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; 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:

 

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.  (Deleted by amendment.)

1-4    Sec. 3.  As used in sections 2 to 16, inclusive, of this act, unless the

1-5  context otherwise requires, the words and terms defined in sections 4 to

1-6  7, inclusive, of this act have the meanings ascribed to them in those

1-7  sections.

1-8    Sec. 4.  “Agreement” means an agreement to purchase property, in

1-9  the form of a lease or an agreement to pay in installments, pursuant to

1-10  which the State of Nevada or a state agency may pay the purchase price

1-11  of real or personal property over a period of time which extends beyond

1-12  the biennium in which the agreement is executed, including, without

1-13  limitation:

1-14    1.  An agreement pursuant to which the State of Nevada or a state

1-15  agency may acquire the property that is the subject of the agreement at

1-16  the end of the term of the agreement or the end of the term of a renewal

2-1  of the agreement upon payment of no additional consideration or

2-2  nominal additional consideration; and

2-3    2.  An agreement that, for the purposes of federal income tax, is

2-4  treated as an agreement for conditional sale.

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

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

2-7  department of administration.

2-8    Sec. 7.  “State agency” means an agency, bureau, board,

2-9  commission, department, division or any other unit of the government of

2-10  this state that is required to submit information to the chief pursuant to

2-11  subsection 1 or 6 of NRS 353.210, except for the University and

2-12  Community College System of Nevada.

2-13    Sec. 8.  1.  The provisions of sections 2 to 16, inclusive, of this act

2-14  do not obligate the legislature to appropriate money for payments due

2-15  pursuant to an agreement entered into pursuant to those sections.

2-16    2.  A state agency, person acting on behalf of a state agency, officer of

2-17  this state or employee of this state shall not represent that the legislature

2-18  is obligated to appropriate money for payments due pursuant to an

2-19  agreement entered into pursuant to sections 2 to 16, inclusive, of this act.

2-20    Sec. 9.  The state treasurer may take such actions as he deems

2-21  appropriate to facilitate an agreement pursuant to sections 2 to 16,

2-22  inclusive, of this act, including, without limitation:

2-23    1.  Entering into contracts for relevant professional services;

2-24    2.  Obtaining credit enhancement and interest rate hedges; and

2-25    3.  Assisting with the offering of certificates of participation pursuant

2-26  to the limitations set forth in section 11 of this act.

2-27    Sec. 10.  An agreement entered into pursuant to sections 2 to 16,

2-28  inclusive, of this act is not subject to any requirement of competitive

2-29  bidding or other restriction imposed on the procedure for the awarding of

2-30  contracts.

2-31    Sec. 11.  1.  A state agency may propose a project to acquire real

2-32  property, an interest in real property or an improvement to real property

2-33  through an agreement which has a term, including the terms of any

2-34  options for renewal, that extends beyond the biennium in which the

2-35  agreement is executed if the agreement:

2-36    (a) Provides that all obligations of the State of Nevada and the state

2-37  agency are extinguished by the failure of the legislature to appropriate

2-38  money for the ensuing fiscal year for payments due pursuant to the

2-39  agreement;

2-40    (b) Does not encumber any property of the State of Nevada or the

2-41  state agency except for the property that is the subject of the agreement;

2-42    (c) Provides that property of the State of Nevada and the state agency,

2-43  except for the property that is the subject of the agreement, must not be

2-44  forfeited if:

2-45      (1) The legislature fails to appropriate money for payments due

2-46  pursuant to the agreement; or

2-47      (2) The State of Nevada or the state agency breaches the

2-48  agreement;

2-49    (d) Prohibits certificates of participation in the agreement; and

3-1    (e) For the biennium in which it is executed, does not require

3-2  payments that are greater than the amount authorized for such payments

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

3-4    2.  The provisions of paragraph (d) of subsection 1 may be waived by

3-5  the board, upon the recommendation of the state treasurer, if the board

3-6  determines that waiving those provisions:

3-7    (a) Is in the best interests of this state; and

3-8    (b) Complies with federal securities laws.

3-9    3.  Before an agreement proposed pursuant to subsection 1 may

3-10  become effective:

3-11    (a) The proposed project must be approved by the legislature by

3-12  concurrent resolution or statute or as part of the budget of the state

3-13  agency, or by the interim finance committee when the legislature is not in

3-14  regular session;

3-15    (b) The agency must submit the proposed agreement to the chief, the

3-16  state treasurer and the state land registrar for their review and

3-17  transmittal to the board;

3-18    (c) The board must approve the proposed agreement; and

3-19    (d) The governor must execute the agreement.

