EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

1-1 Section 1. NRS 355.140 is hereby amended to read as follows:

1-2 355.140 1. In addition to other investments provided for by a

1-17 Union, including special assessment district bonds if those bonds provide

2-1 that any deficiencies in the proceeds to pay the bonds are to be paid from

2-2 the general fund of the incorporated city;

2-3 (g) General obligation bonds of irrigation districts and drainage districts

2-4 in this state which are liens upon the property within those districts, if the

2-5 value of the property is found by the board or commission making the

2-6 investments to render the bonds financially sound over [and above] all

2-7 other obligations of the districts;

2-8 (h) Bonds of school districts within this state;

2-9 (i) Bonds of any general improvement district whose population is

2-10 200,000 or more and which is situated in two or more counties of this state

2-11 or of any other state, if:

2-12 (1) The bonds are general obligation bonds and constitute a lien upon

2-13 the property within the district which is subject to taxation; and

2-14 (2) That property is of an assessed valuation of not less than five

2-15 times the amount of the bonded indebtedness of the district;

2-16 (j) Medium-term obligations for counties, cities and school districts

2-17 authorized pursuant to chapter 350 of NRS;

2-18 (k) Loans bearing interest at a rate determined by the state board of

2-19 finance when secured by first mortgages on agricultural lands in this state

2-20 of not less than three times the value of the amount loaned, exclusive of

2-21 perishable improvements, and of unexceptional title and free from all

2-22 encumbrances;

2-23 (l) Farm loan bonds, consolidated farm loan bonds, debentures,

2-24 consolidated debentures and other obligations issued by federal land banks

2-25 and federal intermediate credit banks under the authority of the Federal

2-26 Farm Loan Act, formerly 12 U.S.C. §§ 636 to 1012, inclusive, and §§ 1021

2-27 to 1129, inclusive, and the Farm Credit Act of 1971, 12 U.S.C. §§ 2001 to

2-28 2259, inclusive, and bonds, debentures, consolidated debentures and other

2-29 obligations issued by banks for cooperatives under the authority of the

2-30 Farm Credit Act of 1933, formerly 12 U.S.C. §§ 1131 to 1138e, inclusive,

2-31 and the Farm Credit Act of 1971, 12 U.S.C. §§ 2001 to 2259, inclusive,

2-32 excluding such money thereof as has been received or which may be

2-33 received hereafter from the Federal Government or received pursuant to

2-34 some federal law which governs the investment thereof;

2-35 (m) Negotiable certificates of deposit issued by commercial banks or

2-36 insured savings and loan associations;

2-37 (n) Bankers’ acceptances of the kind and maturities made eligible by

2-38 law for rediscount with Federal Reserve banks or trust companies which

2-39 are members of the Federal Reserve System, except that acceptances may

2-40 not exceed 180 days’ maturity, and may not, in aggregate value, exceed 20

2-41 percent of the total par value of the portfolio as determined on the date of

2-42 purchase;

3-1 (o) Commercial paper issued by a corporation organized and operating

3-2 in the United States or by a depository institution licensed by the United

3-3 States or any state and operating in the United States that:

3-4 (1) At the time of purchase has a remaining term to maturity of no

3-5 more than 270 days; and

3-6 (2) Is rated by a nationally recognized rating service as "A-1," "P-1"

3-7 or its equivalent, or better,

3-8 except that investments pursuant to this paragraph may not, in aggregate

3-9 value, exceed 20 percent of the total par value of the portfolio as

3-10 determined on the date of purchase, and if the rating of an obligation is

3-11 reduced to a level that does not meet the requirements of this paragraph, it

3-12 must be sold as soon as possible;

3-13 (p) Notes, bonds and other unconditional obligations for the payment of

3-14 money, except certificates of deposit that do not qualify pursuant to

3-15 paragraph (m), issued by corporations organized and operating in the

3-16 United States or by depository institutions licensed by the United States or

3-17 any state and operating in the United States that:

3-18 (1) Are purchased from a registered broker-dealer;

3-19 (2) At the time of purchase have a remaining term to maturity of no

3-20 more than [3] 5 years; and

3-21 (3) Are rated by a nationally recognized rating service as "A" or its

3-22 equivalent, or better,

3-23 except that investments pursuant to this paragraph may not, in aggregate

3-24 value, exceed 20 percent of the total par value of the portfolio, and if the

3-25 rating of an obligation is reduced to a level that does not meet the

3-26 requirements of this paragraph, it must be sold as soon as possible;

3-27 (q) Money market mutual funds which:

3-28 (1) Are registered with the Securities and Exchange Commission;

3-29 (2) Are rated by a nationally recognized rating service as "AAA" or

3-30 its equivalent; and

3-31 (3) Invest only in securities issued by the Federal Government or

3-32 agencies of the Federal Government or in repurchase agreements fully

3-33 collateralized by such securities; [and]

3-34 (r) Collateralized mortgage obligations that are rated by a nationally

3-35 recognized rating service as "AAA" or its equivalent [.] ; and

3-36 (s) Asset-backed securities that are rated by a nationally recognized

3-37 rating service as "AAA" or its equivalent.

