Yes, I will stand with Nevada's kids!

Facts

Nevada is 49th in per pupil spending
- National Journal

Nevada has the lowest corporate taxes in the United States
- Taxpayers Foundation

Education in Nevada has suffered through over $700 million in cuts since 2009
- Associated Press

A study referred to Brian Sandoval's 2011 proposed cuts to k-12 education as "by far the largest in modern history" of Nevada
- Las Vegas Sun

87% of Nevada Businesses would be unaffected by TEI
- Applied Analysis

Research shows that a high-quality education increases the earnings of individuals and the economic health of their communities.
- William Schweke, “Smart Money – Education and Economic Development”

Full Text of The Education Initiative

REQUIRES TWO-THIRDS MAJORITY VOTE (§ 22, 50)

I.P. 1

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INITIATIVE PETITION NO. 1

FEBRUARY 4, 2013

Referred to Committee on Taxation

SUMMARY—Imposes a margin tax on business entities in this

State.

~

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

AN ACT relating to taxation; imposing a margin tax on business

entities engaged in business in this State; providing for

the administration and collection of the tax and the

distribution of the proceeds; temporarily increasing the

payroll tax imposed on certain financial institutions;

providing penalties; making an appropriation; and

providing other matters properly relating thereto.

 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1 Section 1. This act provides for the imposition of a margin tax

 2 on business entities engaged in business in this State, and requires

 3 that the proceeds of the tax be used to fund the operation of the

 4 public schools in this State for kindergarten through grade 12.

 5 Sec. 2. Title 32 of NRS is hereby amended by adding thereto a

 6 new chapter to consist of the provisions set forth as sections 3 to 45,

 7 inclusive, of this act.

 8 Sec. 3. As used in this chapter, unless the context otherwise

 9 requires, the words and terms defined in sections 4 to 17,

 10 inclusive, of this act have the meanings ascribed to them in those

 11 sections.

 12 Sec. 4. “Affiliated group” means a group of two or more

 13 business entities, each of which is controlled by one or more

 14 common owners or by one or more of the members of the group.

 15 Sec. 5. “Business” means any activity engaged in or caused

 16 to be engaged in with the object of gain, benefit or advantage,

 17 either direct or indirect, to any person or governmental entity.

 18 Sec. 6. 1. Except as otherwise provided in this section,

 19 “business entity” means a corporation, partnership,

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 1 proprietorship, limited-liability company, business association,

 2 joint venture, limited-liability partnership, business trust,

 3 professional association, joint stock company, holding company

 4 and any other person engaging in a business, and includes a

 5 combined group.

 6 2. “Business entity” does not include:

 7 (a) A natural person unless that person is engaging in a

 8 business and is required to file with the Internal Revenue Service

 9 a Schedule C (Form 1040), Profit or Loss From Business, or its

 10 equivalent or successor form, a Schedule E (Form 1040),

 11 Supplemental Income and Loss, or its equivalent or successor

 12 form, or a Schedule F (Form 1040), Profit or Loss From Farming,

 13 or its equivalent or successor form, for that business;

 14 (b) A governmental entity;

 15 (c) Any person or other entity that this State is prohibited from

 16 taxing under the Constitution, laws or treaties of the United States

 17 or the Nevada Constitution; or

 18 (d) Any credit union that is authorized to transact business in

 19 this State pursuant to the provisions of chapter 678 of NRS.

 20 Sec. 7. “Combined group” means an affiliated group of

 21 business entities that is required to file a group return pursuant to

 22 section 27 of this act.

 23 Sec. 8. “Commission” means the Nevada Tax Commission.

 24 Sec. 9. “Controlled by” means the possession, directly or

 25 indirectly, of the power to direct or cause the direction of the

 26 management and policies of a business entity, whether through

 27 the ownership of voting securities, by contract or otherwise.

 28 Sec. 10. “Engaging in a business” means commencing,

 29 conducting or continuing a business, the exercise of corporate or

 30 franchise powers regarding a business, and the liquidation of a

 31 business which is or was engaging in a business when the

 32 liquidator holds itself out to the public as conducting that

 33 business.

 34 Sec. 11. “Governmental entity” means:

 35 1. The United States and any of its unincorporated agencies

 36 and instrumentalities.

 37 2. Any incorporated agency or instrumentality of the United

 38 States wholly owned by the United States or by a corporation

 39 wholly owned by the United States.

 40 3. The State of Nevada and any of its unincorporated

 41 agencies and instrumentalities.

 42 4. Any county, city, district or other political subdivision of

 43 this State.

 44 Sec. 12. “Lending institution” means an entity that makes

 45 loans and:

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 1 1. Is regulated by the Federal Reserve Board, the Office of

 2 the Comptroller of the Currency, the Federal Deposit Insurance

 3 Corporation, the Commodity Futures Trading Commission, the

 4 Office of Thrift Supervision or any comparable regulatory body;

 5 2. Is licensed by, registered with or otherwise regulated by the

 6 Commissioner of Financial Institutions;

 7 3. Is a “broker” or “dealer” as defined in 15 U.S.C. § 78c; or

 8 4. Provides financing to unrelated parties solely for

 9 agricultural production.

 10 Sec. 13. “Pass-through revenue” means:

 11 1. Revenue received by a business entity solely on behalf of

 12 another in a disclosed agency capacity, including, without

 13 limitation, revenue received as a broker, bailee, consignee or

 14 auctioneer, notwithstanding that the business entity may incur

 15 liability, primarily or secondarily, in a transaction in its capacity

 16 as an agent;

 17 2. Taxes collected from a third party by a business entity and

 18 remitted by the business entity to a taxing authority; and

 19 3. Reimbursement for advances made by a business entity on

 20 behalf of a customer or client, other than with respect to services

 21 rendered or with respect to purchases of goods by the business

 22 entity in carrying out the business in which it engages.

 23 Sec. 14. “Taxable year” means the taxable year used by a

 24 business entity for the purposes of federal income taxation.

 25 Sec. 15. “Total income” means the total amount received by

 26 a business entity from all sources, without subtracting any costs or

 27 expenses.

 28 Sec. 16. “Total revenue” means the total revenue of a

 29 business entity as determined under section 24 of this act.

 30 Sec. 17. “Unitary business” means a business characterized

 31 by unity of ownership, functional integration, centralization of

 32 management and economy of scale.

 33 Sec. 18. 1. For the purposes of this chapter, an entity

 34 constitutes a “passive entity” only if:

 35 (a) The entity is a general partnership, limited partnership,

 36 limited-liability partnership or limited-liability limited partnership

 37 or a trust, other than a business trust; and

 38 (b) During the period on which margin is based, at least 90

 39 percent of the entity’s federal gross income consists of:

 40 (1) Dividends or interest; and

 41 (2) Royalties, bonuses or delay rental income from mineral

 42 properties and income from other nonoperating mineral interests.

 43 2. The income described in paragraph (b) of subsection 1

 44 does not include any:

 45 (a) Rent; or

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 1 (b) Income received by a nonoperator from mineral properties

 2 under a joint operating agreement if the nonoperator is a member

 3 of an affiliated group and another member of that group is the

 4 operator under that joint operating agreement.

 5 Sec. 19. The Department shall:

 6 1. Administer and enforce the provisions of this chapter, and

 7 may adopt such regulations as it deems appropriate for those

 8 purposes.

 9 2. Adopt such regulations as may be necessary or appropriate

 10 to interpret and carry out the provisions of sections 24 and 27 of

 11 this act.

 12 3. Retain from the proceeds of the taxes, interest and

 13 penalties it receives pursuant to this chapter an amount sufficient

 14 to reimburse the Department for the actual cost of administering

 15 this chapter, to the extent that the Department incurs any cost it

 16 would not have incurred but for the enactment of this chapter, and

 17 deposit the amount so retained with the State Treasurer for credit

 18 to the State General Fund. The amount so retained must not

 19 exceed the amount authorized by statute for this purpose.

 20 4. Except as otherwise provided in subsection 3, deposit all

 21 taxes, interest and penalties it receives pursuant to this chapter in

 22 the State Distributive School Account in the State General Fund.

 23 The money so deposited must be apportioned among the several

 24 school districts and charter schools of this State at the times and in

 25 the manner provided by law for the money in the State Distributive

 26 School Account.

 27 Sec. 20. 1. Each person responsible for maintaining the

 28 records of a business entity shall:

 29 (a) Keep such records as may be necessary to determine the

 30 amount of the liability of the business entity pursuant to the

 31 provisions of this chapter;

 32 (b) Preserve those records for 4 years or until any litigation or

 33 prosecution pursuant to this chapter is finally determined,

 34 whichever is longer; and

 35 (c) Make the records available for inspection by the

 36 Department upon demand at reasonable times during regular

 37 business hours.

 38 2. The Department may by regulation specify the types of

 39 records which must be kept to determine the amount of the

 40 liability of a business entity pursuant to the provisions of this

 41 chapter.

 42 3. Any person who violates the provisions of subsection 1 is

 43 guilty of a misdemeanor.

 44 Sec. 21. 1. To verify the accuracy of any return filed or, if

 45 no return is filed by a business entity, to determine the amount

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 1 required to be paid, the Department, or any person authorized in

 2 writing by the Department, may examine the books, papers and

 3 records of any person who may be liable for the tax imposed by

 4 this chapter.

 5 2. Any person who may be liable for the tax imposed by this

 6 chapter and who keeps outside of this State any books, papers and

 7 records relating thereto shall pay to the Department an amount

 8 equal to the allowance provided for state officers and employees

 9 generally while traveling outside of the State for each day or

 10 fraction thereof during which an employee of the Department is

 11 engaged in examining those documents, plus any other actual

 12 expenses incurred by the employee while he or she is absent from

 13 his or her regular place of employment to examine those

 14 documents.

 15 Sec. 22. 1. Except as otherwise provided in this section, a

 16 margin tax is hereby imposed on each business entity that engages

 17 in a business in this State during any taxable year beginning on or

 18 after the effective date of this section, at the rate of 2 percent of the

 19 taxable margin of the business entity for the taxable year.

 20 2. The margin tax extends to the limits of the Nevada

 21 Constitution, the Constitution of the United States and the federal

 22 law adopted under the United States Constitution.

 23 3. A business entity is exempt from the margin tax imposed

 24 for each taxable year regarding which:

 25 (a) The amount of the total revenue of the business entity from

 26 its entire business is less than or equal to $1,000,000, as

 27 determined under section 24 of this act;

 28 (b) The business entity qualifies as a passive entity, as

 29 determined pursuant to section 18 of this act; or

 30 (c) The business entity qualifies as a tax-exempt organization

 31 pursuant to 26 U.S.C. § 501(c).

 32 4. A business entity that pays any tax imposed on the business

 33 entity pursuant to NRS 363A.130 or 363B.110 for any of the last

 34 four calendar quarters ending on or before the last day of a

 35 taxable year for which the margin tax is imposed pursuant to this

 36 section is entitled to a credit against the amount of the margin tax

 37 due from that business entity for that taxable year in the amount

 38 of the taxes paid by the business entity pursuant to NRS 363A.130

 39 and 363B.110 for those calendar quarters, but not more than the

 40 amount of the margin tax due from the business entity for that

 41 taxable year.

 42 Sec. 23. 1. Subject to the provisions of section 27 of this

 43 act, the taxable margin of a business entity must be computed by:

 44 (a) Determining the business entity’s margin, which is the

 45 lesser of 70 percent of the total revenue of the business entity from

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 1 its entire business, as determined under section 24 of this act, or

 2 an amount computed by:

 3 (1) Determining the total revenue of the business entity

 4 from its entire business under section 24 of this act; and

 5 (2) Except as otherwise provided in subsection 2,

 6 subtracting from the amount determined under subparagraph (1),

 7 at the election of the business entity, either:

 8 (I) The cost of goods sold, as determined under section

 9 25 of this act; or

 10 (II) The amount of compensation, as determined under

 11 section 26 of this act; and

 12 (b) Apportioning the business entity’s margin to this State as

 13 provided in section 28 of this act to determine the business entity’s

 14 taxable margin.

 15 2. An election under subparagraph (2) of paragraph (a) of

 16 subsection 1 must be made by a business entity on its annual

 17 return and is effective only for that annual return. A business

 18 entity shall notify the Department of its election not later than the

 19 date the annual return is due.

 20 3. In making any computation under this section, an amount

 21 that is zero or less must be computed as zero.

 22 Sec. 24. 1. Except as otherwise provided in this section and

 23 subject to the provisions of section 27 of this act, for the purpose

 24 of computing its taxable margin under section 23 of this act, the

 25 total revenue of a business entity is:

 26 (a) For a business entity treated for the purposes of federal

 27 income taxation as a corporation, an amount computed by:

 28 (1) Adding:

 29 (I) The amount reportable as income on line 1c of

 30 Internal Revenue Service Form 1120; and

 31 (II) The amounts reportable as income on lines 4 to 10,

 32 inclusive, of Internal Revenue Service Form 1120; and

 33 (2) Subtracting:

 34 (I) The amount of any bad debts expensed for the

 35 purposes of federal income taxation that corresponds to items of

 36 income included in subparagraph (1) for the current reporting

 37 period or a past reporting period;

 38 (II) To the extent included in subparagraph (1), any

 39 foreign royalties and foreign dividends;

 40 (III) To the extent included in subparagraph (1), any net

 41 distributive income from a business entity treated as a partnership

 42 or as an S corporation for the purposes of federal income

 43 taxation;

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 1 (IV) Any allowable deductions from Internal Revenue

 2 Service Form 1120, Schedule C, to the extent that the relating

 3 dividend income is included in total revenue;

 4 (V) To the extent included in subparagraph (1), any

 5 items of income attributable to an entity that is a disregarded

 6 entity for the purposes of federal income taxation; and

 7 (VI) To the extent included in subparagraph (1), any

 8 other amounts authorized by this section;

 9 (b) For a business entity treated for the purposes of federal

 10 income taxation as a partnership, an amount computed by:

 11 (1) Adding:

 12 (I) The amount reportable as income on line 1c of

 13 Internal Revenue Service Form 1065;

 14 (II) The amounts reportable as income on lines 4, 6 and

 15 7 of Internal Revenue Service Form 1065;

 16 (III) The amounts reportable as income on lines 3a and

 17 5 to 11, inclusive, of Internal Revenue Service Form 1065,

 18 Schedule K;

 19 (IV) The amount reportable as income on line 17 of

 20 Internal Revenue Service Form 8825; and

 21 (V) The amount reportable as income on line 11, plus

 22 the amount reportable on line 2 or line 45, of Internal Revenue

 23 Service Form 1040, Schedule F; and

 24 (2) Subtracting:

 25 (I) The amount of any bad debts expensed for the

 26 purposes of federal income taxation that corresponds to items of

 27 income included in subparagraph (1) for the current reporting

 28 period or a past reporting period;

 29 (II) To the extent included in subparagraph (1), any

 30 foreign royalties and foreign dividends;

 31 (III) To the extent included in subparagraph (1), any net

 32 distributive income from a business entity treated as a partnership

 33 or as an S corporation for the purposes of federal income

 34 taxation;

 35 (IV) To the extent included in subparagraph (1), any

 36 items of income attributable to an entity that is a disregarded

 37 entity for the purposes of federal income taxation; and

 38 (V) To the extent included in subparagraph (1), any

 39 other amounts authorized by this section; or

 40 (c) For any business entity other than a business entity treated

 41 for the purposes of federal income taxation as a corporation or

 42 partnership, an amount determined in a manner substantially

 43 equivalent to the amount determined under paragraph (a) or (b),

 44 as prescribed in regulations adopted by the Department.

