the Office pursuant to section 1 be included in such reports. Existing law enacts the Nevada New Markets Jobs Act, which entitles certain businesses to receive credit against certain taxes in exchange for investing in a qualified community development entity, which in turn must make certain capital or equity investments in, or loans to, qualified active low-income community businesses. (Chapter 231A of NRS) Existing law provides that a business that has received certain abatements from taxation from the Office is not a “qualified active low-income community business” for purposes of the Nevada New Markets Jobs Act, unless the business has waived the abatement and meets certain other qualifications. (NRS 231A.155, 231A.170) Sections 8 and 9 of this bill provide that a business that has received a partial tax abatement pursuant to section 1 is not a qualified active low-income community business, unless the business waives the abatement and meets certain other qualifications. Existing law requires the Office to periodically conduct an analysis of the relative costs and benefits of each incentive for economic development, including any abatement from taxes, approved by the Office and in effect during the immediately preceding 2 fiscal years. (NRS 353.207) Section 10 of this bill requires the Office to perform such an analysis for the partial abatements approved pursuant to section 1. Section 12 of this bill provides that the provisions of sections 5-11 of this bill expire by limitation on June 30, 2045, to comply with the requirement of the Nevada Constitution that the Legislature must provide a specific expiration date for certain tax exemptions. (Nev. Const. Art. 10, § 6) Accordingly, section 6 of this bill exempts section 1 from provisions of law providing that any legislation which requires or authorizes the Office to approve any abatement of taxes expires 10 years after the effective date of such legislation. (NRS 218D.355)

Statutes affected:
As Introduced: 360.225, 360.755, 360.757, 360.7575, 218D.355, 231.0685, 231A.155, 231A.170, 353.207
Reprint 1: 360.225, 360.755, 360.757, 360.7575, 218D.355, 231.0685, 231A.155, 231A.170, 353.207
BDR: 360.225, 360.755, 360.757, 360.7575, 218D.355, 231.0685, 231A.155, 231A.170, 353.207