SB420 - Authorizes the creation of business improvement districts. (BDR 22-372)

EXEMPT (Reprinted with amendments adopted on April 21, 2025) FIRST REPRINT S.B. 420 - *SB420_R1* SENATE BILL NO. 420–COMMITTEE ON NATURAL RESOURCES (ON BEHALF OF THE LEGISLATIVE COMMITTEE FOR THE REVIEW AND OVERSIGHT OF THE TAHOE REGIONAL PLANNING AGENCY AND THE MARLETTE LAKE WATER SYSTEM) MARCH 24, 2025 ____________ Referred to Committee on Government Affairs SUMMARY—Authorizes the creation of business improvement districts. (BDR 22-372) FISCAL NOTE: Effect on Local Government: May have Fiscal Impact. Effect on the State: No. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to business improvement districts; authorizing a person to submit a petition to create a business improvement district to the board of county commissioners of certain counties; prescribing certain requirements for a district management plan; requiring the board of county commissioners to hold a public hearing before creating a district; prescribing certain procedures for the renewal of a district; setting forth certain requirements for an owners’ association to administer or implement the improvements or activities of a district; prescribing certain requirements for assessments; authorizing the board of county commissioners to enter into an agreement with the Department of Taxation; requiring the board of county commissioners to annually submit to the Legislature a report concerning the district; authorizing the board of county commissioners to issue bonds for the benefit of a district; requiring the board of county commissioners to have an independent auditor review certain claims; prescribing certain requirements to modify a district; authorizing a board of county commissioners to dissolve a district under certain circumstances; and providing other matters properly relating thereto. – 2 – - *SB420_R1* Legislative Counsel’s Digest: Existing law authorizes the governing body of a city or county to create a 1 tourism improvement district or an economic diversification district to finance 2 certain projects within the district. (Chapters 271A and 271B of NRS) This bill 3 authorizes the board of county commissioners of certain counties to create a 4 business improvement district to perform certain activities relating to transportation 5 and visitor activities. Section 2 of this bill provides that the provisions of this bill 6 may be referred to as the Business Improvement District Law. Section 3 of this bill 7 provides that the provisions of this bill apply, under certain circumstances, in any 8 region of this State governed by a regional planning agency created by interstate 9 compact (currently the Lake Tahoe Basin). Sections 5-10.5 of this bill define 10 certain terms relating to business improvement districts. Section 4 of this bill 11 applies these definitions to the provisions of this bill. 12 Section 11 of this bill authorizes a person to submit a petition to the board of 13 county commissioners to create a business improvement district. Such a petition is 14 required to: (1) be signed by the business owners in the proposed district who will 15 pay more than 50 percent of the total amount of assessments proposed to be levied 16 in the district; and (2) include a district management plan. Section 12 of this bill 17 sets forth certain requirements for a district management plan and authorizes the 18 district management plan to provide for increases in assessments for each year of 19 operation of the district. 20 Section 13 of this bill requires the board of county commissioners to hold a 21 public hearing to consider a petition to create a district and sets forth certain notice 22 requirements for the public hearing. Section 13 also: (1) authorizes any interested 23 person to make a protest orally or in writing; and (2) prohibits the board of county 24 commissioners from creating a district if the board of county commissioners 25 receives protests from the business owners or authorized representatives of the 26 businesses in the proposed district who will pay more than 50 percent of the total 27 amount of proposed assessments. Section 14 of this bill authorizes, with certain 28 exceptions, the board of county commissioners to adopt, revise, change, reduce or 29 modify the proposed assessments or the types of activities to be provided by the 30 proposed district. Section 15 of this bill authorizes the board of county 31 commissioners, following a public hearing, to create by ordinance a district and 32 requires the county clerk to maintain, and make available for public inspection, a 33 copy of the district management plan. Section 15 prohibits: (1) with certain 34 exceptions, the boundaries of a district from overlapping with the boundaries of 35 another district; and (2) the board of county commissioners from creating a district 36 in the jurisdiction of another county without the consent of the board of county 37 commissioners of that county. Additionally, section 15 provides, with certain 38 exceptions, that the term of a district may not exceed 5 years upon the initial 39 formation of the district and an additional 10 years upon renewal. Section 15.3 of 40 this bill authorizes the board of county commissioners to renew a district by 41 following the procedures for establishing a district. Section 15.3 also provides, with 42 certain exceptions, that the term of the district may not exceed 10 years upon 43 renewal. Additionally, section 15.3 requires any remaining revenue from a previous 44 district be spent to benefit the businesses that were included in the previous district 45 and in accordance with the district management plan for the previous district. 46 Section 15.7 requires a board of county commissioners to contract with an 47 owners’ association if the district management plan designated an owners’ 48 association. Section 15.7 further requires an owners’ association to: (1) comply 49 with certain provisions governing the payment of prevailing wage for certain 50 contracts for a project regardless of whether the project would qualify as a public 51 work; and (2) prepare and submit a report to the county clerk concerning the 52 upcoming fiscal years in which assessments are levied. 53 – 3 – - *SB420_R1* Section 16 of this bill: (1) requires assessments to be levied on the basis of the 54 estimated benefit to the businesses within the district; (2) requires, with certain 55 exceptions, the revenue from the levy of assessments to be used for certain 56 purposes; and (3) authorizes the board of county commissioners to establish 57 separate benefit zones within a district and impose a different assessment within 58 each benefit zone. 59 Section 17 of this bill authorizes the board of county commissioners to enter 60 into an agreement with the Department of Taxation for the collection and 61 distribution of the assessments levied by the district. 62 Section 18 of this bill requires the board of county commissioners that created 63 a district to submit an annual report to the Legislature concerning the status of the 64 district and the financial impact of the district on local governmental services. 