SB202_EN

Senate Bill No. 202–Committee on Government Affairs

CHAPTER..........

AN ACT relating to state financial administration; revising the requirement of financial reporting by the state controller; changing the designation of certain funds and accounts; making various changes relating to warrants of the state controller; requiring the state controller to present funds in annual financial statements in conformity with generally accepted accounting principles; 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. NRS 227.110 is hereby amended to read as follows:

227.110 1. The state controller shall annually digest, prepare and

report to the governor[, not later than 60 days after the close of each fiscal

year or 60 days after the latest date in the succeeding fiscal year fixed by

the legislature for the closing of accounts and final disposition of

unexpended funds, to be laid before the legislature at each regular

session:] and the legislature:

(a) A complete statement of the condition of the revenue, taxable funds,

resources, income and property of the state, and the amount of the

expenditures for the preceding fiscal year.

(b) A full and detailed statement of the public debt.

appropriation of money made by law, the amount paid under each of those

appropriations, and the balance unexpended.

(d) A tabular statement showing the amount of revenue collected from

each county for the preceding year.

2. [In his report the] The state controller [shall] may recommend such

plans as he deems expedient for the support of the public credit, for

promoting frugality and economy, and for the better management and

more perfect understanding of the fiscal affairs of the state.

Sec. 2. NRS 227.160 is hereby amended to read as follows:

227.160 1. The state controller shall:

(a) Audit all claims against the state, for the payment of which an

appropriation or authorization has been made but of which the amount has

not been definitely fixed by law, which have been examined and passed

upon by the state board of examiners, or which have been presented to the

board and not examined and passed upon by it within 30 days from their

presentation.

(b) Allow of those claims mentioned in paragraph (a) as not having

been passed upon by the state board of examiners within 30 days after

presentation the whole, or such portion thereof as he deems just and legal;

and of claims examined and passed upon by the state board of examiners,

such an amount as he decrees just and legal not exceeding the amount

allowed by the board.

2. No claim for services rendered or advances made to the state or any

officer thereof may be audited or allowed unless the services or

advancement have been specially authorized by law and an appropriation

or authorization made for its payment.

3. For the purpose of satisfying himself of the justness and legality of

any claim, the state controller may examine witnesses under oath and

receive and consider documentary evidence in addition to that furnished

him by the state board of examiners. [Except as otherwise provided in

NRS 227.215, he] The state controller shall draw warrants on the state

treasurer for such amounts as [he] the state controller allows of claims of

the character described in this section, and also for all claims of which the

amount has been definitely fixed by law and for the payment of which an

appropriation or authorization has been made.

Sec. 3. NRS 227.200 is hereby amended to read as follows:

227.200 [Except as otherwise provided in NRS 227.215, the] The state

controller shall:

1. Draw a warrant in favor of any person or governmental payee

certified by an agency of state government to receive money from the

treasury and deliver or mail the warrant to the state treasurer who shall

sign the warrant and:

(a) Deliver or mail the countersigned warrant, if it is for an account

payable, directly to the payee or his representative;

(b) [Deliver the warrant, if] If it is for payment of an employee[,] :

(1) Deliver or mail the warrant to the employee or to the appropriate

state agency for distribution; or

(2) Deposit the warrant to the credit of the employee by direct

deposit at a bank or credit union in which the employee has an account,

if the employee has authorized the direct deposit; or

transfer.

2. Keep a warrant register, in which he shall enter all warrants drawn

by him. The arrangement of this book must be such as to show the bill and

warrant number, the amount, out of which fund the warrants are payable,

and a distribution of the warrants under the various appropriations.

3. Credit the state treasurer with all warrants paid.

Sec. 4. NRS 232.355 is hereby amended to read as follows:

232.355 1. Except for gifts or grants specifically accounted for in

another fund, all gifts or grants of money or other property which the

divisions of the department of human resources are authorized to accept

must be accounted for in the department of human resources’ gift fund,

which is hereby created as a [trust] special revenue fund. The fund is a

continuing fund without reversion. The department may establish such

accounts in the fund as are necessary to account properly for gifts

received. All such money received by the [division] divisions must be

deposited in the state treasury for credit to the fund. The money in the fund

must be paid out on claims as other claims against the state are paid.

Unless otherwise specifically provided by statute, claims against the fund

must be approved by the director or his delegate.

