Senate Bill No. 369–Committee on Government Affairs

CHAPTER........

AN ACT relating to revenue bonds for industrial development; providing under certain

circumstances for the confidentiality of certain records submitted by obligors for the

issuance of such bonds; prohibiting, under certain circumstances, the issuance of

such bonds by the state if the issuance would result in the abandonment or closure

of an existing facility; revising the prerequisites to the financing of a proposed

project; authorizing the director of the department of business and industry to adopt

regulations related to the issuance of such bonds and to refund such bonds issued by

counties and cities in this state; 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. Chapter 349 of NRS is hereby amended by adding thereto

the provisions set forth as sections 2 and 3 of this act.

Sec. 2. 1. The director may provide financing for a project

pursuant to this section if:

(a) The financing is limited in amount and purpose to the payment of

the costs associated with:

(1) The acquisition, refurbishing, replacement and installation of

equipment for the project; and

(2) The issuance of bonds pursuant to this section;

(b) The total amount of the bonds issued pursuant to this section for a

particular project does not exceed $2,500,000;

(c) The director determines that the bonds will:

  1. (1) Be sold only to qualified institutional buyers, as defined in Rule
  1. 144A of the Securities and Exchange Commission, 17 C.F.R. §
  1. 230.144A, in minimum denominations of at least $100,000; or

(2) Receive a rating within one of the top four rating categories of

Moody’s Investors Service, Inc., Standard and Poor’s Rating Services or

Fitch IBCA, Inc.;

(d) The director makes the findings set forth in paragraphs (a) to (e),

inclusive, (g) and (h) of subsection 2 of NRS 349.580, and the governing

body of the city or county where the project is to be located approves the

findings of the director; and

(e) The director complies with the guidelines established pursuant to

subsection 2.

2. The board shall establish guidelines for the provision of financing

for a project pursuant to this section.

  1. Sec. 3. 1. Except as otherwise provided in subsection 2, the
  1. director, the board and the governing body of the county or city where a
  1. project is located shall make available for public inspection, upon
  1. request, information furnished by an obligor to obtain the director’s
  2. assistance in financing a project pursuant to NRS 349.400 to 349.670,
  1. inclusive, and section 2 of this act.

2. Except as ordered by a court of competent jurisdiction or as

required by federal law, the director, the board and the governing body of

the county or city where the project is located shall not, without the prior

consent of the obligor, disclose proprietary information or financial

statements or records of the obligor or guarantor that are not otherwise

available to the public unless the obligor has:

(a) Requested in writing that the information, statements or records be

made public; or

(b) Furnished the information, statements or records for a purpose

other than obtaining the director’s assistance in financing a project

pursuant to NRS 349.400 to 349.670, inclusive, and section 2 of this act.

3. As used in this section:

(a) "Proprietary information" means any trade secret or other

information which, if disclosed to members of the general public, may

result in a competitive disadvantage to the obligor, including, without

limitation:

(1) Documents concerning the marketing or strategic planning of

the obligor;

(2) Data, studies and reports concerning the development of new

products or services; and

(3) Data that identify the share of the market of the obligor.

(b) "Trade secret" has the meaning ascribed to it in NRS 600A.030.

Sec. 4. NRS 349.400 is hereby amended to read as follows:

349.400 As used in NRS 349.400 to 349.670, inclusive, and sections 2

and 3 of this act, unless the context otherwise requires, the words and

terms defined in NRS 349.410 to 349.540, inclusive, have the meanings

ascribed to them in those sections.

Sec. 5. NRS 349.425 is hereby amended to read as follows:

  1. 349.425 "Corporation for public benefit" means a corporation that is
  1. [recognized] :
  1. 1. Recognized as exempt pursuant to section 501(c)(3) of the Internal
  1. Revenue Code of 1986, 26 U.S.C. § 501(c)(3), future amendments to that
  1. section and the corresponding provisions of future internal revenue laws [.]
  1. ; or
  1. 2. Organized for a public or charitable purpose and which, upon
  1. dissolution, must distribute its assets to the United States, a state, or a
  1. person which is recognized as exempt pursuant to section 501(c)(3) of the
  1. Internal Revenue Code of 1986, 26 U.S.C. § 501(c)(3), future
  1. amendments to that section and the corresponding provisions of future
  1. internal revenue laws.