3-20    Sec. 12.  If an agreement pursuant to sections 2 to 16, inclusive, of

3-21  this act involves the construction of an improvement, the construction

3-22  may be conducted as specified in the agreement without complying with

3-23  the provisions of:

3-24    1.  Any law requiring competitive bidding; or

3-25    2.  Chapter 341 of NRS.

3-26    Sec. 13.  1.  Except as otherwise provided in this section, if an

3-27  agreement pursuant to sections 2 to 16, inclusive, of this act involves an

3-28  improvement to property owned by the State of Nevada or the state

3-29  agency, the state land registrar, in consultation with the state treasurer

3-30  and in conjunction with the agreement, upon approval of the state board

3-31  of examiners may enter into a lease of the property to which the

3-32  improvement will be made if the lease:

3-33    (a) Has a term of 35 years or less; and

3-34    (b) Provides for rental payments that approximate the fair market

3-35  rental of the property before the improvement is made, as determined by

3-36  the state land registrar in consultation with the state treasurer at the time

3-37  the lease is entered into, which must be paid if the agreement terminates

3-38  before the expiration of the lease because the legislature fails to

3-39  appropriate money for payments due pursuant to the agreement.

3-40    2.  A lease entered into pursuant to this section may provide for

3-41  nominal rental payments to be paid pursuant to the lease before the

3-42  agreement terminates.

3-43    3.  Before the state land registrar may enter into a lease pursuant to

3-44  this section:

3-45    (a) The state land registrar must submit the proposed lease to the chief

3-46  and the state treasurer for their review and transmittal to the board; and

3-47    (b) The board must approve the lease.

4-1    Sec. 14.  Immediately after an agreement is executed pursuant to

4-2  section 11 of this act, the state agency on whose behalf the agreement

4-3  was executed shall file with the chief and the state treasurer:

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

4-5    2.  A schedule of payments that indicates the principal and interest

4-6  payments due throughout the term of the agreement.

4-7    Sec. 15.  While an agreement entered into pursuant to sections 2 to

4-8  16, inclusive, of this act is in effect, the property that is the subject of the

4-9  agreement is exempt from ad valorem property taxation by this state and

4-10  its political subdivisions if:

4-11    1.  An improvement is being constructed on the property pursuant to

4-12  the agreement; or

4-13    2.  This state or a state agency is in possession of the property.

4-14    Sec. 16.  While an agreement entered into pursuant to sections 2 to

4-15  16, inclusive, of this act is in effect, the property that is the subject of the

4-16  agreement shall be deemed to be the property of this state or the state

4-17  agency for the purposes of statutory limits on damages that may be

4-18  awarded against this state, including, without limitation, the limits in

4-19  chapter 41 of NRS, with respect to any action or claim, including a claim

4-20  for civil damages, that arises from or is related to the property and is

4-21  brought by a person who is not a party to the agreement if:

4-22    1.  An improvement is being constructed on the property pursuant to

4-23  the agreement; or

4-24    2.  This state or a state agency is in possession of the property.

4-25    Sec. 17.  NRS 349.276 is hereby amended to read as follows:

4-26    349.276  1.  As the commission may determine, any bonds and other

4-27  state securities issued hereunder, except as otherwise provided in the

4-28  constitution of the state, or in the State Securities Law, or in any act

4-29  supplemental thereto, must:

4-30    (a) Be of a convenient denomination or denominations;

4-31    (b) Be fully negotiable within the meaning of and for all the purposes of

4-32  the Uniform Commercial Code-Investment Securities;

4-33    (c) Mature at such a time or serially at such times in regular numerical

4-34  order at annual or other designated intervals in such amounts as designated

4-35  and fixed by the commission;

4-36    (d) Be made payable in lawful money of the United States, at the office

4-37  of the treasurer or any commercial bank or commercial banks within or

4-38  without or both within and without the state as may be provided by the

4-39  commission; and

4-40    (e) Be printed at such a place within or without this state, as the

4-41  commission may determine.

4-42    2.  Any such bonds or other state securities must bear interest at a rate

4-43  or rates which do not exceed the limit provided in NRS 349.076. The

4-44  interest must be made payable:

4-45    (a) If the security constitutes a debt subject to the limitations stated in

4-46  the first paragraph of section 3 of article 9 of the constitution of this state,

4-47  not less often than semiannually.

4-48    (b) If the security does not constitute a debt or is issued for the

4-49  protection and preservation of the state’s property or natural resources or

5-1  for the purpose of obtaining the benefits thereof, at intervals which the

5-2  commission shall designate, and the first interest payment may be for

5-3  another period.

