[Rev. 11/21/2013 10:57:46 AM--2013]

CHAPTER 350A - PURCHASE OF MUNICIPAL AND REVENUE SECURITIES BY STATE

NRS 350A.010        Legislative findings.

NRS 350A.020        Definitions.

NRS 350A.025        “Allocable local revenues” defined.

NRS 350A.030        “Board” defined.

NRS 350A.040        “Cost of a lending project” defined.

NRS 350A.050        “Expense of operation and maintenance” defined.

NRS 350A.055        “Flood management authority” defined.

NRS 350A.060        “Lending project” defined.

NRS 350A.070        “Municipal securities” defined.

NRS 350A.080        “Municipality” defined.

NRS 350A.090        “Purpose related to natural resources” defined.

NRS 350A.095        “Revenue securities” defined.

NRS 350A.100        “Revenues of a lending project” defined.

NRS 350A.110        “State securities” defined.

NRS 350A.120        “Tax” defined.

NRS 350A.125        “Wastewater authority” defined.

NRS 350A.130        Loans to municipalities by state purchase of municipal securities authorized.

NRS 350A.140        Powers of State Treasurer as Administrator of Municipal Bond Bank.

NRS 350A.150        Limitations and conditions on issuance of certain state securities; applicability of State Securities Law.

NRS 350A.152        Conditions upon issuance of state securities to acquire bonds issued by certain water authorities; acquisition of bonds of certain water authorities does not constitute indebtedness of members; property tax levied by member to pay member’s share of payments due on bonds.

NRS 350A.153        Limitations and conditions upon issuance of state securities to acquire revenue securities; exceptions.

NRS 350A.154        Revenue security pledged by allocable local revenues not debt of State.

NRS 350A.155        Issuance of state securities to refund state securities.

NRS 350A.160        Judicial confirmation of exemption of specific obligation from State’s debt limit required.

NRS 350A.170        State securities: Interest; discount.

NRS 350A.180        Private sale of municipal or revenue securities to State; fees and charges.

NRS 350A.190        Fund for the Municipal Bond Bank: Creation; disposition of revenue.

NRS 350A.200        Powers additional; applicable procedures for issuing securities; issuance of securities by municipality not authorized.

NRS 350A.210        Liberal construction.

_________

 

      NRS 350A.010  Legislative findings.  The Legislature finds that:

      1.  It is in the public interest to foster and promote the protection and preservation of the property and natural resources of the State of Nevada, and to obtain the benefits thereof, and that the State should encourage and assist municipalities in undertaking local projects for such purposes by making loans to municipalities which might not be otherwise available or which might be available only at prohibitive interest rates;

      2.  The making of such loans and the issuing of state securities therefor as general obligations are necessary, expedient and advisable for the protection and preservation of the property and natural resources of the State of Nevada and for obtaining the benefits thereof; and

      3.  Because of market conditions relating to credit and public finance, it is in the public interest to assist municipalities in the acquisition, construction or equipping of public improvements by providing money to municipalities at reasonable rates of interest through the issuance of state securities to finance the acquisition of revenue securities.

      (Added to NRS by 1981, 767; A 1993, 2318)

      NRS 350A.020  Definitions.  As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 350A.025 to 350A.125, inclusive, have the meanings ascribed to them in those sections.

      (Added to NRS by 1981, 767; A 1993, 2318; 2005, 184; 2009, 2742)

      NRS 350A.025  “Allocable local revenues” defined.  “Allocable local revenues” means amounts received by the State which are payable to a municipality and which are designated as allocable by the municipality in the instrument authorizing the revenue security with respect to a particular lending project.

      (Added to NRS by 1993, 2316; A 1995, 389)

      NRS 350A.030  “Board” defined.  “Board” means the State Board of Finance.

