Establishes the Sustainable Aviation Fuel Incentive Program. (BDR 44-1095)

EXEMPT
(Reprinted with amendments adopted on April 18, 2025)
FIRST REPRINT A.B. 481

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ASSEMBLY BILL NO. 481–COMMITTEE ON WAYS AND MEANS

MARCH 24, 2025
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Referred to Committee on Growth and Infrastructure

SUMMARY—Establishes the Sustainable Aviation Fuel Incentive
Program. (BDR 44-1095)

FISCAL NOTE: Effect on Local Government: No.
Effect on the State: Contains Appropriation not included
in Executive Budget.

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

AN ACT relating to aviation; creating the Sustainable Aviation Fuel
Incentive Fund and the Sustainable Aviation Fuel
Incentive Program; making an appropriation; and
providing other matters properly relating thereto.
Legislative Counsel’s Digest:
Existing law creates the Nevada Air Service Development Fund as a special 1
revenue fund in the State Treasury and provides for the award of grants of money 2
from the Nevada Air Service Development Fund to air carriers that meet certain 3
requirements. (NRS 231.690-231.720) Section 2 of this bill creates the Sustainable 4
Aviation Fuel Incentive Fund in the State Treasury to be administered by the State 5
Treasurer. Section 3 of this bill creates the Sustainable Aviation Fuel Incentive 6
Program to provide incentives of money to domestic air carriers for the purchase of 7
sustainable aviation fuel produced in this State. Section 4 of this bill makes an 8
appropriation of $10,000,000 to the Fund for the Program. 9

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Chapter 493 of NRS is hereby amended by adding 1
thereto the provisions set forth as sections 2 and 3 of this act. 2
Sec. 2. 1. The Sustainable Aviation Fuel Incentive Fund is 3
hereby created in the State Treasury as a special revenue fund. 4
2. The Sustainable Aviation Fuel Incentive Fund is a 5
continuing fund without reversion. The interest and income 6
earned on the money in the Fund must, after deducting any 7

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applicable charges, be credited to the Fund. All claims against the 1
Fund must be paid as other claims against the State are paid. 2
3. The State Treasurer shall administer the Fund. The money 3
in the Fund must be used by the State Treasurer to carry out the 4
Sustainable Aviation Fuel Incentive Program created pursuant to 5
section 3 of this act. 6
4. The State Treasurer may apply for and accept gifts, grants, 7
donations, bequests and any other source of money available 8
under federal law and from private sources for deposit in the 9
Fund to carry out the provisions of the Sustainable Av iation Fuel 10
Incentive Program created by section 3 of this act. 11
Sec. 3. 1. The Sustainable Aviation Fuel Incentive 12
Program is hereby created for the purpose of providing incentives 13
of money for the purchase of sustainable aviation fuel produced in 14
this State. 15
2. A domestic air carrier based in the United States is eligible 16
to receive from the Program for the purchase of sustainable 17
aviation fuel produced in this State an incentive of $2.50 per 18
gallon. 19
3. A carrier that qualifies for an incentive from the Program 20
pursuant to subsection 2 may obtain an incentive by submitting a 21
claim to the State Treasurer. The State Treasurer shall review any 22
claim submitted pursuant to this subsection to confirm that the air 23
carrier qualifies for an incentive from the Program. 24
4. The State Treasurer may adopt regulations to carry out the 25
provisions of this section. 26
5. As used in this section: 27
(a) “Air carrier” means a person who provides commercial air 28
transportation to passengers. 29
(b) “Sustainable aviation fuel” means liquid fuel that meets 30
the criteria set forth in subsections (d) and (e) of 26 U.S.C. § 40B. 31
Sec. 4. There is hereby appropriated from the State General 32
Fund to the Sustainable Avia tion Fuel Incentive Fund created by 33
section 2 of this act the sum of $10,000,000 to award incentives 34
from the Sustainable Aviation Fuel Incentive Program created by 35
section 3 of this act. 36
Sec. 5. 1. The Legislature hereby finds and declares that: 37
(a) Section 9 of Article 8 of the Nevada Constitution contains a 38
provision commonly known as a “gift clause” which restricts the 39
State under certain circumstances from donating or loaning the 40
State’s money or credit to any compan y, association or corporation, 41
except corporations formed for educational or charitable purposes. 42
(b) In Employers Insurance Company of Nevada v. State Board 43
of Examiners, 117 Nev. 249, 258 (2001), the Nevada Supreme Court 44
held that the State loans its credit in violation of Section 9 of Article 45

