Hot Topic - AB 46: Schools Capital Facilities Funding
Governor Brian Sandoval signed Assembly Bill 46 (AB 46) into law June 11, 2013. The bill passed by the Nevada Legislature included an amendment that allows the Washoe County Board of Commissioners to determine whether to enact proposed tax increases that would generate funding for critical school repairs and maintenance in the Washoe County School District (WCSD). The school capital needs initiative proposes to increase sales tax by ¼ of 1 percent in Washoe County and property tax by 5 cents per $100 of assessed value in Washoe County. The proposal needs to be approved by 4 of the 5 County Commissioners by Jan. 1, 2014 to be enacted.
Frequently Asked Questions
Note: The following information has been prepared by the Washoe County District Attorney’s Office.
What is AB46?
Nevada Assembly Bill 46 (AB 46) is the bill from the 2013 Nevada Legislature which authorizes the Washoe County Board of County Commissioners to enact ordinances imposing sales and property taxes for the benefit of the Washoe County School District (WCSD) and its fund for capital projects. Governor Brian Sandoval signed AB46 into law June 11, 2013 after the bill was passed by the Nevada Legislature and included an amendment that allows the Washoe County Board of Commissioners to determine whether to enact a proposal that would generate funding for critical school repairs and maintenance in the WCSD. The school capital needs initiative proposes to increase sales tax by ¼ of 1 percent in Washoe County and property tax by 5 cents per $100 of assessed value in Washoe County. The proposal needs to be approved by 4 of the 5 county commissioners by Jan. 1, 2014 to be enacted.
What are the details of AB 46?
AB 46 authorizes the Washoe County Board of County Commissioners (the Board) to enact an ordinance imposing a tax on the gross receipts of retail sales of personal property of 1/4 of 1 percent of the sale. Like other existing sales taxes, a new AB 46 sales tax would be collected at the state level. The bill requires the county to enter into a contract with the state to administer the new tax prior to its imposition. The new sales tax cannot be imposed before the state has time to arrange for the collection of the tax from retailers in the county. AB 46 provides the state with at least 120 days from the effective date of the ordinance imposing the tax to begin to collect.
AB 46 also authorizes the Board to levy an ad valorem tax of 5 cents on each $100 of assessed valuation of taxable property in the county. Any such property tax is exempt from the statutory statewide limitation on property taxes within counties of $3.64 on each $100 of assessed valuation imposed by NRS 361.453. Such a new tax is also exempt from partial tax abatement provisions of NRS 361.4722, 361.4723 and 361.4724. The Board may impose either, both or neither tax.
If the tax or taxes are approved, where does the money go?
The proceeds of any such new taxes are required to be deposited into the school district’s capital projects fund. Under NRS 387.328 and 387.335, the money in that capital projects fund must be used for construction, design or purchase of new buildings for schools; enlarging, remodeling or repairing existing buildings or grounds; acquiring sites for building schools, or additional real property for necessary purposes related to schools; paying expenses relating to the acquisition of school facilities which have been leased by a school district; and purchasing necessary furniture and equipment.
What’s the timeline for the County’s decision?
Proposed ordinances to enact the taxes must be introduced at one County Commission meeting, adopted at another meeting within 35 days and published for a period of two weeks before they go into effect (NRS 244.095 – 244.105). The legislature gave the County the authority to impose the new sales tax or the new property tax only if the Board acts before Jan. 1, 2014. So the first reading, second reading and publications must all be completed prior to Jan. 1, 2014. After that date, the authority for the new taxes expires if it is not used.
How many of the five Washoe County Commissioners will it take to approve AB46?
AB 46 requires approval of either the new sales tax or the property tax by a two-thirds majority of the members of the Board, which is four affirmative votes.
How much money would AB 46 produce if it’s approved?
The fiscal note with AB 46 estimates that in each of the first five years of the taxes, if they were both imposed, the sales tax would produce about $14 million and the property tax would produce approximately $6 million.
How would the County oversee the School District’s use of the proceeds?
According to the Nevada Legislative Counsel, the County ordinances enacting the taxes cannot impose conditions such as restrictions on the use of the proceeds or a requirement for periodic reports from the School District on the expenditure of the new tax proceeds. However, nothing prevents the County and the School District from voluntarily entering into an agreement by which the School District would agree to provide information to the County. It is possible the School District would also agree to a certain manner in which the tax revenues could be spent or bonded.
Is this a “forever” tax?
The County can include sunset provisions in the ordinances enacting the taxes. However, such provisions could hamper the School District’s ability to issue debt (bonds) based on those tax revenues. If the taxes were enacted without sunsets or with sunsets that take effect far in the future and bonds were issued with a pledge of those revenues, the County could not later add a sunset or attempt to repeal the taxes until the District extinguished the debt.
Can the County raise the percentage of the taxes?
The County could impose the taxes at levels below, but not above the amounts authorized by AB 46.
Are there certain segments of the county population that will be exempt from the taxes?
