AB508 - Revises various provisions relating to state financial administration. (BDR 31-930)

A.B. 508 - *AB508* ASSEMBLY BILL NO. 508–COMMITTEE ON WAYS AND MEANS MARCH 24, 2025 ____________ Referred to Committee on Ways and Means SUMMARY—Revises various provisions relating to state financial administration. (BDR 31-930) FISCAL NOTE: Effect on Local Government: No. Effect on the State: Contains Appropriation not included in Executive Budget. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to state financial administration; requiring the Economic Forum to provide an estimate of future State revenue required to be credited to the State Education Fund; revising provisions governing the disposition of proceeds of the tax on wholesale sales of cannabis; revising requirements for certain reservations of money in and recommendations for the proposed executive budget for the support of public schools; revising the date for certain payments to the State Education Fund; making an appropriation to the Cannabis Compliance Board; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law requires the Governor, on or before July 1 of each even-numbered 1 year, to impanel an Economic Forum consisting of economic and financial experts 2 appointed by the Governor to provide an estimate of the revenue that will be 3 collected by the State for general, unrestricted uses during the subsequent biennium 4 and to make such additional projections for economic indicators as the Economic 5 Forum deems necessary to ensure that this estimate is accurate. (NRS 353.226, 6 353.228) Existing law creates the State Education Fund for the purpose of 7 supporting the operation of the public schools in this State and requires certain 8 revenues of the State be deposited in the Fund. (NRS 387.1212) Section 1 of this 9 bill requires the Economic Forum to provide, in addition to an estimate of general, 10 unrestricted revenues, an estimate of the revenue that will be collected by the State 11 in the subsequent biennium that is required to be deposited for credit to the State 12 Education Fund. 13 Existing law requires the Governor, to the extent practicable, to ensure that 14 money in the State General Fund is reserved in the proposed executive budget for 15 transfer to the State Education Fund in an amount that equals the amount 16 – 2 – - *AB508* transferred in the immediately preceding biennium: (1) plus the greater of the rate 17 of increase in revenue collected for general, unrestricted uses as projected by the 18 Economic Forum or the combined rate of inflation and the growth of enrollment in 19 the public schools in this State in the immediately preceding biennium; or (2) 20 decreased by an amount not greater than the rate of decrease for the revenue 21 collected by the State as projected by the Economic Forum. (NRS 387.12455) 22 Section 4 of this bill requires the amount reserved in the proposed executive budget 23 for transfer to the State Education Fund, if the Economic Forum projects an 24 increase in State revenue, to be the amount transferred during the immediately 25 preceding biennium plus the rate of increase in revenue collected for general, 26 unrestricted uses as projected by the Economic Forum, without taking into 27 consideration the combined rate of inflation and growth of enrollment in public 28 schools. Section 4 also no longer requires the Governor to consider projected 29 growth of enrollment in public schools when recommending statewide base per 30 pupil funding. 31 Existing law provides that if the final computation of apportionment for any 32 school district, charter school or university school for profoundly gifted pupils 33 exceeds the actual amount paid to that entity during the school year, the additional 34 amount due to the entity is required to be paid before September 1. If the final 35 computation of apportionment for any school district, charter school or university 36 school for profoundly gifted pupils is less than the actual amount paid to the entity 37 during the school year, the entity is required to pay the difference to the State 38 Education Fund before September 25. (NRS 387.1243) Section 3 of this bill 39 changes the date for such a payment to the State Education Fund by a school 40 district, charter school or university school for profoundly gifted pupils from before 41 September 25 to before September 1. 