      (Added to NRS by 1981, 767; A 1997, 3012)

      NRS 350A.040  “Cost of a lending project” defined.  “Cost of a lending project” means all or any designated part of the cost of any lending project, including any incidental cost pertaining to such a project. The cost of a lending project may include, without limitation, the costs of:

      1.  Surveys, audits, preliminary plans, other plans, specifications, estimates and other costs of preparations.

      2.  Appraising, printing, estimating, advice, services of engineers, architects, financial consultants, attorneys, clerical personnel and other agents and employees.

      3.  Publishing, posting, mailing and otherwise giving notice, filing or recording instruments, taking options and fees to banks and credit unions.

      4.  Establishment of a reserve for contingencies.

      5.  Interest on state securities for any time which does not exceed 3 years, discounts on such state securities, reserves for the payment of the principal of and interest on such securities, replacement expenses and other costs of issuing such securities.

      6.  Amending any resolution or other instrument authorizing the issuance of, or otherwise relating to, state securities for any lending project.

      7.  Funding medium-term obligations.

      8.  Financing the issuance of state securities and any other expenses necessary in connection with a lending project, as determined by the Board.

      (Added to NRS by 1981, 767; A 1993, 2318; 1997, 554; 1999, 1473)

      NRS 350A.050  “Expense of operation and maintenance” defined.  “Expense of operation and maintenance” means any reasonable and necessary current expense of the State for the operation, maintenance or administration of a lending project or of the collection and administration of revenues therefrom. The term includes, without limitation:

      1.  Expenses for engineering, auditing, reporting, legal services and other expenses of the State Treasurer which are directly related to the administration of lending projects.

      2.  Premiums for fidelity bonds and policies of property and liability insurance pertaining to lending projects, and shares of the premiums of blanket bonds and policies which may be reasonably allocated to lending projects.

      3.  Payments to pension, retirement, health insurance and other insurance funds.

      4.  Reasonable charges made by any paying agent, commercial bank, credit union, trust company or other depository bank pertaining to any state securities.

      5.  Services rendered under the terms of contracts, services of professionally qualified persons, salaries, administrative expenses and the cost of materials, supplies and labor pertaining to the issuance of any state securities, including the expenses of any trustee, receiver or other fiduciary.

      6.  Costs incurred in the collection and any refund of revenues from a lending project, including the amount of the refund.

      (Added to NRS by 1981, 767; A 1999, 1473)

      NRS 350A.055  “Flood management authority” defined.  “Flood management authority” means any entity that is created by cooperative agreement pursuant to chapter 277 of NRS, the functions of which include the acquisition, construction, improvement, operation and maintenance of a flood management project.

      (Added to NRS by 2009, 2742)

      NRS 350A.060  “Lending project” defined.  “Lending project” means any undertaking which the State is authorized to complete in connection with loans to municipalities made by the purchase of:

      1.  Municipal securities validly issued for a purpose related to natural resources; or

      2.  Revenue securities validly issued for a purpose related to any undertaking which a municipality is authorized to complete.

      (Added to NRS by 1981, 768; A 1993, 2319)

      NRS 350A.070  “Municipal securities” defined.  “Municipal securities” means notes, warrants, interim debentures, bonds and temporary bonds validly issued as obligations for a purpose related to natural resources which are payable:

      1.  From taxes whether or not additionally secured by any municipal revenues available therefor;

      2.  For bonds issued by an irrigation district, from assessments against real property;

      3.  For bonds issued by a water authority organized as a political subdivision created by cooperative agreement, from revenues of the water system of the water authority or one or more of the water purveyors who are members of the water authority or any combination thereof;

      4.  For bonds issued by a wastewater authority, from revenues of the water reclamation system of the wastewater authority or one or more of the municipalities that are members of the wastewater authority, or any combination thereof; or

      5.  For bonds issued by a flood management authority, from revenues of the flood management authority or one or more of the municipalities that are members of the flood management authority, or any combination thereof.

      (Added to NRS by 1981, 768; A 1985, 1901; 1997, 164; 2005, 184; 2009, 2742)

      NRS 350A.080  “Municipality” defined.  “Municipality” means any county, city, town, wastewater authority, flood management authority, water authority organized as a political subdivision created by cooperative agreement, school district, general improvement district or other district, including an irrigation district.

