exempt

                                            (REPRINTED WITH ADOPTED AMENDMENTS)

 

Assembly Bill No. 567–Committee on Government Affairs

 

(On Behalf of Office of the State Treasurer)

 

March 26, 2001

____________

 

Referred to Committee on Government Affairs

 

SUMMARY—Revises provisions governing state financial administration. (BDR 30‑358)

 

FISCAL NOTE:    Effect on Local Government: No.

                                 Effect on the State: No.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to state financial administration; allowing the State of Nevada or a state agency to purchase property pursuant to an agreement the term of which extends beyond the current biennium; allowing the interest on certain state securities to be paid more frequently than semiannually; exempting from the operation of the Uniform Commercial Code—Secured Transactions certain transfers involving a government or governmental unit; providing the manner for applying sales and use taxes to personal property transferred to a governmental entity pursuant to certain agreements; authorizing the issuance of general obligation bonds to finance improvements and refinance existing obligations relating to 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:

 

1-1    Section 1. Chapter 349 of NRS is hereby amended by adding thereto

1-2  the provisions set forth as sections 2 to 16, inclusive, of this act.

1-3    Sec. 2.  Sections 2 to 16, inclusive, of this act may be cited as the

1-4  State Lease Purchase and Installment Purchase Law.

1-5    Sec. 3.  As used in sections 2 to 16, inclusive, of this act, unless the

1-6  context otherwise requires, the words and terms defined in sections 4 to

1-7  7, inclusive, of this act have the meanings ascribed to them in those

1-8  sections.

1-9    Sec. 4.  “Agreement” means an agreement to purchase property, in

1-10  the form of a lease or an agreement to pay in installments, pursuant to

1-11  which the State of Nevada or a state agency may pay the purchase price

1-12  of real or personal property over a period of time which extends beyond

1-13  the biennium in which the agreement is executed, including, without

1-14  limitation:

2-1    1.  An agreement pursuant to which the State of Nevada or a state

2-2  agency may acquire the property that is the subject of the agreement at

2-3  the end of the term of the agreement or the end of the term of a renewal

2-4  of the agreement upon payment of no additional consideration or

2-5  nominal additional consideration; and

2-6    2.  An agreement that, for the purposes of federal income tax, is

2-7  treated as an agreement for conditional sale.

2-8    Sec. 5.  “Board” means the state board of finance.

2-9    Sec. 6.  “Chief” means the chief of the budget division of the

2-10  department of administration.

2-11    Sec. 7.  “State agency” means an agency, bureau, board,

2-12  commission, department, division or any other unit of the government of

2-13  this state that is required to submit information to the chief pursuant to

2-14  subsection 1 or 6 of NRS 353.210, except for the University and

2-15  Community College System of Nevada.

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

2-17  do not obligate the legislature to appropriate money for payments due

2-18  pursuant to an agreement entered into pursuant to those sections.

2-19    2.  A state agency, person acting on behalf of a state agency, officer of

2-20  this state or employee of this state shall not represent that the legislature

2-21  is obligated to appropriate money for payments due pursuant to an

2-22  agreement entered into pursuant to sections 2 to 16, inclusive, of this act.

2-23    Sec. 9.  The state treasurer may take such actions as he deems

2-24  appropriate to facilitate an agreement pursuant to sections 2 to 16,

2-25  inclusive, of this act, including, without limitation:

2-26    1.  Entering into contracts for relevant professional services;

2-27    2.  Obtaining credit enhancement and interest rate hedges; and

2-28    3.  Assisting with the offering of certificates of participation pursuant

2-29  to the limitations set forth in section 11 of this act.

2-30    Sec. 10.  An agreement entered into pursuant to sections 2 to 16,

2-31  inclusive, of this act is not subject to any requirement of competitive

2-32  bidding or other restriction imposed on the procedure for the awarding of

2-33  contracts.

2-34    Sec. 11.  1.  Except as otherwise provided in this section, a state

2-35  agency or person acting on the behalf of a state agency may enter into an

2-36  agreement which has a term, including the terms of any options for

2-37  renewal, that extends beyond the biennium in which the agreement is

2-38  executed if the agreement:

2-39    (a) Provides that all obligations of the State of Nevada and the state

2-40  agency are extinguished by the failure of the legislature to appropriate

2-41  money for the ensuing fiscal year for payments due pursuant to the

2-42  agreement;

2-43    (b) Does not encumber any property of the State of Nevada or the

2-44  state agency except for the property that is the subject of the agreement;

2-45    (c) Provides that property of the State of Nevada and the state agency,

2-46  except for the property that is the subject of the agreement, must not be

2-47  forfeited if:

2-48      (1) The legislature fails to appropriate money for payments due

2-49  pursuant to the agreement; or

3-1       (2) The State of Nevada or the state agency breaches the

3-2  agreement;

3-3    (d) Prohibits certificates of participation in the agreement; and

3-4    (e) For the biennium in which it is executed, does not require

3-5  payments that are greater than the amount authorized for such payments

3-6  pursuant to the applicable budget of the state agency.

