2005 Nevada Revised Statutes - Chapter 350A — Purchase of Municipal and Revenue Securities by State

CHAPTER 350A - PURCHASE OF MUNICIPAL ANDREVENUE SECURITIES BY STATE

NRS 350A.010 Legislativefindings.

NRS 350A.020 Definitions.

NRS 350A.025 Allocablelocal revenues defined.

NRS 350A.030 Boarddefined.

NRS 350A.040 Costof a lending project defined.

NRS 350A.050 Expenseof operation and maintenance defined.

NRS 350A.060 Lendingproject defined.

NRS 350A.070 Municipalsecurities defined.

NRS 350A.080 Municipalitydefined.

NRS 350A.090 Purposerelated to natural resources defined.

NRS 350A.095 Revenuesecurities defined.

NRS 350A.100 Revenuesof a lending project defined.

NRS 350A.110 Statesecurities defined.

NRS 350A.120 Taxdefined.

NRS 350A.125 Wastewaterauthority defined.

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

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

NRS 350A.150 Limitationsand conditions on issuance of certain state securities; applicability of StateSecurities Law.

NRS 350A.152 Conditionsupon issuance of state securities to acquire bonds issued by certain waterauthorities; acquisition of bonds of certain water authorities does notconstitute indebtedness of members; property tax levied by member to paymembers share of payments due on bonds.

NRS 350A.153 Limitationsand conditions upon issuance of state securities to acquire revenue securities.

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

NRS 350A.155 Issuanceof state securities to refund state securities.

NRS 350A.160 Judicialconfirmation of exemption of specific obligation from States debt limitrequired.

NRS 350A.170 Statesecurities: Interest; discount.

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

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

NRS 350A.200 Powersadditional; applicable procedures for issuing securities; issuance ofsecurities by municipality not authorized.

NRS 350A.210 Liberalconstruction.

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NRS 350A.010 Legislativefindings. The Legislature finds that:

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

2. The making of such loans and the issuing of statesecurities therefor as general obligations are necessary, expedient andadvisable for the protection and preservation of the property and naturalresources of the State of Nevada and for obtaining the benefits thereof; and

3. Because of market conditions relating to credit andpublic finance, it is in the public interest to assist municipalities in theacquisition, construction or equipping of public improvements by providingmoney to municipalities at reasonable rates of interest through the issuance ofstate 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 otherwiserequires, the words and terms defined in NRS350A.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)

NRS 350A.025 Allocablelocal revenues defined. Allocable local revenuesmeans amounts received by the State which are payable to a municipality andwhich are designated as allocable by the municipality in the instrumentauthorizing the revenue security with respect to a particular lending project.

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

NRS 350A.030 Boarddefined. Board means the State Board of Finance.

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

NRS 350A.040 Costof a lending project defined. Cost of alending project means all or any designated part of the cost of any lendingproject, including any incidental cost pertaining to such a project. The costof 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, servicesof engineers, architects, financial consultants, attorneys, clerical personneland other agents and employees.

3. Publishing, posting, mailing and otherwise givingnotice, filing or recording instruments, taking options and fees to banks andcredit unions.

4. Establishment of a reserve for contingencies.

5. Interest on state securities for any time whichdoes not exceed 3 years, discounts on such state securities, reserves for thepayment of the principal of and interest on such securities, replacementexpenses and other costs of issuing such securities.

6. Amending any resolution or other instrument authorizingthe issuance of, or otherwise relating to, state securities for any lendingproject.

7. Funding medium-term obligations.

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

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

NRS 350A.050 Expenseof operation and maintenance defined. Expenseof operation and maintenance means any reasonable and necessary currentexpense of the State for the operation, maintenance or administration of alending 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 directlyrelated to the administration of lending projects.

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

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

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

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

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

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

NRS 350A.060 Lendingproject defined. Lending project means anyundertaking which the State is authorized to complete in connection with loansto municipalities made by the purchase of:

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

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

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

NRS 350A.070 Municipalsecurities defined. Municipal securitiesmeans notes, warrants, interim debentures, bonds and temporary bonds validlyissued as obligations for a purpose related to natural resources which arepayable:

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

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

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

4. For bonds issued by a wastewater authority, fromrevenues of the water reclamation system of the wastewater authority or one ormore of the municipalities that are members of the wastewater authority, or anycombination thereof.

