SB461 - Revises provisions relating to economic development. (BDR 32-1070)

S.B. 461 - *SB461* SENATE BILL NO. 461–COMMITTEE ON REVENUE AND ECONOMIC DEVELOPMENT (ON BEHALF OF THE OFFICE OF THE GOVERNOR) APRIL 30, 2025 ____________ Referred to Committee on Revenue and Economic Development SUMMARY—Revises provisions relating to economic development. (BDR 32-1070) FISCAL NOTE: Effect on Local Government: May have Fiscal Impact. Effect on the State: Executive Budget. CONTAINS UNFUNDED MANDATE (§ 32) (NOT REQUESTED BY AFFECTED LOCAL GOVERNMENT) ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to economic development; revising provisions governing abatements of certain taxes and transferable tax credits for certain businesses; authorizing the Office of Economic Development to approve a partial deduction of certain taxes for a person who intends to locate or expand a high-impact business in this State; authorizing the Board of Economic Development to deny an application for an abatement, deduction or transferable tax credits under certain circumstances; authorizing the Office to issue transferable tax credits for the location or expansion of a child care facility in this State; creating the Community Infrastructure Grant Program; revising provisions governing the State Plan for Economic Development; revising provisions governing programs of workforce recruitment, assessment and training; requiring the Office of Economic Development and the Department of Employment, Training and Rehabilitation to establish a program to reimburse certain expenses of certain students of the Nevada System of Higher Education; providing for the establishment of a program to provide stipends to – 2 – - *SB461* certain employers whose employees teach in programs of career and technical education; revising provisions governing programs of career and technical education; authorizing businesses that recycle certain materials or produce certain fuels from recycled materials to apply to the Office for a partial abatement of certain taxes; 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. (NRS 231.1555, 274.310, 274.320, 274.330, 360.750, 360.753, 4 360.754, 360.759, 360.889, 360.945) Sections 3 and 13-15 of this bill authorize a 5 person who intends to locate or expand a high-impact business in this State, which 6 is defined in section 3 as a business primarily engaged in electric battery 7 production, the production of clean energy and water technology, advanced 8 manufacturing or the manufacturing of aerospace systems, defense technologies, 9 national security solutions or certain advanced health care technology, to apply to 10 the Office for a partial deduction of certain property taxes, business taxes and sales 11 and use taxes. Section 3 authorizes the Office to approve an application for a partial 12 deduction if the Office makes certain determinations and establishes the method to 13 calculate the amount of the partial deduction based upon whether the applicant 14 meets certain criteria. Section 3 prohibits the Office from approving a partial 15 deduction that would allow a business to deduct: (1) more than 60 percent of the 16 total amount of taxes that would otherwise be due in any tax year or over the 10- 17 year period following the date on which the partial deduction becomes effective; or 18 (2) in combination with any partial abatement that the business might receive, more 19 than 90 percent of the total amount of taxes that would otherwise be due. Section 7 20 of this bill requires the Department of Taxation to investigate whether a person 21 meets the eligibility requirements for the partial deduction created by section 3 22 during the course of certain other investigations. Sections 3 and 9 of this bill 23 require a person, to be eligible for the partial deduction, to enter into an agreement 24 with the Office that contains certain provisions. Section 10 of this bill requires the 25 Office to provide certain notice and take action at a public meeting on an 26 application for the partial deduction created by section 3. If the Office approves a 27 partial deduction of sales and use tax pursuant to section 3, section 11 of this bill 28 requires the Office to issue to the business a document certifying the partial 29 deduction. Section 16 of this bill exempts the partial deduction created by section 3 30 from provisions excluding certain provisions of the Local School Support Tax Law 31 from being subject to abatements on taxation which the Office is authorized to 32 approve. Sections 22 and 30 of this bill add the partial deduction created by 33 section 3 to the list of economic development incentives for which the Office is 34 required to submit certain reports. Sections 26 and 27 of this bill provide that 35 businesses that receive the deduction created by section 3 are not eligible to receive 36 certain tax credits that are authorized under existing law for businesses that meet 37 criteria to be a qualified active low-income community business or impact qualified 38 active low-income community business. 39 To be eligible for certain partial abatements or transferable tax credits, existing 40 law requires the business of the applicant to offer primary jobs. (NRS 360.750, 41 360.889) Section 3 requires a business to offer primary jobs to be eligible for the 42 partial deduction created by that section. Section 2 of this bill defines the term 43 “primary job” for the purposes of such provisions to mean a permanent, full-time 44 – 3 – - *SB461* position of employment at a physical location of a business in this State that is: (1) 45 a location that generates a certain percentage of its revenue from exports to 46 locations outside of this State; or (2) a business that operates in certain sectors of 47 the economy and manufactures, produces or sells certain goods or services that are 48 imported into this State in significant quantities and which closes gaps in supply 49 chains, promotes local production or reduces the outflow of capital from this State. 50 Section 18 of this bill similarly defines “primary jobs” for the purposes of certain 51 other programs administered by the Office, and section 20 of this bill makes this 52 definition applicable to such programs. 53 Section 4 of this bill requires a person who claims an abatement, partial 54 abatement or partial deduction to submit a quarterly report to the Department 55 containing certain information, including: (1) a certification that the person was 56 approved for and continues to meet the requirements for the abatement or 57 deduction; and (2) documentation to demonstrate the person’s continuing 58 compliance with those requirements. Section 4 also requires the person to remit 59 sales and use tax owed for the previous calendar quarter that was not previously 60 remitted. 61 Section 5 of this bill authorizes the Board of Economic Development to deny, 62 or approve for a lesser amount, an application for an abatement, partial abatement, 63 partial deduction or transferable tax credits if the Board determines that approving 64 the full amount applied for is not in the best interests of the State. Section 5 lists 65 certain factors that the Board may consider in determining whether granting the full 66 amount applied for is in the best interests of the State. 