Assembly Bill No. 539

Assembly Bill No. 539-Committee on Government Affairs

(On Behalf of the Budget Division of the
Department of Administration)

May 27, 1997
____________

Referred to Committee on Government Affairs

SUMMARY--Makes various changes to provisions governing housing division of department of business and industry. (BDR 25-1445)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: Executive Budget.

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

AN ACT relating to the housing division of the department of business and industry; expanding the authority of the division to create or participate in nonprofit corporations; revising the provisions governing the issuance of letters of credit by the division for certain housing projects; 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 NRS 319.165 is hereby amended to read as follows:
319.165 1. The division may create or cause to be created:
(a) Nonprofit corporations, pursuant to chapter 82 of NRS;
(b) Grantor trusts; or
(c) Other instrumentalities,
which the division determines are necessary or convenient for the exercise of its powers and duties pursuant to this chapter.
2. Any corporation created pursuant to subsection 1 must be subject to the control of the administrator. The purposes, powers and operation of the corporation must be consistent with the purposes, powers and duties of the division.
3. Any notes, bonds or other obligations issued by a corporation, trust or other instrumentality created pursuant to subsection 1 are subject to the same requirements prescribed for notes, bonds and other obligations of the division in NRS 319.171, 319.270, 319.280, 319.323 and 319.327.
4. In addition to the authority set forth in subsection 1, the division may, for purposes of:
(a) Providing housing for persons and families of low or moderate income within this state; or
(b) Accomplishing other purposes consistent with this chapter,
create, cause to be created or otherwise participate in a nonprofit corporation organized pursuant to chapter 82 of NRS. The administrator shall determine the extent, if any, to which the division will be involved in the management and operation of a nonprofit corporation created pursuant to this subsection. A nonprofit corporation created pursuant to this subsection is not a political subdivision, municipal corporation, quasi-municipal corporation, agency, department, instrumentality or other public or governmental entity of this state.
5. The articles of incorporation of a nonprofit corporation that the division creates, causes to be created or participates in pursuant to this section must specify whether that creation or participation is authorized pursuant to subsection 1 or 4.
6. The division may, in accordance with terms and conditions prescribed by the administrator, make loans or grants or otherwise provide money or other financial assistance to a nonprofit corporation that the division creates, causes to be created or participates in pursuant to subsection 1 or 4 to carry out the purposes of this chapter. A loan made by the division pursuant to this subsection is not required to be guaranteed or insured. The sum of the aggregate amount of any grants made pursuant to this subsection and the aggregate unpaid principal balance of any loans made pursuant to this subsection must not exceed $5,000,000.
Sec. 2. NRS 319.190 is hereby amended to read as follows:
319.190 1. The division may make, undertake commitments to make and participate with lending institutions in the making of mortgage loans, make temporary loans and advances in anticipation of mortgage loans, and issue letters of credit pursuant to subsection 2 to finance the acquisition, construction or rehabilitation of residential housing, including multifamily housing. Any loan made by the division pursuant to this section must be insured or guaranteed unless it is financed by an issue of obligations of the division that are insured or secured by surety bonds, letters of credit not issued by the division, guaranties or other means of assuring repayment of those obligations. Such loans may be made or letters of credit issued only after a determination by the administrator that mortgage loans or letters of credit are not otherwise available from private lenders upon reasonable equivalent terms and conditions.
2. The division may issue a letter of credit only if [sufficient reserves in the funds established by the division are deposited in a separate account to be used to pay any] the administrator determines that the division has reserves of money in an amount sufficient to pay liabilities that [may be incurred by issuing] the division may be required to pay pursuant to the letter of credit. Any letter of credit issued by the division must state that it is payable only from the assets of the division that are designated by the division as available for the payment of letters of credit. The aggregate amount of outstanding letters of credit issued by the division must not exceed [$5,000,000.] $25,000,000.
Sec. 3. This act becomes effective on July 1, 1997.