S.B. 420
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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
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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.
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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 governing body of certain
municipalities; prescribing certain requirements for a
district management plan; requiring the governing body to
hold a public hearing before creating a district;
prescribing certain requirements for assessments;
authorizing the governing body to enter into an agreement
with the Department of Taxation; requiring the governing
body to annually submit to the Legislature a report
concerning the district; authorizing the governing body to
issue bonds for the benefit of a district; requiring the
governing body to have an independent auditor review
certain claims; and providing other matters properly
relating thereto.
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 governing body of certain municipalities to create a business 4
improvement district to perform certain activities relating to transportation and 5
housing and mitigating visitor activities. Section 2 of this bill provides that the 6
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provisions of this bill may be referred to as the Business Improvement District 7
Law. Section 3 of this bill provides that the provisions of this bill apply, under 8
certain circumstances, in any region of this State governed by a regional planning 9
agency created by interstate compact (currently the Lake Tahoe Basin). Sections 5-10
10 of this bill define certain terms relating to business improvement districts. 11
Section 4 of this bill applies these definitions to the provisions of this bill. 12
Section 11 of this bill authorizes a person to submit a petition to the governing 13
body of a municipality 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 governing body to hold a public hearing to 21
consider a petition to create a district and sets forth certain notice requirements for 22
the public hearing. Section 13 also: (1) authorizes any interested person to make a 23
protest orally or in writing; and (2) prohibits the governing body from creating a 24
district if the governing body receives protests from the owners or authorized 25
representatives of the businesses in the proposed district who will pay more than 50 26
percent of the total amount of proposed assessments. Section 14 of this bill 27
authorizes, with certain exceptions, the governing body to adopt, revise, change, 28
reduce or modify the proposed assessments or the types of activities to be provided 29
by the proposed district. Section 15 of this bill authorizes the governing body, 30
following a public hearing, to create by ordinance a district. Section 15 prohibits: 31
(1) with certain exceptions, the boundaries of a district from overlapping with the 32
boundaries of another district; and (2) the governing body from creating a district in 33
the jurisdiction of another municipality without the consent of the governing body 34
of that municipality. Additionally, section 15 provides, with certain exceptions, that 35
the term of a district may not exceed 5 years upon the initial formation of the 36
district and an additional 10 years upon renewal. 37
Section 16 of this bill: (1) requires assessments to be levied on the basis of the 38
estimated benefit to the businesses within the district; (2) requires, with certain 39
exceptions, the revenue from the levy of assessments to be used for certain 40
purposes; and (3) authorizes the governing body to establish separate benefit zones 41
within a district and impose a different assessment within each benefit zone. 42
Section 17 of this bill authorizes the governing body to enter into an agreement 43
with the Department of Taxation for the collection and distribution of the 44
assessments levied by the district. 45
Section 18 of this bill requires the governing body that created a district to 46
submit an annual report to the Legislature concerning the status of the district and 47
the financial impact of the district on local governmental services. 48
Section 19 of this bill authorizes the governing body that formed a district to 49
issue bonds for the benefit of the district or to enter into an agreement with certain 50
governmental entities or other persons for the costs of acquiring, improving or 51
equipping any project performed for the purposes of the district. Section 20 of this 52
bill requires such a governing body to have an independent auditor review each 53
claim submitted as part of any contract or other agreement made with the governing 54
body to provide any financing or reimbursement. 55
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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, 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, 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, housing and the mitigation of 10
visitor activities. 11
Sec. 4. As used in this chapter, unless the context otherwise 12
requires, the words and terms defined in sections 5 to 10, 13
inclusive, of this act have the meanings ascribed to them in those 14
sections. 15
Sec. 5. “Activity” means a project, improvement or service 16
acquired, improved, equipped, operated or maintained by a 17
business improvement district that benefits businesses in the 18
district, including, without limitation, a structure, facility, 19
undertaking or system. 20
Sec. 6. “Business” means all types of businesses, including, 21
without limitation, financial institutions and professions. 22
Sec. 7. “District” means a business improvement district 23
created pursuant to section 15 of this act. 24
Sec. 8. “District management plan” means a district 25
management plan as described in section 12 of this act. 26
Sec. 9. “Improvement” means the acquisition, construction, 27
installation or maintenance of any tangible property, 28