Sec. 6. NRS 349.565 is hereby amended to read as follows:

  1. 349.565 1. The director may not, under NRS 349.400 to 349.670,
  1. inclusive [:
  1. 1.] , and sections 2 and 3 of this act
  1. :
  2. (a) Operate any manufacturing, industrial, warehousing or commercial
  1. enterprise or an organization for research and development or any health
  1. and care facility to which he provided assistance; or
  1. [2. Assist]
  1. (b) Except as otherwise provided in subsection 2, assist any
  1. manufacturing, industrial, warehousing or commercial enterprise or an
  1. organization for research and development to locate in a county or city
  1. which would [compete substantially with an enterprise or organization
  1. already established in the county or city for substantially the same intrastate
  1. markets.] result in the abandonment or closure of an existing facility of a
  1. like nature located within that county or city, unless the existing facility
  1. is operated by the contemplated lessee, purchaser or other obligor or an
  1. affiliate of such a person and the facility is to be abandoned or closed
  1. because of obsolescence, lack of available labor or limitations at the site
  1. of the facility.
  1. 2. The provisions of paragraph (b) of subsection 1 do not apply to:
  1. (a) Health and care facilities and supplemental facilities for a health
  1. and care facility;
  1. (b) Civic and cultural enterprises open to the general public;
  1. (c) Enterprises located in a redevelopment area created pursuant to
  1. NRS 279.382 to 279.685, inclusive;
  1. (d) Enterprises located in an area designated as an empowerment
  1. zone pursuant to sections 1391 to 1397, inclusive, of the Internal
  1. Revenue Code of 1986, 26 U.S.C. §§ 1391-97, future amendments to
  1. those sections and the corresponding provisions of future internal
  1. revenue laws;
  1. (e) Facilities established by a corporation for public benefit; and

(f) Enterprises whose products are substantially sold, used or

distributed outside this state.

Sec. 7. NRS 349.580 is hereby amended to read as follows:

  1. 349.580 [The] Except as otherwise provided in NRS 349.640 and
  1. section 2 of this act, the director shall not finance a project unless, before
  1. financing:
  1. 1. The director finds that:
  1. (a) The project to be financed has been approved for financing pursuant
  1. to the requirements of NRS 244A.669 to 244A.763, inclusive, or 268.512
  1. to 268.568, inclusive; and
  1. (b) There has been a request by a city or county to have the director
  1. issue bonds to finance the project; or
  1. 2. The director finds and both the board and the governing body of the
  1. city or county where the project is to be located approve the findings of the
  1. director that:
  1. (a) The project consists of any land, building or other improvement and
  1. all real and personal properties necessary in connection therewith,
  1. excluding inventories, raw materials and working capital, whether or not in
  2. existence, which is suitable for new construction, improvement,
  1. preservation, restoration, rehabilitation or redevelopment:
  1. (1) For manufacturing, industrial, warehousing, civic, cultural or other
  1. commercial enterprises, educational institutions , corporations for public
  1. benefit or organizations for research and development;
  1. (2) For a health and care facility or a supplemental facility for a health
  1. and care facility;
  1. (3) Of real or personal property appropriate for addition to a hotel,
  1. motel, apartment building, casino or office building to protect it or its
  1. occupants from fire; or
  1. (4) Of a historic structure;
  1. (b) The project will provide a public benefit;
  1. (c) The contemplated lessee, purchaser or other obligor has sufficient
  1. financial resources to place the project in operation and to continue its
  1. operation, meeting the obligations of the lease, purchase contract or
  1. financing agreement;
  1. (d) There are sufficient safeguards to assure that all money provided by
  1. the department will be expended solely for the purposes of the project;
  1. (e) [There are existing and projected needs for the project and the
  1. project would alleviate an existing shortage of facilities or services in the
  1. state;
  1. (f)] The project would be compatible with existing facilities in the area
  1. adjacent to the location of the project;
  1. [(g)] (f) The project is compatible with the plan of the state for
  1. economic diversification and development or for the marketing and
  1. development of tourism in this state;
  1. [(h)] (g) Through the advice of counsel or other reliable source that the
  1. project has received all approvals by the local, state and federal
  1. governments which may be necessary to proceed with construction,
  1. improvement, rehabilitation or redevelopment of the project; and
  1. [(i)] (h) There has been a request by a city, county, lessee, purchaser,
  1. other obligor or other enterprise to have the director issue revenue bonds
  1. for industrial development to finance the project.

