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--- version:As Introduced+++ version:(document, no version)@@ -1,172 +1,66 @@- A.J.R. 1+PASS THE PLAN! SUPPORT AJR1+Public Comment to Senate Legislative Operations and Elections 5.15.25-- *AJR1*+The Nevada State Education Association has been the voice of Nevada educators for 125 years. We+support AJR1 to amend the Nevada Constitution to reset property tax depreciation at the point of sale.+This change would represent a significant step toward passing the plan.-ASSEMBLY JOINT RESOLUTION NO. 1–ASSEMBLYMEMBER-ANDERSON+In 2019, recognizing the overwhelming needs in Nevada schools, the Legislature created the Commission+on School Funding, tasking it with recommending a plan to reach optimal education funding over the+course of 10 years. The Commission on School Funding has diligently worked on this task, and they+have presented a clear, research-backed plan to close the multi-billion-dollar gap between what Nevada+spends on public education now, and where we need to be in 10 years. (It is important to note that even+after record increases in education funding last session, Nevada trails the national average by more than+$4000 per student today.)-PREFILED JANUARY 22, 2025-____________+To keep pace with the plan, Nevada needs to increase per-pupil funding by about $700 each year of the+upcoming biennium, requiring an additional $604M over and above funds moved to offset lesser than+anticipated revenue. In a cold rebuke to the plan, the Governor’s budget recommendation only increases+base funding by $2 per pupil next year. Of course, $2 won't keep up with increasing costs, especially with+a 3.5% PERS increase coming in July and inflation that is once again trending up. This flat funding is the+result of the Governor’s unwillingness to consider new revenue, and without new revenue, Nevada+schools will continue to wallow among the bottom 50 states.-Referred to Committee on Revenue+The Commission on School Funding took a deep dive on Nevada’s tax structure to make the best possible+recommendation for raising revenue. In their own words…-SUMMARY—Proposes to amend the Nevada Constitution to revise-certain provisions relating to property taxes.-(BDR C-185)+The Commission chose to approach the task of identifying the potential revenue sources required to+meet target funding levels through a tax reform or restructuring lens. Rather than identifying a new+funding source, increasing current tax rates, or targeting single industry taxes, the Commission+preferred to examine the Nevada tax system as a means of adjusting the way taxes are collected or+managed, improving the efficiency of the tax base, and maximizing economic and social benefits…+Via thorough and lengthy deliberations, the Commission determined that a nearer-term focus on+broader-based property tax and sales/use tax systems would best satisfy the adopted revenue+principles. Therefore, the Commission’s identification process for sufficient, predictable, and+equitable funding sources concentrated on existing excise (sales and use) taxes and upon property+(ad valorem) taxes.-FISCAL NOTE: Effect on Local Government: May have Fiscal Impact.- Effect on the State: Yes.+As noted, there are only two sources of tax revenue that have the capacity to achieve the identified+levels of annual funding increases over time – property tax and sales tax. While other tax sources+can certainly be considered to complement or supplement the overall funding strategy, the revenue+demands to achieve the targeted levels of funding in the coming decade would not be achievable+without significant contributions from the tax capacity that exists within the property and sales tax+systems.-~+Perhaps as important as revenue sufficiency, an examination of Nevada’s property tax system also+offers a much-needed opportunity to modernize the system. Once heralded as Nevada’s most stable+and predictable revenue source, the introduction of property tax abatements has complicated and+confounded the calculation of the value of a unit of property tax, while the unique use of+depreciation and replacement value has further separated property assessments from a market-+based reality.-EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.+It is also notable that of the 10 states in the U.S. with the highest amount of funding on a per-pupil+basis, each relies upon property tax as a primary funding source for education. Property tax has also+historically been one of Nevada’s principal methods of funding education, as have revenues from+sales and use tax.-ASSEMBLY JOINT RESOLUTION—Proposing to amend the-Nevada Constitution to revise provisions relating to the-assessment and taxation of real property which is sold or-transferred and to require the Legislature to enact a-program to provide property tax assistance to senior-citizens and persons with disabilities.-Legislative Counsel’s Digest:- The Nevada Constitution requires the Legislature to provide by law for a 1-uniform and equal rate of assessment and taxation of property. (Nev . Const. Art. 2-10, § 1) 3- Under existing law, for the purpose of determining the amount of property tax 4-owed by the owner of a parcel of real property, the taxable value of the real 5-property is equal to the value of the land plus the replacement cost of the 6-improvements less all applicable depreciation and obsolescence. Depreciation of an 7-improvement is calculated at 1.5 percent for each year of adjusted actual age, up to 8-a maximum of 50 years. (NRS 361.227) Existing law also provides for a partial 9-abatement of property taxes, which has the effect of establishing an annual cap on 10-increases in property taxes. (NRS 361.4722, 361.4723, 361.4724) This resolution 11-proposes to amend the Nevada Constitution to provide that: (1) for the first fiscal 12-year after real pro perty is sold or transferred, the real property is ineligible for any 13-adjustment to the value of improvements on the real property which is based on the 14-age of the improvement and certain partial abatements; and (2) for any fiscal year 15-thereafter, any adjustment to the value of improvements on the real property which 16-is based on the age of the improvements must be determined as if the improvements 17-were new improvements on the date of the sale or transfer. 18- This resolution also proposes to amend the Nevada C onstitution to require the 19-Legislature to provide by law for a program to provide assistance to persons 20+While the Commission’s $2.5B plan includes fixing both property tax depreciation and abatements, along+with modernization of the sales tax, just passing AJR1 would deliver significant new revenue to Nevada+schools. According to a report from Applied Analysis, a nearly identical measure from 2017 would have+netted Nevada schools an additional $330M in operating funds and $240M capital funds this year alone.