Senate Bill No. 433–Senator Porter

March 15, 1999

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Referred to Committee on Government Affairs

 

SUMMARY—Makes various changes concerning local government finance. (BDR 31-51)

FISCAL NOTE: Effect on Local Government: Yes.

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 government finance; requiring each local government to prepare a capital improvement plan; authorizing local governments to enter into contracts for the construction or completion of certain public works before the issuance of bonds or medium-term obligations under certain circumstances; authorizing certain counties to acquire securities issued by municipalities within those counties that are issued for infrastructure projects 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 a

1-2 new section to read as follows:

1-3 1. On or before July 1 of each year, each local government shall

1-4 prepare, on a form prescribed by the department of taxation for use by

1-5 local governments, a capital improvement plan for the ensuing 5 fiscal

1-6 years.

1-7 2. Each local government must submit a copy of the capital

1-8 improvement plan of the local government to the:

1-9 (a) Department of taxation; and

1-10 (b) Debt management commission of the county in which the local

1-11 government is located.

1-12 3. Each local government must file a copy of the capital

1-13 improvement plan of the local government for public record and

1-14 inspection by the public in the offices of:

1-15 (a) The clerk or secretary of the governing body; and

1-16 (b) The county clerk.

2-1 4. The total amount of the expenditures contained in the capital

2-2 improvement plan of the local government for the next ensuing fiscal

2-3 year must equal the total amount of expenditures for capital outlay set

2-4 forth in the final budget of the local government for each fund listed in

2-5 that budget.

2-6 Sec. 2. NRS 354.470 is hereby amended to read as follows:

2-7 354.470 NRS 354.470 to 354.626, inclusive, and section 1 of this act

2-8 may be cited as the Local Government Budget Act.

2-9 Sec. 3. NRS 354.59801 is hereby amended to read as follows:

2-10 354.59801 Each local government shall file in the office of the clerk or

2-11 secretary of its governing body, for public record and inspection:

2-12 1. A copy of its final budget;

2-13 2. A copy of its final plan for capital improvements [;] prepared

2-14 pursuant to section 1 of this act and, if applicable, NRS 350.0035; and

2-15 3. A report of its proposed expenditures for the following fiscal year,

2-16 written in the same detail as its chart of accounts. The total amount of these

2-17 expenditures must equal the total amount of expenditures contained in its

2-18 final budget for each department and fund listed in that budget.

2-19 Sec. 4. NRS 354.626 is hereby amended to read as follows:

2-20 354.626 1. No governing body or member thereof, officer, office,

2-21 department or agency may, during any fiscal year, expend or contract to

2-22 expend any money or incur any liability, or enter into any contract which by

2-23 its terms involves the expenditure of money, in excess of the amounts

2-24 appropriated for that function, other than bond repayments, medium-term

2-25 obligation repayments, and any other long-term contract expressly

2-26 authorized by law. Any officer or employee of a local government who

2-27 willfully violates NRS 354.470 to 354.626, inclusive, is guilty of a

2-28 misdemeanor, and upon conviction thereof ceases to hold his office or

2-29 employment. Prosecution for any violation of this section may be

2-30 conducted by the attorney general, or, in the case of incorporated cities,

2-31 school districts or special districts, by the district attorney.

2-32 2. Without limiting the generality of the exceptions contained in

2-33 subsection 1, the provisions of this section specifically do not apply to:

2-34 (a) Purchase of comprehensive general liability policies of insurance

2-35 which require an audit at the end of the term thereof.

2-36 (b) Long-term cooperative agreements as authorized by chapter 277 of

2-37 NRS.

2-38 (c) Long-term contracts in connection with planning and zoning as

2-39 authorized by NRS 278.010 to 278.630, inclusive.

2-40 (d) Long-term contracts for the purchase of utility service such as, but

2-41 not limited to, heat, light, sewerage, power, water and telephone service.