2. Gifts of property other than money may be sold or exchanged when

this is deemed by the head of the facility or agency responsible for the gift

to be in the best interest of the facility or agency. The sale price must not

be less than 90 percent of the value determined by a qualified appraiser

appointed by the head of the facility or agency. All money received from

the sale must be deposited in the state treasury to the credit of the

appropriate gift account in the department of human resources’ gift fund.

The money may be spent only for the purposes of the facility or agency

named in the title of the account. The property may not be sold or

exchanged if to do so would violate the terms of the gift.

Sec. 5. NRS 232.960 is hereby amended to read as follows:

232.960 1. Except for gifts or grants specifically accounted for in

another fund, all gifts or grants of money or other property which the

rehabilitation division of the department is authorized to accept must be

accounted for in the department of employment, training and

rehabilitation’s gift fund, which is hereby created as a [trust] special

revenue fund. The fund is a continuing fund without reversion. The

department may establish such accounts in the fund as are necessary to

account properly for gifts received. All such money received by the

division must be deposited in the state treasury for credit to the fund. The

money in the fund must be paid out on claims as other claims against the

state are paid. Unless otherwise specifically provided by statute, claims

against the fund must be approved by the director or his delegate.

2. Gifts of property other than money may be sold or exchanged when

it is deemed by the director to be in the best interest of the rehabilitation

division. The sale price must not be less than 90 percent of the value

determined by a qualified appraiser appointed by the director. All money

received from the sale must be deposited in the state treasury to the credit

of the fund. The money may be spent only for the purposes of the division.

The property may not be sold or exchanged if to do so would violate the

terms of the gift.

Sec. 6. NRS 349.952 is hereby amended to read as follows:

349.952 1. Except as otherwise provided in subsection 3 and NRS

349.951, all amounts received by the director from an obligor in

connection with any financing undertaken pursuant to NRS 349.935 to

349.961, inclusive, must be deposited with the state treasurer for credit to

the account for the financing of water projects which is hereby created in

the fund for [the municipal bond bank.] natural resources, which is

hereby created as a special revenue fund.

2. Any revenue from water projects financed with state securities

which is in the account must be applied in the following order of priority:

(a) Deposited into the consolidated bond interest and redemption fund

in amounts necessary to pay the principal of, interest on and redemption

premiums due in connection with state securities issued for water projects.

(b) Deposited into any reserve account created for the payment of the

principal of, interest on and redemption premiums due in connection with

state securities issued for water projects, in amounts and at times

determined to be necessary.

3. Any revenue from water projects financed with revenue bonds may:

(a) Be deposited in the account for the financing of water projects and

subject to the provisions of subsection 2; or

(b) Subject to any agreement with the holders of the bonds, be invested,

deposited or held by the director in such funds or accounts as he deems

necessary or desirable. If the director is acting pursuant to this subsection,

he need not deposit the money in the state treasury and the provisions of

chapters 355 and 356 of NRS do not apply to any investments or deposits

made pursuant to this subsection.

Sec. 7. NRS 350A.190 is hereby amended to read as follows:

350A.190 1. All revenues from lending projects must be deposited in

the fund for the municipal bond bank in the state treasury, which is hereby

created as [a special revenue] an enterprise fund.

2. Any revenue from lending projects which is in the fund must be

applied in the following order of priority:

(a) Deposited into the consolidated bond interest and redemption fund

created pursuant to NRS 349.090 in amounts necessary to pay the

principal of, interest on and redemption premiums due in connection with

state securities issued pursuant to this chapter.

(b) Deposited into any reserve account created for the payment of the

principal of, interest on and redemption premiums due in connection with

state securities issued pursuant to this chapter, in amounts and at times

determined to be necessary.

(d) On July 1 of each odd-numbered year, to the extent of any

uncommitted balance in the fund, deposited in the state general fund.

Sec. 8. Chapter 353 of NRS is hereby amended by adding thereto a

new section to read as follows:

“Generally accepted accounting principles” means generally accepted

accounting principles for government as prescribed by the

Governmental Accounting Standards Board.

Sec. 9. NRS 353.130 is hereby amended to read as follows:

353.130 All state controller’s warrants issued in payment of claims

against the state become void if not presented for payment to the state

treasurer within 180 days after the date of issuance. All such warrants

remaining unpaid after the expiration of the 180 days[, whether

outstanding or uncalled for in the office of the state controller,] must be

canceled by the state controller, and the state treasurer must be notified

immediately of the cancellation. The state treasurer shall not pay a warrant

presented for payment more than 180 days after the date of issuance.

