Senate Joint Resolution No. 12–Committee on Finance
April 17, 1997
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Referred to Committee on Finance
SUMMARY—Proposes to amend Nevada constitution to allow investment of state money to stimulate economic development. (BDR C-1471)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: No.
EXPLANATION – Matter in italics is new; matter in brackets [ ] is material to be omitted.
SENATE JOINT RESOLUTION—Proposing to amend the Nevada constitution to allow the
investment of state money to stimulate economic development.
Whereas, Emerging competition in other states and federally regulated
territories threatens the long-term growth of the State of Nevada in its vital
gaming industry; and
Whereas, Financial programs necessary to ensure business expansion
and high-quality job growth do not currently provide the business sector of
this state with adequate access to the types of money and capital essential to
support the growth of a diversified economic base; and
Whereas, The Nevada constitution currently contains restrictions, based
on conditions existing in the 19th century, that have prevented the
Legislature from considering legislation similar to laws enacted in several
other states which would permit prudently managed investments in public-
private partnerships and corporations designed to provide needed sources of
capital for high-quality, job-creating businesses and low-cost housing
programs within this state that cannot feasibly obtain such financing from
existing private financial markets in an easily accessible and efficient
manner; and
Whereas, The State of Nevada must remain competitive with other
states in providing the necessary financial tools to attract the types of
businesses and industries that would diversify the economic base of this state
and improve the standard of living for the residents of this state; and
Whereas, The benefits to be derived from an effort toward strong
economic development throughout this state may be jeopardized if current
restrictions in the Nevada constitution are not replaced with more flexible
and contemporary standards that both protect public investments in economic
development projects and provide access to the type of financing needed to
stimulate the growth of businesses and industries throughout this state which
will provide the high-quality jobs, increased property values and enhanced
standard of living desired by Nevadans; now, therefore, be it
Resolved by the Senate and Assembly of the State of Nevada,
Jointly, That section 9 of article 8 of the constitution of the State of
Nevada be amended to read as follows:
[Sec: 9. The]
Sec. 9. 1. Except as otherwise provided in subsections 2 and 3, the
State shall not donate or loan money [,] or its credit [,] to, or subscribe to or
be [,] interested in the Stock of any company, association, or corporation .
[, except]
2. The legislature may enact legislation, approved by a vote of two-
thirds of the members of each house, to authorize the investment of state
money in any company, association or corporation for the purpose of
stimulating the economic diversification or development of this state and the
creation of new employment opportunities for the residents of this state,
subject to the following conditions:
(a) Before any such investment is authorized, a determination must be
made by a person or entity designated in the authorizing legislation that:
(1) The investment is for the economic development of this state or the
creation of new employment opportunities in this state; and
(2) This state can reasonably expect to achieve a reasonable rate of
return on the investment, adjusted for the relative degree of risk.
(b) Each such investment by this state must be made through a
cooperative venture with private investors of reasonable sophistication who
participate in the venture on terms that are the same as or less favorable
than the terms on which this state is participating.
Revenue received from investments pursuant to this subsection may be
reinvested subject to the same conditions.
3. The provisions of this section do not apply to corporations formed for
educational or charitable purposes.
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