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

NRS 350A.080 Municipalitydefined. Municipality means any county,city, town, wastewater authority, water authority organized as a politicalsubdivision created by cooperative agreement, school district, generalimprovement district or other district, including an irrigation district.

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

NRS 350A.090 Purposerelated to natural resources defined. Purposerelated to natural resources means a purpose necessary, expedient or advisablefor the protection and preservation of any property or natural resources of theState, or for obtaining the benefits thereof, including without limitationwater projects, sewer projects and park projects which preserve naturallandscape or wildlife habitat or both.

(Added to NRS by 1981, 768)

NRS 350A.095 Revenuesecurities defined. Revenue securities meansnotes, warrants, interim debentures, bonds and temporary bonds validly issuedby a municipality as obligations for a purpose related to any undertaking whichthe 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 municipalityfor revenues pledged by the municipality which are not derived from a project;or

3. Any combination of those revenues and taxes.

The termdoes not include municipal securities or obligations issued pursuant to theprovisions of NRS 244A.669 to 244A.763, inclusive, 268.512 to 268.568, inclusive, or 315.140 to 315.780, inclusive.

(Added to NRS by 1993, 2317)

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

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

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

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

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

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

NRS 350A.110 Statesecurities defined. State securities meansnotes, warrants, interim debentures, bonds and temporary bonds issued as:

1. General obligations by the State pursuant to thischapter for any lending project which is for a purpose related to naturalresources or for a refunding which are payable from taxes, whether or notadditionally secured by a pledge of all or any designated revenues of one ormore lending projects; or

2. Limited obligations by the State pursuant to thischapter for any lending project which is for a purpose related to anyundertaking which a municipality is authorized to complete or for a refundingwhich 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 Taxdefined. Tax means a general (ad valorem)property tax.

(Added to NRS by 1981, 768)

NRS 350A.125 Wastewaterauthority defined. Wastewater authoritymeans an entity that is created by cooperative agreement pursuant to chapter 277 of NRS, the functions of whichinclude sanitation and sewerage, the treatment and disposal of wastewater, orthe development and reclamation of water resources.

(Added to NRS by 2005, 184)

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

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

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

the StateTreasurer may make loans to municipalities by purchasing their municipalsecurities validly issued for a purpose related to natural resources or theirrevenue securities validly issued for a purpose related to any undertakingwhich the municipality is authorized to complete.

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

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

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

2. In his capacity as Administrator, the StateTreasurer may:

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

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

(c) Sell or otherwise dispose of municipal securitiesand 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 orconvenient 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 andthe administration of lending projects;

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

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

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

(j) Undertake other matters which he determines to benecessary or desirable in accomplishing the purposes of this chapter.

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

NRS 350A.150 Limitationsand conditions on issuance of certain state securities; applicability of StateSecurities Law.

1. The Board may, at the request of the StateTreasurer, to pay the cost of any lending project, borrow money or otherwisebecome obligated, and may provide evidence of those obligations by issuingstate securities.

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

3. State securities issued to:

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

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

Any suchstate securities may be issued without an election or other preliminaries. Nostate securities may be issued to refund any municipal securities issued beforeMay 29, 1981.

4. No state securities may be issued to acquirerevenue securities unless:

(a) The State Treasurer presents to the State Board ofFinance findings which indicate that the revenues and taxes pledged to thepayment 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 arenot inconsistent with the provisions of this chapter apply to the issuance ofstate 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 Conditionsupon issuance of state securities to acquire bonds issued by certain waterauthorities; acquisition of bonds of certain water authorities does notconstitute indebtedness of members; property tax levied by member to paymembers share of payments due on bonds.

1. Before state securities may be issued pursuant tothis chapter for the purpose of acquiring bonds which are issued by a waterauthority organized as a political subdivision created by cooperative agreementthat operates in all or a portion of a county whose population is 400,000 ormore:

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

(b) The members of the water authority must contractwith the water authority to make payments from the revenues of the memberswater systems that, in the aggregate, are fully sufficient to pay those bondsas they become due. If the water revenues of any such member are insufficientto pay that members share of the amount due on the bonds, the member shall paythe deficiency out of money available for that purpose in the general fund ofthe member. If the money in the general fund of the member is insufficient topay fully any such deficiency promptly, the member shall levy a general advalorem tax on all taxable property within the members boundaries at a ratenecessary to produce revenue in an amount sufficient to pay that members shareof the payments due on the bonds.