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 1 2. Subject to the provisions of section 27 of this act, a

 2 business entity that is part of a federal consolidated group shall

 3 compute its total revenue under subsection 1 as if it had filed a

 4 separate return for the purposes of federal income taxation.

 5 3. A business entity that owns an interest in a passive entity

 6 may exclude from the total revenue of the business entity the

 7 business entity’s share of the net income of the passive entity, but

 8 only to the extent the net income of the passive entity was

 9 generated by the margin of any other business entity.

 10 4. Except as otherwise provided in subsection 5, to the extent

 11 included under subparagraph (1) of paragraph (a) of subsection 1,

 12 subparagraph (1) of paragraph (b) of subsection 1 or paragraph

 13 (c) of subsection 1:

 14 (a) A business entity may exclude from its total revenue:

 15 (1) The amount of any pass-through revenue of the

 16 business entity; and

 17 (2) The amount of tax basis, as determined under the

 18 Internal Revenue Code and any regulations adopted pursuant

 19 thereto, of any securities and loans sold; and

 20 (b) A business entity that is a lending institution may exclude

 21 from its total revenue the amount of any proceeds from the

 22 principal repayment of loans.

 23 5. If a business entity is part of an affiliated group, the

 24 business entity may not exclude from its total revenue any of the

 25 amounts described in subsection 4 which are paid to entities that

 26 are members of the affiliated group.

 27 6. To the extent included under subparagraph (1) of

 28 paragraph (a) of subsection 1, subparagraph (1) of paragraph (b)

 29 of subsection 1 or paragraph (c) of subsection 1:

 30 (a) A business entity may exclude from its total revenue the

 31 amount of any revenue attributable to dividends and interest upon

 32 any bonds or securities of the Federal Government, the State of

 33 Nevada or a political subdivision of this State.

 34 (b) A business entity that is required to pay a license fee

 35 pursuant to NRS 463.370 may exclude from its total revenue the

 36 amount of its gross revenue used to determine the amount of that

 37 fee.

 38 7. Any amount excluded under this section from the total

 39 revenue of a business entity must not be included in the

 40 determination of the cost of goods sold under section 25 of this act

 41 or the determination of the amount of compensation under section

 42 26 of this act.

 43 8. For the purposes of this section, any reference to:

 44 (a) An Internal Revenue Service form includes any variant of

 45 the form and any subsequent form with a different number or

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 1 designation that substantially provides the same information as

 2 the original form.

 3 (b) An amount reportable as income on a line number of an

 4 Internal Revenue Service form means the amount entered to the

 5 extent the amount entered complies with federal income tax law

 6 and includes the corresponding amount entered on a variant of

 7 the form or subsequent form with a different line number to the

 8 extent the amount entered complies with federal income tax law.

 9 Sec. 25. 1. Subject to the provisions of section 27 of this

 10 act, a business entity that elects to subtract the cost of goods sold

 11 for the purpose of computing its taxable margin under section 23

 12 of this act must determine the amount of that cost as provided in

 13 this section.

 14 2. Except as otherwise provided in this section, the cost of

 15 goods sold includes:

 16 (a) All direct costs of acquiring or producing the goods,

 17 including:

 18 (1) Labor costs;

 19 (2) The cost of materials that are an integral part of the

 20 specific property produced;

 21 (3) The cost of materials that are consumed in the ordinary

 22 course of performing production activities;

 23 (4) Handling costs, including costs attributable to

 24 processing, assembling, repackaging and transportation to the

 25 business entity;

 26 (5) Storage costs, including the costs of carrying, storing or

 27 warehousing property;

 28 (6) Depreciation, depletion and amortization, as reported

 29 on the federal income tax return on which the return under this

 30 chapter is based, to the extent associated with and necessary for

 31 the production of the goods;

 32 (7) The cost of renting or leasing equipment, facilities or

 33 real property which is directly used for the production of the

 34 goods;

 35 (8) The cost of repairing and maintaining equipment,

 36 facilities or real property which is directly used for the production

 37 of the goods;

 38 (9) The costs attributable to any research, experimental,

 39 engineering or design activities directly related to the production

 40 of the goods;

 41 (10) Taxes paid in relation to acquiring or producing any

 42 material, and taxes paid in relation to services that are a direct

 43 cost of production; and

 44 (11) The cost of producing or acquiring any electricity sold;

 45 and

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 1 (b) The following costs in relation to the business entity’s

 2 goods:

 3 (1) Deterioration of the goods;

 4 (2) Obsolescence of the goods;

 5 (3) Spoilage and abandonment of the goods, including the

 6 costs of rework labor, reclamation and scrap;

 7 (4) If the property is held for future production, the direct

 8 costs of preproduction allocable to the property;

 9 (5) The direct costs of postproduction allocable to the

 10 property;

 11 (6) The costs of insurance on any plant, facility, machinery,

 12 equipment or materials directly used in the production of the

 13 goods;

 14 (7) The cost of insurance on the produced goods;

 15 (8) The cost of utilities, including any electricity, gas and

 16 water, directly used in the production of the goods;

 17 (9) The costs of quality control, including any replacement

 18 of defective components pursuant to standard warranty policies,

 19 inspection directly allocable to the production of the goods, and

 20 repairs and maintenance of the goods; and

 21 (10) Licensing and franchise costs, including any fees

 22 incurred in securing the contractual right to use a trademark,

 23 corporate plan, manufacturing procedure, special recipe or other

 24 similar right directly associated with the goods produced.

 25 3. The cost of goods sold does not include the following costs

 26 in relation to the business entity’s goods:

 27 (a) The cost of renting or leasing any equipment, facilities or

 28 real property that is not used for the production of the goods;

 29 (b) Selling costs, including employee expenses relating to

 30 sales;

 31 (c) Distribution costs;

 32 (d) Advertising and marketing costs;

 33 (e) Expenses for idle facilities;

 34 (f) Rehandling costs;

 35 (g) Bidding costs incurred in the solicitation of contracts,

 36 whether or not the contracts are ultimately awarded to the

 37 business entity;

 38 (h) Interest, including interest on debt incurred or continued

 39 during the period of production of the goods to finance such

 40 production;

 41 (i) Any taxes assessed on the business entity based on income;

 42 (j) Strike or lockout expenses, except the wages of employees

 43 hired to replace striking personnel;

 44 (k) Compensation of directors, officers and consultants;

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 1 (l) Dividends to shareholders or distributions to members or

 2 partners which are business entities;

 3 (m) Professional fees and costs of litigation;

 4 (n) Fines, damages or restitution paid pursuant to judgments,

 5 consent decrees or settlements of legal actions including

 6 arbitration; and

 7 (o) Any of the amounts described in subsection 2 which are

 8 paid to entities that are members of an affiliated group of which

 9 the business entity is a part.

 10 4. For the purposes of this section and section 23 of this act,

 11 and subject to the provisions of section 27 of this act, a business

 12 entity:

 13 (a) May make a subtraction in relation to the cost of goods

 14 sold only if that entity owns those goods.

 15 (b) Must determine its cost of goods sold in accordance with

 16 the methods used on the federal income tax return on which is

 17 based the return under this chapter. This paragraph does not

 18 affect the type or category of cost of goods sold that may be

 19 subtracted in accordance with this section to compute the taxable

 20 margin of a business entity.

 21 5. As used in this section:

 22 (a) “Goods” means real property or tangible personal property

 23 sold in the ordinary course of business of a business entity.

 24 (b) “Production” includes construction, installation,

 25 manufacture, development, extraction, improvement, creation,

 26 raising or growth.

 27 Sec. 26. 1. Except as otherwise provided in this section and

 28 subject to the provisions of section 27 of this act, a business entity

 29 that elects to subtract the amount of compensation for the purpose

 30 of computing its taxable margin under section 23 of this act may

 31 subtract an amount equal to:

 32 (a) All wages, salaries and bonuses paid by the business entity

 33 to its officers, directors, owners, partners and employees who are

 34 natural persons; and

 35 (b) The cost of all benefits, to the extent deductible for the

 36 purposes of federal income taxation, the business entity provides

 37 to its officers, directors, owners, partners and employees,

 38 including retirement, health care, employer contributions made to

 39 employees’ health savings accounts and workers’ compensation

 40 benefits.

 41 2. Notwithstanding the actual amount of wages, salaries and

 42 bonuses paid by a business entity to its officers, directors, owners,

 43 partners and employees, a business entity may not include in the

 44 amount of wages, salaries and bonuses the business entity

 45 subtracts pursuant to paragraph (a) of subsection 1, in relation to

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 1 each individual person, more than $300,000 per taxable year on

 2 which margin is based. If a person is paid by more than one entity

 3 of a combined group, the combined group may not subtract

 4 pursuant to paragraph (a) of subsection 1, in relation to that

 5 person, a total of more than $300,000 per taxable year on which

 6 margin is based.

 7 3. As used in this section:

 8 (a) Except as otherwise provided in paragraph (b), “wages,

 9 salaries and bonuses means the amount entered in the Medicare

 10 wages and tips box of Internal Revenue Service Form W-2 or any

 11 subsequent form with a different number or designation that

 12 substantially provides the same information.

 13 (b) “Wages, salaries and bonuses” includes, to the extent not

 14 included in the amount described in paragraph (a), the amount of

 15 any:

 16 (1) Net distributive income from a business entity treated as

 17 a partnership for the purposes of federal income taxation, but only

 18 if the person receiving the distribution is a natural person;

 19 (2) Net distributive income from limited-liability companies

 20 and corporations treated as S corporations for the purposes of

 21 federal income taxation, but only if the person receiving the

 22 distribution is a natural person; and

 23 (3) Net distributive income from a limited-liability company

 24 treated as a sole proprietorship for the purposes of federal income

 25 taxation, but only if the person receiving the distribution is a

 26 natural person.

 27 Sec. 27. 1. Business entities that are part of an affiliated

 28 group engaged in a unitary business must file, in lieu of individual

 29 returns, a combined group return based on the combined group’s

 30 business. The combined group:

 31 (a) Must not include a business entity that conducts business

 32 outside of the United States if, as determined in accordance with

 33 regulations adopted by the Department:

 34 (1) Eighty percent or more of that business entity’s property

 35 and payroll are allocable to locations outside of the United States;

 36 or

 37 (2) That business entity has no property or payroll and 80

 38 percent or more of the business entity’s total income is allocable to

 39 locations outside of the United States.

 40 (b) Constitutes a single business entity for purposes of the

 41 application of the tax imposed by this chapter.

 42 2. For the purposes of section 23 of this act, a combined

 43 group shall determine its total revenue by:

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 1 (a) Determining the total revenue of each of its members as

 2 provided in section 24 of this act as if the member was an

 3 individual business entity;

 4 (b) Adding the total revenue of all its members determined

 5 under paragraph (a); and

 6 (c) Subtracting from the amount determined under paragraph

 7 (b), to the extent included under subparagraph (1) of paragraph

 8 (a) of subsection 1 of section 24 of this act, subparagraph (1) of

 9 paragraph (b) of subsection 1 of section 24 of this act or

 10 paragraph (c) of subsection 1 of section 24 of this act, any items of

 11 total revenue received from a member of the combined group.

 12 3. For the purposes of section 23 of this act, a combined

 13 group shall make an election to subtract either the cost of goods

 14 sold or the amount of compensation that applies to all of its

 15 members. Regardless of the election, the taxable margin of the

 16 combined group may not exceed 70 percent of the combined

 17 group’s total revenue from its entire business.

 18 4. A member of a combined group may claim as the cost of

 19 goods sold those costs that qualify under section 25 of this act if

 20 the goods for which the costs are incurred are owned by another

 21 member of the combined group.

 22 5. For the purposes of section 23 of this act, a combined

 23 group that elects to subtract:

 24 (a) The cost of goods sold must determine that amount by:

 25 (1) Determining the cost of goods sold for each of its

 26 members as provided in section 25 of this act as if the member was

 27 an individual business entity;

 28 (2) Adding all the amounts of the costs of goods sold

 29 determined under subparagraph (1); and

 30 (3) Subtracting from the amount determined under

 31 subparagraph (2) any amount of the costs of goods sold paid

 32 from one member of the combined group to another member of

 33 the combined group, but only to the extent that the corresponding

 34 item of total revenue was subtracted under paragraph (c) of

 35 subsection 2.

 36 (b) The amount of compensation must determine that amount

 37 by:

 38 (1) Determining the amount of compensation for each of its

 39 members as provided in section 26 of this act as if the member was

 40 an individual business entity, subject to the limitation set forth in

 41 subsection 2 of section 26 of this act;

 42 (2) Adding all the amounts of compensations determined

 43 under subparagraph (1); and

 44 (3) Subtracting from the amount determined under

 45 subparagraph (2) any amount of compensation paid from one

 – 14 –

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 1 member of the combined group to another member of the

 2 combined group, but only to the extent that the corresponding

 3 item of total revenue was subtracted under paragraph (c) of

 4 subsection 2.

 5 6. Each business entity that is part of a combined group’s

 6 return must, for the purposes of determining margin and

 7 apportionment, include its activities for the same period as that

 8 used by the combined group.

 9 7. Each member of a combined group is jointly and severally

 10 liable for the tax of the combined group.

 11 Sec. 28. 1. A business entity’s margin must be apportioned

 12 to this State to determine the amount of tax imposed by section 22

 13 of this act by multiplying the margin by a fraction, the numerator

 14 of which is the business entity’s total income from business done

 15 in this State, as determined under section 29 of this act, and the

 16 denominator of which is the business entity’s total income from its

 17 entire business, as determined under section 30 of this act.

 18 2. For the purpose of apportioning margin:

 19 (a) Income excluded from total revenue by a business entity

 20 under section 24 of this act must not be included in either the total

 21 income of the business entity from its business done in this State

 22 as determined under section 29 of this act or the total income of

 23 the business entity from its entire business as determined under

 24 section 30 of this act.

 25 (b) Income derived from transactions between individual

 26 members of a combined group that are excluded under paragraph

 27 (c) of subsection 2 of section 27 of this act must not be included

 28 in:

 29 (1) The total income of the business entity from its business

 30 done in this State as determined under section 29 of this act,

 31 except that income ultimately derived from the sale of tangible

 32 personal property between individual members of a combined

 33 group where one member party to the transaction does not have

 34 nexus in this State must be included in the total income of the

 35 business entity from its business done in this State as determined

 36 under section 29 of this act to the extent that the member of the

 37 combined group that does not have nexus in this State resells the

 38 tangible personal property without substantial modification to a

 39 purchaser in this State. For the purposes of this subsection,

 40 “income ultimately derived from the sale of tangible personal

 41 property” means the amount paid for the tangible personal

 42 property by the third-party purchaser.

 43 (2) The total income of the business entity from its entire

 44 business as determined under section 30 of this act.

 – 15 –

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 1 (c) Notwithstanding any provision of paragraph (a) or (b) to

 2 the contrary, if a loan or security is treated as inventory of the

 3 seller for the purposes of federal income taxation, the gross

 4 proceeds of the sale of that loan or security are considered total

 5 income.