appurtenances and incidentals. 29
Sec. 10. “Municipality” means any county or city in this 30
State. 31
Sec. 11. 1. A person may submit a petition to create a 32
business improvement district to the governing body of a 33
municipality. Such a petition must: 34
(a) Be signed by the business owners in the proposed district 35
who will pay more than 50 percent of the total amount of 36
assessments proposed to be levied; and 37
(b) Include a district management plan that complies with the 38
requirements set forth in section 12 of this act. 39
2. For the purposes of determining whether the petition was 40
signed by the business owners who will pay more than 50 percent 41
of the total amount of assessments proposed to be levied, the 42
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amount of assessments attributable to a business owned by the 1
business owner that is in excess of 40 percent of the amount of all 2
assessments proposed to be levied must not be included. 3
3. Upon submission of a petition received by a governing 4
body pursuant to subsection 1 and in accordance with the 5
requirements of sections 2 to 20, inclusive, of this act, a governing 6
body may initiate proceedings to create a business improvement 7
district. A district may acquire, improve, equip, operate and 8
maintain any activity within the district relating to transportation 9
or housing or mitigating visitor activities within the district. 10
Sec. 12. 1. A district management plan must include, 11
without limitation: 12
(a) A map of the district that depicts each business in the 13
district in sufficient detail to allow a business owner to reasonably 14
determine whether a business is located within the district. 15
(b) The name of the proposed district. 16
(c) A description of the boundaries of the district, including 17
the proposed boundaries of the zones that will benefit from the 18
district in sufficient detail to identify the affected businesses. 19
(d) A description of the activities proposed for each year the 20
district will operate and the estimated cost of such activities. If the 21
activities proposed for each year of the operation of the district are 22
the same, the description may detail the proposed activities and 23
include a statement that the same activities are proposed for the 24
subsequent years of operation. 25
(e) The total amount of the annual expenditures for the 26
activities and debt collection in each year the district will operate, 27
which may be estimated based upon the rate of the assessment. If 28
the total amount of annual expenditures in each year is not 29
significantly different, the district management plan may include 30
the total amount of annual expenditures for the first year and a 31
statement that a similar amount applies for the subsequent years 32
of operation. 33
(f) The proposed source or sources of financing of the 34
activities in the district, including, without limitation, the proposed 35
method and basis of levying the assessments and whether bonds 36
will be issued to finance improvements, maintenance or activities. 37
The method for levying the assessments must include sufficient 38
information for a business owner to calculate the amount of the 39
assessments to be levied against his or her business. 40
(g) The time and manner of collecting the assessments. 41
(h) The total number of years in which the assessments will be 42
levied. 43
(i) The proposed amount of time to implement the district 44
management plan. 45
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(j) Any proposed rules and regulations to be applied to the 1
district. 2
(k) A list of each business proposed to be assessed, including, 3
without limitation, a statement of the method or methods by which 4
the expenses of a district will be imposed upon the businesses that 5
benefit from the district, in proportion to the benefit received by 6
the business, to defray the cost thereof. 7
(l) Any other information or material required by the 8
governing body of the municipality. 9
2. A district management plan may set forth specific 10
increases in assessments for each year of operation of the district. 11
Sec. 13. 1. Upon receiving a petition submitted pursuant to 12
section 11 of this act, the governing body of the municipality shall 13
hold a public hearing to consider the petition. Not less than 45 14
days before holding the public hearing, the governing body of the 15
municipality shall mail a notice of the meeting to each business 16
owner whose business is located in the proposed district. The 17
notice must include, without limitation: 18
(a) The proposed method and basis of levying assessments; 19
(b) If there is a proposal for an increase in assessments for 20
each year of operation of the district, the proposed increase or 21
increases in the amount or rate of assessments for each year; 22
(c) A general description of the activities the assessments will 23
fund; 24
(d) The address to which business owners may mail a protest 25
against the assessments; 26
(e) The telephone number and address of a person, office or 27
organization that an interested person may contact to receive 28
additional information about the assessments; 29
(f) A statement that if protests are received from the owners or 30
authorized representatives of the businesses in the proposed 31
district who will pay more than 50 percent of the total amount of 32
assessments proposed to be levied, the governing body of the 33
municipality will be prohibited pursuant to subsection 4 from 34
establishing the district; and 35
(g) The date, time and location of the public hearing. 36
2. In addition to the notice provided pursuant to subsection 1, 37
the governing body of the municipality shall publish notice of the 38
public hearing in accordance with NRS 271.190. 39
3. Any interested person may make a protest orally or in 40
writing. A written protest must be filed with the clerk of the 41
governing body of the municipality at or before the time of the 42
