SB69 - Revises provisions relating to economic development. (BDR 32-369)

- 83rd Session (2025) Senate Bill No. 69–Committee on Revenue and Economic Development CHAPTER.......... AN ACT relating to taxation; requiring an applicant for the issuance of transferable tax credits and the partial abatement of certain taxes for a project that is located in an economic diversification district to enter into an agreement with certain local governments to defray the cost of services provided by the local governments under certain circumstances; revising provisions governing applications for the issuance of transferable tax credits and the partial abatement of certain taxes for a project that satisfies certain capital investment and other requirements; authorizing a fire protection district to abate certain fees; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law authorizes the Office of Economic Development to approve applications for an abatement or partial abatement of certain taxes and the issuance of transferable tax credits submitted by the lead participant in a qualified project that will make a capital investment in this State of at least $1 billion. (NRS 360.880-360.980) Additionally, existing law authorizes the governing body of a county or city in which a qualified project is or is expected to be located to: (1) create an economic diversification district that includes within its boundaries the qualified project; and (2) pledge for certain purposes the proceeds of all sales and use taxes imposed in the county or city on each participant in the qualified project, other than any sales and use taxes for which an abatement is received. (Chapter 271B of NRS) Sections 2 and 6 of this bill require, as a condition of eligibility for the transferable tax credits or the abatement or partial abatement of taxes for a project that is or will be located in an economic diversification district, the lead participant to enter into an agreement with the governing body of the city, county or fire protection district in which the project is located, if the governing body so requires, to require the lead participant to make payments to defray the cost of local governmental services and infrastructure to service the project. Sections 2 and 6: (1) provide that the city or county in which a project is located is the lead negotiator for all such agreements; and (2) authorize a city, county or fire protection district that is not the lead negotiator to enter into an interlocal agreement with the lead negotiator. Sections 2, 3, 6 and 7 make records, files and communications exchanged between the lead participant and a county, city or fire protection district for the purpose of entering into certain agreements confidential and prohibit the disclosure of such records, files and communications except with the consent of the lead participant. Section 10 of this bill provides that these records, files and communications are not public records. Section 11 of this bill makes a conforming change to reflect that the governing body of a county or city is authorized to enter into agreements with owners of any interest in property for the payment of amounts to defray the costs of local government services, in addition to the agreement which the governing body of the county or city is required to enter into with the lead participant pursuant to sections 2 and 6. Existing law prohibits the Office from approving an application for a partial abatement for a qualified project whose participants intend to make a capital – 2 – - 83rd Session (2025) investment in this State of at least $1 billion unless the lead participant of the project has entered into an agreement with the Office establishing certain terms for the abatement, including the date on which the abatement becomes effective, which must not be earlier than the date on which the Office receives the application and not later than 1 year after the date on which the Office approves the application. (NRS 360.889) Section 2 limits the requirement to state the effective date of the partial abatement in the agreement to partial abatements of property taxes and requires the effective date of such an abatement, as established by the agreement, to be not earlier than July 1 of the fiscal year in which the Office executes the agreement. Section 6 adds a similar requirement regarding the effective date of an abatement to applications for an abatement for a qualified project whose participants intend to make a capital investment in this State of at least $3.5 billion. Sections 3 and 7 of this bill require the Office, within 15 days after receipt of an application for transferable tax credits or an abatement or partial abatement of taxes for a project with a capital investment of at least $1 billion in this State, to send a notification containing certain information to each city, county and fire protection district in which the project will be located. Sections 3 and 7 authorize the disclosure of certain confidential information in an application to an officer or employee of a county, city or fire protection district who is subject to an agreement prohibiting further disclosure of the information. Sections 3 and 7 require the Office to receive a letter of acknowledgment of an application from certain local governments before considering the application, unless such a letter is not received within 30 days of a request for the letter. Finally, sections 3 and 7 require the governing body of the county, city or fire protection district to state in the letter of acknowledgment whether the governing body will require the lead participant to enter into an agreement to defray the cost of local government services and infrastructure. Existing law authorizes the governing body of a county or city to grant an abatement of all or part of any permitting fee or licensing fee which the local government is authorized to impose, for the purpose of encouraging local economic development. (NRS 360.896, 360.980) Sections 5 and 9 of this bill similarly authorize a fire protection district to grant an abatement of any permitting fee or licensing fee which the fire protection district is authorized to impose. 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. (Deleted by amendment.) Sec. 2. NRS 360.889 is hereby amended to read as follows: 360.889 1. On behalf of a project, the lead participant in the project may apply to the Office of Economic Development for: (a) A certificate of eligibility for transferable tax credits which may be applied to: (1) Any tax imposed by chapters 363A and 363B of NRS; (2) The gaming license fees imposed by the provisions of NRS 463.370; (3) Any tax imposed by chapter 680B of NRS; or – 3 – - 83rd Session (2025) (4) Any combination of the fees and taxes described in subparagraphs (1), (2) and (3). (b) A partial abatement of property taxes, employer excise taxes or local sales and use taxes, or any combination of any of those taxes. 