5-4    3.  General obligation bonds must mature within 20 years from their

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

5-6  issuance or the issuance of any securities funded or refunded thereby,

5-7  whichever limitation is shorter; but any bonds constituting a debt which is

5-8  not subject to the limitations stated in the first paragraph of section 3 of

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

5-10  their date.

5-11    4.  Special obligation bonds must mature within 50 years from their

5-12  date.

5-13    Sec. 18.  (Deleted by amendment.)

5-14    Sec. 19.  Chapter 372 of NRS is hereby amended by adding thereto a

5-15  new section to read as follows:

5-16    In administering the provisions of NRS 372.325, the department shall

5-17  apply the exemption for the sale of tangible personal property to the State

5-18  of Nevada, its unincorporated agencies and instrumentalities, to include

5-19  all tangible personal property that is transferred for use by a state entity

5-20  in accordance with an agreement executed pursuant to sections 2 to 16,

5-21  inclusive, of this act.

5-22    Sec. 20.  Chapter 374 of NRS is hereby amended by adding thereto a

5-23  new section to read as follows:

5-24    In administering the provisions of NRS 374.330, the department shall

5-25  apply the exemption for the sale of tangible personal property to the State

5-26  of Nevada, its unincorporated agencies and instrumentalities, to include

5-27  all tangible personal property that is transferred for use by a state entity

5-28  in accordance with an agreement executed pursuant to sections 2 to 16,

5-29  inclusive, of this act.

5-30    Sec. 21.  1.  In addition to the debt authorized in subsection 1 of

5-31  section 4 of chapter 656, Statutes of Nevada 1995, at page 2530, and

5-32  notwithstanding the provisions of subsection 2 of section 4 of chapter 656,

5-33  Statutes of Nevada 1995, at page 2530, the state board of finance may issue

5-34  general obligation bonds of the State of Nevada in the face amount of not

5-35  more than $27,971,319, the proceeds of which must be used for refinancing

5-36  the obligations of this state pursuant to the construction, lease purchase and

5-37  management services contract between the department of prisons and

5-38  Corrections Corporation of America that was approved by the state board

5-39  of examiners on October 14, 1996, and by the board of state prison

5-40  commissioners on October 14, 1996, and was authorized by section 4 of

5-41  chapter 656, Statutes of Nevada 1995, at page 2530, including, without

5-42  limitation, by exercising the prepayment purchase option pursuant to the

5-43  contract.

5-44    2.  The expenses related to the issuance of bonds pursuant to this

5-45  section must be paid from the proceeds of the bonds, and must not exceed

5-46  2 percent of the face amount of the bonds sold.

5-47    3.  The provisions of the State Securities Law, contained in chapter 349

5-48  of NRS, apply to the issuance of bonds pursuant to this section.

 

6-1    Sec. 22.  Assembly Bill No. 601 of this session is hereby repealed.

6-2    Sec. 23.  This act becomes effective upon passage and approval.

 

6-3  TEXT OF REPEALED SECTIONS

 

6-4    Section 1. Chapter 353 of NRS is hereby amended by adding thereto a

6-5   new section to read as follows:

6-6    1.  Before a state agency or person acting on the behalf of a state

6-7   agency may enter into a long-term agreement to purchase

6-8   unimproved real property, improved real property or improvements

6-9   to real property, the purchase must be approved by the legislature

6-10   by concurrent resolution or statute or as part of the budget of the

6-11   state agency, or by the interim finance committee when the

6-12   legislature is not in regular session.

6-13    2.  This section does not affect any agreement, including,

6-14   without limitation, a long-term agreement, to purchase personal

6-15   property.

6-16    3.  As used in this section:

6-17    (a) “Long-term agreement” means an agreement to purchase

6-18   property, in the form of a lease or an agreement to pay in

6-19   installments, pursuant to which the State of Nevada or a state

6-20   agency may pay the purchase price of the property over a period

6-21   that extends beyond the biennium in which the agreement is

6-22   executed, including, without limitation:

6-23    (1) An agreement pursuant to which the State of Nevada or a

6-24   state agency may acquire the property that is the subject of the

6-25   agreement at the end of the term of the agreement or the end of the

6-26   term of a renewal of the agreement upon payment of no additional

6-27   consideration or nominal additional consideration; and

6-28    (2) An agreement that, for the purposes of federal income tax,

6-29   is treated as an agreement for conditional sale.

6-30    (b) “State agency” means an agency, bureau, board, commission,

6-31   department, division or any other unit of the government of this

6-32   state that is required to submit information to the chief pursuant to

6-33   subsection 1 or 6 of NRS 353.210.

6-34    Sec. 2.  This act becomes effective upon passage and approval.

 

6-35  H