Assembly Bill No. 567–Committee on Government Affairs

 

CHAPTER..........

 

AN ACT relating to state financial administration; authorizing the purchase of property by a state agency pursuant to a lease-purchase or installment-purchase agreement that extends beyond the current biennium under certain circumstances; allowing the interest on certain state securities to be paid more frequently than semiannually; providing the manner for applying sales and use taxes to personal property transferred to the state pursuant to certain lease-purchase or installment-purchase agreements; authorizing the issuance of general obligation bonds to refinance existing obligations relating to the Southern Nevada Women’s Correctional Facility; 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 to 16, inclusive, of this act.

   Sec. 2.  (Deleted by amendment.)

   Sec. 3.  As used in sections 2 to 16, inclusive, of this act, unless the

 context otherwise requires, the words and terms defined in sections 4 to

 7, inclusive, of this act have the meanings ascribed to them in those

 sections.

   Sec. 4.  “Agreement” means an agreement to purchase property, in

 the form of a lease or an agreement to pay in installments, pursuant to

 which the State of Nevada or a state agency may pay the purchase price

 of real or personal property over a period of time which extends beyond

 the biennium in which the agreement is executed, including, without

 limitation:

   1.  An agreement pursuant to which the State of Nevada or a state

 agency may acquire the property that is the subject of the agreement at

 the end of the term of the agreement or the end of the term of a renewal

 of the agreement upon payment of no additional consideration or

 nominal additional consideration; and

   2.  An agreement that, for the purposes of federal income tax, is

 treated as an agreement for conditional sale.

   Sec. 5.  “Board” means the state board of finance.

   Sec. 6.  “Chief” means the chief of the budget division of the

 department of administration.

   Sec. 7.  “State agency” means an agency, bureau, board,

 commission, department, division or any other unit of the government of

 this state that is required to submit information to the chief pursuant to

 subsection 1 or 6 of NRS 353.210, except for the University and

 Community College System of Nevada.

   Sec. 8.  1.  The provisions of sections 2 to 16, inclusive, of this act

 do not obligate the legislature to appropriate money for payments due

 pursuant to an agreement entered into pursuant to those sections.

   2.  A state agency, person acting on behalf of a state agency, officer of

 this state or employee of this state shall not represent that the legislature

 is obligated to appropriate money for payments due pursuant to an

 agreement entered into pursuant to sections 2 to 16, inclusive, of this

 act.

   Sec. 9.  The state treasurer may take such actions as he deems

appropriate to facilitate an agreement pursuant to sections 2 to 16,

 inclusive, of this act, including, without limitation:

   1.  Entering into contracts for relevant professional services;

   2.  Obtaining credit enhancement and interest rate hedges; and

   3.  Assisting with the offering of certificates of participation pursuant

 to the limitations set forth in section 11 of this act.

   Sec. 10.  An agreement entered into pursuant to sections 2 to 16,

 inclusive, of this act is not subject to any requirement of competitive

 bidding or other restriction imposed on the procedure for the awarding

 of contracts.

   Sec. 11.  1.  A state agency may propose a project to acquire real

 property, an interest in real property or an improvement to real property

 through an agreement which has a term, including the terms of any

 options for renewal, that extends beyond the biennium in which the

 agreement is executed if the agreement:

   (a) Provides that all obligations of the State of Nevada and the state

 agency are extinguished by the failure of the legislature to appropriate

 money for the ensuing fiscal year for payments due pursuant to the

 agreement;

   (b) Does not encumber any property of the State of Nevada or the

 state agency except for the property that is the subject of the agreement;

   (c) Provides that property of the State of Nevada and the state agency,

 except for the property that is the subject of the agreement, must not be

 forfeited if:

     (1) The legislature fails to appropriate money for payments due

 pursuant to the agreement; or

     (2) The State of Nevada or the state agency breaches the

 agreement;

   (d) Prohibits certificates of participation in the agreement; and

   (e) For the biennium in which it is executed, does not require

 payments that are greater than the amount authorized for such

 payments pursuant to the applicable budget of the state agency.

   2.  The provisions of paragraph (d) of subsection 1 may be waived by

 the board, upon the recommendation of the state treasurer, if the board

 determines that waiving those provisions:

   (a) Is in the best interests of this state; and

   (b) Complies with federal securities laws.

   3.  Before an agreement proposed pursuant to subsection 1 may

 become effective:

   (a) The proposed project must be approved by the legislature by

 concurrent resolution or statute or as part of the budget of the state

 agency, or by the interim finance committee when the legislature is not

 in regular session;

   (b) The agency must submit the proposed agreement to the chief, the

 state treasurer and the state land registrar for their review and

 transmittal to the board;

   (c) The board must approve the proposed agreement; and

   (d) The governor must execute the agreement.

   Sec. 12.  If an agreement pursuant to sections 2 to 16, inclusive, of

this act involves the construction of an improvement, the construction

 may be conducted as specified in the agreement without complying with

 the provisions of:

   1.  Any law requiring competitive bidding; or

   2.  Chapter 341 of NRS.

   Sec. 13.  1.  Except as otherwise provided in this section, if an

 agreement pursuant to sections 2 to 16, inclusive, of this act involves an

 improvement to property owned by the State of Nevada or the state

 agency, the state land registrar, in consultation with the state treasurer

 and in conjunction with the agreement, upon approval of the state board

 of examiners may enter into a lease of the property to which the

 improvement will be made if the lease:

   (a) Has a term of 35 years or less; and

   (b) Provides for rental payments that approximate the fair market

 rental of the property before the improvement is made, as determined by

 the state land registrar in consultation with the state treasurer at the

 time the lease is entered into, which must be paid if the agreement

 terminates before the expiration of the lease because the legislature fails

 to appropriate money for payments due pursuant to the agreement.

