Assembly Bill No. 96–Committee on Government
Affairs
(On Behalf of County Fiscal Officers
Association)
February 12, 2001
____________
Referred to Committee on Government Affairs
SUMMARY—Revises certain provisions governing
financial administration of local governments. (BDR 31‑338)
FISCAL NOTE: Effect on Local Government: 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 the financial administration of local governments; authorizing
additional types of investments by certain local governments; revising the
authority of county treasurers to deposit county money in time accounts;
revising the requirements for annual accountings by tax receivers to county
auditors; 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 355 of NRS is hereby amended by adding thereto a
1-2 new section to read as
follows:
1-3 1. Except as otherwise provided in this section,
a board of county
1-4 commissioners, a board of trustees of a county school district or
the
1-5 governing body of an incorporated city may purchase for investment:
1-6 (a) Notes, bonds and other
unconditional obligations for the payment
1-7 of money issued by corporations organized and operating in the
United
1-8 States that:
1-9 (1) Are purchased from a
registered broker-dealer;
1-10 (2) At the time of
purchase have a remaining term to maturity of no
1-11 more than 5 years; and
1-12 (3) Are rated by a
nationally recognized rating service as “A” or its
1-13 equivalent, or better,
1-14 except that investments purchased pursuant to this paragraph may
not,
1-15 in aggregate value, exceed 20 percent of the total portfolio as
determined
1-16 on the date of purchase, and if the rating of an obligation is reduced
to a
1-17 level that does not meet the requirements of this paragraph, it
must be
1-18 sold as soon as possible.
2-1 (b) Collateralized mortgage
obligations that are rated by a nationally
2-2 recognized rating service as “AAA” or its equivalent.
2-3 (c) Asset-backed securities
that are rated by a nationally recognized
2-4 rating service as “AAA” or its equivalent.
2-5 2. Subsection 1 does not:
2-6 (a) Apply to a:
2-7 (1) Board of county
commissioners of a county whose population is
2-8 less than 100,000;
2-9 (2) Board of trustees of
a county school district in a county whose
2-10 population is less than 100,000; or
2-11 (3) Governing body of an
incorporated city whose population is less
2-12 than 100,000,
2-13 unless the purchase is effected by the state treasurer pursuant to
his
2-14 investment of a pool of money from local governments or by an
2-15 investment advisor who is registered with the Securities and
Exchange
2-16 Commission and approved by the state board of finance.
2-17 (b) Authorize the investment
of money administered pursuant to a
2-18 contract, debenture agreement or grant in a manner not authorized
by
2-19 the terms of the contract, agreement or grant.
2-20 Sec. 2. NRS 355.170 is hereby amended to read as follows:
2-21 355.170 1. Except as otherwise provided in this section , [and in]
2-22 NRS 354.750 [,] and section 1 of this act, a
board of county
2-23 commissioners, a board of
trustees of a county school district or the
2-24 governing body of an
incorporated city may purchase for investment the
2-25 following securities and no
others:
2-26 (a) Bonds and debentures of the United States, the maturity dates
of
2-27 which do not extend more
than 10 years after the date of purchase.
2-28 (b) Farm loan bonds, consolidated farm loan bonds, debentures,
2-29 consolidated debentures and
other obligations issued by federal land banks
2-30 and federal intermediate
credit banks under the authority of the Federal
2-31 Farm Loan Act, formerly 12
U.S.C. §§ 636 to 1012, inclusive, and §§ 1021
2-32 to 1129, inclusive, and the
Farm Credit Act of 1971, 12 U.S.C. §§ 2001 to
2-33 2259, inclusive, and bonds,
debentures, consolidated debentures and other
2-34 obligations issued by banks
for cooperatives under the authority of the
2-35 Farm Credit Act of 1933,
formerly 12 U.S.C. §§ 1131 to 1138e, inclusive,
2-36 and the Farm Credit Act of
1971, 12 U.S.C. §§ 2001 to 2259, inclusive.
2-37 (c) Bills and notes of the United States Treasury, the maturity
date of
2-38 which is not more than 10
years after the date of purchase.