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8 of the Nevada Constitution only when “the State acts as a surety or 1
guarantor for the debts of a company, corporation or association.” 2
(c) In Lawrence v. Clark County, 127 Nev. 390, 399 (2011) , the 3
Nevada Supreme Court held that the State does not donate, loan or 4
“gift” its money in violation of Section 9 of Article 8 of the Nevada 5
Constitution when the State dispenses state funds for a public 6
purpose and the State receives a valuable benefit or fair 7
consideration in exchange for the dispensation of the state funds. 8
(d) In State ex rel. Brennan v. Bowman , 89 Nev. 330, 333 9
(1973), the Nevada Supreme Court held that legislation which 10
promotes economic development and seeks to create, protect or 11
enhance job opportun ities “inures to the public benefit” and serves 12
important public purposes because it assists in “relieving 13
unemployment and maintaining a stable economy.” 14
(e) In Lawrence v. Clark County , 127 Nev. 390, 399, 406 15
(2011), the Nevada Supreme Court adopted th e public trust doctrine 16
in this State, noting that the public possesses inviolable rights to the 17
natural resources of the State and the State must serve as trustee of 18
the public resources and finding that the “constitutional policy 19
contained in the gift clause infers the people’s intent to constrain the 20
Legislature’s ability to alienate public trust lands as well as public 21
funds.” 22
(f) Section 3 of Article 9 of the Nevada Constitution restricts the 23
ability of the State to contract public debts, but makes an exception 24
for “any and all contracts necessary, expedient or advisable for the 25
protection and preservation of any of its property or natural 26
resources, or for the purposes of obtaining the benefits thereof,” 27
which further emphasizes the constitutionally m andated importance 28
of the protection and preservation of the natural resources of this 29
State. 30
(g) In McLaughlin v. Housing Authority of the City of Las 31
Vegas, 68 Nev. 84, 93 (1951) and Lawrence v. Clark County , 127 32
Nev. 390, 399 (2011), the Nevada Supreme Court held that when 33
the Legislature authorizes a state agency to dispense state funds, the 34
courts will: 35
(1) Carefully examine whether the Legislature made an 36
informed and appropriate finding that the dispensation of the state 37
funds serves a public purp ose and the State receives a valuable 38
benefit or fair consideration in exchange for the dispensation; 39
(2) Give great weight and due deference to the Legislature’s 40
finding, and the courts will uphold the Legislature’s “finding unless 41
it clearly appears t o be erroneous and without reasonable 42
foundation;” and 43
(3) Closely examine whether the dispensing state agency 44
reviews all facts, figures and necessary information when making 45

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the dispensation, and when the state agency has done so, it will not 1
be second-guessed by the courts. 2
2. The Legislature hereby further finds and declares that: 3
(a) The release of greenhouse gases traps heat in the Earth’s 4
atmosphere, driving climate change. 5
(b) The United States Environmental Protection Agency has 6
concluded th at certain large subsonic jet aircraft and subsonic 7
propeller driven airplanes that are used in all domestic and 8
international flights originating in the United States are responsible 9
for 10 percent of all greenhouse gas emissions from the 10
transportation s ector in the United States and 3 percent of all 11
greenhouse gas emissions in the United States. 12
(c) According to the Federal Aviation Administration, about 10 13
percent of all aircraft emissions occur close to the surface of the 14
Earth near ground level and most particulate matter that affects 15
communities surrounding an airport are the result of emissions 16
released during landing and takeoff. 17
(d) Climate change threatens the health, lives and safety of 18
Nevada’s residents, as well as Nevada’s diverse ecosystem s, 19
wildlands and wildlife. Rising temperatures have increased the 20
severity and length of droughts and the frequency and intensity of 21
wildfires. 22
(e) Climate change threatens Nevada’s economy. Rising 23
temperatures, compounded by the urban heat island effect, will 24
likely make summers in Southern Nevada dangerously hot, 25
potentially deterring visitors and reducing the hours when it is safe 26
to engage in outdoor activities, such as construction. 27
(f) Throughout this State, rising temperatures will impact public 28
health by increasing heat stress on vulnerable populations and 29
increasing air pollution from more frequent wildfires. 30
(g) The State of Nevada and its residents will benefit from the 31
diversification and economic growth driven by a transition to a low -32
carbon emission aviation transportation sector. 33
3. The Legislature lastly finds and declares that: 34
(a) The state program developed and carried into effect pursuant 35
to this act will not resul t in the State acting as a surety or guarantor 36
of the debts of an air carrier receiving an incentive of money. 37
(b) The purpose of this act is to develop and carry into effect a 38
state program to encourage the production and purchase of 39
sustainable aviation fuel in this State for the purposes of: 40
(1) Developing the market and industry for sustainable 41
aviation fuel in this State and promoting jobs and businesses in this 42
State in the sustainable aviation fuel industry; and 43

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(2) Reducing greenhouse gases em itted by domestic air 1
carriers that operate in this State, specifically emissions occurring 2
on takeoff and landing at airports in this State. 3
(c) The promotion and development of the sustainable fuel 4
industry in this State is an important public purpose which 5
incentivizes the development of business and industry in this State. 6
(d) The protection and preservation of the natural resources of 7
this State by incentivizing the purchase of sustainable aviation fuel 8
is an important public purpose which will limi t the emissions of 9
greenhouse gasses from air carriers operating in this State and thus 10
lower the contributions air travel in this State make to climate 11
change, which threatens the health, safety and welfare of the 12
residents of this State and the economy of this State. 13
(e) The provisions of this act are intended to serve an important 14
public purpose and ensure that the State receives valuable benefits 15
and fair consideration in exchange for each incentive of money from 16
the program because: 17
(1) The program requires the dispensing agency to review all 18
facts, figures and necessary information when making each 19
incentive of money from the program to ensure the incentive meets 20
the requirements of the program; 21
(2) The promotion and development of the sustainable fuel 22
industry in this State and the protection and preservation of the 23
natural resources of this State are important public purposes that 24
promote job growth in this State and protect the health, safety and 25
welfare of the residents of this State; and 26
(3) The dispensing state agency may not make an incentive 27
of money from the program unless the air carrier purchases 28
sustainable aviation fuel in accordance with the requirements of the 29
program. 30

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