 6 Sec. 29. 1. Subject to the provisions of section 28 of this

 7 act, in apportioning margin, the total income of a business entity

 8 from its business done in this State is the sum of the business

 9 entity’s total income from:

 10 (a) Each sale of tangible personal property which is delivered

 11 or shipped to a buyer in this State, regardless of the specified

 12 terms and conditions of the sale;

 13 (b) Each service performed in this State;

 14 (c) Each rental of property situated in this State;

 15 (d) The use of a patent, copyright, trademark, franchise or

 16 license in this State;

 17 (e) Each sale of real property located in this State, including

 18 royalties from oil, gas or other mineral interests; and

 19 (f) Any other business done in this State.

 20 2. For the purposes of paragraph (b) of subsection 1, the total

 21 income derived from servicing loans secured by real property shall

 22 be deemed to be performed in this State if the real property is

 23 located in this State.

 24 3. A combined group shall include in its total income

 25 computed under subsection 1 the total income of each business

 26 entity that is a member of the combined group which has a nexus

 27 in this State for the purpose of taxation.

 28 Sec. 30. 1. Subject to the provisions of section 28 of this

 29 act, in apportioning margin, the total income of a business entity

 30 from its entire business is the sum of the business entity’s total

 31 income from:

 32 (a) Each sale of the business entity’s tangible personal

 33 property;

 34 (b) Each service, rental or royalty; and

 35 (c) Any other business.

 36 2. If a business entity sells an investment or capital asset, the

 37 business entity’s total income from its entire business for taxable

 38 margin includes only the net gain from the sale.

 39 3. A combined group shall include in its total income

 40 computed under subsection 1 the total income of each business

 41 entity that is a member of the combined group, without regard to

 42 whether that entity has a nexus with this State for the purpose of

 43 taxation.

 44 Sec. 31. 1. A business entity shall use the same accounting

 45 methods to apportion margin as used in computing margin.

 – 16 –

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 1 2. A business entity may not change its accounting methods

 2 used to calculate its total income more often than once every 4

 3 years without the express written consent of the Department. A

 4 change in accounting methods is not justified solely because the

 5 change results in a reduction of tax liability.

 6 Sec. 32. 1. The tax imposed by this chapter for each taxable

 7 year is due on the last day of the calendar month following that

 8 taxable year.

 9 2. Except as otherwise provided in this chapter, each business

 10 entity engaging in a business in this State during a taxable year

 11 that is not exempt from the tax imposed by this chapter for that

 12 taxable year shall file with the Department a return on a form

 13 prescribed by the Department, together with the remittance of any

 14 tax due pursuant to this chapter for that taxable year, not later

 15 than 30 days after the date the business entity is required to file its

 16 federal income tax return for that taxable year with the Internal

 17 Revenue Service. The return required by this subsection must be

 18 executed under penalty of perjury and include the taxpayer

 19 identification number or social security number of the business

 20 entity, as applicable, and such other information as is required by

 21 the Department.

 22 Sec. 33. Upon written application made before the date on

 23 which a business entity is otherwise required to file a return and

 24 pay the tax imposed by this chapter, the Department may:

 25 1. If the business entity is granted an extension of time by the

 26 Federal Government for the filing of its federal income tax return,

 27 extend the time for filing the return required by this chapter until

 28 not later than 30 days after the date the business entity is required

 29 to file its federal income tax return pursuant to the extension of

 30 time granted by the Federal Government. The Department may

 31 require, as a condition to the granting of any extension pursuant

 32 to this subsection, the payment of the tax estimated to be due

 33 pursuant to this chapter.

 34 2. For good cause extend by 30 days the time within which

 35 the business entity is required to pay the tax. If the tax is paid

 36 during a period of extension granted pursuant to this subsection,

 37 no penalty or late charge may be imposed for failure to pay at the

 38 time required, but the business entity shall pay interest at the rate

 39 of 1 percent per month from the date on which the amount would

 40 have been due without the extension until the date of payment,

 41 unless otherwise provided in NRS 360.232 or 360.320.

 42 Sec. 34. 1. If the taxable margin of a business entity

 43 changes as a result of:

 44 (a) The filing by the business entity of an amended federal

 45 income tax return or other return, the business entity shall, within

 – 17 –

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 1 30 days after that filing, file an amended return with the

 2 Department.

 3 (b) An audit or other adjustment by the Internal Revenue

 4 Service or another competent authority, the business entity shall,

 5 within 30 days after the audit report or other adjustment becomes

 6 final, file an amended return with the Department.

 7 2. If, based upon an amended return filed pursuant to this

 8 section, it appears that the tax imposed by this chapter has not

 9 been fully assessed, the Department shall assess the deficiency,

 10 with interest calculated at the rate and in the manner set forth in

 11 NRS 360.417. Any assessment required by this subsection must be

 12 made within 3 years after the Department receives the amended

 13 return.

 14 Sec. 35. If the Department determines that any tax, penalty

 15 or interest has been paid more than once or has been erroneously

 16 collected or computed, the Department shall set forth that fact in

 17 the records of the Department and certify to the State Board of

 18 Examiners the amount collected in excess of the amount legally

 19 due and the person from whom it was collected or by whom it was

 20 paid. If approved by the State Board of Examiners, the excess

 21 amount collected or paid must, after being credited against any

 22 amount then due from the person in accordance with NRS

 23 360.236, be refunded to the person or his or her successors in

 24 interest.

 25 Sec. 36. 1. Except as otherwise provided in NRS 360.235

 26 and 360.395:

 27 (a) No refund may be allowed unless a claim for it is filed with

 28 the Department within 3 years after the last day of the month

 29 following the taxable year for which the overpayment was made.

 30 (b) No credit may be allowed after the expiration of the period

 31 specified for filing claims for refund unless a claim for credit is

 32 filed with the Department within that period.

 33 2. Each claim must be in writing and must state the specific

 34 grounds upon which the claim is founded.

 35 3. Failure to file a claim within the time prescribed in this

 36 chapter constitutes a waiver of any demand against the State on

 37 account of overpayment.

 38 4. Within 30 days after rejecting any claim in whole or in

 39 part, the Department shall serve notice of its action on the

 40 claimant in the manner prescribed for service of notice of a

 41 deficiency determination.

 42 Sec. 37. 1. No injunction, writ of mandate or other legal or

 43 equitable process may issue in any suit, action or proceeding in

 44 any court against this State or against any officer of this State to

 45 prevent or enjoin the collection under this chapter of the tax

 – 18 –

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 1 imposed by this chapter or any amount of tax, penalty or interest

 2 required to be collected.

 3 2. No suit or proceeding may be maintained in any court for

 4 the recovery of any amount alleged to have been erroneously

 5 determined or collected unless a claim for refund or credit has

 6 been filed.

 7 Sec. 38. 1. Within 90 days after a final decision upon a

 8 claim filed pursuant to this chapter is rendered by the

 9 Commission, the claimant may bring an action against the

 10 Department on the grounds set forth in the claim in a court of

 11 competent jurisdiction in Carson City, the county of this State

 12 where the claimant resides or maintains his or her principal place

 13 of business or a county in which any relevant proceedings were

 14 conducted by the Department, for the recovery of the whole or any

 15 part of the amount with respect to which the claim has been

 16 disallowed.

 17 2. Failure to bring an action within the time specified

 18 constitutes a waiver of any demand against the State on account of

 19 alleged overpayments.

 20 Sec. 39. 1. If the Department fails to mail notice of action

 21 on a claim within 6 months after the claim is filed, the claimant

 22 may consider the claim disallowed and file an appeal with the

 23 Commission within 30 days after the last day of the 6-month

 24 period. If the claimant is aggrieved by the decision of the

 25 Commission rendered on appeal, the claimant may, within 90 days

 26 after the decision is rendered, bring an action against the

 27 Department on the grounds set forth in the claim for the recovery

 28 of the whole or any part of the amount claimed as an

 29 overpayment.

 30 2. If judgment is rendered for the plaintiff, the amount of the

 31 judgment must first be credited towards any tax due from the

 32 plaintiff.

 33 3. The balance of the judgment must be refunded to the

 34 plaintiff.

 35 Sec. 40. If the court finds that the Department acted

 36 arbitrarily or capriciously in denying the plaintiff’s claim, interest

 37 on the amount refunded to the plaintiff may be allowed at the

 38 Federal Funds Target Rate, but no greater than 6 percent per

 39 annum, upon the amount refunded to the plaintiff from the date of

 40 payment of the amount to a date preceding the date of the refund

 41 warrant by not more than 30 days. The date must be determined by

 42 the Department.

 43 Sec. 41. A judgment may not be rendered in favor of the

 44 plaintiff in any action brought against the Department to recover

 45 any amount paid when the action is brought by or in the name of

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 1 an assignee of the person paying the amount or by any person

 2 other than the person who paid the amount.

 3 Sec. 42. 1. The Department may recover a refund or any

 4 part thereof which is erroneously made and any credit or part

 5 thereof which is erroneously allowed in an action brought in a

 6 court of competent jurisdiction in Carson City or Clark County in

 7 the name of the State of Nevada.

 8 2. The action must be tried in Carson City or Clark County

 9 unless the court, with the consent of the Attorney General, orders

 10 a change of place of trial.

 11 3. The Attorney General shall prosecute the action, and the

 12 provisions of NRS, the Nevada Rules of Civil Procedure and the

 13 Nevada Rules of Appellate Procedure relating to service of

 14 summons, pleadings, proofs, trials and appeals are applicable to

 15 the proceedings.

 16 Sec. 43. 1. If any amount in excess of $25 has been

 17 illegally determined, either by the Department or by the person

 18 filing the return, the Department shall certify this fact to the State

 19 Board of Examiners, and the latter shall authorize the

 20 cancellation of the amount upon the records of the Department.

 21 2. If an amount not exceeding $25 has been illegally

 22 determined, either by the Department or by the person filing the

 23 return, the Department, without certifying this fact to the State

 24 Board of Examiners, shall authorize the cancellation of the

 25 amount upon the records of the Department.

 26 Sec. 44. 1. A person shall not:

 27 (a) Make, cause to be made or permit to be made any false or

 28 fraudulent return or declaration or false statement in any return

 29 or declaration with intent to defraud the State or to evade payment

 30 of the tax or any part of the tax imposed by this chapter.

 31 (b) Make, cause to be made or permit to be made any false

 32 entry in books, records or accounts with intent to defraud the State

 33 or to evade the payment of the tax or any part of the tax imposed

 34 by this chapter.

 35 (c) Keep, cause to be kept or permit to be kept more than one

 36 set of books, records or accounts with intent to defraud the State

 37 or to evade the payment of the tax or any part of the tax imposed

 38 by this chapter.

 39 2. Any person who violates the provisions of subsection 1 is

 40 guilty of a gross misdemeanor.

 41 Sec. 45. The remedies of the State provided for in this

 42 chapter are cumulative, and no action taken by the Department or

 43 the Attorney General constitutes an election by the State to pursue

 44 any remedy to the exclusion of any other remedy for which

 45 provision is made in this chapter.

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 1 Sec. 46. NRS 360.2937 is hereby amended to read as follows:

 2 360.2937 1. Except as otherwise provided in this section,

 3 NRS 360.320 or any other specific statute, and notwithstanding the

 4 provisions of NRS 360.2935, interest must be paid upon an

 5 overpayment of any tax provided for in chapter 362, 363A, 363B,

 6 369, 370, 372, 374, 377 or 377A of NRS [,] or sections 3 to 45,

 7 inclusive, of this act, any fee provided for in NRS 444A.090 or

 8 482.313, or any assessment provided for in NRS 585.497, at the rate

 9 of 0.25 percent per month from the last day of the calendar month

 10 following the period for which the overpayment was made.

 11 2. No refund or credit may be made of any interest imposed on

 12 the person making the overpayment with respect to the amount

 13 being refunded or credited.

 14 3. The interest must be paid:

 15 (a) In the case of a refund, to the last day of the calendar month

 16 following the date upon which the person making the overpayment,

 17 if the person has not already filed a claim, is notified by the

 18 Department that a claim may be filed or the date upon which the

 19 claim is certified to the State Board of Examiners, whichever is

 20 earlier.

 21 (b) In the case of a credit, to the same date as that to which

 22 interest is computed on the tax or the amount against which the

 23 credit is applied.

 24 Sec. 47. NRS 360.300 is hereby amended to read as follows:

 25 360.300 1. If a person fails to file a return or the Department

 26 is not satisfied with the return or returns of any tax, contribution or

 27 premium or amount of tax, contribution or premium required to be

 28 paid to the State by any person, in accordance with the applicable

 29 provisions of this chapter, chapter 360B, 362, 363A, 363B, 369,

 30 370, 372, 372A, 374, 377, 377A or 444A of NRS, sections 3 to 45,

 31 inclusive, of this act, NRS 482.313, or chapter 585 or 680B of NRS

 32 as administered or audited by the Department, it may compute and

 33 determine the amount required to be paid upon the basis of:

 34 (a) The facts contained in the return;

 35 (b) Any information within its possession or that may come into

 36 its possession; or

 37 (c) Reasonable estimates of the amount.

 38 2. One or more deficiency determinations may be made with

 39 respect to the amount due for one or for more than one period.

 40 3. In making its determination of the amount required to be

 41 paid, the Department shall impose interest on the amount of tax

 42 determined to be due, calculated at the rate and in the manner set

 43 forth in NRS 360.417, unless a different rate of interest is

 44 specifically provided by statute.

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 1 4. The Department shall impose a penalty of 10 percent in

 2 addition to the amount of a determination that is made in the case of

 3 the failure of a person to file a return with the Department.

 4 5. When a business is discontinued, a determination may be

 5 made at any time thereafter within the time prescribed in NRS

 6 360.355 as to liability arising out of that business, irrespective of

 7 whether the determination is issued before the due date of the

 8 liability.

 9 Sec. 48. NRS 360.417 is hereby amended to read as follows:

 10 360.417 Except as otherwise provided in NRS 360.232 and

 11 360.320, and unless a different penalty or rate of interest is

 12 specifically provided by statute, any person who fails to pay any tax

 13 provided for in chapter 362, 363A, 363B, 369, 370, 372, 374, 377,

 14 377A, 444A or 585 of NRS, or sections 3 to 45, inclusive, of this

 15 act, or any fee provided for in NRS 482.313, and any person or

 16 governmental entity that fails to pay any fee provided for in NRS

 17 360.787, to the State or a county within the time required, shall pay

 18 a penalty of not more than 10 percent of the amount of the tax or fee

 19 which is owed, as determined by the Department, in addition to the

 20 tax or fee, plus interest at the rate of 0.75 percent per month, or

 21 fraction of a month, from the last day of the month following the

 22 period for which the amount or any portion of the amount should

 23 have been reported until the date of payment. The amount of any

 24 penalty imposed must be based on a graduated schedule adopted by

 25 the Nevada Tax Commission which takes into consideration the

 26 length of time the tax or fee remained unpaid.