3-7    2.  The provisions of paragraph (d) of subsection 1 may be waived by

3-8  the board, upon the recommendation of the state treasurer, if the board

3-9  determines that waiving those provisions:

3-10    (a) Is in the best interests of this state; and

3-11    (b) Complies with federal securities laws.

3-12    3.  Before a state agency may enter into an agreement pursuant to

3-13  this section to acquire real property or an interest in real property or pay

3-14  a total of $50,000 or more in any 1 year:

3-15    (a) The agency must submit the proposed agreement to the chief and

3-16  the state treasurer for their review and transmittal to the board;

3-17    (b) The board must approve the agreement; and

3-18    (c) The governor must execute the agreement.

3-19    4.  Before a state agency may enter into an agreement pursuant to

3-20  this section to pay a total of $100,000 or more in any 1 year:

3-21    (a) The legislature must approve the acquisition of the property that is

3-22  the subject of the agreement;

3-23    (b) The agency must submit the proposed agreement to the chief and

3-24  the state treasurer for their review and transmittal to the board;

3-25    (c) The board must approve the agreement; and

3-26    (d) The governor must execute the agreement.

3-27    Sec. 12.  If an agreement pursuant to sections 2 to 16, inclusive, of

3-28  this act involves the construction of an improvement, the construction

3-29  may be conducted as specified in the agreement without complying with

3-30  the provisions of:

3-31    1.  Any law requiring competitive bidding; or

3-32    2.  Chapter 341 of NRS.

3-33    Sec. 13.  1.  Except as otherwise provided in this section, if an

3-34  agreement pursuant to sections 2 to 16, inclusive, of this act involves an

3-35  improvement to property owned by the State of Nevada or the state

3-36  agency, the state land registrar, in consultation with the state treasurer

3-37  and in conjunction with the agreement, may enter into a lease of the

3-38  property to which the improvement will be made if the lease:

3-39    (a) Has a term of 35 years or less; and

3-40    (b) Provides for rental payments that approximate the fair market

3-41  rental of the property before the improvement is made, as determined by

3-42  the state land registrar in consultation with the state treasurer at the time

3-43  the lease is entered into, which must be paid if the agreement terminates

3-44  before the expiration of the lease because the legislature fails to

3-45  appropriate money for payments due pursuant to the agreement.

3-46    2.  A lease entered into pursuant to this section may provide for

3-47  nominal rental payments to be paid pursuant to the lease before the

3-48  agreement terminates.

4-1    3.  Before the state land registrar may enter into a lease pursuant to

4-2  this section:

4-3    (a) The state land registrar must submit the proposed lease to the chief

4-4  and the state treasurer for their review and transmittal to the board; and

4-5    (b) The board must approve the lease.

4-6    Sec. 14.  Immediately after entering into an agreement pursuant to

4-7  sections 2 to 16, inclusive, of this act, the state agency or person acting

4-8  on behalf of the state agency shall file with the chief and the state

4-9  treasurer:

4-10    1.  A fully executed copy of the agreement; and

4-11    2.  A schedule of payments that indicates the principal and interest

4-12  payments due throughout the term of the agreement.

4-13    Sec. 15.  While an agreement entered into pursuant to sections 2 to

4-14  16, inclusive, of this act is in effect, the property that is the subject of the

4-15  agreement is exempt from ad valorem property taxation by this state and

4-16  its political subdivisions if:

4-17    1.  An improvement is being constructed on the property pursuant to

4-18  the agreement; or

4-19    2.  This state or a state agency is in possession of the property.

4-20    Sec. 16.  While an agreement entered into pursuant to sections 2 to

4-21  16, inclusive, of this act is in effect, the property that is the subject of the

4-22  agreement shall be deemed to be the property of this state or the state

4-23  agency for the purposes of statutory limits on damages that may be

4-24  awarded against this state, including, without limitation, the limits in

4-25  chapter 41 of NRS, with respect to any action or claim, including a claim

4-26  for civil damages, that arises from or is related to the property and is

4-27  brought by a person who is not a party to the agreement if:

4-28    1.  An improvement is being constructed on the property pursuant to

4-29  the agreement; or

4-30    2.  This state or a state agency is in possession of the property.

