SB385 - Revises provisions relating to certain transferable tax credits and certain tax abatements. (BDR 32-826)

S.B. 385 - *SB385* SENATE BILL NO. 385–SENATOR TITUS MARCH 17, 2025 ____________ Referred to Committee on Revenue and Economic Development SUMMARY—Revises provisions relating to certain transferable tax credits and certain tax abatements. (BDR 32-826) FISCAL NOTE: Effect on Local Government: No. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to taxation; requiring applicants for certain transferable tax credits and certain tax abatements to agree to a workforce development plan; prescribing the requirements for a program of workforce development implemented under the plan; authorizing the Office of Economic Development to investigate the recipient of certain transferable tax credits and certain tax abatements for compliance with a workforce development plan; requiring the recipient of certain transferable tax credits and certain tax abatements to repay the amount of the credits and abatements if the recipient is not in substantial compliance with the workforce development plan; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law authorizes the Office of Economic Development to approve 1 transferable tax credits and abatements or partial abatements of certain property 2 taxes, business taxes and sales and use taxes for certain businesses in certain 3 circumstances. The Office is prohibited from approving an application for such 4 credits or abatements unless the applicant satisfies certain criteria and has entered 5 into an agreement with the Office establishing certain terms for the abatement. 6 (NRS 231.1555, 274.310, 274.320, 274.330, 360.750, 360.753, 360.754, 360.759, 7 360.889, 360.945) Sections 1-3, 5 and 9-12 of this bill require an applicant for 8 transferable tax credits or a tax abatement to enter into an agreement with the 9 Office that includes a workforce development plan that provides for the 10 implementation by the applicant of a workforce development program which meets 11 certain requirements, including that the program is provided by certain educational 12 institutions and that the completion of the program will result in certain credentials 13 – 2 – - *SB385* or identifiable occupational skills. Sections 1, 2, 4, 6 and 9-12 of this bill: (1) 14 authorize the Office to investigate whether the recipient of an abatement or partial 15 abatement is complying with the terms of the workforce development plan; and (2) 16 require a recipient to repay the amount of the abatement or partial abatement or an 17 amount equal to the amount of transferable tax credits, plus interest, if the 18 Executive Director of the Office determines that the recipient has not substantially 19 complied with the terms of the workforce development plan. Sections 7 and 8 of 20 this bill make conforming changes to update references to provisions renumbered 21 by section 2. Section 13 of this bill makes the requirements of this bill relating to 22 workforce development plans applicable only to an application for certain 23 transferable tax credits or certain abatements made on or after July 1, 2025. 24 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: 1 360.750 1. A person who intends to locate or expand a 2 business in this State may apply to the Office of Economic 3 Development pursuant to this section for a partial abatement of one 4 or more of the taxes imposed on the: 5 (a) New business pursuant to chapter 361, 363B or 374 of NRS. 6 (b) Expanded business pursuant to chapter 361 or 363B of NRS 7 or a partial abatement of the local sales and use taxes imposed on 8 the expanded business. As used in this paragraph, “local sales and 9 use taxes” means the taxes imposed on the gross receipts of any 10 retailer from the sale of tangible personal property sold at retail, or 11 stored, used or otherwise consumed, in the political subdivision in 12 which the business is to be located or expanded, except the taxes 13 imposed by the Sales and Use Tax Act and the Local School 14 Support Tax Law. 15 2. The Office of Economic Development shall approve an 16 application for a partial abatement pursuant to this section if the 17 Office makes the following determinations: 18 (a) The business offers primary jobs and is consistent with: 19 (1) The State Plan for Economic Development developed by 20 the Executive Director of the Office of Economic Development 21 pursuant to subsection 2 of NRS 231.053; and 22 (2) Any guidelines adopted by the Executive Director of the 23 Office to implement the State Plan for Economic Development. 24 (b) Not later than 1 year after the date on which the application 25 was received by the Office, the applicant has executed an agreement 26 with the Office which must: 27 (1) Comply with the requirements of NRS 360.755; 28 (2) State the date on which the abatement becomes effective, 29 as agreed to by the applicant and the Office, which must not be 30 earlier than the date on which the Office received the application 31 – 3 – - *SB385* and not later than 1 year after the date on which the Office approves 1 the application; 2 (3) State that the business will, after the date on which the 3 abatement becomes effective, continue in operation in this State for 4 a period specified by the Office, which must be at least 5 years, and 5 will continue to meet the eligibility requirements set forth in this 6 subsection; 7 (4) State that the business will offer primary jobs; [and] 8 (5) Incorporate a workforce development plan that provides 9 for the implementation by the business of a program of workforce 10 development for employees employed in this State by the business 11 that must: 12 (I) Train incumbent employees or be used to recruit, 13 assess and train new employees of the business; 14 (II) Be provided by an institution within the Nevada 15 System of Higher Education, a private postsecondary educational 16 institution, a school district or a charter school; and 17 (III) If completed, result in a postsecondary or industry- 18 recognized credential, or an identifiable occupational skill that 19 meets the applicable industry standard; and 20 (6) Bind the successors in interest of the business for the 21 specified period. 22 (c) The business is registered pursuant to the laws of this State 23 or the applicant commits to obtain a valid business license and all 24 other permits required by the county, city or town in which the 25 business operates. 26 (d) Except as otherwise provided in subsection 4, 5 or 6, the 27 average hourly wage that will be paid by the business to its new 28 employees in this State is at least 100 percent of the average 29 statewide hourly wage as established by the Employment Security 30 Division of the Department of Employment, Training and 31 Rehabilitation on July 1 of each fiscal year. 32 (e) The business will, by the eighth calendar quarter following 33 the calendar quarter in which the abatement becomes effective, offer 34 a health insurance plan for all employees that includes an option for 35 health insurance coverage for dependents of the employees, and the 36 health care benefits the business offers to its employees in this State 37 will meet the minimum requirements for health care benefits 38 established by the Office. 