65 Section 19 of this bill authorizes the board of county commissioners that 66 formed a district to issue bonds for the benefit of the district or to enter into an 67 agreement with certain governmental entities or other persons for the cost of 68 acquiring, improving or equipping any project to be performed for the purposes of 69 the district. Section 20 of this bill requires such a board of county commissioners to 70 have an independent auditor review each claim submitted as part of any contract or 71 other agreement made with the board of county commissioners to provide any 72 financing or reimbursement. 73 Section 20.3 of this bill authorizes an owners’ association to submit a request 74 to the board of county commissioners to modify the improvements, activities or the 75 amount of the assessments of the district. Section 20.3 authorizes the board of 76 county commissioners to modify the district by ordinance after holding a public 77 hearing. Additionally, section 20.3 sets forth certain notice requirements for the 78 public hearing. If the proposed modification increases an assessment or adds a new 79 assessment, section 20.3: (1) authorizes any interested person to make a protest 80 orally or in writing; and (2) prohibits the board of county commissioners from 81 modifying a district if the board of county commissioners receives protests from the 82 business owners or authorized representatives of the businesses in the district who 83 will pay more than 50 percent of the total amount of proposed assessments. 84 Section 20.5 authorizes the board of county commissioners to dissolve a 85 district by ordinance if there was a misappropriation of money, malfeasance or a 86 violation of law concerning the management of the district or upon written petition 87 of the business owners or authorized representatives of the businesses in the district 88 who pay 50 percent or more of the assessments. Section 20.5 prescribes 89 requirements for an annual 30-day period in which the business owners or 90 authorized representatives of the businesses may request the dissolution of a district 91 by written petition. Section 20.5 of this bill requires the board of county 92 commissioners to hold a public hearing before dissolving a district and sets forth 93 certain notice requirements for the public hearing. 94 Section 20.7 requires, upon the dissolution or expiration of a district, any 95 remaining revenue to be spent in accordance with the district management plan or 96 returned to the business owners subject to assessment. 97 – 4 – - *SB420_R1* 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 20.7, inclusive, of this act. 3 Sec. 2. This chapter may be cited as the Business 4 Improvement District Law. 5 Sec. 3. The provisions of sections 2 to 20.7, inclusive, of this 6 act, apply only in a region of this State for which there has been 7 created by interstate compact a regional planning agency and the 8 regional plan adopted by the regional planning agency calls for 9 the regulation of transportation and visitor activities. 10 Sec. 4. As used in this chapter, unless the context otherwise 11 requires, the words and terms defined in sections 5 to 10.5, 12 inclusive, of this act have the meanings ascribed to them in those 13 sections. 14 Sec. 5. “Activity” includes, without limitation, any of the 15 following activities: 16 1. The promotion of public events; 17 2. Marketing and economic development, including, without 18 limitation, the recruitment and retention of retail establishments; 19 3. Transportation; and 20 4. Any other service that benefits businesses in the district. 21 Sec. 6. “Business” means all types of businesses, including, 22 without limitation, financial institutions and professions. 23 Sec. 6.5. “Business owner” means a person recognized by 24 the county or State as the owner of the business on a business 25 license issued by the county or State. 26 Sec. 7. “District” means a business improvement district 27 created pursuant to section 15 of this act. 28 Sec. 8. “District management plan” means a district 29 management plan as described in section 12 of this act. 30 Sec. 9. “Improvement” means the acquisition, construction, 31 installation or maintenance of any tangible property, 32 appurtenances and incidentals. 33 Sec. 10. (Deleted by amendment.) 34 Sec. 10.5. “Owners’ association” means a nonprofit entity 35 that is under contract with a county to administer or implement 36 the improvements and activities set forth in the district 37 management plan. The term includes, without limitation, a newly 38 created nonprofit, an existing nonprofit and a nonprofit 39 cooperative corporation formed in the manner prescribed in NRS 40 81.410 to 81.540, inclusive. 41 – 5 – - *SB420_R1* Sec. 11. 1. A person may submit a petition to create a 1 business improvement district to the board of county 2 commissioners. Such a petition must: 3 (a) Be signed by the business owners in the proposed district 4 who will pay more than 50 percent of the total amount of 5 assessments proposed to be levied; and 6 (b) Include a district management plan that complies with the 7 requirements set forth in section 12 of this act. 8 2. For the purposes of determining whether the petition was 9 signed by the business owners who will pay more than 50 percent 10 of the total amount of assessments proposed to be levied: 11 (a) The amount of assessments attributable to a business 12 owned by the business owner that is in excess of 40 percent of the 13 amount of all assessments proposed to be levied must not be 14 included; and 15 (b) The signature of an authorized representative of a business 16 owner shall be deemed to be the signature of the business owner. 17 3. Upon submission of a petition received by a board of 18 county commissioners pursuant to subsection 1 and in accordance 19 with the requirements of sections 2 to 20.7, inclusive, of this act, a 20 board of county commissioners may initiate proceedings to create 21 a business improvement district. A district may acquire, improve, 22 equip, operate and maintain any improvement or activity within 23 the district relating to transportation or visitor activities within the 24 district provided that such improvement or activity confers a 25 benefit to the businesses subject to the assessment. 26 Sec. 12. 1. A district management plan must include, 27 without limitation: 28 (a) A map of the district that depicts each business in the 29 district in sufficient detail to allow a business owner to reasonably 30 determine whether a business is located within the district. 31 (b) The name of the proposed district. 32 (c) A description of the boundaries of the district, including 33 the proposed boundaries of the zones that will benefit from the 34 district in sufficient detail to identify the affected businesses. 35 (d) A description of the activities proposed for each year the 36 district will operate and the estimated cost of such activities. If the 37 activities propos [Text truncated for display. Full text available on LegiScan.]