2-39 (d) Obligations of an agency or instrumentality of the United
States of
2-40 America or a corporation
sponsored by the government, the maturity date
2-41 of which is not more than 10
years after the date of purchase.
2-42 (e) Negotiable certificates of deposit issued by commercial banks,
2-43 insured credit unions or
savings and loan associations.
2-44 (f) Securities which have been expressly authorized as investments
for
2-45 local governments or
agencies, as defined in NRS 354.474, by any
2-46 provision of Nevada Revised
Statutes or by any special law.
2-47 (g) Nonnegotiable
certificates of deposit issued by insured commercial
2-48 banks, insured credit unions or insured savings and loan
associations,
2-49 except certificates that are not within the limits of insurance
provided by
3-1 an instrumentality of the United States, unless those certificates
are
3-2 collateralized in the same manner as is required for uninsured
deposits
3-3 by a county treasurer pursuant to NRS 356.133. For the purposes of
this
3-4 paragraph, any reference in NRS 356.133 to a “county treasurer” or
3-5 “board of county commissioners” shall be deemed to refer to the
3-6 appropriate financial officer or governing body of the county,
school
3-7 district or city purchasing the certificates.
3-8 (h) Subject to the limitations
contained in NRS 355.177, negotiable
3-9 notes or short-time
negotiable bonds issued by local governments of the
3-10 State of Nevada pursuant to
NRS 350.091.
3-11 [(h)] (i)
Bankers’ acceptances of the kind and maturities made eligible
3-12 by law for rediscount with
Federal Reserve Banks, and generally accepted
3-13 by banks or trust companies
which are members of the Federal Reserve
3-14 System. Eligible bankers’
acceptances may not exceed 180 days’ maturity.
3-15 Purchases of bankers’
acceptances may not exceed 20 percent of the
3-16 money available to a local
government for investment as determined on the
3-17 date of purchase.
3-18 [(i)] (j)
Obligations of state and local governments if:
3-19 (1) The interest on the obligation is exempt from gross income
for
3-20 federal income tax purposes;
and
3-21 (2) The obligation has been rated “A” or higher by one or more
3-22 nationally recognized bond
credit rating agencies.
3-23 [(j)] (k)
Commercial paper issued by a corporation organized and
3-24 operating in the United
States or by a depository institution licensed by the
3-25 United States or any state
and operating in the United States that:
3-26 (1) Is purchased from a registered broker-dealer;
3-27 (2) At the time of purchase has a remaining term to maturity of
no
3-28 more than 270 days; and
3-29 (3) Is rated by a nationally recognized rating service as “A-1,”
“P-1”
3-30 or its equivalent, or
better,
3-31 except that investments
pursuant to this paragraph may not, in aggregate
3-32 value, exceed 20 percent of
the total portfolio as determined on the date of
3-33 purchase, and if the rating
of an obligation is reduced to a level that does
3-34 not meet the requirements of
this paragraph, it must be sold as soon as
3-35 possible.
3-36 [(k)] (l)
Money market mutual funds which:
3-37 (1) Are registered with the Securities and Exchange Commission;
3-38 (2) Are rated by a nationally recognized rating service as “AAA”
or
3-39 its equivalent; and
3-40 (3) Invest only in [securities] :
3-41 (I) Securities issued by the Federal
Government or agencies of the
3-42 Federal Government [or in repurchase agreements fully collateralized by
3-43 such securities.] ;
3-44 (II) Master notes, bank
notes or other short-term commercial
3-45 paper rated by a nationally recognized rating service as “A-1,”
“P-1” or
3-46 its equivalent, or better, issued by a corporation organized and
operating
3-47 in the United States or by a depository institution licensed by the
United
3-48 States or any state and operating in the United States; or
4-1 (III) Repurchase
agreements that are fully collateralized by the
4-2 obligations described in sub-subparagraphs (I) and (II).