 27 Sec. 49. NRS 360.510 is hereby amended to read as follows:

 28 360.510 1. If any person is delinquent in the payment of any

 29 tax or fee administered by the Department or if a determination has

 30 been made against the person which remains unpaid, the

 31 Department may:

 32 (a) Not later than 3 years after the payment became delinquent

 33 or the determination became final; or

 34 (b) Not later than 6 years after the last recording of an abstract

 35 of judgment or of a certificate constituting a lien for tax owed,

 36 ?? give a notice of the delinquency and a demand to transmit

 37 personally or by registered or certified mail to any person,

 38 including, without limitation, any officer or department of this State

 39 or any political subdivision or agency of this State, who has in his or

 40 her possession or under his or her control any credits or other

 41 personal property belonging to the delinquent, or owing any debts to

 42 the delinquent or person against whom a determination has been

 43 made which remains unpaid, or owing any debts to the delinquent or

 44 that person. In the case of any state officer, department or agency,

 45 the notice must be given to the officer, department or agency before

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 1 the Department presents the claim of the delinquent taxpayer to the

 2 State Controller.

 3 2. A state officer, department or agency which receives such a

 4 notice may satisfy any debt owed to it by that person before it

 5 honors the notice of the Department.

 6 3. After receiving the demand to transmit, the person notified

 7 by the demand may not transfer or otherwise dispose of the credits,

 8 other personal property, or debts in his or her possession or under

 9 his or her control at the time the person received the notice until the

 10 Department consents to a transfer or other disposition.

 11 4. Every person notified by a demand to transmit shall, within

 12 10 days after receipt of the demand to transmit, inform the

 13 Department of and transmit to the Department all such credits, other

 14 personal property or debts in his or her possession, under his or her

 15 control or owing by that person within the time and in the manner

 16 requested by the Department. Except as otherwise provided in

 17 subsection 5, no further notice is required to be served to that

 18 person.

 19 5. If the property of the delinquent taxpayer consists of a series

 20 of payments owed to him or her, the person who owes or controls

 21 the payments shall transmit the payments to the Department until

 22 otherwise notified by the Department. If the debt of the delinquent

 23 taxpayer is not paid within 1 year after the Department issued the

 24 original demand to transmit, the Department shall issue another

 25 demand to transmit to the person responsible for making the

 26 payments informing him or her to continue to transmit payments to

 27 the Department or that his or her duty to transmit the payments to

 28 the Department has ceased.

 29 6. If the notice of the delinquency seeks to prevent the transfer

 30 or other disposition of a deposit in a bank or credit union or other

 31 credits or personal property in the possession or under the control of

 32 a bank, credit union or other depository institution, the notice must

 33 be delivered or mailed to any branch or office of the bank, credit

 34 union or other depository institution at which the deposit is carried

 35 or at which the credits or personal property is held.

 36 7. If any person notified by the notice of the delinquency

 37 makes any transfer or other disposition of the property or debts

 38 required to be withheld or transmitted, to the extent of the value of

 39 the property or the amount of the debts thus transferred or paid, that

 40 person is liable to the State for any indebtedness due pursuant to this

 41 chapter, or chapter 360B, 362, 363A, 363B, 369, 370, 372, 372A,

 42 374, 377, 377A or 444A of NRS, sections 3 to 45, inclusive, of this

 43 act, NRS 482.313, or chapter 585 or 680B of NRS from the person

 44 with respect to whose obligation the notice was given if solely by

 45 reason of the transfer or other disposition the State is unable to

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 1 recover the indebtedness of the person with respect to whose

 2 obligation the notice was given.

 3 Sec. 50. NRS 363A.130 is hereby amended to read as follows:

 4 363A.130 1. There is hereby imposed an excise tax on each

 5 employer at the rate of [2] 2.29 percent of the wages, as defined in

 6 NRS 612.190, paid by the employer during a calendar quarter with

 7 respect to employment in connection with the business activities of

 8 the employer.

 9 2. The tax imposed by this section:

 10 (a) Does not apply to any person or other entity or any wages

 11 this State is prohibited from taxing under the Constitution, laws or

 12 treaties of the United States or the Nevada Constitution.

 13 (b) Must not be deducted, in whole or in part, from any wages of

 14 persons in the employment of the employer.

 15 3. Each employer shall, on or before the last day of the

 16 month immediately following each calendar quarter for which

 17 the employer is required to pay a contribution pursuant to

 18 NRS 612.535:

 19 (a) File with the Department a return on a form prescribed by

 20 the Department; and

 21 (b) Remit to the Department any tax due pursuant to this section

 22 for that calendar quarter.

 23 Sec. 51. NRS 363A.130 is hereby amended to read as follows:

 24 363A.130 1. There is hereby imposed an excise tax on each

 25 employer at the rate of [2.29] 2.42 percent of the wages, as defined

 26 in NRS 612.190, paid by the employer during a calendar quarter

 27 with respect to employment in connection with the business

 28 activities of the employer.

 29 2. The tax imposed by this section:

 30 (a) Does not apply to any person or other entity or any wages

 31 this State is prohibited from taxing under the Constitution, laws or

 32 treaties of the United States or the Nevada Constitution.

 33 (b) Must not be deducted, in whole or in part, from any wages of

 34 persons in the employment of the employer.

 35 3. Each employer shall, on or before the last day of the

 36 month immediately following each calendar quarter for which

 37 the employer is required to pay a contribution pursuant to

 38 NRS 612.535:

 39 (a) File with the Department a return on a form prescribed by

 40 the Department; and

 41 (b) Remit to the Department any tax due pursuant to this section

 42 for that calendar quarter.

 43 Sec. 52. NRS 363A.130 is hereby amended to read as follows:

 44 363A.130 1. There is hereby imposed an excise tax on each

 45 employer at the rate of [2.42] 2 percent of the wages, as defined in

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 1 NRS 612.190, paid by the employer during a calendar quarter with

 2 respect to employment in connection with the business activities of

 3 the employer.

 4 2. The tax imposed by this section:

 5 (a) Does not apply to any person or other entity or any wages

 6 this State is prohibited from taxing under the Constitution, laws or

 7 treaties of the United States or the Nevada Constitution.

 8 (b) Must not be deducted, in whole or in part, from any wages of

 9 persons in the employment of the employer.

 10 3. Each employer shall, on or before the last day of the

 11 month immediately following each calendar quarter for which

 12 the employer is required to pay a contribution pursuant to

 13 NRS 612.535:

 14 (a) File with the Department a return on a form prescribed by

 15 the Department; and

 16 (b) Remit to the Department any tax due pursuant to this section

 17 for that calendar quarter.

 18 Sec. 53. NRS 78.245 is hereby amended to read as follows:

 19 78.245 [No]

 20 1. Except as otherwise provided in subsection 2, no stocks,

 21 bonds or other securities issued by any corporation organized under

 22 this chapter, nor the income or profits therefrom, nor the transfer

 23 thereof by assignment, descent, testamentary disposition or

 24 otherwise, shall be taxed by this State when such stocks, bonds or

 25 other securities shall be owned by nonresidents of this State or by

 26 foreign corporations.

 27 2. The provisions of subsection 1 do not apply to the tax

 28 imposed pursuant to sections 3 to 45, inclusive, of this act.

 29 Sec. 54. NRS 90.420 is hereby amended to read as follows:

 30 90.420 1. The Administrator by order may deny, suspend or

 31 revoke any license, fine any licensed person, limit the activities

 32 governed by this chapter that an applicant or licensed person may

 33 perform in this State, bar an applicant or licensed person from

 34 association with a licensed broker-dealer or investment adviser or

 35 bar from employment with a licensed broker-dealer or investment

 36 adviser a person who is a partner, officer, director, sales

 37 representative, investment adviser or representative of an investment

 38 adviser, or a person occupying a similar status or performing a

 39 similar function for an applicant or licensed person, if the

 40 Administrator finds that the order is in the public interest and that

 41 the applicant or licensed person or, in the case of a broker-dealer or

 42 investment adviser, any partner, officer, director, sales

 43 representative, investment adviser, representative of an investment

 44 adviser, or person occupying a similar status or performing similar

 45 functions or any person directly or indirectly controlling the

 – 25 –

- *IP1*

 1 broker-dealer or investment adviser, or any transfer agent or any

 2 person directly or indirectly controlling the transfer agent:

 3 (a) Has filed an application for licensing with the Administrator

 4 which, as of its effective date, or as of any date after filing in the

 5 case of an order denying effectiveness, was incomplete in a material

 6 respect or contained a statement that was, in light of the

 7 circumstances under which it was made, false or misleading with

 8 respect to a material fact;

 9 (b) Has violated or failed to comply with a provision of this

 10 chapter as now or formerly in effect or a regulation or order adopted

 11 or issued under this chapter;

 12 (c) Is the subject of an adjudication or determination after notice

 13 and opportunity for hearing, within the last 5 years by a securities

 14 agency or administrator of another state or a court of competent

 15 jurisdiction that the person has violated the Securities Act of 1933,

 16 the Securities Exchange Act of 1934, the Investment Advisers Act

 17 of 1940, the Investment Company Act of 1940, the Commodity

 18 Exchange Act or the securities law of any other state, but only if the

 19 acts constituting the violation of that state’s law would constitute a

 20 violation of this chapter had the acts taken place in this State;

 21 (d) Within the last 10 years has been convicted of a felony or

 22 misdemeanor which the Administrator finds:

 23 (1) Involves the purchase or sale of a security, taking a false

 24 oath, making a false report, bribery, perjury, burglary, robbery or

 25 conspiracy to commit any of the foregoing offenses;

 26 (2) Arises out of the conduct of business as a broker-dealer,

 27 investment adviser, depository institution, insurance company or

 28 fiduciary; or

 29 (3) Involves the larceny, theft, robbery, extortion, forgery,

 30 counterfeiting, fraudulent concealment, embezzlement, fraudulent

 31 conversion or misappropriation of money or securities or conspiracy

 32 to commit any of the foregoing offenses;

 33 (e) Is or has been permanently or temporarily enjoined by any

 34 court of competent jurisdiction, unless the order has been vacated,

 35 from acting as an investment adviser, representative of an

 36 investment adviser, underwriter, broker-dealer or as an affiliated

 37 person or employee of an investment company, depository

 38 institution or insurance company or from engaging in or continuing

 39 any conduct or practice in connection with any of the foregoing

 40 activities or in connection with the purchase or sale of a security;

 41 (f) Is or has been the subject of an order of the Administrator,

 42 unless the order has been vacated, denying, suspending or revoking

 43 the person’s license as a broker-dealer, sales representative,

 44 investment adviser, representative of an investment adviser or

 45 transfer agent;

 – 26 –

- *IP1*

 1 (g) Is or has been the subject of any of the following orders

 2 which were issued within the last 5 years, unless the order has been

 3 vacated:

 4 (1) An order by the securities agency or administrator of

 5 another state, Canadian province or territory or by the Securities and

 6 Exchange Commission or a comparable regulatory agency of

 7 another country, entered after notice and opportunity for hearing,

 8 denying, suspending or revoking the person’s license as a broker 9

dealer, sales representative, investment adviser, representative of an

 10 investment adviser or transfer agent;

 11 (2) A suspension or expulsion from membership in or

 12 association with a member of a self-regulatory organization;

 13 (3) An order of the United States Postal Service relating to

 14 fraud;

 15 (4) An order to cease and desist entered after notice and

 16 opportunity for hearing by the Administrator, the securities agency

 17 or administrator of another state, Canadian province or territory, the

 18 Securities and Exchange Commission or a comparable regulatory

 19 agency of another country, or the Commodity Futures Trading

 20 Commission; or

 21 (5) An order by the Commodity Futures Trading

 22 Commission denying, suspending or revoking registration under the

 23 Commodity Exchange Act;

 24 (h) Has engaged in unethical or dishonest practices in the

 25 securities business;

 26 (i) Is insolvent, either in the sense that liabilities exceed assets or

 27 in the sense that obligations cannot be met as they mature, but the

 28 Administrator may not enter an order against a broker-dealer or

 29 investment adviser under this paragraph without a finding of

 30 insolvency as to the broker-dealer or investment adviser;

 31 (j) Has failed to pay a tax as required pursuant to the provisions

 32 of chapter 363A of NRS [;] or sections 3 to 45, inclusive, of this

 33 act;

 34 (k) Is determined by the Administrator in compliance with NRS

 35 90.430 not to be qualified on the basis of lack of training,

 36 experience and knowledge of the securities business; or

 37 (l) Has failed reasonably to supervise a sales representative,

 38 employee or representative of an investment adviser.

 39 2. The Administrator may not institute a proceeding on the

 40 basis of a fact or transaction known to the director when the license

 41 became effective unless the proceeding is instituted within 90 days

 42 after issuance of the license.

 43 3. If the Administrator finds that an applicant or licensed

 44 person is no longer in existence or has ceased to do business as a

 45 broker-dealer, sales representative, investment adviser,

 – 27 –

- *IP1*

 1 representative of an investment adviser or transfer agent or is

 2 adjudicated mentally incompetent or subjected to the control of a

 3 committee, conservator or guardian or cannot be located after

 4 reasonable search, the Administrator may by order deny the

 5 application or revoke the license.

 6 Sec. 55. NRS 90.730 is hereby amended to read as follows:

 7 90.730 1. Except as otherwise provided in subsection 2,

 8 information and records filed with or obtained by the Administrator

 9 are public information and are available for public examination.

 10 2. Except as otherwise provided in subsections 3 and 4 and

 11 NRS 239.0115, the following information and records do not

 12 constitute public information under subsection 1 and are

 13 confidential:

 14 (a) Information or records obtained by the Administrator in

 15 connection with an investigation concerning possible violations of

 16 this chapter; and

 17 (b) Information or records filed with the Administrator in

 18 connection with a registration statement filed under this chapter or a

 19 report under NRS 90.390 which constitute trade secrets or

 20 commercial or financial information of a person for which that

 21 person is entitled to and has asserted a claim of privilege or

 22 confidentiality authorized by law.

 23 3. The Administrator may submit any information or evidence

 24 obtained in connection with an investigation to the:

 25 (a) Attorney General or appropriate district attorney for the

 26 purpose of prosecuting a criminal action under this chapter; and

 27 (b) Department of Taxation for its use in carrying out the

 28 provisions of chapter 363A of NRS [.] and sections 3 to 45,

 29 inclusive, of this act.

 30 4. The Administrator may disclose any information obtained in

 31 connection with an investigation pursuant to NRS 90.620 to the

 32 agencies and administrators specified in subsection 1 of NRS 90.740

 33 but only if disclosure is provided for the purpose of a civil,

 34 administrative or criminal investigation or proceeding, and the

 35 receiving agency or administrator represents in writing that under

 36 applicable law protections exist to preserve the integrity,

 37 confidentiality and security of the information.

 38 5. This chapter does not create any privilege or diminish any

 39 privilege existing at common law, by statute, regulation or

 40 otherwise.

 41 Sec. 56. NRS 604A.820 is hereby amended to read as follows:

 42 604A.820 1. If the Commissioner has reason to believe that

 43 grounds for revocation or suspension of a license exist, the

 44 Commissioner shall give 20 days’ written notice to the licensee

 – 28 –

- *IP1*

 1 stating the contemplated action and, in general, the grounds therefor

 2 and set a date for a hearing.

 3 2. At the conclusion of a hearing, the Commissioner shall:

 4 (a) Enter a written order either dismissing the charges, revoking

 5 the license or suspending the license for a period of not more than

 6 60 days, which period must include any prior temporary suspension.

 7 The Commissioner shall send a copy of the order to the licensee by

 8 registered or certified mail.