2. Notwithstanding the provisions of paragraph (a) ofsubsection 1, the obligations of the members of the water authority to thewater authority and the State of Nevada as a result of the acquisition of bondsof the water authority pursuant to this chapter do not constitute indebtednessof the members within the meaning of any constitutional, charter or statutorylimitation 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 thepayment of bonded indebtedness for the purposes of NRS 361.463.

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

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

NRS 350A.153 Limitationsand conditions upon issuance of state securities to acquire revenue securities.

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

2. No state securities may be issued pursuant to thischapter for the purpose of acquiring revenue securities unless the governingbody of the municipality issuing the revenue securities includes within theordinance, resolution or other instrument authorizing the issuance of therevenue securities a statement authorizing the State Treasurer and any otherappropriate state officer to withhold from any allocable local revenues towhich the municipality is otherwise entitled an amount necessary and legallyavailable to pay the principal and interest due on the revenue securities ifthe municipality fails to pay timely such principal and interest. The governingbody of the municipality shall provide to the State Treasurer:

(a) A copy of the ordinance, resolution or otherinstrument 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 whompayments of principal and interest on the revenue securities will be receivedby the State Treasurer.

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

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

(b) Withhold that amount from the next payment to themunicipality of allocable local revenues legally available therefor. If theamount so withheld is insufficient to pay the amount due, the State Treasurermay continue to withhold any amounts necessary from subsequent payments to themunicipality 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 revenuesecurities issued by it, the State Treasurer shall notify the Department ofTaxation and request that action be taken pursuant to the provisions of NRS 354.685.

5. The State Controller and the Director of theDepartment of Administration shall approve requisitions or transfers requiredpursuant to this section and take such other action as is necessary to carryout the provisions of this section.

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

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

(Added to NRS by 1995, 389)

NRS 350A.155 Issuanceof state securities to refund state securities.

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

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

(a) Municipal securities acquired and held by the StateTreasurer pursuant to this chapter for new securities validly issued as generalobligations by the municipality or municipalities.

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

Newsecurities received from a municipality by the State Treasurer must be held andpayments received thereon applied in the same manner as required by this chapterfor the original municipal or revenue securities.

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

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

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

NRS 350A.160 Judicialconfirmation of exemption of specific obligation from States debt limit required. The Board shall not become obligated with respect to aparticular lending project unless it has obtained judicial confirmation, in aproceeding pursuant to chapter 43 of NRS oranother proceeding, that the obligation to be incurred for that project will beexempt from the States debt limit. If an appeal is taken or the confirmationis otherwise reviewed, the obligation must not be incurred unless the exemptionis affirmed by the court of last resort.

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

NRS 350A.170 Statesecurities: Interest; discount. The Boardshall determine the rate or rates of interest which state securities are tobear. These securities may be sold at par, above par, or below par at adiscount determined by the Board.

(Added to NRS by 1981, 769)

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

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

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

1. All revenues from lending projects must bedeposited in the Fund for the Municipal Bond Bank in the State Treasury, whichis hereby created as an enterprise fund.

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

(a) Deposited into the Consolidated Bond Interest andRedemption Fund created pursuant to NRS349.090 in amounts necessary to pay the principal of, interest on andredemption premiums due in connection with state securities issued pursuant tothis chapter.

(b) Deposited into any reserve account created for thepayment of the principal of, interest on and redemption premiums due inconnection with state securities issued pursuant to this chapter, in amountsand 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 extentof any uncommitted balance in the Fund, deposited in the State General Fund.

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

NRS 350A.200 Powersadditional; applicable procedures for issuing securities; issuance ofsecurities by municipality not authorized.

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

2. Securities may be issued pursuant to this chapterwithout regard to any procedure required by law, other than those set forth inthis chapter or in the State Securities Law.

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

(Added to NRS by 1981, 770)

NRS 350A.210 Liberalconstruction. As the provisions of thischapter are necessary to secure the public health, safety, convenience andwelfare, the chapter must be construed liberally to put its provisions intoeffect.

(Added to NRS by 1981, 770)

 

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