   2.  A lease entered into pursuant to this section may provide for

 nominal rental payments to be paid pursuant to the lease before the

 agreement terminates.

   3.  Before the state land registrar may enter into a lease pursuant to

 this section:

   (a) The state land registrar must submit the proposed lease to the chief

 and the state treasurer for their review and transmittal to the board; and

   (b) The board must approve the lease.

   Sec. 14.  Immediately after an agreement is executed pursuant to

 section 11 of this act, the state agency on whose behalf the agreement

 was executed shall file with the chief and the state treasurer:

   1.  A fully executed copy of the agreement; and

   2.  A schedule of payments that indicates the principal and interest

 payments due throughout the term of the agreement.

   Sec. 15.  While an agreement entered into pursuant to sections 2 to

 16, inclusive, of this act is in effect, the property that is the subject of the

 agreement is exempt from ad valorem property taxation by this state and

 its political subdivisions if:

   1.  An improvement is being constructed on the property pursuant to

 the agreement; or

   2.  This state or a state agency is in possession of the property.

   Sec. 16.  While an agreement entered into pursuant to sections 2 to

 16, inclusive, of this act is in effect, the property that is the subject of the

 agreement shall be deemed to be the property of this state or the state

 agency for the purposes of statutory limits on damages that may be

 awarded against this state, including, without limitation, the limits in

 chapter 41 of NRS, with respect to any action or claim, including a

 claim for civil damages, that arises from or is related to the property and

 is brought by a person who is not a party to the agreement if:

   1.  An improvement is being constructed on the property pursuant to

the agreement; or

   2.  This state or a state agency is in possession of the property.

   Sec. 17.  NRS 349.276 is hereby amended to read as follows:

   349.276  1.  As the commission may determine, any bonds and other

 state securities issued hereunder, except as otherwise provided in the

 constitution of the state, or in the State Securities Law, or in any act

 supplemental thereto, must:

   (a) Be of a convenient denomination or denominations;

   (b) Be fully negotiable within the meaning of and for all the purposes of

 the Uniform Commercial Code-Investment Securities;

   (c) Mature at such a time or serially at such times in regular numerical

 order at annual or other designated intervals in such amounts as designated

 and fixed by the commission;

   (d) Be made payable in lawful money of the United States, at the office

 of the treasurer or any commercial bank or commercial banks within or

 without or both within and without the state as may be provided by the

 commission; and

   (e) Be printed at such a place within or without this state, as the

 commission may determine.

   2.  Any such bonds or other state securities must bear interest at a rate

 or rates which do not exceed the limit provided in NRS 349.076. The

 interest must be made payable:

   (a) If the security constitutes a debt subject to the limitations stated in

 the first paragraph of section 3 of article 9 of the constitution of this state,

 not less often than semiannually.

   (b) If the security does not constitute a debt or is issued for the

 protection and preservation of the state’s property or natural resources or

 for the purpose of obtaining the benefits thereof, at intervals which the

 commission shall designate, and the first interest payment may be for

 another period.

   3.  General obligation bonds must mature within 20 years from their

 date or within 20 years from the date of passage of the act authorizing

 their issuance or the issuance of any securities funded or refunded thereby,

 whichever limitation is shorter; but any bonds constituting a debt which is

 not subject to the limitations stated in the first paragraph of section 3 of

 article 9 of the constitution of this state must mature within 50 years from

 their date.

   4.  Special obligation bonds must mature within 50 years from their

 date.

   Sec. 18.  (Deleted by amendment.)

   Sec. 19.  Chapter 372 of NRS is hereby amended by adding thereto a

 new section to read as follows:

   In administering the provisions of NRS 372.325, the department shall

 apply the exemption for the sale of tangible personal property to the

 State of Nevada, its unincorporated agencies and instrumentalities, to

 include all tangible personal property that is transferred for use by a

 state entity in accordance with an agreement executed pursuant to

 sections 2 to 16, inclusive, of this act.

   Sec. 20.  Chapter 374 of NRS is hereby amended by adding thereto a

new section to read as follows:

   In administering the provisions of NRS 374.330, the department shall

 apply the exemption for the sale of tangible personal property to the

 State of Nevada, its unincorporated agencies and instrumentalities, to

 include all tangible personal property that is transferred for use by a

 state entity in accordance with an agreement executed pursuant to

 sections 2 to 16, inclusive, of this act.

   Sec. 21.  1.  In addition to the debt authorized in subsection 1 of

 section 4 of chapter 656, Statutes of Nevada 1995, at page 2530, and

 notwithstanding the provisions of subsection 2 of section 4 of chapter 656,

 Statutes of Nevada 1995, at page 2530, the state board of finance may

 issue general obligation bonds of the State of Nevada in the face amount

 of not more than $27,971,319, the proceeds of which must be used for

 refinancing the obligations of this state pursuant to the construction, lease

 purchase and management services contract between the department of

 prisons and Corrections Corporation of America that was approved by the

 state board of examiners on October 14, 1996, and by the board of state

 prison commissioners on October 14, 1996, and was authorized by section

 4 of chapter 656, Statutes of Nevada 1995, at page 2530, including,

 without limitation, by exercising the prepayment purchase option pursuant

 to the contract.

   2.  The expenses related to the issuance of bonds pursuant to this

 section must be paid from the proceeds of the bonds, and must not exceed

 2 percent of the face amount of the bonds sold.

   3.  The provisions of the State Securities Law, contained in chapter 349

 of NRS, apply to the issuance of bonds pursuant to this section.

   Sec. 22.  Assembly Bill No. 601 of this session is hereby repealed.

   Sec. 23.  This act becomes effective upon passage and approval.

 

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