 9 (b) Impose upon the licensee an administrative fine of not more

 10 than $10,000 for each violation by the licensee of any provision of

 11 this chapter or any regulation adopted pursuant thereto.

 12 (c) If a fine is imposed pursuant to this section, enter such order

 13 as is necessary to recover the costs of the proceeding, including

 14 investigative costs and attorney’s fees of the Commissioner.

 15 3. The grounds for revocation or suspension of a license are

 16 that:

 17 (a) The licensee has failed to pay the annual license fee;

 18 (b) The licensee, either knowingly or without any exercise of

 19 due care to prevent it, has violated any provision of this chapter or

 20 any lawful regulation adopted pursuant thereto;

 21 (c) The licensee has failed to pay a tax as required pursuant to

 22 the provisions of chapter 363A of NRS [;] or sections 3 to 45,

 23 inclusive, of this act;

 24 (d) Any fact or condition exists which would have justified the

 25 Commissioner in denying the licensee’s original application for a

 26 license pursuant to the provisions of this chapter; or

 27 (e) The licensee:

 28 (1) Failed to open an office for the conduct of the business

 29 authorized by his or her license within 180 days after the date the

 30 license was issued; or

 31 (2) Has failed to remain open for the conduct of the business

 32 for a period of 180 days without good cause therefor.

 33 4. Any revocation or suspension applies only to the license

 34 granted to a person for the particular office for which grounds for

 35 revocation or suspension exist.

 36 5. An order suspending or revoking a license becomes effective

 37 5 days after being entered unless the order specifies otherwise or a

 38 stay is granted.

 39 Sec. 57. NRS 612.265 is hereby amended to read as follows:

 40 612.265 1. Except as otherwise provided in this section and

 41 NRS 239.0115, information obtained from any employing unit or

 42 person pursuant to the administration of this chapter and any

 43 determination as to the benefit rights of any person is confidential

 44 and may not be disclosed or be open to public inspection in any

 – 29 –

- *IP1*

 1 manner which would reveal the person’s or employing unit’s

 2 identity.

 3 2. Any claimant or a legal representative of a claimant is

 4 entitled to information from the records of the Division, to the

 5 extent necessary for the proper presentation of the claimant’s claim

 6 in any proceeding pursuant to this chapter. A claimant or an

 7 employing unit is not entitled to information from the records of the

 8 Division for any other purpose.

 9 3. Subject to such restrictions as the Administrator may by

 10 regulation prescribe, the information obtained by the Division may

 11 be made available to:

 12 (a) Any agency of this or any other state or any federal agency

 13 charged with the administration or enforcement of laws relating to

 14 unemployment compensation, public assistance, workers’

 15 compensation or labor and industrial relations, or the maintenance

 16 of a system of public employment offices;

 17 (b) Any state or local agency for the enforcement of child

 18 support;

 19 (c) The Internal Revenue Service of the Department of the

 20 Treasury;

 21 (d) The Department of Taxation; and

 22 (e) The State Contractors’ Board in the performance of its duties

 23 to enforce the provisions of chapter 624 of NRS.

 24 ?? Information obtained in connection with the administration of the

 25 Employment Service may be made available to persons or agencies

 26 for purposes appropriate to the operation of a public employment

 27 service or a public assistance program.

 28 4. Upon written request made by a public officer of a local

 29 government, the Administrator shall furnish from the records of the

 30 Division the name, address and place of employment of any person

 31 listed in the records of employment of the Division. The request

 32 must set forth the social security number of the person about whom

 33 the request is made and contain a statement signed by proper

 34 authority of the local government certifying that the request is made

 35 to allow the proper authority to enforce a law to recover a debt or

 36 obligation owed to the local government. Except as otherwise

 37 provided in NRS 239.0115, the information obtained by the local

 38 government is confidential and may not be used or disclosed for any

 39 purpose other than the collection of a debt or obligation owed to that

 40 local government. The Administrator may charge a reasonable fee

 41 for the cost of providing the requested information.

 42 5. The Administrator may publish or otherwise provide

 43 information on the names of employers, their addresses, their type

 44 or class of business or industry, and the approximate number of

 45 employees employed by each such employer, if the information

 – 30 –

- *IP1*

 1 released will assist unemployed persons to obtain employment or

 2 will be generally useful in developing and diversifying the economic

 3 interests of this State. Upon request by a state agency which is able

 4 to demonstrate that its intended use of the information will benefit

 5 the residents of this State, the Administrator may, in addition to the

 6 information listed in this subsection, disclose the number of

 7 employees employed by each employer and the total wages paid by

 8 each employer. The Administrator may charge a fee to cover the

 9 actual costs of any administrative expenses relating to the disclosure

 10 of this information to a state agency. The Administrator may require

 11 the state agency to certify in writing that the agency will take all

 12 actions necessary to maintain the confidentiality of the information

 13 and prevent its unauthorized disclosure.

 14 6. Upon request therefor, the Administrator shall furnish to any

 15 agency of the United States charged with the administration of

 16 public works or assistance through public employment, and may

 17 furnish to any state agency similarly charged, the name, address,

 18 ordinary occupation and employment status of each recipient of

 19 benefits and the recipient’s rights to further benefits pursuant to this

 20 chapter.

 21 7. To further a current criminal investigation, the chief

 22 executive officer of any law enforcement agency of this State may

 23 submit a written request to the Administrator that the Administrator

 24 furnish, from the records of the Division, the name, address and

 25 place of employment of any person listed in the records of

 26 employment of the Division. The request must set forth the social

 27 security number of the person about whom the request is made and

 28 contain a statement signed by the chief executive officer certifying

 29 that the request is made to further a criminal investigation currently

 30 being conducted by the agency. Upon receipt of such a request, the

 31 Administrator shall furnish the information requested. The

 32 Administrator may charge a fee to cover the actual costs of any

 33 related administrative expenses.

 34 8. In addition to the provisions of subsection 5, the

 35 Administrator shall provide lists containing the names and addresses

 36 of employers, and information regarding the wages paid by each

 37 employer to the Department of Taxation, upon request, for use in

 38 verifying returns for the taxes imposed pursuant to chapters 363A

 39 and 363B of NRS [.] and sections 3 to 45, inclusive, of this act. The

 40 Administrator may charge a fee to cover the actual costs of any

 41 related administrative expenses.

 42 9. A private carrier that provides industrial insurance in this

 43 State shall submit to the Administrator a list containing the name of

 44 each person who received benefits pursuant to chapters 616A to

 45 616D, inclusive, or chapter 617 of NRS during the preceding month

 – 31 –

- *IP1*

 1 and request that the Administrator compare the information so

 2 provided with the records of the Division regarding persons

 3 claiming benefits pursuant to chapter 612 of NRS for the same

 4 period. The information submitted by the private carrier must be in a

 5 form determined by the Administrator and must contain the social

 6 security number of each such person. Upon receipt of the request,

 7 the Administrator shall make such a comparison and, if it appears

 8 from the information submitted that a person is simultaneously

 9 claiming benefits under chapter 612 of NRS and under chapters

 10 616A to 616D, inclusive, or chapter 617 of NRS, the Administrator

 11 shall notify the Attorney General or any other appropriate law

 12 enforcement agency. The Administrator shall charge a fee to cover

 13 the actual costs of any related administrative expenses.

 14 10. The Administrator may request the Comptroller of the

 15 Currency of the United States to cause an examination of the

 16 correctness of any return or report of any national banking

 17 association rendered pursuant to the provisions of this chapter, and

 18 may in connection with the request transmit any such report or

 19 return to the Comptroller of the Currency of the United States as

 20 provided in section 3305(c) of the Internal Revenue Code of 1954.

 21 11. If any employee or member of the Board of Review, the

 22 Administrator or any employee of the Administrator, in violation of

 23 the provisions of this section, discloses information obtained from

 24 any employing unit or person in the administration of this chapter,

 25 or if any person who has obtained a list of applicants for work, or of

 26 claimants or recipients of benefits pursuant to this chapter uses or

 27 permits the use of the list for any political purpose, he or she is

 28 guilty of a gross misdemeanor.

 29 12. All letters, reports or communications of any kind, oral or

 30 written, from thc employer or employee to each other or to the

 31 Division or any of its agents, representatives or employees are

 32 privileged and must not be the subject matter or basis for any

 33 lawsuit if the letter, report or communication is written, sent,

 34 delivered or prepared pursuant to the requirements of this chapter.

 35 Sec. 58. NRS 616B.012 is hereby amended to read as follows:

 36 616B.012 1. Except as otherwise provided in this section and

 37 NRS 239.0115, 616B.015, 616B.021 and 616C.205, information

 38 obtained from any insurer, employer or employee is confidential and

 39 may not be disclosed or be open to public inspection in any manner

 40 which would reveal the person’s identity.

 41 2. Any claimant or legal representative of the claimant is

 42 entitled to information from the records of the insurer, to the extent

 43 necessary for the proper presentation of a claim in any proceeding

 44 under chapters 616A to 616D, inclusive, or chapter 617 of NRS.

 – 32 –

- *IP1*

 1 3. The Division and Administrator are entitled to information

 2 from the records of the insurer which is necessary for the

 3 performance of their duties. The Administrator may, by regulation,

 4 prescribe the manner in which otherwise confidential information

 5 may be made available to:

 6 (a) Any agency of this or any other state charged with the

 7 administration or enforcement of laws relating to industrial

 8 insurance, unemployment compensation, public assistance or labor

 9 law and industrial relations;

 10 (b) Any state or local agency for the enforcement of child

 11 support;

 12 (c) The Internal Revenue Service of the Department of the

 13 Treasury;

 14 (d) The Department of Taxation; and

 15 (e) The State Contractors’ Board in the performance of its duties

 16 to enforce the provisions of chapter 624 of NRS.

 17 ?? Information obtained in connection with the administration of a

 18 program of industrial insurance may be made available to persons or

 19 agencies for purposes appropriate to the operation of a program of

 20 industrial insurance.

 21 4. Upon written request made by a public officer of a local

 22 government, an insurer shall furnish from its records the name,

 23 address and place of employment of any person listed in its records.

 24 The request must set forth the social security number of the person

 25 about whom the request is made and contain a statement signed by

 26 proper authority of the local government certifying that the request

 27 is made to allow the proper authority to enforce a law to recover a

 28 debt or obligation owed to the local government. Except as

 29 otherwise provided in NRS 239.0115, the information obtained by

 30 the local government is confidential and may not be used or

 31 disclosed for any purpose other than the collection of a debt or

 32 obligation owed to the local government. The insurer may charge a

 33 reasonable fee for the cost of providing the requested information.

 34 5. To further a current criminal investigation, the chief

 35 executive officer of any law enforcement agency of this State may

 36 submit to the Administrator a written request for the name, address

 37 and place of employment of any person listed in the records of an

 38 insurer. The request must set forth the social security number of the

 39 person about whom the request is made and contain a statement

 40 signed by the chief executive officer certifying that the request is

 41 made to further a criminal investigation currently being conducted

 42 by the agency. Upon receipt of a request, the Administrator shall

 43 instruct the insurer to furnish the information requested. Upon

 44 receipt of such an instruction, the insurer shall furnish the

 – 33 –

- *IP1*

 1 information requested. The insurer may charge a reasonable fee to

 2 cover any related administrative expenses.

 3 6. Upon request by the Department of Taxation, the

 4 Administrator shall provide:

 5 (a) Lists containing the names and addresses of employers; and

 6 (b) Other information concerning employers collected and

 7 maintained by the Administrator or the Division to carry out the

 8 purposes of chapters 616A to 616D, inclusive, or chapter 617 of

 9 NRS,

 10 ?? to the Department for its use in verifying returns for the taxes

 11 imposed pursuant to chapters 363A and 363B of NRS [.] and

 12 sections 3 to 45, inclusive, of this act. The Administrator may

 13 charge a reasonable fee to cover any related administrative

 14 expenses.

 15 7. Any person who, in violation of this section, discloses

 16 information obtained from files of claimants or policyholders or

 17 obtains a list of claimants or policyholders under chapters 616A to

 18 616D, inclusive, or chapter 617 of NRS and uses or permits the use

 19 of the list for any political purposes, is guilty of a gross

 20 misdemeanor.

 21 8. All letters, reports or communications of any kind, oral or

 22 written, from the insurer, or any of its agents, representatives or

 23 employees are privileged and must not be the subject matter or basis

 24 for any lawsuit if the letter, report or communication is written, sent,

 25 delivered or prepared pursuant to the requirements of chapters 616A

 26 to 616D, inclusive, or chapter 617 of NRS.

 27 9. The provisions of this section do not prohibit the

 28 Administrator or the Division from disclosing any nonproprietary

 29 information relating to an uninsured employer or proof of industrial

 30 insurance.

 31 Sec. 59. NRS 645B.060 is hereby amended to read as follows:

 32 645B.060 1. Subject to the administrative control of the

 33 Director of the Department of Business and Industry, the

 34 Commissioner shall exercise general supervision and control over

 35 mortgage brokers and mortgage agents doing business in this State.

 36 2. In addition to the other duties imposed upon him or her by

 37 law, the Commissioner shall:

 38 (a) Adopt regulations:

 39 (1) Setting forth the requirements for an investor to acquire

 40 ownership of or a beneficial interest in a loan secured by a lien on

 41 real property. The regulations must include, without limitation, the

 42 minimum financial conditions that the investor must comply with

 43 before becoming an investor.

 – 34 –

- *IP1*

 1 (2) Establishing reasonable limitations and guidelines on

 2 loans made by a mortgage broker to a director, officer, mortgage

 3 agent or employee of the mortgage broker.

 4 (b) Adopt any other regulations that are necessary to carry out

 5 the provisions of this chapter, except as to loan brokerage fees.

 6 (c) Conduct such investigations as may be necessary to

 7 determine whether any person has violated any provision of this

 8 chapter, a regulation adopted pursuant to this chapter or an order of

 9 the Commissioner.

 10 (d) Except as otherwise provided in subsection 4, conduct an

 11 annual examination of each mortgage broker doing business in this

 12 State. The annual examination must include, without limitation, a

 13 formal exit review with the mortgage broker. The Commissioner

 14 shall adopt regulations prescribing:

 15 (1) Standards for determining the rating of each mortgage

 16 broker based upon the results of the annual examination; and

 17 (2) Procedures for resolving any objections made by the

 18 mortgage broker to the results of the annual examination. The

 19 results of the annual examination may not be opened to public

 20 inspection pursuant to NRS 645B.090 until after a period of time set

 21 by the Commissioner to determine any objections made by the

 22 mortgage broker.

 23 (e) Conduct such other examinations, periodic or special audits,

 24 investigations and hearings as may be necessary for the efficient

 25 administration of the laws of this State regarding mortgage brokers

 26 and mortgage agents. The Commissioner shall adopt regulations

 27 specifying the general guidelines that will be followed when a

 28 periodic or special audit of a mortgage broker is conducted pursuant

 29 to this chapter.

 30 (f) Classify as confidential certain records and information

 31 obtained by the Division when those matters are obtained from a

 32 governmental agency upon the express condition that they remain

 33 confidential. This paragraph does not limit examination by:

 34 (1) The Legislative Auditor; or

 35 (2) The Department of Taxation if necessary to carry out the

 36 provisions of chapter 363A of NRS [.] or sections 3 to 45, inclusive,

 37 of this act.