Sec. 10. NRS 353.140 is hereby amended to read as follows:

353.140 1. The state controller shall establish an account for lost and

stale warrants in each fund and credit to it the amount of each warrant

canceled[.] pursuant to NRS 353.130.

2. If a state controller’s warrant has been lost or destroyed, the person

in whose favor the warrant was drawn may, within [1 year from] 6 years

after the date of the original warrant, [file] request another warrant in

lieu of the original warrant by:

(a) Filing with the state controller an affidavit [setting] :

(1) Providing sufficient information for the state controller to

identify the original warrant;

(2) Setting forth the reasons for the failure to present the warrant for

payment ; and

(3) Affirming that the warrant is not , to the knowledge of the affiant

, held by any other person or persons[.] ; and

(b) If he files the affidavit more than 180 days after the date of the

original warrant, renewing his claim against the state.

If the state controller is satisfied that the original warrant is lost or

destroyed, and the claim has not been paid by the state, he may issue

another warrant in lieu of the original warrant . [and]

3. If the state controller issues another warrant in lieu of an original

warrant canceled pursuant to NRS 353.130, he shall, except as

otherwise provided by specific statute, charge the amount thereof to the

account for lost and stale warrants in the fund upon which the original

warrant was drawn.

[3.] 4. In June of each year, as to each warrant whose original date is

at least [1 year] 6 years old and whose amount credited to the account for

lost and stale warrants has not been charged out as provided in subsection

[2,] 3, the state controller shall, except as otherwise [provided in

subsection 4, credit] provided by specific statute, recognize as revenue in

the fund upon which the original warrant was drawn [for] an amount

equivalent to the original warrant[,] and shall charge the account for lost

and stale warrants.

[4. The state controller shall credit the wildlife account in the state

general fund for any such warrant drawn from that account.]

Sec. 11. NRS 353.295 is hereby amended to read as follows:

353.295 As used in the State Accounting Procedures Law, unless the

context otherwise requires, and in all accounting procedures and reports

pursuant to this chapter, the words and terms defined in NRS 353.2961 to

353.3135, inclusive, and section 8 of this act have the meanings ascribed

to them in those sections.

Sec. 12. NRS 353.321 is hereby amended to read as follows:

353.321 1. The state controller shall report each fund [and account

group] in one of the following categories for purposes of annual financial

statements:

(a) State general fund;

(b) Special revenue funds;

funds;

(d) [Internal service funds;

(e) Enterprise funds;

(f) Fiduciary funds;

(g)] Debt service funds;

[(h) General long-term debt account group; or

(i) General fixed assets account group.]

(e) Permanent funds;

(f) Enterprise funds;

(g) Internal service funds;

(h) Pension trust funds;

(i) Investment trust funds;

(j) Private purpose trust funds; or

(k) Agency funds.

2. All resources and financial transactions of the state government

must be accounted for within a fund . [or account group.] The state

controller shall assign each existing fund [and account group] which is

created by statute to the proper category [unless the category is designated

by statute.] necessary to present the annual financial statements in

conformity with generally accepted accounting principles,

notwithstanding any statutory designation to the contrary.

Sec. 13. NRS 385.095 is hereby amended to read as follows:

385.095 Except as otherwise provided in NRS 385.091:

1. All gifts of money which the state board is authorized to accept

must be deposited in a [permanent trust] special revenue fund in the state

treasury designated as the education gift fund.

2. The money available in the education gift fund must be used only

for the purpose specified by the donor, within the scope of the state

board’s powers and duties, and no expenditure may be made until

approved by the legislature in an authorized expenditure act or by the

interim finance committee if the legislature is not in session.

3. If all or part of the money accepted by the state board from a donor

is not expended before the end of any fiscal year, the remaining balance of

the amount donated must remain in the education gift fund until needed

for the purpose specified by the donor.

Sec. 14. NRS 397.063 is hereby amended to read as follows:

397.063 1. All contributions from students must be accounted for in

the Western Interstate Commission for Higher Education’s fund for

student loans which is hereby created as [a special revenue] an enterprise

fund.

2. The three commissioners from the State of Nevada, acting jointly,

shall administer the fund and the money in the fund must be used solely to

provide:

(a) Loans to; and

(b) Contractual arrangements for educational services and facilities

for,

residents of Nevada who are certified to attend graduate or professional

schools in accordance with the provisions of the Western Regional Higher

Education Compact.