39 (f) Except as otherwise provided in this subsection and NRS 40 361.0687, if the business is a new business in a county whose 41 population is 100,000 or more or a city whose population is 60,000 42 or more, the business meets at least one of the following 43 requirements: 44 – 4 – - *SB385* (1) The business will have 50 or more full-time employees 1 on the payroll of the business by the eighth calendar quarter 2 following the calendar quarter in which the abatement becomes 3 effective who will be employed at the location of the business in 4 that county or city until at least the date which is 5 years after the 5 date on which the abatement becomes effective. 6 (2) Establishing the business will require the business to 7 make, not later than the date which is 2 years after the date on which 8 the abatement becomes effective, a capital investment of at least 9 $1,000,000 in this State in capital assets that will be retained at the 10 location of the business in that county or city until at least the date 11 which is 5 years after the date on which the abatement becomes 12 effective. 13 (g) Except as otherwise provided in NRS 361.0687, if the 14 business is a new business in a county whose population is less than 15 100,000, in an area of a county whose population is 100,000 or more 16 that is located within the geographic boundaries of an area that is 17 designated as rural by the United States Department of Agriculture 18 and at least 20 miles outside of the geographic boundaries of an area 19 designated as urban by the United States Department of Agriculture, 20 or in a city whose population is less than 60,000, the business meets 21 at least one of the following requirements: 22 (1) The business will have 10 or more full-time employees 23 on the payroll of the business by the eighth calendar quarter 24 following the calendar quarter in which the abatement becomes 25 effective who will be employed at the location of the business in 26 that county or city until at least the date which is 5 years after the 27 date on which the abatement becomes effective. 28 (2) Establishing the business will require the business to 29 make, not later than the date which is 2 years after the date on which 30 the abatement becomes effective, a capital investment of at least 31 $250,000 in this State in capital assets that will be retained at the 32 location of the business in that county or city until at least the date 33 which is 5 years after the date on which the abatement becomes 34 effective. 35 (h) If the business is an existing business, the business meets at 36 least one of the following requirements: 37 (1) For a business in: 38 (I) Except as otherwise provided in sub-subparagraph (II), 39 a county whose population is 100,000 or more or a city whose 40 population is 60,000 or more, the business will, by the eighth 41 calendar quarter following the calendar quarter in which the 42 abatement becomes effective, increase the number of employees on 43 its payroll in that county or city by 10 percent more than it 44 employed in the fiscal year immediately preceding the fiscal year in 45 – 5 – - *SB385* which the abatement becomes effective or by twenty-five 1 employees, whichever is greater, who will be employed at the 2 location of the business in that county or city until at least the date 3 which is 5 years after the date on which the abatement becomes 4 effective; or 5 (II) A county whose population is less than 100,000, an 6 area of a county whose population is 100,000 or more that is located 7 within the geographic boundaries of an area that is designated as 8 rural by the United States Department of Agriculture and at least 20 9 miles outside of the geographic boundaries of an area designated as 10 urban by the United States Department of Agriculture, or a city 11 whose population is less than 60,000, the business will, by the 12 eighth calendar quarter following the calendar quarter in which the 13 abatement becomes effective, increase the number of employees on 14 its payroll in that county or city by 10 percent more than it 15 employed in the fiscal year immediately preceding the fiscal year in 16 which the abatement becomes effective or by six employees, 17 whichever is greater, who will be employed at the location of the 18 business in that county or city until at least the date which is 5 years 19 after the date on which the abatement becomes effective. 20 (2) The business will expand by making a capital investment 21 in this State, not later than the date which is 2 years after the date on 22 which the abatement becomes effective, in an amount equal to at 23 least 20 percent of the value of the tangible property possessed by 24 the business in the fiscal year immediately preceding the fiscal year 25 in which the abatement becomes effective, and the capital 26 investment will be in capital assets that will be retained at the 27 location of the business in that county or city until at least the date 28 which is 5 years after the date on which the abatement becomes 29 effective. The determination of the value of the tangible property 30 possessed by the business in the immediately preceding fiscal year 31 must be made by the: 32 (I) County assessor of the county in which the business 33 will expand, if the business is locally assessed; or 34 (II) Department, if the business is centrally assessed. 35 (i) The applicant has provided in the application an estimate of 36 the total number of new employees which the business anticipates 37 hiring in this State by the eighth calendar quarter following the 38 calendar quarter in which the abatement becomes effective if the 39 Office approves the application. 40 (j) Except as otherwise provided in subsection 3, if the business 41 will have at least 50 full-time employees on the payroll of the 42 business by the eighth calendar quarter following the calendar 43 quarter in which the abatement becomes effective, the business, by 44 the earlier of the eighth calendar quarter following the calendar 45 – 6 – - *SB385* quarter in which the abatement becomes effective or the date on 1 which the business has at least 50 full-time employees on the payroll 2 of the business, has a policy for paid family and medical leave and 3 agrees that all employees who have been employed by the business 4 for at least 1 year will be eligible for at least 12 weeks of paid 5 family and medical leave at a rate of at least 55 percent of the 6 regular wage of the employee. The business will agree in writing 7 that if the Office approves the application, the business will not: 8 (1) Prohibit, interfere with or otherwise discourage an 9 employee from taking paid family and medical leave: 10 (I) For any reason authorized pursuant to the Family and 11 Medical Leave Act of 1993, 29 U.S.C. §§ 2601 et seq. 12 (II) To care for any adult child, sibling or dom [Text truncated for display. Full text available on LegiScan.]