 38 (g) Conduct such examinations and investigations as are

 39 necessary to ensure that mortgage brokers and mortgage agents meet

 40 the requirements of this chapter for obtaining a license, both at the

 41 time of the application for a license and thereafter on a continuing

 42 basis.

 43 3. For each special audit, investigation or examination, a

 44 mortgage broker or mortgage agent shall pay a fee based on the rate

 45 established pursuant to NRS 645F.280.

 – 35 –

- *IP1*

 1 4. The Commissioner may conduct examinations of a mortgage

 2 broker, as described in paragraph (d) of subsection 2, on a biennial

 3 instead of an annual basis if the mortgage broker:

 4 (a) Received a rating in the last annual examination that meets a

 5 threshold determined by the Commissioner;

 6 (b) Has not had any adverse change in financial condition since

 7 the last annual examination, as shown by financial statements of the

 8 mortgage broker;

 9 (c) Has not had any complaints received by the Division that

 10 resulted in any administrative action by the Division; and

 11 (d) Does not maintain any trust accounts pursuant to NRS

 12 645B.170 or 645B.175 or arrange loans funded by private investors.

 13 Sec. 60. NRS 645B.670 is hereby amended to read as follows:

 14 645B.670 Except as otherwise provided in NRS 645B.690:

 15 1. For each violation committed by an applicant for a license

 16 issued pursuant to this chapter, whether or not the applicant is issued

 17 a license, the Commissioner may impose upon the applicant an

 18 administrative fine of not more than $25,000 if the applicant:

 19 (a) Has knowingly made or caused to be made to the

 20 Commissioner any false representation of material fact;

 21 (b) Has suppressed or withheld from the Commissioner any

 22 information which the applicant possesses and which, if submitted

 23 by the applicant, would have rendered the applicant ineligible to be

 24 licensed pursuant to the provisions of this chapter; or

 25 (c) Has violated any provision of this chapter, a regulation

 26 adopted pursuant to this chapter or an order of the Commissioner in

 27 completing and filing his or her application for a license or during

 28 the course of the investigation of his or her application for a license.

 29 2. For each violation committed by a mortgage broker, the

 30 Commissioner may impose upon the mortgage broker an

 31 administrative fine of not more than $25,000, may suspend, revoke

 32 or place conditions upon the mortgage broker’s license, or may do

 33 both, if the mortgage broker, whether or not acting as such:

 34 (a) Is insolvent;

 35 (b) Is grossly negligent or incompetent in performing any act for

 36 which the mortgage broker is required to be licensed pursuant to the

 37 provisions of this chapter;

 38 (c) Does not conduct his or her business in accordance with law

 39 or has violated any provision of this chapter, a regulation adopted

 40 pursuant to this chapter or an order of the Commissioner;

 41 (d) Is in such financial condition that the mortgage broker

 42 cannot continue in business with safety to his or her customers;

 43 (e) Has made a material misrepresentation in connection with

 44 any transaction governed by this chapter;

 – 36 –

- *IP1*

 1 (f) Has suppressed or withheld from a client any material facts,

 2 data or other information relating to any transaction governed by the

 3 provisions of this chapter which the mortgage broker knew or, by

 4 the exercise of reasonable diligence, should have known;

 5 (g) Has knowingly made or caused to be made to the

 6 Commissioner any false representation of material fact or has

 7 suppressed or withheld from the Commissioner any information

 8 which the mortgage broker possesses and which, if submitted by the

 9 mortgage broker, would have rendered the mortgage broker

 10 ineligible to be licensed pursuant to the provisions of this chapter;

 11 (h) Has failed to account to persons interested for all money

 12 received for a trust account;

 13 (i) Has refused to permit an examination by the Commissioner

 14 of his or her books and affairs or has refused or failed, within a

 15 reasonable time, to furnish any information or make any report that

 16 may be required by the Commissioner pursuant to the provisions of

 17 this chapter or a regulation adopted pursuant to this chapter;

 18 (j) Has been convicted of, or entered or agreed to enter a plea of

 19 guilty or nolo contendere to, a felony in a domestic, foreign or

 20 military court within the 7 years immediately preceding the date of

 21 the application, or at any time if such felony involved an act of

 22 fraud, dishonesty or a breach of trust, moral turpitude or money

 23 laundering.

 24 (k) Has refused or failed to pay, within a reasonable time, any

 25 fees, assessments, costs or expenses that the mortgage broker is

 26 required to pay pursuant to this chapter or a regulation adopted

 27 pursuant to this chapter;

 28 (1) Has failed to satisfy a claim made by a client which has been

 29 reduced to judgment;

 30 (m) Has failed to account for or to remit any money of a client

 31 within a reasonable time after a request for an accounting or

 32 remittal;

 33 (n) Has commingled the money or other property of a client

 34 with his or her own or has converted the money or property of

 35 others to his or her own use;

 36 (o) Has engaged in any other conduct constituting a deceitful,

 37 fraudulent or dishonest business practice;

 38 (p) Has repeatedly violated the policies and procedures of the

 39 mortgage broker;

 40 (q) Has failed to exercise reasonable supervision over the

 41 activities of a mortgage agent as required by NRS 645B.460;

 42 (r) Has instructed a mortgage agent to commit an act that would

 43 be cause for the revocation of the license of the mortgage broker,

 44 whether or not the mortgage agent commits the act;

 – 37 –

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 1 (s) Has employed a person as a mortgage agent or authorized a

 2 person to be associated with the mortgage broker as a mortgage

 3 agent at a time when the mortgage broker knew or, in light of all the

 4 surrounding facts and circumstances, reasonably should have known

 5 that the person:

 6 (1) Had been convicted of, or entered or agreed to enter a

 7 plea of guilty or nolo contendere to, a felony in a domestic, foreign

 8 or military court within the 7 years immediately preceding the date

 9 of application, or at any time if such felony involved an act of fraud,

 10 dishonesty or a breach of trust, moral turpitude or money

 11 laundering; or

 12 (2) Had a license or registration as a mortgage agent,

 13 mortgage banker, mortgage broker or residential mortgage loan

 14 originator revoked in this State or any other jurisdiction or had a

 15 financial services license or registration revoked within the

 16 immediately preceding 10 years;

 17 (t) Has violated NRS 645C.557; or

 18 (u) Has failed to pay a tax as required pursuant to the provisions

 19 of chapter 363A of NRS [.] or sections 3 to 45, inclusive, of this

 20 act.

 21 3. For each violation committed by a mortgage agent, the

 22 Commissioner may impose upon the mortgage agent an

 23 administrative fine of not more than $25,000, may suspend, revoke

 24 or place conditions upon the mortgage agent’s license, or may do

 25 both, if the mortgage agent, whether or not acting as such:

 26 (a) Is grossly negligent or incompetent in performing any act for

 27 which the mortgage agent is required to be licensed pursuant to the

 28 provisions of this chapter;

 29 (b) Has made a material misrepresentation in connection with

 30 any transaction governed by this chapter;

 31 (c) Has suppressed or withheld from a client any material facts,

 32 data or other information relating to any transaction governed by the

 33 provisions of this chapter which the mortgage agent knew or, by the

 34 exercise of reasonable diligence, should have known;

 35 (d) Has knowingly made or caused to be made to the

 36 Commissioner any false representation of material fact or has

 37 suppressed or withheld from the Commissioner any information

 38 which the mortgage agent possesses and which, if submitted by the

 39 mortgage agent, would have rendered the mortgage agent ineligible

 40 to be licensed pursuant to the provisions of this chapter;

 41 (e) Has been convicted of, or entered or agreed to enter a plea of

 42 guilty or nolo contendere to, a felony in a domestic, foreign or

 43 military court within the 7 years immediately preceding the date of

 44 the application, or at any time if such felony involved an act of

 – 38 –

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 1 fraud, dishonesty or a breach of trust, moral turpitude or money

 2 laundering.

 3 (f) Has failed to account for or to remit any money of a client

 4 within a reasonable time after a request for an accounting or

 5 remittal;

 6 (g) Has commingled the money or other property of a client

 7 with his or her own or has converted the money or property of

 8 others to his or her own use;

 9 (h) Has engaged in any other conduct constituting a deceitful,

 10 fraudulent or dishonest business practice;

 11 (i) Has violated NRS 645C.557;

 12 (j) Has repeatedly violated the policies and procedures of the

 13 mortgage broker with whom the mortgage agent is associated or by

 14 whom he or she is employed; or

 15 (k) Has violated any provision of this chapter, a regulation

 16 adopted pursuant to this chapter or an order of the Commissioner or

 17 has assisted or offered to assist another person to commit such a

 18 violation.

 19 Sec. 61. NRS 645E.300 is hereby amended to read as follows:

 20 645E.300 1. Subject to the administrative control of the

 21 Director of the Department of Business and Industry, the

 22 Commissioner shall exercise general supervision and control over

 23 mortgage bankers doing business in this State.

 24 2. In addition to the other duties imposed upon him or her by

 25 law, the Commissioner shall:

 26 (a) Adopt regulations establishing reasonable limitations and

 27 guidelines on loans made by a mortgage banker to a director, officer

 28 or employee of the mortgage banker.

 29 (b) Adopt any other regulations that are necessary to carry out

 30 the provisions of this chapter, except as to loan fees.

 31 (c) Conduct such investigations as may be necessary to

 32 determine whether any person has violated any provision of this

 33 chapter, a regulation adopted pursuant to this chapter or an order of

 34 the Commissioner.

 35 (d) Except as otherwise provided in subsection 4, conduct an

 36 annual examination of each mortgage banker doing business in this

 37 State.

 38 (e) Conduct such other examinations, periodic or special audits,

 39 investigations and hearings as may be necessary for the efficient

 40 administration of the laws of this State regarding mortgage bankers.

 41 (f) Classify as confidential certain records and information

 42 obtained by the Division when those matters are obtained from a

 43 governmental agency upon the express condition that they remain

 44 confidential. This paragraph does not limit examination by:

 45 (1) The Legislative Auditor; or

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 1 (2) The Department of Taxation if necessary to carry out the

 2 provisions of chapter 363A of NRS [.] or sections 3 to 45, inclusive,

 3 of this act.

 4 (g) Conduct such examinations and investigations as are

 5 necessary to ensure that mortgage bankers meet the requirements of

 6 this chapter for obtaining a license, both at the time of the

 7 application for a license and thereafter on a continuing basis.

 8 3. For each special audit, investigation or examination, a

 9 mortgage banker shall pay a fee based on the rate established

 10 pursuant to NRS 645F.280.

 11 4. The Commissioner may conduct biennial examinations of a

 12 mortgage banker instead of annual examinations, as described in

 13 paragraph (d) of subsection 2, if the mortgage banker:

 14 (a) Received a rating in the last annual examination that meets a

 15 threshold determined by the Commissioner;

 16 (b) Has not had any adverse change in financial condition since

 17 the last annual examination, as shown by financial statements of the

 18 mortgage banker; and

 19 (c) Has not had any complaints received by the Division that

 20 resulted in any administrative action by the Division.

 21 Sec. 62. NRS 645E.670 is hereby amended to read as follows:

 22 645E.670 1. For each violation committed by an applicant,

 23 whether or not the applicant is issued a license, the Commissioner

 24 may impose upon the applicant an administrative fine of not more

 25 than $25,000 if the applicant:

 26 (a) Has knowingly made or caused to be made to the

 27 Commissioner any false representation of material fact;

 28 (b) Has suppressed or withheld from the Commissioner any

 29 information which the applicant possesses and which, if submitted

 30 by the applicant, would have rendered the applicant ineligible to be

 31 licensed pursuant to the provisions of this chapter; or

 32 (c) Has violated any provision of this chapter, a regulation

 33 adopted pursuant to this chapter or an order of the Commissioner in

 34 completing and filing his or her application for a license or during

 35 the course of the investigation of his or her application for a license.

 36 2. For each violation committed by a licensee, the

 37 Commissioner may impose upon the licensee an administrative fine

 38 of not more than $25,000, may suspend, revoke or place conditions

 39 upon the license, or may do both, if the licensee, whether or not

 40 acting as such:

 41 (a) Is insolvent;

 42 (b) Is grossly negligent or incompetent in performing any act for

 43 which the licensee is required to be licensed pursuant to the

 44 provisions of this chapter;

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 1 (c) Does not conduct his or her business in accordance with law

 2 or has violated any provision of this chapter, a regulation adopted

 3 pursuant to this chapter or an order of the Commissioner;

 4 (d) Is in such financial condition that the licensee cannot

 5 continue in business with safety to his or her customers;

 6 (e) Has made a material misrepresentation in connection with

 7 any transaction governed by this chapter;

 8 (f) Has suppressed or withheld from a client any material facts,

 9 data or other information relating to any transaction governed by the

 10 provisions of this chapter which the licensee knew or, by the

 11 exercise of reasonable diligence, should have known;

 12 (g) Has knowingly made or caused to be made to the

 13 Commissioner any false representation of material fact or has

 14 suppressed or withheld from the Commissioner any information

 15 which the licensee possesses and which, if submitted by the

 16 licensee, would have rendered the licensee ineligible to be licensed

 17 pursuant to the provisions of this chapter;

 18 (h) Has failed to account to persons interested for all money

 19 received for a trust account;

 20 (i) Has refused to permit an examination by the Commissioner

 21 of his or her books and affairs or has refused or failed, within a

 22 reasonable time, to furnish any information or make any report that

 23 may be required by the Commissioner pursuant to the provisions of

 24 this chapter or a regulation adopted pursuant to this chapter;

 25 (j) Has been convicted of, or entered or agreed to enter a plea of

 26 nolo contendere to, a felony in a domestic, foreign or military court

 27 within the 7 years immediately preceding the date of the application,

 28 or at any time if such felony involved an act of fraud, dishonesty or

 29 a breach of trust, moral turpitude or money laundering;

 30 (k) Has refused or failed to pay, within a reasonable time, any

 31 fees, assessments, costs or expenses that the licensee is required to

 32 pay pursuant to this chapter or a regulation adopted pursuant to this

 33 chapter;

 34 (1) Has failed to pay a tax as required pursuant to the provisions

 35 of chapter 363A of NRS [;] or sections 3 to 45, inclusive, of this

 36 act;

 37 (m) Has failed to satisfy a claim made by a client which has

 38 been reduced to judgment;

 39 (n) Has failed to account for or to remit any money of a client

 40 within a reasonable time after a request for an accounting or

 41 remittal;

 42 (o) Has violated NRS 645C.557;

 43 (p) Has commingled the money or other property of a client

 44 with his or her own or has converted the money or property of

 45 others to his or her own use; or

 – 41 –

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 1 (q) Has engaged in any other conduct constituting a deceitful,

 2 fraudulent or dishonest business practice.

 3 3. An order that imposes discipline and the findings of fact and

 4 conclusions of law supporting that order are public records.

 5 Sec. 63. NRS 658.151 is hereby amended to read as follows:

 6 658.151 1. The Commissioner may forthwith take possession

 7 of the business and property of any depository institution to which

 8 this title or title 56 of NRS applies when it appears that the

 9 depository institution:

 10 (a) Has violated its charter or any laws applicable thereto.

 11 (b) Is conducting its business in an unauthorized or unsafe

 12 manner.

 13 (c) Is in an unsafe or unsound condition to transact its business.

 14 (d) Has an impairment of its stockholders’ or members’ equity.