3. Loans from the Western Interstate Commission for Higher

Education’s fund for student loans, before July 1, 1985, and loans made to

students classified as continuing students before July 1, 1985, must be

made upon the following terms:

(a) All student loans must bear interest at 5 percent per annum from the

date when the student receives the loan.

(b) Each student receiving a loan must repay the loan with interest

following the termination of his education or completion of his internship

in accordance with the following schedule:

(1) Within 5 years for loans which total less than $10,000.

(2) Within 8 years for loans which total $10,000 or more but less than

$20,000.

(3) Within 10 years for loans which total $20,000 or more.

academic year.

Sec. 15. NRS 407.075 is hereby amended to read as follows:

407.075 1. The state park grant and gift fund is hereby created as a

[trust] special revenue fund for the use of the division.

2. All grants and gifts of money which the division is authorized to

accept must be deposited with the state treasurer for credit to the state park

grant and gift fund.

3. Expenditures from the state park grant and gift fund must be made

only for the purpose of carrying out the provisions of this chapter and other

programs or laws administered by the division.

Sec. 16. NRS 445A.120 is hereby amended to read as follows:

445A.120 1. The account to finance the construction of treatment

works and the implementation of pollution control projects is hereby

created in the fund for [the municipal bond bank.] water projects loans,

which is hereby created as an enterprise fund.

2. The money in the account must be used only for the purposes set

forth in 33 U.S.C. §§ 1381 et seq.

3. All claims against the account must be paid as other claims against

the state are paid.

4. The faith of the state is hereby pledged that the money in the

account will not be used for purposes other than those authorized by 33

U.S.C. §§ 1381 et seq.

Sec. 17. NRS 445A.255 is hereby amended to read as follows:

445A.255 1. The account to finance the construction of projects, to

be known as the account for the revolving fund, is hereby created in the

fund for [the municipal bond bank.] water projects loans.

2. The account to fund activities, other than projects, authorized by the

Safe Drinking Water Act, to be known as the account for set-aside

programs, is hereby created in the fund for the municipal bond bank.

3. The money in the account for the revolving fund and the account for

set-aside programs may be used only for the purposes set forth in the Safe

Drinking Water Act.

4. All claims against the account for the revolving fund and the

account for set-aside programs must be paid as other claims against the

state are paid.

5. The faith of the state is hereby pledged that the money in the

account for the revolving fund and the account for set-aside programs will

not be used for purposes other than those authorized by the Safe Drinking

Water Act.

Sec. 18. NRS 463.331 is hereby amended to read as follows:

463.331 1. An investigative fund is hereby created as [a special

revenue] an enterprise fund for the purposes of paying all expenses

incurred by the board and the commission for investigation of an

application for a license, finding of suitability or approval under the

provisions of this chapter. The special revenue of the investigative fund is

the money received by the state from the respective applicants. The

amount to be paid by each applicant is the amount determined by the

board in each case, but the board may not charge any amount to an

applicant for a finding of suitability to be associated with a gaming

enterprise pursuant to paragraph (a) of subsection 2 of NRS 463.167.

2. Expenses may be advanced from the investigative fund by the

chairman, and expenditures from the fund may be made without regard to

NRS 281.160. Any money received from the applicant in excess of the

costs and charges incurred in the investigation or the processing of the

application must be refunded pursuant to regulations adopted by the board

and the commission. At the conclusion of the investigation, the board shall

give to the applicant a written accounting of the costs and charges so

incurred.

3. Within 3 months after the end of a fiscal year, the amount of the

balance in the fund in excess of $2,000 must be deposited in the state

general fund.

Sec. 19. NRS 616A.425 is hereby amended to read as follows:

616A.425 1. There is hereby established in the state treasury the fund

for workers’ compensation and safety as [a special revenue] an enterprise

fund. All money received from assessments levied on insurers and

employers by the administrator pursuant to NRS 232.680 must be

deposited in this fund.

2. All assessments, penalties, bonds, securities and all other properties

received, collected or acquired by the division for functions supported in

whole or in part from the fund must be delivered to the custody of the state

treasurer for deposit to the credit of the fund.

3. All money and securities in the fund must be used to defray all costs

and expenses of administering the program of workmen’s compensation,

including the payment of:

(a) All salaries and other expenses in administering the division of

industrial relations, including the costs of the office and staff of the

administrator.

(b) All salaries and other expenses of administering NRS 616A.435 to

616A.460, inclusive, the offices of the hearings division of the department

of administration and the programs of self-insurance and review of

premium rates by the commissioner.

legislative counsel bureau whose principal duties are limited to conducting

research and reviewing and evaluating data related to industrial insurance.

