AB226 - Revises provisions relating to economic development. (BDR 32-690)

- 83rd Session (2025) Assembly Bill No. 226–Assemblymember Mosca CHAPTER.......... AN ACT relating to taxation; requiring an application for certain transferable tax credits and certain tax abatements to contain a certification that the applicant agrees to submit a community benefits agreement and collaborate with the community in which the business is located if the application is approved; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law authorizes the Office of Economic Development to approve transferable tax credits and abatements or partial abatements of certain property taxes, business taxes and sales and use taxes for certain businesses in certain circumstances. The Office is prohibited from approving an application for such credits or abatements unless the applicant satisfies certain criteria and has entered into an agreement with the Office establishing certain terms for the abatement. (NRS 231.1555, 274.310, 274.320, 274.330, 360.750, 360.753, 360.754, 360.759, 360.889, 360.945) Sections 1-3, 6, 8 and 12-15 of this bill additionally require an applicant for certain transferable tax credits or a tax abatement to certify in the application for transferrable tax credits or a tax abatement, as applicable, that, if the application is approved, the business will: (1) collaborate with the community in which the business is located; and (2) submit to the Office a community benefits agreement not later than 2 years after the date on which the application is approved. Section 16 of this bill makes the requirements of this bill relating to the certification requirement applicable only to applications for certain transferable tax credits or certain abatements submitted on or after July 1, 2025. EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 360.750 is hereby amended to read as follows: 360.750 1. 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 the taxes imposed on the: (a) New business pursuant to chapter 361, 363B or 374 of NRS. (b) Expanded business pursuant to chapter 361 or 363B of NRS or a partial abatement of the local sales and use taxes imposed on the expanded business. As used in this paragraph, “local sales and use taxes” means the 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 the political subdivision in which the business is to be located or expanded, except the taxes – 2 – - 83rd Session (2025) imposed by the Sales and Use Tax Act and the Local School Support Tax Law. 2. The Office of Economic Development shall approve an application for a partial abatement pursuant to this section if the Office makes the following determinations: (a) The business offers primary jobs and is consistent with: (1) The State Plan for Economic Development developed by the Executive Director of the Office of Economic Development pursuant to subsection 2 of NRS 231.053; and (2) Any guidelines adopted by the Executive Director of the Office 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 must: (1) Comply with the requirements of NRS 360.755; (2) State 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) State that the business will, after the date on which the abatement becomes effective, continue in operation in this State for a period specified by the Office, which must be at least 5 years, and will continue to meet the eligibility requirements set forth in this subsection; (4) State that the business will offer primary jobs; and (5) Bind the 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) Except as otherwise provided in subsection 4, 5 or 6, the average hourly wage that will be paid by the business to its new 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. (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 – 3 – - 83rd Session (2025) will meet the minimum requirements for health care benefits established by the Office. (f) Except as otherwise provided in this subsection and NRS 361.0687, if the business is a new business in a county whose population is 100,000 or more or a city whose population is 60,000 or more, the business meets at least one of the following requirements: (1) The business will have 50 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 $1,000,000 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. (g) Except as otherwise provided in NRS 361.0687, if the business is a new business in a county whose population is less than 100,000, in 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 in a city whose population is less than 60,000, the business meets at least one of the following requirements: (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. – 4 – - 83rd Session (2025) (h) If the business is an existing business, the business meets at least one of the following requirements: (1) For a business in: (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: – 5 – - 83rd Session (2025) (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 calendar quarter in which the abatement becomes effective if the Office approves the application. (j) Except as otherwise provided in subsection 3, if the business will have at least 50 full-time employees on the payroll of the business by the eighth calendar quarter following the calendar quarter in which the abatement becomes effective, the business, by the earlier of the eighth calendar quarter following the calendar quarter in which the abatement becomes effective or the date on which the business has at least 50 full-time employees on the payroll of the business, has a policy for paid family and medical leave and agrees that all employees who have been employed by the business for at least 1 year will be eligible for at least 12 weeks of paid family and medical leave at a rate of at least 55 percent of the regular wage of the employee. The business will agree in writing that if the Office approves the application, the business will not: (1) Prohibit, interfere with or otherwise discourage an employee from taking paid family and medical leave: (I) For any reason authorized pursuant to the Family and Medical Leave Act of 1993, 29 U.S.C. §§ 2601 et seq. (II) To care for any adult child, sibling or domestic partner of the employee. (2) Discriminate, discipline or discharge an employee for taking paid family and medical leave: (I) For any reason authorized pursuant to the Family and Medical Leave Act of 1993, 29 U.S.C. §§ 2601 et seq. (II) To care for any adult child, sibling or domestic partner of the employee. (3) Prohibit, interfere with or otherwise discourage an employee or other person from bringing a proceeding or testifying in a proceeding against the business for a violation of the policy for paid family and medical leave that is required pursuant to this paragraph. (k) The applicant has certified in the application that the business will, if the application is approved: (1) Collaborate with the community in which the business is located; and – 6 – - 83rd Session (2025) (2) Submit a community benefits agreement to the Office not later than 2 years after the date on which the Office approves the application. 3. For purposes of paragraph (j) of subsection 2, the Office of Economic Development shall determine that a business meets the requirements of that paragraph if the business has a policy for paid family and medical leave for employees on the payroll of the business outside of this State that meets or exceeds the requirements for a policy for paid family and medical leave pursuant to that paragraph and the business agrees in writing that its employees on the payroll in this State are eligible for paid family and medical leave under such policy. 4. 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 policy of paid family and medical leave 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 qua [Text truncated for display. Full text available on LegiScan.]