      (Added to NRS by 1981, 768; A 1997, 165; 2005, 184; 2009, 2743)

      NRS 350A.090  “Purpose related to natural resources” defined.  “Purpose related to natural resources” means a purpose necessary, expedient or advisable for the protection and preservation of any property or natural resources of the State, or for obtaining the benefits thereof, including without limitation water projects, sewer projects and park projects which preserve natural landscape or wildlife habitat or both.

      (Added to NRS by 1981, 768)

      NRS 350A.095  “Revenue securities” defined.  “Revenue securities” means notes, warrants, interim debentures, bonds and temporary bonds validly issued by a municipality as obligations for a purpose related to any undertaking which the municipality is authorized to complete and which are payable from:

      1.  The revenues of one or more such undertakings;

      2.  Taxes levied by or on behalf of the municipality for revenues pledged by the municipality which are not derived from a project; or

      3.  Any combination of those revenues and taxes.

Ê The term does not include municipal securities or obligations issued pursuant to the provisions of NRS 244A.669 to 244A.763, inclusive, 268.512 to 268.568, inclusive, or 315.140 to 315.7813, inclusive.

      (Added to NRS by 1993, 2317)

      NRS 350A.100  “Revenues of a lending project” defined.  “Revenues of a lending project” means any money, except the proceeds of taxes levied by the State, received by the State Treasurer from or in respect to any lending project, including without limitation:

      1.  Money derived from any source of revenue connected with a lending project, including without limitation payments by a municipality of the principal, interest or redemption premium of any municipal or revenue security, and any other income derived from the operation or administration of a lending project or the sale or other disposal of municipal or revenue securities or other assets acquired in connection with a lending project;

      2.  Loans, grants or contributions to the State from the Federal Government for the payment of the principal, interest and redemption premiums of state securities;

      3.  Fees or charges paid by a municipality in connection with a lending project; and

      4.  Money derived from the investment and reinvestment of any of these.

      (Added to NRS by 1981, 768; A 1993, 2319)

      NRS 350A.110  “State securities” defined.  “State securities” means notes, warrants, interim debentures, bonds and temporary bonds issued as:

      1.  General obligations by the State pursuant to this chapter for any lending project which is for a purpose related to natural resources or for a refunding which are payable from taxes, whether or not additionally secured by a pledge of all or any designated revenues of one or more lending projects; or

      2.  Limited obligations by the State pursuant to this chapter for any lending project which is for a purpose related to any undertaking which a municipality is authorized to complete or for a refunding which are payable from the revenues of one or more lending projects.

      (Added to NRS by 1981, 768; A 1983, 1034; 1993, 2319)

      NRS 350A.120  “Tax” defined.  “Tax” means a general (ad valorem) property tax.

      (Added to NRS by 1981, 768)

      NRS 350A.125  “Wastewater authority” defined.  “Wastewater authority” means an entity that is created by cooperative agreement pursuant to chapter 277 of NRS, the functions of which include sanitation and sewerage, the treatment and disposal of wastewater, or the development and reclamation of water resources.

      (Added to NRS by 2005, 184)

      NRS 350A.130  Loans to municipalities by state purchase of municipal securities authorized.  In order to:

      1.  Protect and preserve the property and natural resources of the State, and to obtain the benefits thereof; and

      2.  Assist municipalities in the acquisition, construction and equipping of public improvements,

Ê the State Treasurer may make loans to municipalities by purchasing their municipal securities validly issued for a purpose related to natural resources or their revenue securities validly issued for a purpose related to any undertaking which the municipality is authorized to complete.

      (Added to NRS by 1981, 768; A 1993, 2319)

      NRS 350A.140  Powers of State Treasurer as Administrator of Municipal Bond Bank.

