Assembly Bill No. 606–Committee on Government Affairs

(On Behalf of Budget Division)

March 18, 1999

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Referred to Committee on Government Affairs

 

SUMMARY—Establishes severe financial emergency fund for loans to local governments in severe financial emergency. (BDR 31-1580)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: No.

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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).

 

AN ACT relating to local financial administration; establishing the severe financial emergency fund; authorizing the executive director of the department of taxation to loan money from the fund to a local government in severe financial emergency under certain circumstances; and providing other matters properly relating thereto.

 

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

1-1 Section 1. Chapter 354 of NRS is hereby amended by adding thereto

1-2 a new section to read as follows:

1-3 1. The severe financial emergency fund is hereby created in the state

1-4 treasury as a revolving fund. The executive director shall administer the

1-5 fund.

1-6 2. The money in the fund must be invested as other state funds are

1-7 invested. Any interest and income earned on the money in the fund must,

1-8 after deducting any applicable charges, be credited to the fund.

1-9 3. The executive director may distribute the money in the severe

1-10 financial emergency fund as a loan to a local government for the

1-11 purpose of paying the operating expenses of the local government until

1-12 the local government receives revenues if:

1-13 (a) The department takes over the management of a local government

1-14 pursuant to NRS 354.685 to 354.725, inclusive;

2-1 (b) The executive director determines that a loan from the severe

2-2 financial emergency fund is necessary to pay the operating expenses of

2-3 the local government; and

2-4 (c) The local government adopts a resolution in which the local

2-5 government agrees to:

2-6 (1) Use the money only for the purpose of paying the operating

2-7 expenses of the local government until the local government receives

2-8 revenues; and

2-9 (2) Repay the entire amount of the loan, without any interest, to the

2-10 severe financial emergency fund as soon as practicable, but not later

2-11 than 12 months after the date on which the resolution is adopted.

2-12 4. A loan approved by the executive director must be repaid as soon

2-13 as practicable by the local government, but the duration of the loan must

2-14 not exceed 12 months after the date on which the loan was made. The

2-15 executive director shall not charge interest on a loan made pursuant to

2-16 this section.

2-17 5. The executive director shall report to the committee on local

2-18 government finance and to the Nevada tax commission as soon as

2-19 practicable after the date that the loan is approved concerning:

2-20 (a) The status of the loan;

2-21 (b) The purposes for which the local government will use the money

2-22 from the loan; and

2-23 (c) The resources that the local government will use to repay the loan.

2-24 Sec. 2. NRS 354.655 is hereby amended to read as follows:

2-25 354.655 As used in NRS 354.655 to 354.725, inclusive, and section 1

2-26 of this act unless the context requires otherwise:

2-27 1. "Committee" means the committee on local government finance.

2-28 2. "Department" means the department of taxation.

2-29 3. "Executive director" means the executive director of the department

2-30 of taxation.

2-31 4. "Local government" means any local government subject to the

2-32 provisions of the Local Government Budget Act.

2-33 5. The words and terms defined in the Local Government Budget Act

2-34 have the meanings ascribed to them in that act.

2-35 Sec. 3. As soon as practicable after the effective date of this act, the

2-36 state controller shall transfer all the money in the local government

2-37 emergency fund (fund 652, budget account 6067, dept. 13) to the severe

2-38 financial emergency fund created pursuant to section 1 of this act.

2-39 Sec. 4. This act becomes effective upon passage and approval.

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