+By FY29, resetting depreciation would net school operating budgets more than a half-billion dollars.- – 2 –--- *AJR1*-domiciled in this State who are 62 years of age or older or persons with a disability 21-by paying such persons refunds of the property taxes imposed on th e primary 22-residences of such persons. 23-- RESOLVED BY THE ASSEMBLY AND SENATE OF THE STATE OF 1-NEVADA, JOINTLY, That Section 1 of Article 10 of the Nevada 2-Constitution be amended to read as follows: 3- Section 1. 1. The Legislature shall provide by law for 4-a uniform and equal rate of assessment and taxation, and shall 5-prescribe such regulations as shall secure a just valuation for 6-taxation of all property, real, personal and possessory, except 7-mines and mining claims, which shall be assessed and taxed 8-only as provided in Section 5 of this Article. 9- 2. Shares of stock, bonds, mortgages, notes, bank 10-deposits, book accounts and credits, and securities and choses 11-in action of like character are deemed to represent interest in 12-property already assessed and taxed, either in Nevada or 13-elsewhere, and shall be exempt. 14- 3. The Legislature may constitute agricultural and open -15-space real property having a gr eater value for another use 16-than that for which it is being used, as a separate class for 17-taxation purposes and may provide a separate uniform plan 18-for appraisal and valuation of such property for assessment 19-purposes. If such plan is provided, the Legislat ure shall also 20-provide for retroactive assessment for a period of not less 21-than 7 years when agricultural and open-space real property is 22-converted to a higher use conforming to the use for which 23-other nearby property is used. 24- 4. Personal property which is moving in interstate 25-commerce through or over the territory of the State of 26-Nevada, or which was consigned to a warehouse, public or 27-private, within the State of Nevada from outside the State of 28-Nevada for storage in transit to a final destination outsi de the 29-State of Nevada, whether specified when transportation 30-begins or afterward, shall be deemed to have acquired no 31-situs in Nevada for purposes of taxation and shall be exempt 32-from taxation. Such property shall not be deprived of such 33-exemption because while in the warehouse the property is 34-assembled, bound, joined, processed, disassembled, divided, 35-cut, broken in bulk, relabeled or repackaged. 36- 5. The Legislature may exempt motor vehicles from the 37-provisions of the tax required by this Section, and in lieu 38-thereof, if such exemption is granted, shall provide for a 39-uniform and equal rate of assessment and taxation of motor 40-- – 3 –--- *AJR1*-vehicles, which rate shall not exceed five cents on one dollar 1-of assessed valuation. 2- 6. The Legislature shall provide by law for a progressive 3-reduction in the tax upon business inventories by 20 percent 4-in each year following the adoption of this provision, and 5-after the expiration of the 4th year such inventories are 6-exempt from taxation. The Legislature may exempt any other 7-personal property, including livestock. 8- 7. No inheritance tax shall ever be levied. 9- 8. The Legislature may exempt by law property used for 10-municipal, educational, literary, scientific or other charitable 11-purposes, or to encourage the conservation of energy or the 12-substitution of other sources for fossil sources of energy. 13- 9. No income tax shall be levied upon the wages or 14-personal income of natural persons. Notwithstanding the 15-foregoing provision, and except as otherwise provided in 16-subsection 1 of this Se ction, taxes may be levied upon the 17-income or revenue of any business in whatever form it may 18-be conducted for profit in the State. 19- 10. The Legislature may provide by law for an 20-abatement of the tax upon or an exemption of part of the 21-assessed value of a single-family residence occupied by the 22-owner to the extent necessary to avoid severe economic 23-hardship to the owner of the residence. 24- 11. For purposes of assessment and taxation of 25-property: 26- (a) Except as otherwise provided in this paragraph, for 27-the first fiscal year after the sale or transfer of real property, 28-the real property sold or transferred shall not be eligible for 29-any adjustment provided by the Legislature by law based on 30-the age of improvements to the real property, any abatement 31-of the tax upon the real property provided by the Legislature 32-by law pursuant to subsection 8 or any abatement or 33-exemption provided by the Legislature by law pursuant to 34-subsection 10. The provisions of this paragraph do not apply 35-to real property for which the Legislature has provided by 36-law for an exemption of the tax on property. 37- (b) For any fiscal year following the first fiscal year 38-after the sale or transfer of real property to which the 39-provisions of paragraph (a) apply, any adjustment provided 40-by the Legislature by law based on the age of improvements 41-to the real property must be determined as if the 42-improvements were new improvements on the date of the 43-sale or transfer. 44-- – 4 –--- *AJR1*- (c) The Legislature shall provide by law for definitions 1-of the terms “sale” and “tr ansfer” as necessary to carry out 2-the provisions of this subsection. 3- 12. The Legislature shall provide by law for a program 4-to provide for the payment of refunds of the taxes imposed 5-on the primary residence of a person domiciled in this State 6-who is 62 years of age or older or a person with a disability. 7-If such a person rents his or her primary residence, the 8-amount of the refund for which the person is eligible must 9-not exceed the portion of the rent which is deemed to 10-constitute accrued property tax. The Legislature shall 11-establish by law: 12- (a) The criteria which a person must satisfy to be 13-eligible for such a refund; and 14- (b) The amount of the refund to be paid to a person 15-eligible for such a refund, which may consist of a graduated 16-refund based on the household income of such a person. 17- And be it further 18- RESOLVED, That this resolution becomes effective upon 19-passage. 20--H+Passing AJR1 is the best chance to honor the work of the Commission on School Funding and take a+concrete step toward passing the plan. Not doing so means Nevada’s students, families, and educators+will remain stuck in chronically underfunded schools for the foreseeable future. Please support AJR1.+Please pass the plan.
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