 15 (e) Has refused to pay its depositors in accordance with the

 16 terms on which such deposits were received, or has refused to pay

 17 its holders of certificates of indebtedness or investment in

 18 accordance with the terms upon which those certificates of

 19 indebtedness or investment were sold.

 20 (f) Has become or is in imminent danger of becoming otherwise

 21 insolvent.

 22 (g) Has neglected or refused to comply with the terms of a

 23 lawful order of the Commissioner.

 24 (h) Has refused, upon proper demand, to submit its records,

 25 affairs and concerns for inspection and examination of an appointed

 26 or authorized examiner of the Commissioner.

 27 (i) Has made a voluntary assignment of its assets to trustees.

 28 (j) Has failed to pay a tax as required pursuant to the provisions

 29 of chapter 363A of NRS [.] or sections 3 to 45, inclusive, of this

 30 act.

 31 2. The Commissioner also may forthwith take possession of the

 32 business and property of any depository institution to which this title

 33 or title 56 of NRS applies when it appears that the officers of the

 34 depository institution have refused to be examined upon oath

 35 regarding its affairs.

 36 Sec. 64. NRS 665.133 is hereby amended to read as follows:

 37 665.133 1. The records and information described in NRS

 38 665.130 may be disclosed to:

 39 (a) An agency of the Federal Government or of another state

 40 which regulates the financial institution which is the subject of the

 41 records or information;

 42 (b) The Director of the Department of Business and Industry for

 43 the Director’s confidential use;

 – 42 –

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 1 (c) The State Board of Finance for its confidential use, if the

 2 report or other information is necessary for the State Board of

 3 Finance to perform its duties under this title;

 4 (d) The Department of Taxation for its use in carrying out the

 5 provisions of chapter 363A of NRS [;] and sections 3 to 45,

 6 inclusive, of this act;

 7 (e) An entity which insures or guarantees deposits;

 8 (f) A public officer authorized to investigate criminal charges in

 9 connection with the affairs of the depository institution;

 10 (g) A person preparing a proposal for merging with or acquiring

 11 an institution or holding company, but only after notice of the

 12 disclosure has been given to the institution or holding company;

 13 (h) Any person to whom the subject of the report has authorized

 14 the disclosure;

 15 (i) Any other person if the Commissioner determines, after

 16 notice and opportunity for hearing, that disclosure is in the public

 17 interest and outweighs any potential harm to the depository

 18 institution and its stockholders, members, depositors and creditors;

 19 and

 20 (j) Any court in a proceeding initiated by the Commissioner

 21 concerning the financial institution.

 22 2. All the reports made available pursuant to this section

 23 remain the property of the Division of Financial Institutions, and no

 24 person, agency or authority to whom the reports are made available,

 25 or any officer, director or employee thereof, may disclose any of the

 26 reports or any information contained therein, except in published

 27 statistical material that does not disclose the affairs of any natural

 28 person or corporation.

 29 Sec. 65. NRS 669.275 is hereby amended to read as follows:

 30 669.275 1. The Commissioner may require a licensee to

 31 provide an audited financial statement prepared by an independent

 32 certified public accountant licensed to do business in this State.

 33 2. On the fourth Monday in January of each year, each licensee

 34 shall submit to the Commissioner a list of stockholders required to

 35 be maintained pursuant to paragraph (c) of subsection 1 of NRS

 36 78.105 or the list of members required to be maintained pursuant to

 37 paragraph (a) of subsection 1 of NRS 86.241, verified by the

 38 president or a manager, as appropriate.

 39 3. The list of members required to be maintained pursuant to

 40 paragraph (a) of subsection 1 of NRS 86.241 must include the

 41 percentage of each member’s interest in the company, in addition to

 42 the requirements set forth in that section.

 43 4. Except as otherwise provided in NRS 239.0115, any

 44 document submitted pursuant to this section is confidential. This

 45 subsection does not limit the examination of any document by the

 – 43 –

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 1 Department of Taxation if necessary to carry out the provisions of

 2 sections 3 to 45, inclusive, of this act.

 3 Sec. 66. NRS 669.2825 is hereby amended to read as follows:

 4 669.2825 1. The Commissioner may institute disciplinary

 5 action or forthwith initiate proceedings to take possession of the

 6 business and property of any retail trust company when it appears

 7 that the retail trust company:

 8 (a) Has violated its charter or any state or federal laws

 9 applicable to the business of a trust company.

 10 (b) Is conducting its business in an unauthorized or unsafe

 11 manner.

 12 (c) Is in an unsafe or unsound condition to transact its business.

 13 (d) Has an impairment of its stockholders’ equity.

 14 (e) Has refused to pay or transfer account assets to its account

 15 holders as required by the terms of the accounts’ governing

 16 instruments.

 17 (f) Has become insolvent.

 18 (g) Has neglected or refused to comply with the terms of a

 19 lawful order of the Commissioner.

 20 (h) Has refused, upon proper demand, to submit its records,

 21 affairs and concerns for inspection and examination of an appointed

 22 or authorized examiner of the Commissioner.

 23 (i) Has made a voluntary assignment of its assets to

 24 receivers, conservators, trustees or creditors without complying with

 25 NRS 669.230.

 26 (j) Has failed to pay a tax as required pursuant to the provisions

 27 of chapter 363A of NRS [.] or sections 3 to 45, inclusive, of this

 28 act.

 29 (k) Has materially and willfully breached its fiduciary duties to

 30 its customers.

 31 (l) Has failed to properly disclose all fees, interest and other

 32 charges to its customers.

 33 (m) Has willfully engaged in material conflicts of interest

 34 regarding a customer’s account.

 35 (n) Has made intentional material misrepresentations regarding

 36 any aspect of the services performed or proposed to be performed by

 37 the retail trust company.

 38 2. The Commissioner also may forthwith initiate proceedings

 39 to take possession of the business and property of any trust company

 40 when it appears that the officers of the trust company have refused

 41 to be examined upon oath regarding its affairs.

 42 Sec. 67. NRS 669.2847 is hereby amended to read as follows:

 43 669.2847 1. If the Commissioner has reason to believe that

 44 grounds for revocation or suspension of a license exist, the

 45 Commissioner shall give at least 20 days’ written notice to the

 – 44 –

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 1 licensee stating the contemplated action and, in general, the grounds

 2 therefor and set a date for a hearing.

 3 2. At the conclusion of a hearing, the Commissioner shall:

 4 (a) Enter a written order dismissing the charges, revoking the

 5 license or suspending the license for a period of not more than 60

 6 days, which period must include any prior temporary suspension.

 7 The Commissioner shall send a copy of the order to the licensee by

 8 registered or certified mail.

 9 (b) Impose upon the licensee an administrative fine of not more

 10 than $10,000 for each violation by the licensee of any provision of

 11 this chapter or any regulation adopted pursuant thereto.

 12 (c) If a fine is imposed pursuant to this section, enter such order

 13 as is necessary to recover the costs of the proceeding, including his

 14 or her investigative costs and attorney’s fees.

 15 3. The grounds for revocation or suspension of a license are

 16 that:

 17 (a) The licensee has failed to pay the annual license fee;

 18 (b) The licensee, either knowingly or without any exercise of

 19 due care to prevent it, has violated any provision of this chapter or

 20 any regulation adopted pursuant thereto or any lawful order of the

 21 Division of Financial Institutions;

 22 (c) The licensee has failed to pay a tax as required pursuant to

 23 the provisions of chapter 363A of NRS [;] or sections 3 to 45,

 24 inclusive, of this act;

 25 (d) Any fact or condition exists which would have justified the

 26 Commissioner in denying the licensee’s original application for a

 27 license pursuant to the provisions of this chapter; or

 28 (e) The licensee:

 29 (1) Failed to open an office for the conduct of the business

 30 authorized by his or her license within 180 days after the date the

 31 license was issued; or

 32 (2) Has failed to remain open for the conduct of the business

 33 for a period of 30 days without good cause therefor.

 34 4. An order suspending or revoking a license becomes effective

 35 5 days after being entered unless the order specifies otherwise or a

 36 stay is granted.

 37 Sec. 68. NRS 669.285 is hereby amended to read as follows:

 38 669.285 Except as otherwise provided in NRS 239.0115, any

 39 application and personal or financial records submitted by a person

 40 pursuant to the provisions of this chapter and any personal or

 41 financial records or other documents obtained by the Division of

 42 Financial Institutions pursuant to an examination or audit conducted

 43 by the Division are confidential and may be disclosed only to:

 – 45 –

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 1 1. The Division, any authorized employee of the Division and

 2 any state or federal agency investigating the activities covered under

 3 the provisions of this chapter; [and]

 4 2. The Department of Taxation for its use in carrying out the

 5 provisions of sections 3 to 45, inclusive, of this act; and

 6 3. Any person when the Commissioner, in the Commissioner’s

 7 discretion, determines that the interests of the public that would be

 8 protected by disclosure outweigh the interest of any person in the

 9 confidential information not being disclosed.

 10 Sec. 69. NRS 669A.310 is hereby amended to read as follows:

 11 669A.310 1. Except as otherwise provided in this section,

 12 any application and personal or financial records submitted by a

 13 person pursuant to the provisions of this chapter, any personal or

 14 financial records or other documents obtained by the Division of

 15 Financial Institutions pursuant to an examination or audit conducted

 16 by the Division pursuant to this chapter and any other private

 17 information relating to a family trust company are confidential and

 18 may be disclosed only to:

 19 (a) The Division, any authorized employee of the Division and a

 20 state or federal agency investigating activities regulated pursuant to

 21 this chapter; [and]

 22 (b) The Department of Taxation for its use in carrying out the

 23 provisions of sections 3 to 45, inclusive, of this act; and

 24 (c) Any other person if the Commissioner, in the

 25 Commissioner’s discretion, determines that the interests of

 26 the public in disclosing the information outweigh the interests of the

 27 person about whom the information pertains in not disclosing the

 28 information.

 29 2. The Commissioner shall give to the family trust company to

 30 which the information relates 10-days’ prior written notice of intent

 31 to disclose confidential information directly or indirectly to a person

 32 pursuant to paragraph [(b)] (c) of subsection 1. Any family trust

 33 company which receives such a notice may object to the disclosure

 34 of the confidential information and will be afforded the right to a

 35 hearing in accordance with the provisions of chapter 233B of NRS.

 36 If a family trust company requests a hearing, the Commissioner may

 37 not reveal confidential information prior to the conclusion of the

 38 hearing and a ruling. Prior to dissemination of any confidential

 39 information, the Commissioner shall require a written agreement not

 40 to reveal the confidential information by the party receiving the

 41 confidential information. In no event shall the Commissioner

 42 disclose confidential information to the general public, any

 43 competitor or any potential competitor of a family trust company.

 44 3. Nothing in this chapter is intended to preclude a law

 45 enforcement officer from gaining access to otherwise confidential

 – 46 –

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 1 records by subpoena, court order, search warrant or other lawful

 2 means. Notwithstanding any other provision of this chapter, the

 3 Commissioner shall have the ability to share information with other

 4 out of state or federal regulators with whom the Department of

 5 Business and Industry has an agreement regarding the sharing of

 6 information. Nothing in this chapter is intended to preclude any

 7 agency of this State from gaining access to otherwise confidential

 8 records in accordance with any applicable law.

 9 Sec. 70. NRS 673.484 is hereby amended to read as follows:

 10 673.484 The Commissioner may after notice and hearing

 11 suspend or revoke the charter of any association for:

 12 1. Repeated failure to abide by the provisions of this chapter or

 13 the regulations adopted thereunder.

 14 2. Failure to pay a tax as required pursuant to the provisions of

 15 chapter 363A of NRS [.] or sections 3 to 45, inclusive, of this act.

 16 Sec. 71. NRS 675.440 is hereby amended to read as follows:

 17 675.440 1. If the Commissioner has reason to believe that

 18 grounds for revocation or suspension of a license exist, he or she

 19 shall give 20 days’ written notice to the licensee stating the

 20 contemplated action and, in general, the grounds therefor and set a

 21 date for a hearing.

 22 2. At the conclusion of a hearing, the Commissioner shall:

 23 (a) Enter a written order either dismissing the charges, revoking

 24 the license, or suspending the license for a period of not more than

 25 60 days, which period must include any prior temporary suspension.

 26 A copy of the order must be sent by registered or certified mail to

 27 the licensee.

 28 (b) Impose upon the licensee an administrative fine of not more

 29 than $10,000 for each violation by the licensee of any provision of

 30 this chapter or any lawful regulation adopted under it.

 31 (c) If a fine is imposed pursuant to this section, enter such order

 32 as is necessary to recover the costs of the proceeding, including his

 33 or her investigative costs and attorney’s fees.

 34 3. The grounds for revocation or suspension of a license are

 35 that:

 36 (a) The licensee has failed to pay the annual license fee;

 37 (b) The licensee, either knowingly or without any exercise of

 38 due care to prevent it, has violated any provision of this chapter or

 39 any lawful regulation adopted under it;

 40 (c) The licensee has failed to pay a tax as required pursuant to

 41 the provisions of chapter 363A of NRS [;] or sections 3 to 45,

 42 inclusive, of this act;

 43 (d) Any fact or condition exists which would have justified the

 44 Commissioner in denying the licensee’s original application for a

 45 license hereunder; or

 – 47 –

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 1 (e) The applicant failed to open an office for the conduct of the

 2 business authorized under this chapter within 120 days after the date

 3 the license was issued, or has failed to remain open for the conduct

 4 of the business for a period of 120 days without good cause therefor.

 5 4. Any revocation or suspension applies only to the license

 6 granted to a person for the particular office for which grounds for

 7 revocation or suspension exist.

 8 5. An order suspending or revoking a license becomes effective

 9 5 days after being entered unless the order specifies otherwise or a

 10 stay is granted.

 11 Sec. 72. NRS 677.510 is hereby amended to read as follows:

 12 677.510 1. If the Commissioner has reason to believe that

 13 grounds for revocation or suspension of a license exist, he or she

 14 shall give 20 days’ written notice to the licensee stating the

 15 contemplated action and, in general, the grounds therefor and set a

 16 date for a hearing.

 17 2. At the conclusion of a hearing, the Commissioner shall:

 18 (a) Enter a written order either dismissing the charges, or

 19 revoking the license, or suspending the license for a period of not

 20 more than 60 days, which period must include any prior temporary

 21 suspension. A copy of the order must be sent by registered or

 22 certified mail to the licensee.

 23 (b) Impose upon the licensee an administrative fine of not more

 24 than $10,000 for each violation by the licensee of any provision of

 25 this chapter or any lawful regulation adopted pursuant thereto.

 26 (c) If a fine is imposed pursuant to this section, enter such order

 27 as is necessary to recover the costs of the proceeding, including his

 28 or her investigative costs and attorney’s fees.

 29 3. The grounds for revocation or suspension of a license are

 30 that:

 31 (a) The licensee has failed to pay the annual license fee;

 32 (b) The licensee, either knowingly or without any exercise of

 33 due care to prevent it, has violated any provision of this chapter, or

 34 any lawful regulation adopted pursuant thereto;

 35 (c) The licensee has failed to pay a tax as required pursuant to

 36 the provisions of chapter 363A of NRS [;] or sections 3 to 45,

 37 inclusive, of this act;

 38 (d) Any fact or condition exists which would have justified the

 39 Commissioner in denying the licensee’s original application for a

 40 license hereunder; or

 41 (e) The applicant failed to open an office for the conduct of the

 42 business authorized under this chapter within 120 days after the date

 43 the license was issued, or has failed to remain open for the conduct

 44 of the business for a period of 120 days without good cause therefor.

