SB402 - Provides for the creation of restoration improvement districts for building restoration projects. (BDR 22-332)

EXEMPT (Reprinted with amendments adopted on April 21, 2025) FIRST REPRINT S.B. 402 - *SB402_R1* SENATE BILL NO. 402–SENATORS FLORES; DOÑATE, STONE AND TAYLOR MARCH 17, 2025 ____________ JOINT SPONSORS: ASSEMBLYMEMBERS WATTS, DELONG; DICKMAN, GRAY, GURR AND O’NEILL ____________ Referred to Committee on Government Affairs SUMMARY—Provides for the creation of restoration improvement districts for building restoration projects. (BDR 22-332) FISCAL NOTE: Effect on Local Government: May have Fiscal Impact. 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; authorizing under certain circumstances the governing body of a county or city to create a restoration improvement district for the purpose of a project to restore certain buildings that are at least 50 years of age; authorizing under certain circumstances the governing body of a county or city to pledge certain property tax proceeds for the costs of such a project; establishing certain requirements for contracts or agreements for construction work performed on such a project; and providing other matters properly relating thereto. Legislative Counsel’s Digest: This bill authorizes the governing body of a county or city in which a building 1 restoration project is or is expected to be located to create a restoration 2 improvement district that includes the project, or a part of the project, within its 3 boundaries. Section 3 of this bill defines the criteria for a project to qualify as a 4 building restoration project. Under section 7 of this bill, the governing body of a 5 county or city is authorized to: (1) adopt an ordinance creating a restoration 6 improvement district, subject to certain restrictions concerning the areas that may 7 be included in the district; and (2) pledge a portion of certain taxes on real property 8 collected in the district during a fiscal year, except that such a pledge may not 9 – 2 – - *SB402_R1* include taxes on real property levied by or for the benefit of a public body if the 10 governing body of that public body elects, within a certain period, not to include 11 such taxes in the pledge. Section 8 of this bill provides that the amount of the 12 property taxes pledged is equal to the property tax revenue, excluding property tax 13 rate levied by a public body that has elected pursuant to section 7 not to include 14 such rates in the pledge and certain other property tax rates, collected in the district 15 in excess of the property tax revenue collected in the district before the creation of 16 the district. Sections 9 and 12 of this bill exclude a district created pursuant to 17 section 7 from certain limitations on the amount of revenue that a local government 18 is authorized to collect from property taxes. Section 10 of this bill provides that 19 such money would be pledged to the developer of the project for certain costs of the 20 project pursuant to an agreement entered into by the county or city in which the 21 project is located. Section 11 of this bill provides that work performed on a project 22 after the effective date of an ordinance creating a district, pursuant to a contract for 23 construction of the project, is subject to the prevailing wage requirements set forth 24 in existing law. Sections 3-6 of this bill define terms for the purposes of this bill, 25 and section 2 of this bill specifies the applicability of those definitions. 26 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Title 22 of NRS is hereby amended by adding 1 thereto a new chapter to consist of the provisions set forth as 2 sections 2 to 11, inclusive, of this act. 3 Sec. 2. As used in this chapter, unless the context otherwise 4 requires, the words and terms defined in sections 3 to 6, inclusive, 5 of this act have the meanings ascribed to them in those sections. 6 Sec. 3. “Building restoration project” or “project” means a 7 project to improve, rehabilitate, repair, equip, maintain and 8 operate a building, and the site surrounding the building, if: 9 1. The building and the surrounding site are located, in 10 whole or in part, in the municipality creating a restoration 11 improvement district pursuant to section 7 of this act with respect 12 to the district; 13 2. The original structure of the building, excluding any 14 additions, is at least 50 years of age; 15 3. The owner of the building may hold a business license to 16 operate a business at the site of the building, whether or not the 17 owner holds such a license; 18 4. The building has not had any business operated at the site 19 for at least 10 years other than any operations necessary to 20 maintain a privileged license issued by a local government; and 21 5. As a result of the project, the building will be restored in a 22 manner consistent with the original character of the building. 