4-3 2. Repurchase agreements
are proper and lawful investments of money
4-4 of a board of county
commissioners, a board of trustees of a county school
4-5 district or a governing body
of an incorporated city for the purchase or sale
4-6 of securities which are
negotiable and of the types listed in subsection 1 if
4-7 made in accordance with the
following conditions:
4-8 (a) The board of county commissioners, the board of trustees of the
4-9 school district or the
governing body of the city shall designate in advance
4-10 and thereafter maintain a
list of qualified counterparties which:
4-11 (1) Regularly provide audited and, if available, unaudited
financial
4-12 statements;
4-13 (2) The board of county commissioners, the board of trustees of
the
4-14 school district or the
governing body of the city has determined to have
4-15 adequate capitalization and
earnings and appropriate assets to be highly
4-16 credit worthy; and
4-17 (3) Have executed a written master repurchase agreement in a form
4-18 satisfactory to the board of
county commissioners, the board of trustees of
4-19 the school district or the
governing body of the city pursuant to which all
4-20 repurchase agreements are
entered into. The master repurchase agreement
4-21 must require the prompt
delivery to the board of county commissioners, the
4-22 board of trustees of the
school district or the governing body of the city and
4-23 the appointed custodian of
written confirmations of all transactions
4-24 conducted thereunder, and
must be developed giving consideration to the
4-25 Federal Bankruptcy Act.
4-26 (b) In all repurchase agreements:
4-27 (1) At or before the time money to pay the purchase price is
4-28 transferred, title to the
purchased securities must be recorded in the name
4-29 of the appointed custodian,
or the purchased securities must be delivered
4-30 with all appropriate,
executed transfer instruments by physical delivery to
4-31 the custodian;
4-32 (2) The board of county commissioners, the board of trustees of
the
4-33 school district or the
governing body of the city must enter a written
4-34 contract with the custodian
appointed pursuant to subparagraph (1) which
4-35 requires the custodian to:
4-36 (I) Disburse cash for repurchase agreements only upon receipt
of
4-37 the underlying securities;
4-38 (II) Notify the board of county commissioners, the board of
4-39 trustees of the school
district or the governing body of the city when the
4-40 securities are marked to the
market if the required margin on the agreement
4-41 is not maintained;
4-42 (III) Hold the securities separate from the assets of the
custodian;
4-43 and
4-44 (IV) Report periodically to the board of county commissioners,
the
4-45 board of trustees of the
school district or the governing body of the city
4-46 concerning the market value
of the securities;
4-47 (3) The market value of the purchased securities must exceed 102
4-48 percent of the repurchase
price to be paid by the counterparty and the value
4-49 of the purchased securities
must be marked to the market weekly;
5-1 (4) The date on which the securities are to be repurchased must
not
5-2 be more than 90 days after
the date of purchase; and
5-3 (5) The purchased securities must not have a term to maturity at
the
5-4 time of purchase in excess
of 10 years.
5-5 3. The securities described
in paragraphs (a), (b) and (c) of subsection
5-6 1 and the repurchase
agreements described in subsection 2 may be
5-7 purchased when, in the
opinion of the board of county commissioners, the
5-8 board of trustees of a
county school district or the governing body of the
5-9 city, there is sufficient
money in any fund of the county, the school district
5-10 or city to purchase those
securities and the purchase will not result in the
5-11 impairment of the fund for
the purposes for which it was created.
5-12 4. When the board of county
commissioners, the board of trustees of a
5-13 county school district or
governing body of the city has determined that
5-14 there is available money in
any fund or funds for the purchase of bonds as
5-15 set out in subsection 1 or
2, those purchases may be made and the bonds
5-16 paid for out of any one or
more of the funds, but the bonds must be
5-17 credited to the funds in the
amounts purchased, and the money received
5-18 from the redemption of the
bonds, as and when redeemed, must go back
5-19 into the fund or funds from
which the purchase money was taken
5-20 originally.
5-21 5. Any interest earned on
money invested pursuant to subsection 3,
5-22 may, at the discretion of
the board of county commissioners, the board of
5-23 trustees of a county school
district or governing body of the city, be
5-24 credited to the fund from
which the principal was taken or to the general
5-25 fund of the county, school
district or incorporated city.