42 Existing law imposes an excise tax on: (1) the first wholesale sale in this State 43 of cannabis by a medical cannabis cultivation facility or an adult-use cannabis 44 cultivation facility to another cannabis establishment; and (2) each retail sale in this 45 State of cannabis or cannabis products by an adult-use cannabis retail store or 46 cannabis consumption lounge. Existing law requires the revenues collected from 47 the excise tax on wholesale sales of cannabis to first be distributed to the Cannabis 48 Compliance Board and to local governments to pay the costs of the Board and local 49 governments to carry out the provisions governing the sale and taxation of cannabis 50 and cannabis products. Any amount of revenue remaining after these distributions 51 is required to be deposited in the State Education Fund. Although existing law caps 52 the amount of revenue from wholesale sales which is authorized to be used to 53 pay the costs of local governments at $5,000,000, existing law does not place a 54 limit on the costs of the Board which are authorized to be reimbursed from such 55 revenues. (NRS 372A.290) Section 2 of this bill eliminates the requirement to use 56 revenue from the tax on wholesale sales of cannabis to pay the costs of the Board, 57 but retains the requirement for the Board to transfer $5,000,000 to local 58 governments for their costs. Section 5 of this bill makes an appropriation to the 59 Board to pay the costs of the Board to carry out certain provisions governing the 60 regulation of cannabis and cannabis products. 61 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 353.228 is hereby amended to read as follows: 1 353.228 1. The Economic Forum impaneled pursuant to NRS 2 353.226 shall: 3 – 3 – - *AB508* (a) Make such projections for economic indicators as it deems 1 necessary to ensure that an accurate estimate is produced pursuant to 2 paragraph (b); 3 (b) Provide an accurate estimate of the revenue that will be 4 collected by the State [for] during the biennium that begins on 5 July 1 of the year following the date on which the Economic 6 Forum was empaneled: 7 (1) For general, unrestricted uses, and not for special 8 purposes [, during the biennium that begins on July 1 of the year 9 following the date on which the Economic Forum was empaneled;] ; 10 and 11 (2) For deposit to the credit of the State Education Fund; 12 (c) Request such technical assistance as the Economic Forum 13 deems necessary from the Technical Advisory Committee created 14 by NRS 353.229; 15 (d) On or before December 3 of each even-numbered year, 16 prepare a written report of its projections of economic indicators and 17 estimate of future state revenue required by paragraphs (a) and (b) 18 and present the report to the Governor and the Legislature; 19 (e) On or before May 1 of each odd-numbered year, prepare a 20 written report confirming or revising the projections of economic 21 indicators and estimate of future state revenue contained in the 22 report prepared pursuant to paragraph (d) and present the report to 23 the Governor and the Legislature; and 24 (f) Except as otherwise provided in subsection 2, on or before 25 June 10 of each even-numbered year and December 10 of each odd- 26 numbered year, hold a meeting to consider current economic 27 indicators, including, without limitation, employment, 28 unemployment, personal income and any other indicators deemed 29 appropriate by the Economic Forum. Based on current economic 30 indicators, the Economic Forum shall update the status of actual 31 State General Fund revenue compared to the most recent forecast of 32 the Economic Forum. The provisions of this paragraph are not 33 intended to authorize the Economic Forum to make additional 34 forecasts pursuant to paragraph (b). At the next appropriate meeting 35 of the Interim Finance Committee, the Chair of the Economic 36 Forum or a member of the staff of the Economic Forum shall 37 present to the Interim Finance Committee such matters considered at 38 the meeting of the Economic Forum held pursuant to this paragraph, 39 as the Economic Forum determines appropriate. Any such 40 information presented to the Interim Finance Committee must be 41 made available on the Internet website of the Legislature. 42 2. If the deadline for preparing a report or holding a meeting as 43 required in subsection 1 falls on a Saturday, Sunday or legal 44 – 4 – - *AB508* holiday, the deadline is extended to the second business day 1 following the deadline. 2 3. The Economic Forum may make preliminary projections of 3 economic indicators and estimates of future state revenue at any 4 time. Any such projections and estimates must be made available to 5 the various agencies of the State through the Chief. 6 4. The Economic Forum may request information directly from 7 any state agency, including, without limitation, the Nevada System 8 of Higher Education. A state agency, including, without limitation, 9 the Nevada System of Higher Education, that receives a reasonable 10 request for information from the Economic Forum shall comply 11 with the request as soon as is reasonably practicable after receiving 12 the request. 