public hearing. A written protest may be withdrawn in writing at 43
any time before the conclusion of the public hearing. A written 44
protest must include, without limitation, a description of the 45
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business in which the person submitting the protest has an interest 1
and written evidence that the person is the owner of the business 2
or an authorized representative. A written protest that does not 3
contain the information required by this subsection must not be 4
counted in determining whether the protests are received from the 5
owners or authorized representatives of the businesses in the 6
proposed district who will pay more than 50 percent of the total 7
amount of assessments proposed to be levied. 8
4. If protests are received from the owners or authorized 9
representatives of the businesses in the proposed district who will 10
pay more than 50 percent of the total amount of assessments 11
proposed to be levied by the end of the period to withdraw a 12
protest, the governing body of the municipality shall not take any 13
further action to create a district as contained in the petition 14
submitted pursuant to section 11 of this act for a period of 1 year 15
from the date the governing body of the municipality finds that 16
there are enough protests to satisfy the requirements of this 17
subsection. 18
Sec. 14. 1. Except as otherwise provided in subsection 2, at 19
the conclusion of a public hearing to establish a district, the 20
governing body of the municipality may adopt, revise, change, 21
reduce or modify the proposed assessments or the types of 22
activities to be funded with the assessments as set forth in the 23
district management plan submitted pursuant to section 11 of this 24
act. 25
2. The governing body of the municipality shall not increase 26
the amount of any proposed assessment. Any changes to the 27
boundaries of a proposed district may only exclude properties or 28
businesses that will not benefit from the proposed activities. 29
Sec. 15. 1. Following the public hearing held pursuant to 30
section 13 of this act, the governing body of the municipality may 31
by ordinance create a business improvement district. The 32
ordinance must include, without limitation: 33
(a) A description of the proposed activities to be performed by 34
the proposed district; 35
(b) The amount of the proposed assessments; 36
(c) A statement indicating whether bonds will be issued; 37
(d) A description of the exterior boundaries of the proposed 38
district or a reference to the map that is submitted to the governing 39
body of the municipality pursuant to paragraph (a) of subsection 1 40
of section 12 of this act; 41
(e) The date of adoption; 42
(f) The time and place where the public hearing was held 43
pursuant to section 13 of this act concerning the creation of the 44
district; 45
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(g) A determination regarding any protests received by the 1
governing body of the municipality; 2
(h) A statement that the businesses in the district created by 3
the ordinance are subject to any amendments to this chapter; 4
(i) A statement that the activities to be conferred on businesses 5
in the district will be funded by the levy of assessments; and 6
(j) A finding that the businesses within the boundaries of the 7
district will be benefited by the activities funded by the proposed 8
assessments. 9
2. The governing body of the municipality shall not create a 10
district if the governing body of the municipality receives protests 11
from the owners or the authorized representatives of the 12
businesses who will pay more than 50 percent of the total amount 13
of proposed assessments. 14
3. Except as otherwise provided in this subsection, the 15
governing body of the municipality shall not create a district when 16
the proposed boundaries of the district overlap with the 17
boundaries of another district created pursuant to this chapter. 18
Nothing in this subsection prohibits the boundaries of a district 19
that levies assessments on businesses from overlapping with the 20
boundaries of a district that levies assessments on property. 21
4. The governing body of a municipality shall not create a 22
district within the jurisdiction of another municipality without the 23
consent of the governing body of the municipality. 24
5. Except as otherwise provided in this subsection, the 25
maximum term of a new district is 5 years. Upon renewal, a 26
district may have an additional term not longer than 10 years. 27
Notwithstanding the provisions of this subsection, a district 28
created pursuant to this section to finance capital improvements 29
with bonds may levy assessments until the maximum maturity of 30
the bonds. 31
Sec. 16. 1. An assessment levied on a business owner in a 32
district created in accordance with this chapter must be levied on 33
the basis of the estimated benefit to the businesses within the 34
district. The governing body of the municipality shall determine 35
the structure of the assessments to ensure the assessments 36
correspond with the distribution of benefits from the proposed 37
activities. 38
2. Except as otherwise provided in this subsection, the 39
revenue from the levy of assessments within a district may not be 40
used to provide activities outside the district or for any purpose 41
other than the purposes specified in the ordinance adopted 42
pursuant to section 15 of this act. Activities that are provided 43
outside the boundaries of a district to create a special or specific 44
benefit may only include marketing or signage. 45
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3. The governing body of the municipality may: 1
(a) Establish separate benefit zones within the district based on 2
the degree of benefit that each zone will receive from the activities 3
that will be provided in the benefit zone and impose a different 4
assessment within each benefit zone; and 5