67 Existing law authorizes the Office to approve applications for partial 68 abatements of certain taxes and the issuance of transferable tax credits submitted by 69 the lead participant engaged in a qualified project with other participants for a 70 common purpose or business endeavor and which is located within the geographic 71 boundaries of a single project site, if the participants agree collectively to make a 72 total new capital investment in this State of at least $1 billion during the 10-year 73 period immediately following the approval of the application. (NRS 360.880- 74 360.896) Under existing law, the Office is prohibited from approving such 75 transferable tax credits for any fiscal year beginning on or after July 1, 2025. (NRS 76 360.892) Additionally, the provisions authorizing such partial abatements and 77 transferable tax credits expire on June 30, 2032. (Section 69 of chapter 2, Statutes 78 of Nevada 2015, 29th Special Session, at page 54) Section 12 of this bill authorizes 79 the Office to approve such transferable tax credits, not to exceed $7,600,000 per 80 fiscal year, in each fiscal year beginning on or after July 1, 2025. Section 34 of this 81 bill delays the expiration of those provisions until June 30, 2033. 82 Section 6 of this bill authorizes the Office to issue transferable tax credits to a 83 person who has undertaken a project for the location or expansion of a child care 84 facility in this State which may be applied to certain fees and taxes. Section 6 limits 85 the number of the transferable tax credits that may be authorized by the Office each 86 fiscal year to $12,000,000, except that: (1) any amount of transferable tax credits 87 not approved in the fiscal year of a biennium must be carried forward and used only 88 in the second fiscal year of the biennium; and (2) the Office may not approve 89 credits for a fiscal year beginning on or after July 1, 2045. Section 6 provides that 90 the amount of transferable tax credits issued to an applicant must be a percentage of 91 the amount of qualified expenditures by the applicant and not more than 60 percent 92 of such qualified expenditures. Section 6 requires the Office, before issuing a 93 certificate of transferable tax credits, to certify to the Department or the Nevada 94 Gaming Control Board, as applicable, that the amount of transferable tax credits 95 will be deducted from the maximum amount of certain transferable tax credits that 96 the Office is authorized to approve that fiscal year. Section 6 prohibits more than 97 one-fifth of the total tax credits issued to a person from being used by the person, or 98 a person to whom the tax credits were transferred, in a fiscal year and provides that 99 – 4 – - *SB461* the tax credits expire after 5 years. Section 6 requires the Office to submit a report 100 to the Governor, the Legislature and the Joint Interim Standing Committee on 101 Revenue regarding the tax credit for child care facilities. 102 Existing law authorizes a person who intends to locate or expand a business in 103 this State to apply to the Office for a partial abatement of certain property taxes, 104 business taxes and sales and use taxes. (NRS 360.750) Section 8 of this bill 105 removes a prohibition on the approval of a partial abatement for an applicant who 106 intends to locate or expand a business but who has already received a partial 107 abatement for locating or expanding that business, thereby authorizing a business to 108 obtain a partial abatement for locating or expanding a business in this State multiple 109 times. 110 Section 19 of this bill requires the Office to establish and administer a program 111 to award grants to qualified entities to construct certain infrastructure projects or 112 rural housing projects and creates the Community Infrastructure Grant Program 113 Account, which must be used to award such grants. Section 19 provides 114 requirements for the administration of the money in the Account and requires the 115 Office to prioritize applications for grants for certain projects. 116 Existing law requires the Executive Director of the Office to develop a State 117 Plan for Economic Development. (NRS 231.053) Section 21 of this bill requires 118 the Executive Director to revise the State Plan at least biennially and revises the 119 information which the Executive Director is required to include in the State Plan. 120 Existing law authorizes the Office to provide an allocation, grant or loan of 121 money to defray the cost of an approved program of workforce recruitment, 122 assessment and training. Existing law requires such a program to include a 123 workforce diversity action plan. (NRS 231.1467, 231.1468) Section 23 of this bill 124 revises the requirements for an application for approval of such a program and an 125 application by a business to participate in such a program. Section 23 replaces the 126 requirement for such a program to include a workforce diversity action plan with a 127 requirement to include a workforce development action plan, and section 38 of this 128 bill repeals provisions providing for the contents of a workforce diversity action 129 plan. Section 25 of this bill replaces a reference to the workforce diversity action 130 plan with the workforce development action plan. 131 Section 28 of this bill requires the Department of Employment, Training and 132 Rehabilitation and the Office to jointly establish a program to provide 133 reimbursement for certain expenses related to enrollment in an undergraduate or 134 certificate program in a trade-related field provided by the Nevada System of 135 Higher Education to persons who successfully completed a program of career and 136 technical education provided by a school district in this State. Section 28 requires 137 such reimbursement to be repaid unless the recipient meets certain requirements, 138 including completion of the undergraduate or certificate program and satisfaction of 139 a requirement to work in a trade-related field in a rural county for at least 2 years. 140 Section 29 of this bill applies certain definitions in existing law governing the 141 Department to section 28. 142 Section 31 of this bill requires the State Board of Education, to the extent 143 money is made available by the Department of Employment, Training and 144 Rehabilitation and in collaboration with the Department and the Office of 145 Economic Development, to establish a program to provide stipends to employers 146 whose employees act as part-time teachers for programs of career and technical 147 education. Section 31 authorizes an employer that is approved for a stipend to 148 donate the stipend to the school district in which the employee teaches for costs 149 associated with the program of career and technical education. Section 31 requires 150 an employer that receives the stipend to provide the employee with the full 151 [Text truncated for display. Full text available on LegiScan.]