23 Sec. 4. “Developer” means the person or entity that proposes 24 to undertake a building restoration project. 25 – 3 – - *SB402_R1* Sec. 5. “District” means a restoration improvement district 1 created pursuant to section 7 of this act. 2 Sec. 6. “Municipality” means any county or city in this State. 3 Sec. 7. 1. Except as otherwise provided in this section, the 4 governing body of a municipality may: 5 (a) Create a restoration improvement district for the purposes 6 of carrying out this chapter by adopting an ordinance describing 7 the boundaries of the district, which must be the geographic 8 boundaries of a building restoration project in the municipality, 9 and generally describing the purposes within the district for which 10 money pledged pursuant to this chapter may be used. An 11 ordinance adopted pursuant to this paragraph must include the 12 findings of the governing body of the municipality that the project 13 qualifies as a building restoration project. 14 (b) For the purposes of carrying out paragraph (a), include in 15 an ordinance adopted pursuant to that paragraph the pledge of the 16 proceeds of any taxes levied for a fiscal year upon taxable real 17 property in the district each year by or for the benefit of the State, 18 the municipality and any public body, in the amount determined 19 pursuant to paragraph (b) of subsection 1 of section 8 of this act. 20 2. Upon introduction of an ordinance to create a restoration 21 improvement district pursuant to paragraph (a) of subsection 1, 22 the governing body of the municipality shall provide notice of the 23 introduction of the ordinance to the governing body of each public 24 body, other than the State, by or for the benefit of which any tax is 25 levied upon taxable real property in the district. Not later than 30 26 days after the receipt of such notice, the governing body of a 27 public body receiving such a notice may: 28 (a) Provide comments to the governing body of the 29 municipality introducing the ordinance concerning the creation of 30 the restoration improvement district; and 31 (b) Adopt a resolution to elect not to include any taxes levied 32 by or for the benefit of the public body in the pledge of the 33 proceeds of taxes levied upon taxable real property in the district, 34 which is proposed to be included in an ordinance adopted 35 pursuant to paragraph (a) of subsection 1. If, within 30 days after 36 receiving notice pursuant to this subsection the governing body of 37 a public body adopts such a resolution, the governing body must 38 send, by certified mail, notice of the adoption of the resolution to 39 the governing body of the municipality that introduced the 40 ordinance and the governing body of that municipality may not 41 include in the ordinance a pledge of any taxes levied for a fiscal 42 year upon taxable real property in the district each year by or for 43 the benefit of that public body. 44 – 4 – - *SB402_R1* 3. The governing body of a municipality shall not adopt an 1 ordinance pursuant to this section or create a restoration 2 improvement district for any building restoration project unless 3 the municipality has entered into a written deed restriction or 4 restrictive covenant with the developer of the project, and such 5 deed restriction or restrictive covenant has been properly and 6 validly recorded with the appropriate county recorder in the 7 county where the building restoration project is located. The 8 recorded deed restriction or restrictive covenant must restrict the 9 use of the building restoration project or any portion of the 10 building restoration project as follows: 11 (a) The written deed restriction or restrictive covenant must 12 include the developer of the building restoration project and the 13 municipality as parties to the document. 14 (b) The written deed restriction or restrictive covenant must 15 prohibit the building restoration project or any portion of the 16 building restoration project from conducting or operating a 17 nonrestricted operation, as defined in NRS 463.0177, on all or any 18 portion of the building restoration project that requires or would 19 require a nonrestricted license, as defined in NRS 463.0177, for a 20 period of at least 20 years from the date of the ordinance or the 21 creation of the district, whichever date is later. 22 (c) The written deed restriction or restrictive covenant shall be 23 a covenant running with the land for the benefit of the 24 municipality and shall be binding on the successors and assigns of 25 the building restoration project and the municipality. 