4-31    Sec. 17.  NRS 349.276 is hereby amended to read as follows:

4-32    349.276  1.  As the commission may determine, any bonds and other

4-33  state securities issued hereunder, except as otherwise provided in the

4-34  constitution of the state, or in the State Securities Law, or in any act

4-35  supplemental thereto, must:

4-36    (a) Be of a convenient denomination or denominations;

4-37    (b) Be fully negotiable within the meaning of and for all the purposes of

4-38  the Uniform Commercial Code-Investment Securities;

4-39    (c) Mature at such a time or serially at such times in regular numerical

4-40  order at annual or other designated intervals in such amounts as designated

4-41  and fixed by the commission;

4-42    (d) Be made payable in lawful money of the United States, at the office

4-43  of the treasurer or any commercial bank or commercial banks within or

4-44  without or both within and without the state as may be provided by the

4-45  commission; and

4-46    (e) Be printed at such a place within or without this state, as the

4-47  commission may determine.

5-1    2.  Any such bonds or other state securities must bear interest at a rate

5-2  or rates which do not exceed the limit provided in NRS 349.076. The

5-3  interest must be made payable:

5-4    (a) If the security constitutes a debt subject to the limitations stated in

5-5  the first paragraph of section 3 of article 9 of the constitution of this state,

5-6  not less often than semiannually.

5-7    (b) If the security does not constitute a debt or is issued for the

5-8  protection and preservation of the state’s property or natural resources or

5-9  for the purpose of obtaining the benefits thereof, at intervals which the

5-10  commission shall designate, and the first interest payment may be for

5-11  another period.

5-12    3.  General obligation bonds must mature within 20 years from their

5-13  date or within 20 years from the date of passage of the act authorizing their

5-14  issuance or the issuance of any securities funded or refunded thereby,

5-15  whichever limitation is shorter; but any bonds constituting a debt which is

5-16  not subject to the limitations stated in the first paragraph of section 3 of

5-17  article 9 of the constitution of this state must mature within 50 years from

5-18  their date.

5-19    4.  Special obligation bonds must mature within 50 years from their

5-20  date.

5-21    Sec. 18.  NRS 104.9109 is hereby amended to read as follows:

5-22    104.9109  1.  Except as otherwise provided in subsections 3 and 4,

5-23  this article applies to:

5-24    (a) A transaction, regardless of its form, that creates a security interest

5-25  in personal property or fixtures by contract;

5-26    (b) An agricultural lien;

5-27    (c) A sale of accounts, chattel paper, payment intangibles or promissory

5-28  notes;

5-29    (d) A consignment;

5-30    (e) A security interest arising under NRS 104.2401, 104.2505,

5-31  subsection 3 of NRS 104.2711, or subsection 5 of NRS 104A.2508, as

5-32  provided in NRS 104.9110; and

5-33    (f) A security interest arising under NRS 104.4210 or 104.5118.

5-34    2.  The application of this article to a security interest in a secured

5-35  obligation is not affected by the fact that the obligation is itself secured by

5-36  a transaction or interest to which this article does not apply.

5-37    3.  This article does not apply to the extent that:

5-38    (a) A statute, regulation or treaty of the United States preempts this

5-39  article;

5-40    [(b) Another statute of this state expressly governs the creation,

5-41  perfection, priority or enforcement of a security interest created by this

5-42  state or a governmental unit of this state;

5-43    (c) A statute of another state, a foreign country, or a governmental unit

5-44  of another state or a foreign country, other than a statute generally

5-45  applicable to security interests, expressly governs creation, perfection,

5-46  priority, or enforcement of a security interest created by the state, country,

5-47  or governmental unit; or

5-48      (d)] or

6-1    (b) The rights of a transferee beneficiary or nominated person under a

6-2  letter of credit are independent and superior under NRS 104.5114.

6-3    4.  This article does not apply to:

6-4    (a) A landlord’s lien, other than an agricultural lien;

6-5    (b) A lien, other than an agricultural lien, given by statute or other rule

6-6  of law for services or materials, but NRS 104.9333 applies with respect to

6-7  priority of the lien;

6-8    (c) An assignment of a claim for wages, salary or other compensation of

6-9  an employee;

6-10    (d) A sale of accounts, chattel paper, payment intangibles or promissory

6-11  notes as part of a sale of the business out of which they arose;

6-12    (e) An assignment of accounts, chattel paper, payment intangibles or

6-13  promissory notes which is for the purpose of collection only;

6-14    (f) An assignment of a right to payment under a contract to an assignee

6-15  that is also obligated to perform under the contract;

6-16    (g) An assignment of a single account, payment intangible or

6-17  promissory note to an assignee in full or partial satisfaction of a preexisting

6-18  indebtedness;

