Senate Bill No. 311--Committee on Taxation CHAPTER........ AN ACT relating to taxes on retail sales; providing for the submission to the voters of the question whether the Sales and Use Tax Act of 1955 should be amended to revise and clarify the provisions governing the exemption for aircraft and parts of aircraft; clarifying the provisions governing the administration of the existing exemption for aircraft and parts of aircraft; contingently creating the same exemption from certain analogous taxes; and providing other matters properly relating thereto. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. At the general election on November 5, 1996, a proposal must be submitted to the registered voters of this state to amend the Sales and Use Tax Act, which was enacted by the 47th session of the legislature of the State of Nevada and approved by the governor in 1955, and subsequently approved by the people of this state at the general election held on November 6, 1956. Sec. 2. At the time and in the manner provided by law, the secretary of state shall transmit the proposed act to the several county clerks, and the county clerks shall cause it to be published and posted as provided by law. Sec. 3. The proclamation and notice to the voters given by the county clerks pursuant to law must be in substantially the following form: Notice is hereby given that at the general election on November 5, 1996, a question will appear on the ballot for the adoption or rejection by the registered voters of the state of the following proposed act: AN ACT to amend an act entitled "An Act to provide revenue for the State of Nevada; providing for sales and use taxes; providing for the manner of collection; defining certain terms; providing penalties for violation, and other matters properly relating thereto." approved March 29, 1955, as amended. THE PEOPLE OF THE STATE OF NEVADA DO ENACT AS FOLLOWS: Section 1. Section 61.5 of the above-entitled act, being chapter 397, Statutes of Nevada 1955, at page 762, as added by chapter 466, Statutes of Nevada 1985, at page 1441, is hereby amended to read as follows: Sec. 61.5 There are exempted from the taxes imposed by this act the gross receipts from the sale [of aircraft and major components] \, and the storage, use or other consumption in this state of: 1. Aircraft, aircraft engines and component parts \\of aircraft [, such as engines and other components made for use only in aircraft, to an air carrier which: 1. Holds a certificate to engage in air transportation issued pursuant to 49 U.S.C. § 1371 and is not solely a charter air carrier or a supplemental air carrier as described in Title 49 of the United States Code; and 2. Maintains its central office in Nevada and bases a majority of its aircraft in Nevada.] \or aircraft engines which are manufactured exclusively for use in aircraft, sold or purchased for lease to a commercial air carrier for use in the transportation of persons or property in intrastate, interstate or foreign commerce pursuant to a certificate or license issued to the air carrier authorizing such transportation; and 2. Machinery, tools and other equipment and parts which are used exclusively in the repair, remodeling or maintenance of aircraft, aircraft engines or component parts of aircraft or aircraft engines which meet the requirements of subsection 1.\\ Sec. 2. This act becomes effective on January 1, 1997. Sec. 4. The ballot page assemblies and the paper ballots to be used in voting on the question must present the question in substantially the following form: Shall the Sales and Use Tax Act of 1955 be amended to revise and clarify the criteria used to determine which aircraft and parts of aircraft are exempt from the taxes imposed by the act, including removing the requirement that an air carrier must be based in Nevada to be eligible for the exemption, and providing an exemption for certain machinery and equipment used on eligible aircraft and parts of aircraft? Yes ³ No ³ Sec. 5. The explanation of the question which must appear on each paper ballot and sample ballot and in every publication and posting of notice of the question must be in substantially the following form: (Explanation of Question) The proposed amendment to the Sales and Use Tax Act of 1955 revises and clarifies the criteria used to determine which aircraft and parts of aircraft are exempt from the taxes imposed by the act, including removing the requirement that an air carrier must be based in Nevada to be eligible for the exemption, and providing an exemption for certain machinery and equipment used on eligible aircraft and parts of aircraft. If this proposal is adopted, the legislature has provided that the Local School Support Tax Law and the City-County Relief Tax Law will be amended to provide the same revision and exemption. Sec. 6. If a majority of the votes cast on the question is yes, the amendment to the Sales and Use Tax Act of 1955 becomes effective on January 1, 1997. If less than a majority of votes cast on the question is yes, the question fails and the amendment to the Sales and Use Tax Act of 1955 does not become effective. Sec. 7. All general election laws not inconsistent with this act are applicable. Sec. 8. Any informalities, omissions or defects in the content or making of the publications, proclamations or notices provided for in this act and by the general election laws under which this election is held must be so construed as not to invalidate the adoption of the act by a majority of the registered voters voting on the question if it can be ascertained with reasonable certainty from the official returns transmitted to the office of the secretary of state whether the proposed amendment was adopted by a majority of those registered voters. Sec. 9. Chapter 372 of NRS is hereby amended by adding thereto a new section to read as follows:\ On and after July 1, 1995, in administering the provisions of section 61.5 of chapter 397, Statutes of Nevada 1955, which is included in NRS as NRS 372.317, the department shall: 1. Not enforce any restriction on the applicability of the exemption provided therein which would violate the United States Constitution. 2. Apply the exemption to all types of sales to air carriers including both indirect sales to an entity which purchases the aircraft or major components of an aircraft for lease to and use by an air carrier that otherwise qualifies for the exemption and direct sales to air carriers.\\ Sec. 10. NRS 374.322 is hereby amended to read as follows: 374.322 There are exempted from the taxes imposed by this chapter the gross receipts from the sale [of aircraft and major components] \, and the storage, use or other consumption in this state of: 1. Aircraft, aircraft engines and component parts \\of aircraft [, such as engines and other components made for use only in aircraft, to an air carrier which: 1. Holds a certificate to engage in air transportation issued pursuant to 49 U.S.C. § 1371 and is not solely a charter air carrier or a supplemental air carrier as described in Title 49 of the United States Code; and 2. Maintains its central office in Nevada and bases a majority of its aircraft in Nevada.] \or aircraft engines which are manufactured exclusively for use in aircraft, sold or purchased for lease to a commercial air carrier for use in the transportation of persons or property in intrastate, interstate or foreign commerce pursuant to a certificate or license issued to the air carrier authorizing such transportation; and 2. Machinery, tools and other equipment and parts which are used exclusively in the repair, remodeling or maintenance of aircraft, aircraft engines or component parts of aircraft or aircraft engines which meet the requirements of subsection 1. \\Sec. 11. This act becomes effective on July 1, 1995. -30-