3-1 (e) Contracts between a local government and an employee covering

3-2 professional services to be performed within 24 months following the date

3-3 of such contract or contracts entered into between local government

3-4 employers and employee organizations.

3-5 (f) Contracts between a local government and any person for the

3-6 construction or completion of public works, money for which has been or

3-7 will be provided by the proceeds of a sale of bonds or medium-term

3-8 obligations [.] and that are entered into by the local government after:

3-9 (1) Any election required for the approval of the bonds has been

3-10 held;

3-11 (2) Any approvals by any other governmental entity required to be

3-12 obtained before the bonds or medium-term obligations can be issued

3-13 have been obtained; and

3-14 (3) The ordinance or resolution that specifies each of the terms of

3-15 the bonds or medium-term obligations, except those terms that are set

3-16 forth in paragraphs (a) to (e), inclusive, of subsection 2 of NRS 350.165,

3-17 has been adopted.

3-18 Neither the fund balance of a governmental fund nor the equity balance in

3-19 any proprietary fund may be used unless appropriated in a manner provided

3-20 by law.

3-21 (g) Contracts which are entered into by a local government and

3-22 delivered to any person solely for the purpose of acquiring supplies and

3-23 equipment necessarily ordered in the current fiscal year for use in an

3-24 ensuing fiscal year, and which, under the method of accounting adopted by

3-25 the local government, will be charged against an appropriation of a

3-26 subsequent fiscal year. Purchase orders evidencing such contracts are

3-27 public records available for inspection by any person on demand.

3-28 (h) Long-term contracts for the furnishing of television or FM radio

3-29 broadcast translator signals as authorized by NRS 269.127.

3-30 (i) The receipt and proper expenditure of money received pursuant to a

3-31 grant awarded by an agency of the Federal Government.

3-32 (j) The incurrence of obligations beyond the current fiscal year under a

3-33 lease or contract for installment purchase which contains a provision that

3-34 the obligation incurred thereby is extinguished by the failure of the

3-35 governing body to appropriate money for the ensuing fiscal year for the

3-36 payment of the amounts then due.

3-37 Sec. 5. Chapter 244A of NRS is hereby amended by adding thereto the

3-38 provisions set forth as sections 6 to 11, inclusive, of this act.

3-39 Sec. 6. "Infrastructure project" means:

3-40 1. A capital improvement for fire protection, a library, a building, a

3-41 park or police protection that a municipality is authorized to improve,

3-42 acquire or equip pursuant to a law other than the County Bond Law; or

4-1 2. For a water authority or any municipality whose governing body is

4-2 composed of only the members of the board, a capital improvement for a

4-3 water system or a sanitary sewer that the municipality is authorized to

4-4 improve, acquire or equip pursuant to a law other than the County Bond

4-5 Law.

4-6 Sec. 7. "Lending project" means the acquisition of municipal

4-7 securities issued by a municipality located wholly or partially within the

4-8 county acquiring the municipal securities for one or more infrastructure

4-9 projects or for the refunding of municipal securities previously acquired

4-10 as part of a lending project by a county for one or more infrastructure

4-11 projects or any combination thereof.

4-12 Sec. 8. "Municipal securities" means notes, warrants, interim

4-13 debentures, bonds and temporary bonds issued by a municipality

4-14 pursuant to a law other than the County Bond Law which are:

4-15 1. General obligations payable from ad valorem taxes that are

4-16 approved by the voters of the municipality issued for a capital

4-17 improvement of a library or park;

4-18 2. General obligations payable from ad valorem taxes that are

4-19 approved by the voters of the municipality or are approved pursuant to

4-20 subsection 3 of NRS 350.020 issued for a capital improvement of an

4-21 infrastructure project other than a library or park; or

4-22 3. Revenue obligations of a water authority that are payable from

4-23 revenues of:

4-24 (a) The water system of the water authority;

4-25 (b) One or more of the municipalities that are members of the water

4-26 authority; or

4-27 (c) Any combination of the entities described in paragraphs (a) and

4-28 (b).