Sec. 8. NRS 349.590 is hereby amended to read as follows:

  1. 349.590 [Before] Except as otherwise provided in NRS 349.640,
  1. before financing a project pursuant to subsection 2 of NRS 349.580, the
  1. director and the [state board of finance] board must also:
  1. 1. Determine the total amount of money necessary to be provided by
  1. the director for financing the project.
  1. 2. [Receive] Except as otherwise provided in this subsection, receive
  1. a 5-year operating history from the contemplated lessee, purchaser or other
  1. obligor or from [a parent or other enterprise which guarantees principal and
  1. interest payments] any other enterprise that will make or guarantee the
  1. payment of the principal, premium, if any, and interest on any bonds
  1. issued. An operating history is not required if the bonds:
  2. (a) Are to be sold only to qualified institutional buyers, as defined in
  1. Rule 144A of the Securities and Exchange Commission, 17 C.F.R. §
  1. 230.144A, in minimum denominations of at least $100,000; or
  1. (b) Will receive a rating within one of the top four rating categories of
  1. Moody’s Investors Service, Inc., Standard and Poor’s Rating Services or
  1. Fitch IBCA, Inc.
  1. 3. Consider whether the contemplated lessee, purchaser, other obligor
  1. or other enterprise [which guarantees principal and interest payments] that
  1. will make or guarantee the payment of the principal, premium, if any,
  1. and interest on any bonds issued has received within the 12 months
  1. preceding the date of the findings of the director, or then has or has not in
  1. effect, a rating within one of the top four rating categories of [either]
  1. Moody’s Investors Service, Inc., [or] Standard and Poor’s Ratings Services
  1. [.] or Fitch IBCA, Inc.
  1. 4. Identify any existing facilities of a like nature within the [area to be
  1. served by the project] county or city in which the project will be located
  1. and consider [what the competitive effect of the project would be on the
  1. existing facilities.] the applicability of paragraph (b) of subsection 1 of
  1. NRS 349.565.
  1. 5. Consider the extent to which the project is affected by any federal,
  1. state or local governmental action, activity, program or development.

6. Consider whether the lessee, purchaser, other obligor or other

enterprise of the project has maintained facilities appropriate to the

community in this state for 10 years or longer.

Sec. 9. NRS 349.630 is hereby amended to read as follows:

  1. 349.630 The director shall adopt regulations to carry out the
  1. provisions of NRS 349.400 to 349.670, inclusive, and sections 2 and 3 of
  1. this act, including, without limitation, regulations for:
  1. 1. Investment and reinvestment of the proceeds from the sale of bonds,
  1. including, but not limited to:
  1. (a) Bonds or other obligations of the United States of America.
  1. (b) Bonds or other obligations, the payment of the principal and interest
  1. of which is unconditionally guaranteed by the United States of America.
  1. (c) Obligations issued or guaranteed as to principal and interest by any
  1. agency or person controlled or supervised by and acting as an
  1. instrumentality of the United States of America pursuant to authority
  1. granted by the Congress of the United States of America.
  1. (d) Obligations issued or guaranteed by any state of the United States of
  1. America, or any political subdivision of any state.
  1. (e) Prime commercial paper.
  1. (f) Prime finance company paper.
  1. (g) Bankers’ acceptances drawn on and accepted by commercial banks.
  1. (h) Repurchase agreements fully secured by obligations issued or
  1. guaranteed as to principal and interest by the United States of America or
  1. by any person controlled or supervised by and acting as an instrumentality
  2. of the United States of America pursuant to authority granted by the
  1. Congress of the United States of America.
  1. (i) Certificates of deposit issued by commercial banks, including banks
  1. domiciled outside the United States of America.
  1. (j) Money market mutual funds that:
  1. (1) Are registered with the Securities and Exchange Commission;
  1. (2) Are rated by a nationally recognized rating service as "AAA" or
  1. its equivalent; and
  1. (3) Invest only in securities issued or guaranteed as to payment of
  1. principal and interest by the Federal Government, or its agencies or
  1. instrumentalities, or in repurchase agreements that are fully collateralized
  1. by such securities.

2. Receiving, holding and disbursing of proceeds of the sale of bonds

by one or more banks or trust companies located within or out of this state.