 – 48 –

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 1 4. Any revocation or suspension applies only to the license

 2 granted to a person for the particular office for which grounds for

 3 revocation or suspension exist.

 4 5. An order suspending or revoking a license becomes effective

 5 5 days after being entered unless the order specifies otherwise or a

 6 stay is granted.

 7 Sec. 73. NRS 680B.037 is hereby amended to read as follows:

 8 680B.037 [Payment]

 9 1. Except as otherwise provided in subsection 2, payment by

 10 an insurer of the tax imposed by NRS 680B.027 is in lieu of all

 11 taxes imposed by the State or any city, town or county upon

 12 premiums or upon income of insurers and of franchise, privilege or

 13 other taxes measured by income of the insurer.

 14 2. The provisions of subsection 1 do not apply to the tax

 15 imposed pursuant to the provisions of sections 3 to 45, inclusive,

 16 of this act.

 17 Sec. 74. NRS 683A.451 is hereby amended to read as follows:

 18 683A.451 The Commissioner may refuse to issue a license or

 19 certificate pursuant to this chapter or may place any person to whom

 20 a license or certificate is issued pursuant to this chapter on

 21 probation, suspend the person for not more than 12 months, or

 22 revoke or refuse to renew his or her license or certificate, or may

 23 impose an administrative fine or take any combination of the

 24 foregoing actions, for one or more of the following causes:

 25 1. Providing incorrect, misleading, incomplete or partially

 26 untrue information in his or her application for a license.

 27 2. Violating a law regulating insurance, or violating a

 28 regulation, order or subpoena of the Commissioner or an equivalent

 29 officer of another state.

 30 3. Obtaining or attempting to obtain a license through

 31 misrepresentation or fraud.

 32 4. Misappropriating, converting or improperly withholding

 33 money or property received in the course of the business of

 34 insurance.

 35 5. Intentionally misrepresenting the terms of an actual or

 36 proposed contract of or application for insurance.

 37 6. Conviction of a felony.

 38 7. Admitting or being found to have committed an unfair trade

 39 practice or fraud.

 40 8. Using fraudulent, coercive or dishonest practices, or

 41 demonstrated incompetence, untrustworthiness or financial

 42 irresponsibility in the conduct of business in this State or elsewhere.

 43 9. Denial, suspension or revocation of a license as a producer

 44 of insurance, or its equivalent, in any other state, territory or

 45 province.

 – 49 –

- *IP1*

 1 10. Forging another’s name to an application for insurance or

 2 any other document relating to the transaction of insurance.

 3 11. Improperly using notes or other reference material to

 4 complete an examination for a license related to insurance.

 5 12. Knowingly accepting business related to insurance from an

 6 unlicensed person.

 7 13. Failing to comply with an administrative or judicial order

 8 imposing an obligation of child support.

 9 14. Failing to pay a tax as required pursuant to the provisions

 10 of chapter 363A of NRS [.] or sections 3 to 45, inclusive, of this

 11 act.

 12 Sec. 75. NRS 686C.360 is hereby amended to read as follows:

 13 686C.360 The Association is exempt from payment of all fees

 14 and all taxes levied by this state or any of its political subdivisions,

 15 except taxes on property [.] and the tax imposed pursuant to

 16 sections 3 to 45, inclusive, of this act.

 17 Sec. 76. NRS 687A.130 is hereby amended to read as follows:

 18 687A.130 The Association is exempt from payment of all fees

 19 and all taxes levied by this State or any of its subdivisions, except

 20 taxes:

 21 1. Levied on real or personal property; or

 22 2. Imposed pursuant to the provisions of chapter 363A or 363B

 23 of NRS [.] or sections 3 to 45, inclusive, of this act.

 24 Sec. 77. NRS 688C.210 is hereby amended to read as follows:

 25 688C.210 1. After notice, and after a hearing if requested, the

 26 Commissioner may suspend, revoke, refuse to issue or refuse to

 27 renew a license under this chapter if the Commissioner finds that:

 28 (a) There was material misrepresentation in the application for

 29 the license;

 30 (b) The licensee or an officer, partner, member or significant

 31 managerial employee has been convicted of fraudulent or dishonest

 32 practices, is subject to a final administrative action for

 33 disqualification, or is otherwise shown to be untrustworthy or

 34 incompetent;

 35 (c) A provider of viatical settlements has engaged in a pattern of

 36 unreasonable payments to viators;

 37 (d) The applicant or licensee has been found guilty or guilty but

 38 mentally ill of, or pleaded guilty, guilty but mentally ill or nolo

 39 contendere to, a felony or a misdemeanor involving fraud, forgery,

 40 embezzlement, obtaining money under false pretenses, larceny,

 41 extortion, conspiracy to defraud or any crime involving moral

 42 turpitude, whether or not a judgment of conviction has been entered

 43 by the court;

 44 (e) A provider of viatical settlements has entered into a viatical

 45 settlement in a form not approved pursuant to NRS 688C.220;

 – 50 –

- *IP1*

 1 (f) A provider of viatical settlements has failed to honor

 2 obligations of a viatical settlement or an agreement to purchase a

 3 viatical settlement;

 4 (g) The licensee no longer meets a requirement for initial

 5 licensure;

 6 (h) A provider of viatical settlements has assigned, transferred

 7 or pledged a viaticated policy to a person other than another

 8 provider licensed under this chapter, a purchaser of the viatical

 9 settlement or a special organization;

 10 (i) The applicant or licensee has provided materially untrue

 11 information to an insurer that issued a policy that is the subject of a

 12 viatical settlement;

 13 (j) The applicant or licensee has failed to pay a tax as required

 14 pursuant to the provisions of chapter 363A of NRS [;] or sections 3

 15 to 45, inclusive, of this act;

 16 (k) The applicant or licensee has violated a provision of this

 17 chapter or other applicable provisions; or

 18 (l) The applicant or licensee has acted in bad faith with regard to

 19 a viator.

 20 2. A suspension imposed for grounds set forth in paragraph (k)

 21 or (l) of subsection 1 must not exceed a period of 12 months.

 22 3. If the Commissioner takes action as described in subsection

 23 1, the applicant or licensee may apply in writing for a hearing before

 24 the Commissioner to determine the reasonableness of the action

 25 taken by the Commissioner, pursuant to the provisions of NRS

 26 679B.310 to 679B.370, inclusive.

 27 Sec. 78. NRS 694C.450 is hereby amended to read as follows:

 28 694C.450 1. Except as otherwise provided in this section, a

 29 captive insurer shall pay to the Division, not later than March 1 of

 30 each year, a tax at the rate of:

 31 (a) Two-fifths of 1 percent on the first $20,000,000 of its net

 32 direct premiums;

 33 (b) One-fifth of 1 percent on the next $20,000,000 of its net

 34 direct premiums; and

 35 (c) Seventy-five thousandths of 1 percent on each additional

 36 dollar of its net direct premiums.

 37 2. Except as otherwise provided in this section, a captive

 38 insurer shall pay to the Division, not later than March 1 of each

 39 year, a tax at a rate of:

 40 (a) Two hundred twenty-five thousandths of 1 percent on the

 41 first $20,000,000 of revenue from assumed reinsurance premiums;

 42 (b) One hundred fifty thousandths of 1 percent on the next

 43 $20,000,000 of revenue from assumed reinsurance premiums; and

 44 (c) Twenty-five thousandths of 1 percent on each additional

 45 dollar of revenue from assumed reinsurance premiums.

 – 51 –

- *IP1*

 1 ?? The tax on reinsurance premiums pursuant to this subsection

 2 must not be levied on premiums for risks or portions of risks which

 3 are subject to taxation on a direct basis pursuant to subsection 1. A

 4 captive insurer is not required to pay any reinsurance premium tax

 5 pursuant to this subsection on revenue related to the receipt of assets

 6 by the captive insurer in exchange for the assumption of loss

 7 reserves and other liabilities of another insurer that is under

 8 common ownership and control with the captive insurer, if the

 9 transaction is part of a plan to discontinue the operation of the other

 10 insurer and the intent of the parties to the transaction is to renew or

 11 maintain such business with the captive insurer.

 12 3. If the sum of the taxes to be paid by a captive insurer

 13 calculated pursuant to subsections 1 and 2 is less than $5,000 in any

 14 given year, the captive insurer shall pay a tax of $5,000 for that

 15 year. The maximum aggregate tax for any year must not exceed

 16 $175,000. The maximum aggregate tax to be paid by a sponsored

 17 captive insurer applies only to each protected cell and does not

 18 apply to the sponsored captive insurer as a whole.

 19 4. Two or more captive insurers under common ownership and

 20 control must be taxed as if they were a single captive insurer.

 21 5. Notwithstanding any specific statute to the contrary and

 22 except as otherwise provided in this subsection, the tax provided for

 23 by this section constitutes all the taxes collectible pursuant to the

 24 laws of this State from a captive insurer, and no occupation tax or

 25 other taxes may be levied or collected from a captive insurer by this

 26 State or by any county, city or municipality within this State, except

 27 for taxes imposed pursuant to chapter 363A or 363B of NRS or

 28 sections 3 to 45, inclusive, of this act and ad valorem taxes on real

 29 or personal property located in this State used in the production of

 30 income by the captive insurer.

 31 6. Twenty-five percent of the revenues collected from the tax

 32 imposed pursuant to this section must be deposited with the State

 33 Treasurer for credit to the Account for the Regulation and

 34 Supervision of Captive Insurers created pursuant to NRS 694C.460.

 35 The remaining 75 percent of the revenues collected must be

 36 deposited with the State Treasurer for credit to the State General

 37 Fund.

 38 7. A captive insurer that is issued a license pursuant to this

 39 chapter after July 1, 2003, is entitled to receive a nonrefundable

 40 credit of $5,000 applied against the aggregate taxes owed by the

 41 captive insurer for the first year in which the captive insurer incurs

 42 any liability for the payment of taxes pursuant to this section. A

 43 captive insurer is entitled to a nonrefundable credit pursuant to this

 44 section not more than once after the captive insurer is initially

 45 licensed pursuant to this chapter.

 – 52 –

- *IP1*

 1 8. As used in this section, unless the context otherwise

 2 requires:

 3 (a) “Common ownership and control” means:

 4 (1) In the case of a stock insurer, the direct or indirect

 5 ownership of 80 percent or more of the outstanding voting stock of

 6 two or more corporations by the same member or members.

 7 (2) In the case of a mutual insurer, the direct or indirect

 8 ownership of 80 percent or more of the surplus and the voting power

 9 of two or more corporations by the same member or members.

 10 (b) “Net direct premiums” means the direct premiums collected

 11 or contracted for on policies or contracts of insurance written by a

 12 captive insurer during the preceding calendar year, less the amounts

 13 paid to policyholders as return premiums, including dividends on

 14 unabsorbed premiums or premium deposits returned or credited to

 15 policyholders.

 16 Sec. 79. NRS 695A.550 is hereby amended to read as follows:

 17 695A.550 Every society organized or licensed under this

 18 chapter is hereby declared to be a charitable and benevolent

 19 institution, and is exempt from every state, county, district,

 20 municipal and school tax other than the tax imposed pursuant to

 21 sections 3 to 45, inclusive, of this act and taxes on real property and

 22 office equipment.

 23 Sec. 80. 1. Subject to the provisions of section 82 of this act,

 24 there is hereby appropriated from the State General Fund to the

 25 Department of Taxation for the initial costs of administering the

 26 provisions of sections 3 to 45, inclusive, of this act:

 27 For fiscal year 2013-2014 ....................................... $2,900,000

 28 For fiscal year 2014-2015 ....................................... $2,700,000

 29 2. The sums appropriated by subsection 1 are available for

 30 either fiscal year. Any remaining balance of the appropriation made

 31 by subsection 1 must not be committed for expenditure after

 32 June 30, 2015, and reverts to the State General Fund as soon as all

 33 payments of money committed have been made.

 34 Sec. 81. 1. Subject to the provisions of section 82 of this act,

 35 there is hereby appropriated from the State General Fund to the

 36 Department of Taxation for the initial costs of administering the

 37 provisions of sections 3 to 45, inclusive, of this act:

 38 For fiscal year 2014-2015 ....................................... $1,400,000

 39 For fiscal year 2015-2016 ....................................... $4,200,000

 40 2. The sums appropriated by subsection 1 are available for

 41 either fiscal year. Any remaining balance of the appropriation made

 42 by subsection 1 must not be committed for expenditure after

 43 June 30, 2016, and reverts to the State General Fund as soon as all

 44 payments of money committed have been made.

 – 53 –

- *IP1*

 1 Sec. 82. The amendatory provisions of sections 50 and 51 of

 2 this act, as applicable, are intended to raise the revenue necessary to

 3 support the appropriation made by section 80 or 81 of this act,

 4 whichever becomes effective, as required by Section 6 of Article 19

 5 of the Nevada Constitution. If the revenue so raised is not sufficient

 6 to support the full amount of the appropriation in either fiscal year,

 7 the appropriation for that year is reduced to the extent of the

 8 deficiency.

 9 Sec. 83. 1. If this act is enacted by the 77th Session of the

 10 Legislature and approved by the Governor as provided in subsection

 11 3 of Section 2 of Article 19 of the Nevada Constitution:

 12 (a) This section, sections 1 to 21, inclusive, sections 23 to 50,

 13 inclusive, sections 53 to 80, inclusive, and sections 82 and 84 of this

 14 act become effective on July 1, 2013.

 15 (b) Section 22 of this act becomes effective on January 1, 2014.

 16 (c) Section 50 of this act expires by limitation on June 30, 2015.

 17 (d) Sections 51, 52 and 81 of this act shall not become effective.

 18 2. If this act is not enacted and approved as provided in

 19 subsection 1, but is approved by the voters after the act has been

 20 referred or submitted to the voters pursuant to subsection 3 of

 21 Section 18 of Article 4 or subsection 3 of Section 2 of Article 19 of

 22 the Nevada Constitution:

 23 (a) This section, sections 1 to 50, inclusive, sections 53 to 79,

 24 inclusive, and sections 81, 82 and 84 of this act become effective on

 25 January 1, 2015.

 26 (b) Section 51 of this act becomes effective on July 1, 2015.

 27 (c) Section 52 of this act becomes effective on July 1, 2016.

 28 (d) Section 80 of this act shall not become effective.

 29 3. For the purposes of subsection 1, this act shall be deemed to

 30 have been approved by the Governor if, in accordance with Section

 31 35 of Article 4 of the Nevada Constitution:

 32 (a) The Governor signs the act;

 33 (b) The act is passed by both Houses of the Legislature during

 34 its 77th Session notwithstanding the objections of the Governor; or

 35 (c) The Governor fails to return or file the act within the time

 36 provided by Section 35 of Article 4 of the Nevada Constitution.

 37 Sec. 84. If any provision of this act or its application to any

 38 person or circumstance is held to invalid or ineffective, that

 39 invalidity or ineffectiveness must be given the narrowest possible

 40 construction and shall not affect any other provision or application

 41 of this act.

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