5-26 6. The board of county
commissioners, the board of trustees of a
5-27 county school district or
governing body of an incorporated city may invest
5-28 any money apportioned into
funds and not invested pursuant to subsection
5-29 3 and any money not
apportioned into funds in bills and notes of the United
5-30 States Treasury, the
maturity date of which is not more than 1 year after the
5-31 date of investment. These
investments must be considered as cash for
5-32 accounting purposes, and all
the interest earned on them must be credited
5-33 to the general fund of the
county, school district or incorporated city.
5-34 7. This section does not
authorize the investment of money
5-35 administered pursuant to a
contract, debenture agreement or grant in a
5-36 manner not authorized by the
terms of the contract, agreement or grant.
5-37 8. As used in this section:
5-38 (a) “Counterparty” means a bank organized and operating or licensed
to
5-39 operate in the United States
pursuant to federal or state law or a securities
5-40 dealer which is:
5-41 (1) A registered broker-dealer;
5-42 (2) Designated by the Federal Reserve Bank of New York as a
5-43 “primary” dealer in United
States government securities; and
5-44 (3) In full compliance with all applicable capital requirements.
5-45 (b) “Repurchase agreement” means a purchase of securities by a
board
5-46 of county commissioners, the
board of trustees of a county school district
5-47 or the governing body of an
incorporated city from a counterparty which
5-48 commits to repurchase those
securities or securities of the same issuer,
6-1 description, issue date and
maturity on or before a specified date for a
6-2 specified price.
6-3 Sec. 3. NRS 356.120 is hereby amended to read as follows:
6-4 356.120 [With unanimous consent of his bondsmen, a] A county
6-5 treasurer may:
6-6 1. When one or more insured
banks, insured credit unions or insured
6-7 savings and loan
associations are located in the county, deposit county
6-8 money in such insured banks,
credit unions or savings and loan
6-9 associations in demand [or time]
accounts.
6-10 2. When no such banks,
credit unions or savings and loan associations
6-11 exist in the county, deposit
county money in any insured bank, insured
6-12 credit union or insured
savings and loan association in the State of Nevada
6-13 in demand [or time]
accounts.
6-14 Sec. 4. NRS 356.125 is hereby amended to read as follows:
6-15 356.125 1. [All money
placed] A county treasurer may deposit
6-16 county money in insured depository banks, insured credit unions
or insured
6-17 savings and loan
associations in time accounts [may be
deposited] only
6-18 with the written consent of
the board of county commissioners.
6-19 2. The time accounts so
established are subject to the applicable
6-20 contract between the
depository and the county.
6-21 3. The provisions of this
section do not require any depository to
6-22 accept county deposits.
6-23 Sec. 5. NRS 356.140 is hereby amended to read as follows:
6-24 356.140 1. Demand [or] accounts and time accounts
respectively
6-25 authorized by NRS 356.120
and 356.125 must be kept in the name of the
6-26 county in such manner as the
board of county commissioners may
6-27 prescribe.
6-28 2. The balance in each such
account, as certified to by the proper
6-29 officer of the bank, credit
union or savings and loan association in which
6-30 the money is deposited, and
by oath of the county treasurer, may be
6-31 accounted for by the county
as cash.
6-32 Sec. 6. NRS 361.580 is hereby amended to read as follows:
6-33 361.580 1. [On the
third Monday in June] No later than July 31 of
6-34 each year following the
redemption period as set forth in NRS 361.570, the
6-35 ex officio tax receiver
shall attend at the office of the county auditor with
6-36 the assessment roll and
shall render for the period ending
on June 30 of
6-37 that year an account under oath to the county auditor as to the amount of
6-38 the taxes paid on the roll,
the amount of taxes stricken by the board of
6-39 county commissioners and the
amount of taxes delinquent on the roll.
6-40 2. The county auditor shall
audit the account and make a final
6-41 settlement with the ex
officio tax receiver of all taxes charged against him
6-42 on account of the assessment
roll.
6-43 Sec. 7. This act becomes effective on July 1, 2001.
6-44 H