Sec. 10. NRS 349.640 is hereby amended to read as follows:

  1. 349.640 1. Any bonds issued under the provisions of NRS 349.400
  1. to 349.670, inclusive, and sections 2 and 3 of this act, or NRS 244A.669
  1. to 244A.763, inclusive, or 268.512 to 268.568, inclusive, may be refunded
  1. by the director by the issuance of refunding bonds in an amount which he
  1. deems necessary to refund the principal of the bonds to be so refunded, any
  1. unpaid interest thereon and any premiums and incidental expenses
  1. necessary to be paid in connection with refunding.
  1. 2. Refunding may be carried out whether the bonds to be refunded
  1. have matured or thereafter mature, either by sale of the refunding bonds
  1. and the application of the proceeds to the payment of the bonds to be
  1. refunded, or by exchange of the refunding bonds for the bonds to be
  1. refunded. The holders of the bonds to be refunded must not be compelled,
  1. without their consent, to surrender their bonds for payment or exchange
  1. before the date on which they are payable by maturity, option to redeem or
  1. otherwise, or if they are called for redemption before the date on which
  1. they are by their terms subject to redemption by option or otherwise.
  1. 3. All refunding bonds issued pursuant to this section must be payable
  1. solely from revenues and other money out of which the bonds to be
  1. refunded thereby are payable or from revenues out of which bonds of the
  1. same character may be made payable under this or any other law then in
  1. effect at the time of the refunding.
  1. 4. The director shall not issue refunding bonds unless before the
  1. refinancing he finds that issuance of refunding bonds will provide a
  1. lower cost of financing for the obligor or provide some other public
  1. benefit, but the findings and determinations required by NRS 349.580
  1. and 349.590 and section 2 of this act are not required with respect to
  1. refunding bonds issued pursuant to this section.

Sec. 11. Section 50 of Senate Bill No. 39 of this session is hereby

amended to read as follows:

Sec. 50. NRS 349.630 is hereby amended to read as follows:
  1. 349.630 The director shall adopt regulations to carry out the
  1. provisions of NRS 349.400 to 349.670, inclusive, and sections 2
  1. and 3 of [this act,] Senate Bill No. 369 of this session, including,
  1. without limitation, regulations for:
  1. 1. Investment and reinvestment of the proceeds from the sale of
  1. bonds, including, but not limited to:
  1. (a) Bonds or other obligations of the United States of America.
  1. (b) Bonds or other obligations, the payment of the principal and
  1. interest of which is unconditionally guaranteed by the United States
  1. of America.
  1. (c) Obligations issued or guaranteed as to principal and interest
  1. by any agency or person controlled or supervised by and acting as
  1. an instrumentality of the United States of America pursuant to
  1. authority granted by the Congress of the United States of America.
  1. (d) Obligations issued or guaranteed by any state of the United
  1. States of America, or any political subdivision of any state.
  1. (e) Prime commercial paper.
  1. (f) Prime finance company paper.
  1. (g) Bankers’ acceptances drawn on and accepted by commercial
  1. banks.
  1. (h) Repurchase agreements fully secured by obligations issued or
  1. guaranteed as to principal and interest by the United States of
  1. America or by any person controlled or supervised by and acting as
  1. an instrumentality of the United States of America pursuant to
  1. authority granted by the Congress of the United States of America.
  1. (i) Certificates of deposit issued by credit unions or commercial
  1. banks, including banks domiciled outside of the United States of
  1. America.
  1. (j) Money market mutual funds that:
  1. (1) Are registered with the Securities and Exchange
  1. Commission;
  1. (2) Are rated by a nationally recognized rating service as
  1. "AAA" or its equivalent; and
  1. (3) Invest only in securities issued or guaranteed as to
  1. payment of principal and interest by the Federal Government, or its
  1. agencies or instrumentalities, or in repurchase agreements that are
  1. fully collateralized by such securities.

2. Receiving, holding and disbursing of proceeds of the sale of

bonds by one or more banks , credit unions or trust companies

located within or out of this state.

Sec. 12. 1. The director shall not provide any financing pursuant to

section 2 of this act until the state board of finance has established the

guidelines required pursuant to subsection 2 of that section.

  1. 2. For the purposes of this section, "director" has the meaning ascribed
  1. to it in NRS 349.440.
  1. Sec. 13. This act becomes effective upon passage and approval.
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