26 (d) No party to the written deed restriction or restrictive 27 covenant shall alter, amend, revoke or terminate the deed 28 restriction or restrictive covenant for a period of at least 20 29 continuous years after the adoption of the ordinance or creation of 30 the district, whichever date is later. After that time period, any 31 alteration, amendment, revocation or termination of the deed 32 restriction or restrictive covenant shall require the affirmative vote 33 of the governing body of the municipality creating the district. 34 4. A restoration improvement district may not include any 35 property that is, at the time the boundaries of the restoration 36 improvement district are created, included within a redevelopment 37 area previously established pursuant to the laws of this State. 38 5. A restoration improvement district may not include any 39 parcel or parcels of land, building or group of buildings or spaces 40 that include or will include an establishment, as defined in NRS 41 463.0148, that holds a nonrestricted gaming license, as defined in 42 NRS 463.0177, whether the license is held by the owner, lessor or 43 lessee of the building restoration project or a third party licensed 44 by the Nevada Gaming Commission to operate gaming devices, as 45 – 5 – - *SB402_R1* defined in NRS 463.0155, or games as defined NRS 463.0152, on 1 a continuous or periodic basis. 2 6. A district created pursuant to this section by: 3 (a) A city must be located entirely within the boundaries of 4 that city. 5 (b) A county must be located entirely within the boundaries of 6 that county and, when the district is created, entirely outside of the 7 boundaries of any city. 8 Sec. 8. 1. After the effective date of an ordinance adopted 9 pursuant to section 7 of this act, any taxes levied upon the taxable 10 real property in the district each year by or for the benefit of the 11 State, the municipality and any public body must be divided as 12 follows: 13 (a) That portion of the taxes that would be produced by the 14 rate upon which the tax is levied each year by or for each of those 15 taxing agencies upon the total sum of the assessed value of the 16 taxable real property in the district as shown upon the last 17 equalized assessment roll used in connection with the taxation of 18 the real property by the taxing agency, must be allocated to and 19 when collected must be paid into the funds of the respective taxing 20 agencies as taxes by or for the taxing agencies on all other real 21 property are paid. 22 (b) Except as otherwise provided in this section, the portion of 23 the taxes levied on taxable real property each year in excess of the 24 amount determined pursuant to paragraph (a) must be allocated 25 to, and when collected must be paid into, the restoration 26 improvement district account pertaining to the project to pay 27 money pledged pursuant to paragraph (b) of subsection 1 of 28 section 7 of this act. Unless the total assessed valuation of the 29 taxable real property in the restoration improvement district 30 exceeds the total assessed value of the taxable real property in the 31 district as shown by the last equalized assessment roll referred to 32 in this subsection, all of the taxes levied and collected upon the 33 taxable real property in the district must be paid into the funds of 34 the respective taxing agencies. When all payments required by any 35 agreement entered into pursuant to section 10 of this act have 36 been paid, all money thereafter received from taxes upon the 37 taxable real property in the restoration improvement district must 38 be paid into the funds of the respective taxing agencies as taxes on 39 all other real property are paid. 40 2. The portion of the taxes levied each year in excess of the 41 amount determined pursuant to paragraph (a) of subsection 1 42 which is attributable to any tax rate levied by a taxing agency: 43 (a) To produce revenue in an amount sufficient to make 44 annual repayments of the principal of, and the interest on, any 45 – 6 – - *SB402_R1* bonded indebtedness that was approved by a majority of the 1 registered voters within the area of the taxing agency voting upon 2 the question, must be allocated to, and when collected must be 3 paid into, the debt service fund of that taxing agency. 4 (b) In excess of any tax rate of that taxing agency applicable to 5 the last taxation of the real property before the effective date of the 6 ordinance, if that additional rate was approved by a majority of the 7 registered voters within the area of the taxing agency voting upon 8 the question, must be allocated to, and when collected must be 9 paid into, the appropriate fund of that taxing agency. 10 (c) Pursuant to NRS 387.3285 or 387.3287, if that rate was 11 approved [Text truncated for display. 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