6-19    (h) A transfer of an interest in or an assignment of a claim under a

6-20  policy of insurance, other than an assignment by or to a health-care

6-21  provider of a health-care-insurance receivable and any subsequent

6-22  assignment of the right to payment, but NRS 104.9315 and 104.9322 apply

6-23  with respect to proceeds and priorities in proceeds;

6-24    (i) An assignment of a right represented by a judgment, other than a

6-25  judgment taken on a right to payment that was collateral;

6-26    (j) A right of recoupment or set-off, but:

6-27      (1) NRS 104.9340 applies with respect to the effectiveness of rights

6-28  of recoupment or set-off against deposit accounts; and

6-29      (2) NRS 104.9404 applies with respect to defenses or claims of an

6-30  account debtor;

6-31    (k) The creation or transfer of an interest in or lien on real property,

6-32  including a lease or rents thereunder, except to the extent that provision is

6-33  made for:

6-34      (1) Liens on real property in NRS 104.9203 and 104.9308;

6-35      (2) Fixtures in NRS 104.9334;

6-36      (3) Fixture filings in NRS 104.9501, 104.9502, 104.9512, 104.9516

6-37  and 104.9519; and

6-38      (4) Security agreements covering personal and real property in

6-39  NRS 104.9604;

6-40    (l) An assignment of a claim arising in tort, other than a commercial tort

6-41  claim, but NRS 104.9315 and 104.9322 apply with respect to proceeds and

6-42  priorities in proceeds; [or]

6-43    (m) An assignment of a deposit account in a consumer transaction, but

6-44  NRS 104.9315 and 104.9322 apply with respect to proceeds and priorities

6-45  in proceeds[.] ; or

6-46    (n) A transfer by a government or governmental unit.

 

 

 

7-1    Sec. 19.  Chapter 372 of NRS is hereby amended by adding thereto a

7-2  new section to read as follows:

7-3    In administering the provisions of NRS 372.325, the department shall

7-4  apply the exemption for the sale of tangible personal property to the State

7-5  of Nevada, its unincorporated agencies and instrumentalities, to include

7-6  all tangible personal property that is transferred for use by a state entity

7-7  in accordance with an agreement executed pursuant to sections 2 to 16,

7-8  inclusive, of this act.

7-9    Sec. 20.  Chapter 374 of NRS is hereby amended by adding thereto a

7-10  new section to read as follows:

7-11    In administering the provisions of NRS 374.330, the department shall

7-12  apply the exemption for the sale of tangible personal property to the State

7-13  of Nevada, its unincorporated agencies and instrumentalities, to include

7-14  all tangible personal property that is transferred for use by a state entity

7-15  in accordance with an agreement executed pursuant to sections 2 to 16,

7-16  inclusive, of this act.

7-17    Sec. 21.  1.  Except as otherwise provided in subsection 2, in addition

7-18  to the debt authorized in subsection 1 of section 4 of chapter 656, Statutes

7-19  of Nevada 1995, at page 2530, and notwithstanding the provisions of

7-20  subsection 2 of section 4 of chapter 656, Statutes of Nevada 1995, at page

7-21  2530, the state board of finance may issue general obligation bonds of the

7-22  State of Nevada in the face amount of not more than $44,000,000, the

7-23  proceeds of which must be used for:

7-24    (a) Refinancing the obligations of this state pursuant to the construction,

7-25  lease purchase and management services contract between the department

7-26  of prisons and Corrections Corporation of America that was approved by

7-27  the state board of examiners on October 14, 1996, and by the board of state

7-28  prison commissioners on October 14, 1996, and was authorized by section

7-29  4 of chapter 656, Statutes of Nevada 1995, at page 2530, including, without

7-30  limitation, by exercising the prepayment purchase option pursuant to the

7-31  contract;

7-32    (b) Constructing, renovating and improving the Southern Nevada

7-33  Women’s Correctional Facility; or

7-34    (c) Both of such purposes.

7-35    2.  Not more than $16,028,681 of the proceeds of the bonds described

7-36  in subsection 1 may be used for the purpose described in paragraph (b) of

7-37  subsection 1.

7-38    3.  The expenses related to the issuance of bonds pursuant to this

7-39  section must be paid from the proceeds of the bonds, and must not exceed

7-40  2 percent of the face amount of the bonds sold.

7-41    4.  The provisions of the State Securities Law, contained in chapter 349

7-42  of NRS, apply to the issuance of bonds pursuant to this section.

7-43    Sec. 22.  1.  This section and sections 1 to 17, inclusive, 19, 20 and

7-44  21 of this act become effective upon passage and approval.

7-45    2.  Section 18 of this act becomes effective at 12:01 a.m. on

7-46  July 1, 2001.

 

7-47  H