(b) Define categories of businesses based on the degree of 6
benefit that each category will receive from the activities that will 7
be provided to each category and impose a different assessment or 8
assessment rate within each category of business or each category 9
of business within each benefit zone. 10
Sec. 17. After the adoption of an ordinance creating a 11
district in accordance with this chapter, the governing body of the 12
municipality and the Department of Taxation may enter into an 13
agreement specifying the dates and procedures for the distribution 14
to the municipality of any money pledged pursuant to section 15 of 15
this act. The distributions must: 16
1. Be made not less frequently than once each calendar 17
quarter; and 18
2. Cease at the end of the fiscal year in which the district 19
expires. 20
Sec. 18. On or before September 1 of each year, the 21
governing body of a municipality that adopts an ordinance 22
pursuant to section 15 of this act shall prepare and submit to the 23
Director of the Legislative Counsel Bureau for transmission to 24
the Legislature, or to the Legislative Commission when the 25
Legislature is not in regular session, an annual report containing: 26
1. A statement of the status of the activities located or 27
expected to be located in the district, and of any changes in that 28
status since the prior annual report. 29
2. An assessment of the financial impact of the district on the 30
provision of local governmental services, including, without 31
limitation, services for police protection and fire protection. 32
Sec. 19. 1. Except as otherwise provided in this section, if 33
the governing body of a municipality adopts an ordinance 34
pursuant to section 15 of this act, the municipality may: 35
(a) Issue, at one time or from time to time, bonds or notes as 36
special obligations under the Local Government Securities Law to 37
finance or refinance projects for the benefit of the district. Any 38
such bonds or notes may be secured by a pledge of, and be payable 39
from, any money pledged pursuant to section 15 of this act and 40
received by the municipality with respect to the district, any 41
revenue received by the municipality from any revenue-producing 42
projects in the district or any combination thereof. 43
(b) Enter into an agreement with one or more governmental 44
entities or other persons to reimburse that entity or person for the 45
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cost of acquiring, improving or equipping, or any combination 1
thereof, any project to be performed for the purposes of the 2
district, which may contain such terms as are determined to be 3
desirable by the governing body of the municipality, including the 4
payment of reasonable interest and other financing costs incurred 5
by such entity or other person. Any such reimbursement may be 6
secured by a pledge of, and be payable from, any money pledged 7
pursuant to section 15 of this act and received by the municipality 8
with respect to the district, any revenue received by the 9
municipality from any revenue-producing projects in the district 10
or any combination thereof. Such an agreement is not subject to 11
the limitations of subsection 1 of NRS 354.626 and may, at the 12
option of the governing body of the municipality, be binding on 13
the municipality beyond the fiscal year in which it was made. 14
2. Before the issuance of any bonds or notes pursuant to this 15
section, the municipality must obtain the results of a feasibility 16
study, commissioned by the municipality, which shows that a 17
sufficient amount will be generated from money pledged pursuant 18
to section 15 of this act to make timely payment on the bonds or 19
notes, taking into account the revenue from any other revenue-20
producing projects also pledged for the payment of the bonds or 21
notes, if any. A failure to make payments of any amounts due: 22
(a) With respect to any bonds or notes issued pursuant to 23
subsection 1; or 24
(b) Under any agreements entered into pursuant to 25
subsection 1, 26
because of any insufficiency in the amount of money pledged 27
pursuant to section 15 of this act to make those payments shall be 28
deemed not to constitute a default on those bonds, notes or 29
agreements. 30
3. No bond, note or other agreement issued or entered into 31
pursuant to this section may be secured by or payable from the 32
general fund of the municipality, the power of the municipality to 33
levy ad valorem property taxes, or any source other than any 34
money pledged pursuant to section 15 of this act and received by 35
the municipality with respect to the district, any revenue received 36
by the municipality from any revenue-producing projects in the 37
district or any combination thereof. No bond, note or agreement 38
issued or entered into pursuant to this section may ever become a 39
general obligation of the municipality or a charge against its 40
general credit or taxing powers, nor may any such bond, note or 41
agreement become a debt of the municipality for the purposes of 42
any limitation on indebtedness. 43
4. Except as otherwise provided in this subsection, any bond 44
or note issued pursuant to this section, including any bond or note 45
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issued to refund any such bond or note, must mature on or before, 1
and any agreement entered into pursuant to this section must 2
automatically terminate on or before, the end of the fiscal year in 3
which the term of the district expires. 4
Sec. 20. The governing body of the municipality shall require 5
the review by an independent auditor of each claim submitted 6
pursuant to any contract or other agreement made with the 7
governing body of the municipality pursuant to section 19 of this 8
act to provide any financing or reimbursement. 9
Sec. 21. The provisions of subsection 1 of NRS 218D.380 do 10
not apply to any provision of this act which adds or revises a 11
requirement to submit a report to the Legislature. 12
H