SB233

Senate Bill No. 233–Committee on Judiciary

February 22, 1999

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Referred to Committee on Judiciary

SUMMARY—Revises provisions governing rate of interest if there is no written contract fixing rate. (BDR 8-1124)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: No.

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 interest; revising the provisions governing the rate of interest allowed under certain circumstances if there is no written contract fixing the rate; 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. NRS 99.040 is hereby amended to read as follows:

1-2 99.040 1. [~~When]~~ If there is no express contract in writing fixing a

1-3 different rate of interest, interest must be allowed at a rate equal to the

1-4 prime rate at the largest bank in Nevada, as ascertained by the

1-5 commissioner of financial institutions, on January 1 or July 1, as the case

1-6 may be, immediately preceding the date of the transaction, plus 2 percent,

1-7 upon all money from the time it becomes due, in the following cases:

1-8 (a) Upon contracts, express or implied, other than book accounts.

1-9 (b) Upon the settlement of book or store accounts from the day on which

1-10 the balance is ascertained. For the purposes of this paragraph, a book or

1-11 store account is settled when the creditor gives written notice to the

1-12 debtor that a sum certain is due on the account and that the creditor will

1-13 not give the debtor a further extension of credit on the account. The day

1-14 on which the creditor gives such written notice to the debtor shall be

1-15 deemed to be the day on which the balance is ascertained.

1-16 (c) Upon money received to the use and benefit of another and detained

1-17 without his consent.

2-1 (d) Upon wages or salary, if it is unpaid when due, after demand

2-2 therefor has been made.

2-3 The rate must be adjusted accordingly on each January 1 and July 1

2-4 thereafter until the judgment is satisfied.

2-5 2. A written notice given to a debtor by a creditor pursuant to

2-6 paragraph (b) of subsection 1 must contain the following statement:

2-7 The unpaid balance on your account of $ ..... is now due, and you

2-8 will not be given a further extension of credit on the account.

2-9 Beginning today, the unpaid balance on your account will accrue

2-10 interest at a rate equal to the prime rate plus 2 percent. The prime

2-11 rate currently in effect is ..... percent. This prime rate may change

2-12 on January 1 and July 1 of each year, until the balance on your

2-13 account is paid in full.

2-14 3. The provisions of this section do not apply to money owed:

2-15 (a) For the construction or remodeling of a building pursuant to NRS

2-16 624.325; or

2-17 (b) By a contractor to his subcontractor pursuant to NRS 624.326.