      1.  The State Treasurer is the Administrator of the Municipal Bond Bank.

      2.  In his or her capacity as Administrator, the State Treasurer may:

      (a) Sue and be sued to establish or enforce any right arising out of a lending project or of any state securities issued pursuant to this chapter;

      (b) Acquire and hold municipal securities and revenue securities, and exercise all of the rights of holders of those securities;

      (c) Sell or otherwise dispose of municipal securities and revenue securities and assets acquired in connection with those securities, unless limited by any agreement which relates to those securities;

      (d) Make contracts and execute all necessary or convenient instruments;

      (e) Accept grants of money from the Federal Government, the State, any agency or political subdivision, or any other person;

      (f) Adopt regulations relating to lending projects and the administration of lending projects;

      (g) Employ for himself or herself or for any municipality, any necessary legal, fiscal, engineering and other expert services in connection with lending projects and with the authorization, sale and issuance of state securities, municipal securities and revenue securities;

      (h) Enter into agreements and arrangements consistent with the provisions of this chapter with respect to the issuance of state securities and the purchase of municipal and revenue securities;

      (i) Make findings concerning the sufficiency of revenues and taxes pledged for the payment of revenue securities to repay state securities which were issued to acquire those revenue securities;

      (j) At the request of a municipality, on or before June 30, 2011, apply for and accept a volume cap allocation for tax credit bonds that authorizes the issuance of bonds which can be sold with a federal income tax credit;

      (k) On or before June 30, 2011, enter into any agreement with the Federal Government that the State Treasurer determines is necessary or advisable:

             (1) To issue bonds which can be sold with a federal income tax credit pursuant to the provisions of the Internal Revenue Code, as amended; and

             (2) To receive a volume cap allocation for tax credit bonds described in paragraph (j); and

      (l) Undertake other matters which he or she determines to be necessary or desirable in accomplishing the purposes of this chapter.

      (Added to NRS by 1981, 769; A 1993, 2320; 2009, 2659)

      NRS 350A.150  Limitations and conditions on issuance of certain state securities; applicability of State Securities Law.

      1.  The Board may, at the request of the State Treasurer, to pay the cost of any lending project, borrow money or otherwise become obligated, and may provide evidence of those obligations by issuing state securities.

      2.  State securities issued to acquire municipal securities may be outstanding pursuant to this chapter in an aggregate principal amount of not more than $1.8 billion.

      3.  State securities issued to:

      (a) Acquire municipal securities must be payable from taxes and may be additionally secured by all or any designated revenues from one or more lending projects.

      (b) Acquire revenue securities must be payable from all or any designated revenues from one or more lending projects and from allocable local revenues payable to a municipality.

Ê Any such state securities may be issued without an election or other preliminaries. No state securities may be issued to refund any municipal securities issued before May 29, 1981.

      4.  No state securities may be issued to acquire revenue securities unless:

      (a) The State Treasurer presents to the State Board of Finance findings which indicate that the revenues and taxes pledged to the payment of the revenue securities are sufficient to repay the state securities; and

      (b) The State Board of Finance approves the findings.

      5.  Provisions of the State Securities Law which are not inconsistent with the provisions of this chapter apply to the issuance of state securities pursuant to this chapter.

      (Added to NRS by 1981, 769; A 1985, 1901; 1989, 180; 1991, 180; 1993, 2320; 1997, 165)

      NRS 350A.152  Conditions upon issuance of state securities to acquire bonds issued by certain water authorities; acquisition of bonds of certain water authorities does not constitute indebtedness of members; property tax levied by member to pay member’s share of payments due on bonds.

      1.  Before state securities may be issued pursuant to this chapter for the purpose of acquiring bonds which are issued by a water authority organized as a political subdivision created by cooperative agreement that operates in all or a portion of a county whose population is 700,000 or more:

      (a) The water authority must obtain approval for the bonds from the debt management commission of each county in which any member of the water authority that is obligated to make payments on the bonds of the water authority is located; and

      (b) The members of the water authority must contract with the water authority to make payments from the revenues of the members’ water systems that, in the aggregate, are fully sufficient to pay those bonds as they become due. If the water revenues of any such member are insufficient to pay that member’s share of the amount due on the bonds, the member shall pay the deficiency out of money available for that purpose in the general fund of the member. If the money in the general fund of the member is insufficient to pay fully any such deficiency promptly, the member shall levy a general ad valorem tax on all taxable property within the member’s boundaries at a rate necessary to produce revenue in an amount sufficient to pay that member’s share of the payments due on the bonds.