4-29 Sec. 9. "Municipality" means any city, town, library district,

4-30 consolidated library district, fire protection district, district for a fire

4-31 department, park district, general improvement district organized

4-32 pursuant to chapter 318 of NRS, water district organized pursuant to a

4-33 special act or water authority organized as a political subdivision created

4-34 by cooperative agreement whose members include at least the two largest

4-35 municipal retail water purveyors in the county.

4-36 Sec. 10. "Revenues of a lending project" means any money, except

4-37 the proceeds of taxes levied by the county, received by the county

4-38 pursuant to any lending project, including, without limitation:

4-39 1. Money derived from any source of revenue connected with a

4-40 lending project, including, without limitation, payments by a municipality

4-41 of the principal, interest or redemption premium of any municipal

4-42 security, and any other income derived from the operation or

5-1 administration of a lending project or the sale or other disposal of

5-2 municipal securities or other assets acquired in connection with a

5-3 lending project;

5-4 2. Loans, grants or contributions to the county from the Federal

5-5 Government for the payment of the principal, interest and redemption

5-6 premiums of county securities;

5-7 3. Fees or charges paid by a municipality in connection with a

5-8 lending project; and

5-9 4. Money derived from the investment and reinvestment of the money

5-10 described in subsections 1, 2 or 3.

5-11 Sec. 11. In connection with any lending project, a county whose

5-12 population is 400,000 or more may:

5-13 1. Require additional security or credit enhancement for payment of

5-14 municipal securities acquired as it deems prudent.

5-15 2. Make contracts and execute all necessary or desirable instruments

5-16 or documents not in conflict with the requirements of the County Bond

5-17 Law.

5-18 3. Provide by ordinance for its standards, policies and procedures for

5-19 financing lending projects.

5-20 4. Acquire and hold municipal securities and execute the rights of

5-21 the holder of those municipal securities.

5-22 5. Sell or otherwise dispose of municipal securities unless the county

5-23 is limited by any agreement that is related to those securities.

5-24 6. Refund any county general obligations issued for a lending project

5-25 if the county and the municipality agree to the disposition of any savings

5-26 resulting from the refunding.

5-27 7. Require payment by a municipality that participates in a lending

5-28 project of the fees and expenses of the county in connection with the

5-29 lending project.

5-30 8. Secure the payment of county general obligations issued for a

5-31 lending project with a pledge of revenues of the lending project. If the

5-32 revenues of a lending project are formally pledged to the county bonds

5-33 issued to finance a lending project, the board may treat the revenues of

5-34 the lending project financed by an issue of county general obligation

5-35 bonds as pledged revenues pursuant to subsection 3 of NRS 350.020.

5-36 Sec. 12. NRS 244A.011 is hereby amended to read as follows:

5-37 244A.011 NRS 244A.011 to 244A.065, inclusive, and sections 6 to

5-38 11, inclusive, of this act shall be known as the County Bond Law.

5-39 Sec. 13. NRS 244A.013 is hereby amended to read as follows:

5-40 244A.013 Except where the context otherwise requires, the definitions

5-41 in NRS 244A.015 to 244A.056, inclusive, and sections 6 to 10, inclusive,

5-42 of this act govern the construction hereof.

6-1 Sec. 14. NRS 244A.057 is hereby amended to read as follows:

6-2 244A.057 Any board, upon behalf of the county and in its name, may

6-3 acquire, improve, equip, operate and maintain, within the county:

6-4 1. A building project;

6-5 2. A drainage and flood control project;

6-6 3. A lending project if the county has a population of 400,000 or

6-7 more and has adopted an ordinance pursuant to subsection 3 of section

6-8 11 of this act;

6-9 4. An offstreet parking project;

6-10 [4.] 5. An overpass project;

6-11 [5.] 6. A park project;

6-12 [6.] 7. A sewerage project;

6-13 [7.] 8. A street project;

6-14 [8.] 9. An underpass project; and

6-15 [9.] 10. A water project.