(d) All salaries and other expenses of the fraud control unit for

industrial insurance established pursuant to NRS 228.420.

(e) Claims against uninsured employers arising from compliance with

NRS 616C.220 and 617.401.

(f) That portion of the salaries and other expenses of the office for

consumer health assistance established pursuant to NRS 223.550 that is

related to providing assistance to consumers and injured employees

concerning workers’ compensation.

4. The state treasurer may disburse money from the fund only upon

written order of the controller.

5. The state treasurer shall invest money of the fund in the same

manner and in the same securities in which he is authorized to invest state

general funds which are in his custody. Income realized from the

investment of the assets of the fund must be credited to the fund.

6. The commissioner shall assign an actuary to review the

establishment of assessment rates. The rates must be filed with the

commissioner 30 days before their effective date. Any insurer or employer

who wishes to appeal the rate so filed must do so pursuant to

NRS 679B.310.

Sec. 20. NRS 616A.430 is hereby amended to read as follows:

616A.430 1. There is hereby established [as a special revenue fund]

in the state treasury the uninsured employers’ claim [fund,] account in the

fund for workers’ compensation and safety, which may be used only for

the purpose of making payments in accordance with the provisions of NRS

616C.220 and 617.401. The administrator shall administer the [fund]

account and shall credit any excess money toward the assessments of the

insurers for the succeeding years.

2. All assessments, penalties, bonds, securities and all other properties

received, collected or acquired by the administrator for the uninsured

employers’ claim [fund] account must be delivered to the custody of the

state treasurer.

3. All money and securities in the [fund] account must be held by the

state treasurer as custodian thereof to be used solely for workers’

compensation.

4. The state treasurer may disburse money from the [fund] account

only upon written order of the state controller.

5. The state treasurer shall invest money of the [fund] account in the

same manner and in the same securities in which he is authorized to invest

money of the state general fund. Income realized from the investment of

the assets of the [fund] account must be credited to the [fund.] account.

6. The administrator shall assess each insurer, including each employer

who provides accident benefits for injured employees pursuant to NRS

616C.265, an amount to be deposited in the uninsured employers’ claim

[fund.] account. To establish the amount of the assessment, the

administrator shall determine the amount of money necessary to maintain

an appropriate balance in the [fund] account for each fiscal year and shall

allocate a portion of that amount to be payable by private carriers, a

portion to be payable by self-insured employers, a portion to be payable by

associations of self-insured public or private employers and a portion to be

payable by the employers who provide accident benefits pursuant to NRS

616C.265, based upon the expected annual expenditures for claims of each

group of insurers. After allocating the amounts payable, the administrator

shall apply an assessment rate to the:

(a) Private carriers that reflects the relative hazard of the employments

covered by the private carriers, results in an equitable distribution of costs

among the private carriers and is based upon expected annual premiums to

be received;

(b) Self-insured employers that results in an equitable distribution of

costs among the self-insured employers and is based upon expected annual

expenditures for claims;

in an equitable distribution of costs among the associations of self-insured

public or private employers and is based upon expected annual

expenditures for claims; and

(d) Employers who provide accident benefits pursuant to NRS

616C.265 that reflects the relative hazard of the employments covered by

those employers, results in an equitable distribution of costs among the

employers and is based upon expected annual expenditures for

claims.

The administrator shall adopt regulations for the establishment and

administration of the assessment rates, payments and any penalties that the

administrator determines are necessary to carry out the provisions of this

subsection. As used in this subsection, the term “group of insurers”

includes the group of employers who provide accident benefits for injured

employees pursuant to NRS 616C.265.

7. The commissioner shall assign an actuary to review the

establishment of assessment rates. The rates must be filed with the

commissioner 30 days before their effective date. Any insurer who wishes

to appeal the rate so filed must do so pursuant to NRS 679B.310.

Sec. 21. NRS 616B.368 is hereby amended to read as follows:

616B.368 1. The board of trustees of an association of self-insured

public or private employers is responsible for the money collected and

disbursed by the association.

2. The board of trustees shall:

(a) Establish a claims account in a financial institution in this state

which is approved by the commissioner and which is federally insured or

insured by a private insurer approved pursuant to NRS 678.755. Except as

otherwise provided in subsection 3, at least 75 percent of the annual

assessment collected by the association from its members must be

deposited in this account to pay:

(1) Claims;

(2) Expenses related to those claims;

(3) The costs associated with the association’s policy of excess

insurance; and

(4) Assessments, payments and penalties related to the subsequent

injury [fund] account and the uninsured employers’ claim [fund.] account.