      2.  Notwithstanding the provisions of paragraph (a) of subsection 1, the obligations of the members of the water authority to the water authority and the State of Nevada as a result of the acquisition of bonds of the water authority pursuant to this chapter do not constitute indebtedness of the members within the meaning of any constitutional, charter or statutory limitation or other provisions restricting the incurrence of any debt.

      3.  A property tax levied pursuant to this section:

      (a) Shall be considered to have been levied for the payment of bonded indebtedness for the purposes of NRS 361.463.

      (b) Is exempt from the limitations on property taxes contained in chapter 354 of NRS.

      (Added to NRS by 1997, 164; A 2003, 822; 2011, 1218)

      NRS 350A.153  Limitations and conditions upon issuance of state securities to acquire revenue securities; exceptions.

      1.  This chapter does not confer upon a municipality authority to pledge revenues for the payment of revenue securities. Any such authority must be derived from other law.

      2.  No state securities may be issued pursuant to this chapter for the purpose of acquiring revenue securities unless the governing body of the municipality issuing the revenue securities includes within the ordinance, resolution or other instrument authorizing the issuance of the revenue securities a statement authorizing the State Treasurer and any other appropriate state officer to withhold from any allocable local revenues to which the municipality is otherwise entitled an amount necessary and legally available to pay the principal and interest due on the revenue securities if the municipality fails to pay timely such principal and interest. The governing body of the municipality shall provide to the State Treasurer:

      (a) A copy of the ordinance, resolution or other instrument authorizing the issuance of the revenue securities;

      (b) A schedule of payments for the revenue securities; and

      (c) The name and address of the person from whom payments of principal and interest on the revenue securities will be received by the State Treasurer.

      3.  Payments of principal and interest on revenue securities must be due not later than 1 working day before the payments of principal and interest are due on the state securities issued to acquire the revenue securities. If a payment of the principal or interest on revenue securities is not received by the State Treasurer by the date on which the payment is due, the State Treasurer shall immediately notify the municipality to determine if the payment will be immediately forthcoming. If the payment will not be immediately forthcoming, the State Treasurer shall:

      (a) Forward the amount necessary to make the payment from any legally available money in the reserve fund created for that purpose in the bond bank fund; and

      (b) Withhold that amount from the next payment to the municipality of allocable local revenues legally available therefor. If the amount so withheld is insufficient to pay the amount due, the State Treasurer may continue to withhold any amounts necessary from subsequent payments to the municipality until the amount due is paid.

      4.  If, after being notified pursuant to this section, a municipality fails to make a payment of principal or interest on any revenue securities issued by it, the State Treasurer shall notify the Department of Taxation and request that action be taken pursuant to the provisions of NRS 354.685.

      5.  The State Controller and the Director of the Department of Administration shall approve requisitions or transfers required pursuant to this section and take such other action as is necessary to carry out the provisions of this section.

      6.  The provisions of subsections 2 to 5, inclusive, do not:

      (a) Apply to municipal bonds issued on or before June 30, 2011, where the bondholder or issuer may claim or receive a tax credit pursuant to the provisions of the Internal Revenue Code.

      (b) Authorize state taxes to be pledged to pay special obligations of the State.

      (Added to NRS by 1993, 2317; A 1995, 1897; 2009, 2660)

      NRS 350A.154  Revenue security pledged by allocable local revenues not debt of State.  A pledge of allocable local revenues for the payment of a revenue security pursuant to the provisions of this chapter does not cause the revenue security to be a debt of the State.

      (Added to NRS by 1995, 389)

      NRS 350A.155  Issuance of state securities to refund state securities.

      1.  The Board may, at the request of the State Treasurer, issue state securities to refund any state securities issued pursuant to this chapter in the manner prescribed by and subject to the limitations of the State Securities Law for refunding.