6-16 Sec. 15. NRS 244A.059 is hereby amended to read as follows:

6-17 244A.059 1. Subject to the provisions of chapter 350 of NRS, any

6-18 board, upon behalf of the county and in its name, may issue the county’s

6-19 general obligation bonds to acquire, improve and equip , [(] or any

6-20 combination thereof , [),] any project herein authorized, or any part thereof,

6-21 and thereby to defray the cost of the project wholly or in part.

6-22 2. A county shall not become indebted by the issuance of bonds or

6-23 other securities constituting an indebtedness, whether the bonds are issued

6-24 hereunder or under a special or local law, to an amount in the aggregate,

6-25 including existing indebtedness of the county, but excluding any

6-26 outstanding revenue bonds, any outstanding special assessment bonds, or

6-27 any other outstanding special obligation securities, any short-term securities

6-28 issued in anticipation of and payable from general [(] ad valorem [)] taxes

6-29 levied for the current fiscal year, any general obligation indebtedness of

6-30 the county issued to pay the cost of any lending project, and any

6-31 indebtedness not evidenced by notes, bonds or other securities, exceeding

6-32 10 percent of the total last assessed valuation of the taxable property of the

6-33 county.

6-34 3. A county shall not become indebted by the issuance of general

6-35 obligation indebtedness to fund the cost of lending projects in an amount

6-36 exceeding 15 percent of the total last assessed valuation of the taxable

6-37 property of the county.

6-38 Sec. 16. NRS 244A.653 is hereby amended to read as follows:

6-39 244A.653 A county whose population is 400,000 or more shall not

6-40 become indebted for those county recreational purposes under the

6-41 provisions of NRS 244A.597 to 244A.655, inclusive, by the issuance of

6-42 general obligation bonds and other general obligation securities, other than

6-43 any notes or warrants maturing within 1 year from the respective dates of

7-1 their issuance, but excluding any outstanding revenue bonds, special

7-2 assessment bonds or other special obligation securities, and excluding any

7-3 outstanding general obligation notes and warrants, exceeding 5 percent of

7-4 the total last assessed valuation of the taxable property in the county. [A

7-5 county whose population is 400,000 or more shall not become indebted in

7-6 an amount exceeding 10 percent of that valuation by the issuance of any

7-7 general obligation securities, other than any such notes or warrants, but

7-8 excluding any outstanding special obligation securities and excluding any

7-9 outstanding general obligation notes and warrants.]

7-10 Sec. 17. NRS 244A.655 is hereby amended to read as follows:

7-11 244A.655 A county whose population is less than 400,000 shall not

7-12 become indebted for those county recreational purposes under the

7-13 provisions of NRS 244A.597 to 244A.655, inclusive, by the issuance of

7-14 general obligation bonds and other general obligation securities, other than

7-15 any notes or warrants maturing within 1 year from the respective dates of

7-16 their issuance, but excluding any outstanding revenue bonds, special

7-17 assessment bonds or other special obligation securities, and excluding any

7-18 outstanding general obligation notes and warrants, exceeding 3 percent of

7-19 the total last assessed valuation of the taxable property in the county. [A

7-20 county whose population is less than 400,000 shall not become indebted in

7-21 an amount exceeding 10 percent of that valuation by the issuance of any

7-22 general obligation securities, other than any such notes or warrants, but

7-23 excluding any outstanding special obligation securities and excluding any

7-24 outstanding general obligation notes and warrants.]

7-25 Sec. 18. 1. This section and sections 1 to 4, inclusive, of this act

7-26 become effective upon passage and approval.

7-27 2. Sections 5 to 17, inclusive, of this act become effective on October

7-28 1, 1999.

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