2. For a project to be eligible for the transferable tax credits described in paragraph (a) of subsection 1 and the partial abatement of the taxes described in paragraph (b) of subsection 1, the lead participant in the project must, on behalf of the project: (a) Submit an application that meets the requirements of subsection 5; (b) Provide documentation satisfactory to the Office that approval of the application would promote the economic development of this State and aid the implementation of the State Plan for Economic Development developed by the Executive Director of the Office pursuant to subsection 2 of NRS 231.053; (c) Provide documentation satisfactory to the Office that the participants in the project collectively will make a total new capital investment of at least $1 billion in this State within the 10-year period immediately following approval of the application; (d) Provide documentation satisfactory to the Office that the participants in the project are engaged in a common business purpose or industry; (e) Provide documentation satisfactory to the Office that the place of business of each participant is or will be located within the geographic boundaries of the project site or sites; (f) Provide documentation satisfactory to the Office that each participant in the project is registered pursuant to the laws of this State or commits to obtaining a valid business license and all other permits required by the county, city or town in which the project operates; (g) Provide documentation satisfactory to the Office of the number of employees engaged in the construction of the project; (h) Provide documentation satisfactory to the Office of the number of qualified employees employed or anticipated to be employed at the project by the participants; (i) Provide documentation satisfactory to the Office that each employer engaged in the construction of the project provides a plan of health insurance and that each employee engaged in the construction of the project is offered coverage under the plan of health insurance provided by his or her employer; (j) Provide documentation satisfactory to the Office that each participant in the project provides a plan of health insurance and that – 4 – - 83rd Session (2025) each employee employed at the project by each participant is offered coverage under the plan of health insurance provided by his or her employer; (k) Provide documentation satisfactory to the Office that at least 50 percent of the employees engaged in construction of the project and 50 percent of the employees employed at the project are residents of Nevada, unless waived by the Executive Director of the Office upon proof satisfactory to the Executive Director of the Office that there is an insufficient number of Nevada residents available and qualified for such employment; (l) Agree to provide the Office with a full compliance audit of the participants in the project at the end of each fiscal year which: (1) Shows the amount of money invested in this State by each participant in the project; (2) Shows the number of employees engaged in the construction of the project and the number of those employees who are residents of Nevada; (3) Shows the number of employees employed at the project by each participant and the number of those employees who are residents of Nevada; and (4) Is certified by an independent certified public accountant in this State who is approved by the Office; (m) Pay the cost of the audit required by paragraph (l); (n) Enter into an agreement with the governing body of the city or county in which the qualified project is located that: (1) Requires the lead participant to pay the cost of any engineering or design work necessary to determine the cost of infrastructure improvements required to be made by the governing body pursuant to an economic development financing proposal approved pursuant to NRS 360.990; and (2) Requires the lead participant to seek reimbursement for any costs paid by the lead participant pursuant to subparagraph (1) from the proceeds of bonds issued pursuant to NRS 360.991; [and] (o) If the qualified project is or will be located in an economic diversification district created pursuant to NRS 271B.070 and the governing body of the county, city or fire protection district in which the project is located so requires, enter into an agreement with the governing body that requires the lead participant to make payments: (1) In a specified amount or according to an agreed upon formula; and (2) Which do not exceed the lesser of: – 5 – - 83rd Session (2025) (I) In total for all such agreements, 10 percent of the amount of the partial abatement of property taxes and local sales and use taxes approved for the project; or (II) The amount necessary to defray, in whole or in part, the cost of local government services and infrastructure necessary to serve the qualified project during the term of the use of any money pledged pursuant to NRS 271B.070; and (p) Meet any other requirements prescribed by the Office. 3. In addition to meeting the requirements set forth in subsection 2, for a project located on more than one site in this State to be eligible for the partial abatement of the taxes described in paragraph (b) of subsection 1, the lead participant must, on behalf of the project, submit an application that meets the requirements of subsection 5 on or before June 30, 2019, and provide documentation satisfactory to the Office that: (a) The initial project will have a total of 500 or more full-time employees employed at the site of the initial project and the average hourly wage that will be paid to employees of the initial project in this State is at least 120 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; (b) Each participant in the project must be a subsidiary or affiliate of the lead participant; and (c) Each participant offers primary jobs and: (1) Except as otherwise provided in subparagraph (2), satisfies the requirements of paragraph (f) or (g) of subsection 2 of NRS 360.750, regardless of whether the business is a new business or an existing business; and (2) If a participant owns, operates, manufactures, services, maintains, tests, repairs, overhauls or assembles an aircraft or any component of an aircraft, that the participant satisfies the applicable requirements of paragraph (f) or (g) of subsection 2 of NRS 360.753.  If any participant is a data center, as defined in NRS 360.754, any capital investment by that participant must not be counted in determining whether the participants in the project collectively will make a total new capital investment of at least $1 billion in this State within the 10-year period immediately following approval of the application, as required by paragraph (c) of subsection 2. 4. In addition to meeting the requirements set forth in subsection 2, a project is eligible for the transferable tax credits described in paragraph (a) of subsection 1 only if the Interim – 6 – - 83rd Session (2025) Finance Committee approves a written request for the issuance of the transferable tax credits. Such a request may only be submitted by the Office and only after the Office has approved the application submitted for the project pursuant to subsection 2. The Interim Finance Committee may approve a re [Text truncated for display. Full text available on LegiScan.]