The County Commission lacks the legislative authority to create exemptions from the taxes for certain taxpayers or groups of taxpayers.
Isn’t there a property tax cap?
NRS 354.5982 provides the statutory property tax cap of $3.64 per $100 of assessed valuation can be exceeded in a county if “approved by a majority of the voters voting on the question at a general election, a general city election or a special election called for that purpose.” To some that may provide a basis for a special election on the property tax piece of AB 46. However, AB 46 expressly provides that a property tax imposed by the County prior to Jan. 1, 2014 is already outside the tax cap, so there is no basis for asking for voter approval.
Why aren’t citizens allowed to vote on this matter?
There is no practical way for voter approval of the new sales or property taxes prior to the County’s need to act because of the Jan. 1, 2014 expiration of the authority to enact the taxes. The next regularly occurring election is the one to be held in November 2014. That is long after Jan. 1, 2014, which is the date by which the Board must act to impose the taxes. While there may be time enough for a special election to be held prior to that deadline, advisory questions can be asked only at general elections according to NRS 293.482.
I can’t attend the County Commission meetings in person. Is there another way for me to watch them?
If you’re unable to attend a County Commission meeting, there are several convenient options to watch the meeting live from another location or after the event:
- Watch live on TV: Charter digital channel 217 or 80.9 on your digital converter
- Watch live online: WCTV at www.washoecounty.us/mgrsoff/wctv_live.html
- Video-on-demand: Available online within two days of the original meeting
- Watch replays on TV and online: Commission meetings are occasionally replayed, with the scheduled listings available online.
How can I share my opinion on this issue with the County Commission?
To share your comments with County Commissioners about AB46, one of the following methods is recommended:
- Attend a County Commission meeting and speak on the issue during the public comment period for the item. Read the guidelines for public comments.
- If you would prefer to submit your comments in writing, please feel free to do so using Washoe County’s online comment system.
AB 46 will be discussed at the regularly scheduled County Commission meetings which begin at 10 a.m. on the following Tuesdays:
- August 27
- September 10
- September 24
- October 8
- October 22 (item postponed for this meeting with future dates to be announced)
- November 12
- December 10
Three special public workshops to discuss AB 46 have also been scheduled for:
- Tuesday, August 20 at 4 p.m.
- Tuesday, Sept. 17 at 4 p.m.
- Tuesday, Oct. 15 at 4 p.m.
Once agendas for these meetings become available, they will be posted online at www.washoecounty.us/bcc/agendas.html.
Additional documents related to AB 46
- November 12, 2013 Powerpoint Presentation - Information presented to the County Commission by Washoe County's Acting Finance Director and Brian Bonnenfant from UNR Center for Regional Studies.
- August 20, 2013 informational packet from the Washoe County School District - Distributed to the County Commission for their August 20, 2013 workshop-style meeting. Powerpoint documents presented at this meeting by the WCSD are also available online.
- July 23, 2013 informational packet from the Washoe County School District - Distributed to the County Commission for their July 23, 2013 meeting.
- Memo from the State of Nevada Legislative Council Bureau (LCB) - Addresses a variety of clarifying questions related to AB 46.
- Memo from the Washoe County District Attorney's Office - Includes details about AB 46 and the County Commission's role in reviewing the school capital needs initiative.
- Report from the Council of the Great City Schools - Includes findings by the Council of the Great City Schools, which recently conducted a review of several departments within the Washoe County School District. The report includes recommendations aimed at helping the WCSD achieve greater operational efficiency and effectiveness.
Watch previous Commission discussions on AB 46
- November 12, 2013 County Commission meeting (video-on-demand) - The Washoe County Commission received an update from staff on AB 46 and listened to public testimony on the bill. (Video coming soon.)
- October 15, 2013 County Commission workshop (video-on-demand) - The Washoe County Commission held the third and final workshop with the WCSD on school capital funding needs.
- October 3, 2013 AB 46 Town Hall with Channel 5 (KNPB) - Washoe County Commission Chairman David Humke and Commissioner Marsha Berkbigler participated in KNPB's live town hall discussion on AB 46 as part of their Open Lines program. Video is courtesy of KNPB.
- September 17, 2013 County Commission workshop (video-on-demand) - The Washoe County Commission held a workshop on AB 46 that included an overview and discussion on the following topics: history and current status of the school district's capital funding; and responses from the school district on several of the County Commission's questions related to AB 46.
- September 10, 2013 County Commission meeting (video-on-demand) - The Washoe County Commission received an update on AB 46.
- August 27, 2013 County Commission meeting (video-on-demand) - The Washoe County Commission received an update on AB 46.
- August 20, 2013 County Commission workshop (video-on-demand) - The Washoe County Commission held a workshop on AB 46 that included an overview and discussion on the following topics: school funding in Nevada and the WCSD; capital funding at the WCSD; Council of the Great City Schools Report.
- July 23, 2013 County Commission meeting (video-on-demand) - The Washoe County Commission received a report from the Washoe County School District and heard public testimony regarding AB 46.