3-38 2. Repurchase agreements are proper and lawful investments of money

3-39 of the state and the state insurance fund for the purchase or sale of

3-40 securities which are negotiable and of the types listed in subsection 1 if

3-41 made in accordance with the following conditions:

3-42 (a) The state treasurer shall designate in advance and thereafter

3-43 maintain a list of qualified counterparties which:

4-1 (1) Regularly provide audited and, if available, unaudited financial

4-2 statements to the state treasurer;

4-3 (2) The state treasurer has determined to have adequate capitalization

4-4 and earnings and appropriate assets to be highly credit worthy; and

4-5 (3) Have executed a written master repurchase agreement in a form

4-6 satisfactory to the state treasurer and the state board of finance pursuant to

4-7 which all repurchase agreements are entered into. The master repurchase

4-8 agreement must require the prompt delivery to the state treasurer and the

4-9 appointed custodian of written confirmations of all transactions conducted

4-10 thereunder, and must be developed giving consideration to the Federal

4-11 Bankruptcy Act.

4-12 (b) In all repurchase agreements:

4-13 (1) At or before the time money to pay the purchase price is

4-14 transferred, title to the purchased securities must be recorded in the name

4-15 of the appointed custodian, or the purchased securities must be delivered

4-16 with all appropriate, executed transfer instruments by physical delivery to

4-17 the custodian;

4-18 (2) The state must enter into a written contract with the custodian

4-19 appointed pursuant to subparagraph (1) which requires the custodian to:

4-20 (I) Disburse cash for repurchase agreements only upon receipt of

4-21 the underlying securities;

4-22 (II) Notify the state when the securities are marked to the market if

4-23 the required margin on the agreement is not maintained;

4-24 (III) Hold the securities separate from the assets of the custodian;

4-25 and

4-26 (IV) Report periodically to the state concerning the market value

4-27 of the securities;

4-28 (3) The market value of the purchased securities must exceed 102

4-29 percent of the repurchase price to be paid by the counterparty and the value

4-30 of the purchased securities must be marked to the market weekly;

4-31 (4) The date on which the securities are to be repurchased must not

4-32 be more than 90 days after the date of purchase; and

4-33 (5) The purchased securities must not have a term to maturity at the

4-34 time of purchase in excess of 10 years.

4-35 3. As used in subsection 2:

4-36 (a) "Counterparty" means a bank organized and operating or licensed to

4-37 operate in the United States pursuant to federal or state law or a securities

4-38 dealer which is:

4-39 (1) A registered broker-dealer;

4-40 (2) Designated by the Federal Reserve Bank of New York as a

4-41 "primary" dealer in United States government securities; and

4-42 (3) In full compliance with all applicable capital requirements.

5-1 (b) "Repurchase agreement" means a purchase of securities by the state

5-2 or state insurance fund from a counterparty which commits to repurchase

5-3 those securities or securities of the same issuer, description, issue date and

5-4 maturity on or before a specified date for a specified price.

5-5 4. No money of this state may be invested pursuant to a reverse-

5-6 repurchase agreement, except money invested pursuant to chapter 286 or

5-7 chapters 616A to 616D, inclusive, of NRS.

5-8 Sec. 2. NRS 226.110 is hereby amended to read as follows:

5-9 226.110 The state treasurer:

5-43 to chapter 319 of NRS and NRS 349.400 to 349.987, inclusive. The state

6-1 treasurer shall issue such an obligation as soon as practicable after

6-2 receiving a request from a state agency for the issuance of the obligation.

6-3 [10.] 11. May organize and facilitate statewide pooled financing

6-4 programs, including lease purchases, for the benefit of the state and any

6-5 political subdivision, including districts organized pursuant to NRS

6-6 450.550 to 450.750, inclusive, and chapters 244A, 309, 318, 379, 474,

6-7 541, 543 and 555 of NRS.

6-8 Sec. 3. This act becomes effective on July 1, 1999.