13 5. The Economic Forum may request direct testimony from 14 any state agency, including, without limitation, the Nevada System 15 of Higher Education, at a meeting of the Economic Forum or the 16 Technical Advisory Committee. The head, or a designee thereof, of 17 a state agency, including, without limitation, the Nevada System of 18 Higher Education, who receives a reasonable request for direct 19 testimony at a meeting of the Economic Forum or the Technical 20 Advisory Committee shall appear at the meeting and shall comply 21 with the request. 22 6. To carry out its duties pursuant to this section, the Economic 23 Forum may consider any information received from the Technical 24 Advisory Committee and any other information received from 25 independent sources. 26 7. Copies of the projections and estimates made pursuant to 27 this section must be made available to the public by the Director of 28 the Legislative Counsel Bureau for the cost of reproducing the 29 material. 30 Sec. 2. NRS 372A.290 is hereby amended to read as follows: 31 372A.290 1. An excise tax is hereby imposed on the first 32 wholesale sale in this State of cannabis by a medical cannabis 33 cultivation facility to another cannabis establishment at the rate of 34 15 percent of: 35 (a) The fair market value at wholesale of the cannabis, if the sale 36 is made to an affiliate of the medical cannabis cultivation facility; or 37 (b) The sales price of the cannabis, if the sale is made to a 38 cannabis establishment that is not an affiliate of the medical 39 cannabis cultivation facility. 40  The excise tax imposed pursuant to this subsection is the 41 obligation of the medical cannabis cultivation facility. 42 2. An excise tax is hereby imposed on the first wholesale sale 43 in this State of cannabis by an adult-use cannabis cultivation facility 44 to another cannabis establishment at the rate of 15 percent of: 45 – 5 – - *AB508* (a) The fair market value at wholesale of the cannabis, if the sale 1 is made to an affiliate of the adult-use cannabis cultivation facility; 2 or 3 (b) The sales price of the cannabis, if the sale is made to a 4 cannabis establishment that is not an affiliate of the adult-use 5 cannabis cultivation facility. 6  The excise tax imposed pursuant to this subsection is the 7 obligation of the adult-use cannabis cultivation facility. 8 3. Except as otherwise provided in subsection 8, an excise tax 9 is hereby imposed on each retail sale in this State of cannabis or 10 cannabis products by an adult-use cannabis retail store or cannabis 11 consumption lounge at the rate of 10 percent of the sales price of the 12 cannabis or cannabis products. The excise tax imposed pursuant to 13 this subsection: 14 (a) Is the obligation of the seller of the cannabis or cannabis 15 product but may be recovered from the purchaser. 16 (b) Is separate from and in addition to any general state and 17 local sales and use taxes that apply to retail sales of tangible 18 personal property. 19 4. The revenues collected from the excise tax imposed pursuant 20 to subsection 1 must be distributed: 21 (a) To the Cannabis Compliance Board [and] for transfer to 22 local governments in an amount determined to be necessary by the 23 Board to pay the costs of the [Board and] local governments in 24 carrying out the provisions of chapter 678C of NRS; and 25 (b) If any money remains after the revenues are distributed 26 pursuant to paragraph (a), to the State Treasurer to be deposited to 27 the credit of the State Education Fund. 28 5. The revenues collected from the excise tax imposed pursuant 29 to subsection 2 must be distributed: 30 (a) To the Cannabis Compliance Board [and] for transfer to 31 local governments in an amount determined to be necessary by the 32 Board to pay the costs of the [Board and] local governments in 33 carrying out the provisions of chapter 678D of NRS; and 34 (b) If any money remains after the revenues are distributed 35 pursuant to paragraph (a), to the State Treasurer to be deposited to 36 the credit of the State Education Fund. 37 6. For the purpose of subsections 4 and 5, a total amount of 38 $5,000,000 of the revenues collected from the excise tax imposed 39 pursuant to subsection 1 and the excise tax imposed pursuant to 40 subsection 2 in each fiscal year shall be deemed sufficient to pay the 41 costs of all local governments to carry out the provisions of chapters 42 678C and 678D of NRS. The Board shall, by regulation, determine 43 the manner in which local governments may be reimbursed for the 44 – 6 – - *AB508* costs of carrying out the provisions of chapters 678C and 678D of 1 NRS. 2 7. The revenues collected from the excise tax [Text truncated for display. Full text available on LegiScan.]