      2.  No state securities may be issued pursuant to this section without the concurrence of the municipality which issued the municipal or revenue securities purchased with the proceeds of the state securities to be refunded. At or before the time state securities are issued pursuant to this section, the State Treasurer and the municipality must agree as to the method of paying any costs incurred, making any cash deposits required for the refunding escrow, and allocating any savings achieved in connection with the refunding. Such a method may include an exchange of:

      (a) Municipal securities acquired and held by the State Treasurer pursuant to this chapter for new securities validly issued as general obligations by the municipality or municipalities.

      (b) Revenue securities acquired and held by the State Treasurer pursuant to this chapter for new securities validly issued by the municipality or municipalities.

Ê New securities received from a municipality by the State Treasurer must be held and payments received thereon applied in the same manner as required by this chapter for the original municipal or revenue securities.

      3.  The principal amount of state securities which have been refunded pursuant to this section must not be considered in computing compliance with the limitation of subsection 2 of NRS 350A.150, but outstanding state securities issued pursuant to this section are subject to that limitation.

      4.  NRS 350A.160 does not apply to state securities issued pursuant to this section.

      (Added to NRS by 1983, 1034; A 1991, 180; 1993, 2321)

      NRS 350A.160  Judicial confirmation of exemption of specific obligation from State’s debt limit required.  The Board shall not become obligated with respect to a particular lending project unless it has obtained judicial confirmation, in a proceeding pursuant to chapter 43 of NRS or another proceeding, that the obligation to be incurred for that project will be exempt from the State’s debt limit. If an appeal is taken or the confirmation is otherwise reviewed, the obligation must not be incurred unless the exemption is affirmed by the court of last resort.

      (Added to NRS by 1981, 769; A 1993, 2321)

      NRS 350A.170  State securities: Interest; discount.  The Board shall determine the rate or rates of interest which state securities are to bear. These securities may be sold at par, above par, or below par at a discount determined by the Board.

      (Added to NRS by 1981, 769)

      NRS 350A.180  Private sale of municipal or revenue securities to State; fees and charges.  A municipality may sell its municipal or revenue securities to the State at a private sale and may pay or obligate itself to pay to the State fees or charges in connection with any lending project.

      (Added to NRS by 1981, 770; A 1993, 2322)

      NRS 350A.190  Fund for the Municipal Bond Bank: Creation; disposition of revenue.

      1.  All revenues from lending projects must be deposited in the Fund for the Municipal Bond Bank in the State Treasury, which is hereby created as a special revenue fund.

      2.  Any revenue from lending projects which is in the Fund must be applied in the following order of priority:

      (a) Deposited into the Consolidated Bond Interest and Redemption Fund created pursuant to NRS 349.090 in amounts necessary to pay the principal of, interest on and redemption premiums due in connection with state securities issued pursuant to this chapter.

      (b) Deposited into any reserve account created for the payment of the principal of, interest on and redemption premiums due in connection with state securities issued pursuant to this chapter, in amounts and at times determined to be necessary.

      (c) Paid out for expenses of operation and maintenance.

      (d) On July 1 of each odd-numbered year, to the extent of any uncommitted balance in the Fund, deposited in the State General Fund.

      (Added to NRS by 1981, 770; A 1985, 711; 2001, 2751; 2011, 444)

      NRS 350A.200  Powers additional; applicable procedures for issuing securities; issuance of securities by municipality not authorized.

      1.  The powers conferred by this chapter are in addition to the powers conferred by any other law.

      2.  Securities may be issued pursuant to this chapter without regard to any procedure required by law, other than those set forth in this chapter or in the State Securities Law.

      3.  This chapter does not authorize the issuance of securities by any municipality.

      (Added to NRS by 1981, 770)

      NRS 350A.210  Liberal construction.  As the provisions of this chapter are necessary to secure the public health, safety, convenience and welfare, the chapter must be construed liberally to put its provisions into effect.

      (Added to NRS by 1981, 770)