(b) Establish an administrative account in a financial institution in this

state which is approved by the commissioner and which is federally

insured or insured by a private insurer approved pursuant to NRS 678.755.

The amount of the annual assessment collected by the association that is

not deposited in its claims account must be deposited in this account to

pay the administrative expenses of the association.

3. The commissioner may authorize an association to deposit less than

75 percent of its annual assessment in its claims account if the association

presents evidence to the satisfaction of the commissioner that:

(a) More than 25 percent of the association’s annual assessment is

needed to maintain its programs for loss control and occupational safety;

and

(b) The association’s policy of excess insurance attaches at less than 75

percent.

4. The board of trustees may invest the money of the association not

needed to pay the obligations of the association pursuant to chapter 682A

of NRS.

5. The commissioner shall review the accounts of an association

established pursuant to this section at such times as he deems necessary to

ensure compliance with the provisions of this section.

Sec. 22. NRS 616B.545 is hereby amended to read as follows:

616B.545 As used in NRS 616B.545 to 616B.560, inclusive, unless

the context otherwise requires, “board” means the board for the

administration of the subsequent injury [fund] account for self-insured

employers created pursuant to NRS 616B.548.

Sec. 23. NRS 616B.548 is hereby amended to read as follows:

616B.548 1. There is hereby created the board for the administration

of the subsequent injury [fund] account for self-insured employers,

consisting of five members who are self-insured employers. The members

must be appointed by the governor.

2. The members of the board shall elect a chairman and vice chairman

from among the members appointed. After the initial election of a

chairman and vice chairman, each of those officers shall hold office for a

term of 2 years commencing on July 1 of each odd-numbered year. If a

vacancy occurs in the chairmanship or vice chairmanship, the members of

the board shall elect a replacement for the remainder of the unexpired

term.

3. Vacancies on the board must be filled in the same manner as

original appointments.

4. The members of the board serve without compensation.

5. A legal counsel that has been appointed by or has contracted with

the division pursuant to NRS 232.660 shall serve as legal counsel of the

board.

Sec. 24. NRS 616B.551 is hereby amended to read as follows:

616B.551 1. The members of the board may meet throughout each

year at the times and places specified by a call of the chairman or a

majority of the board. The board may prescribe rules and regulations for

its own management and government. Three members of the board

constitute a quorum, and a quorum may exercise all the power and

authority conferred on the board. If a member of the board submits a claim

against the subsequent injury [fund] account for self-insured employers,

that member shall not vote on or otherwise participate in the decision of

the board concerning that claim.

2. The board shall administer the subsequent injury [fund] account for

self-insured employers in accordance with the provisions of NRS

616B.554, 616B.557 and 616B.560.

Sec. 25. NRS 616B.554 is hereby amended to read as follows:

616B.554 1. There is hereby [established as a special revenue fund]

created in the fund for workers’ compensation and safety in the state

treasury the subsequent injury [fund] account for self-insured employers,

which may be used only to make payments in accordance with the

provisions of NRS 616B.557 and 616B.560. The board shall administer

the [fund] account based upon recommendations made by the

administrator pursuant to subsection 8.

2. All assessments, penalties, bonds, securities and all other properties

received, collected or acquired by the board for the subsequent injury

[fund] account for self-insured employers must be delivered to the

custody of the state treasurer.

3. All money and securities in the [fund] account must be held by the

state treasurer as custodian thereof to be used solely for workers’

compensation for employees of self-insured employers.

4. The state treasurer may disburse money from the [fund] account

only upon written order of the board.

5. The state treasurer shall invest money of the [fund] account in the

same manner and in the same securities in which he is authorized to invest

state general funds which are in his custody. Income realized from the

investment of the assets of the [fund] account must be credited to the fund.

6. The board shall adopt regulations for the establishment and

administration of assessment rates, payments and penalties. Assessment

rates must result in an equitable distribution of costs among the self

-insured employers and must be based upon expected annual expenditures

for claims for payments from the subsequent injury [fund] account for

self-insured employers.

7. The commissioner shall assign an actuary to review the

establishment of assessment rates. The rates must be filed with the

commissioner 30 days before their effective date. Any self-insured

employer who wishes to appeal the rate so filed must do so pursuant to

NRS 679B.310.

8. The administrator shall:

(a) Evaluate any claim submitted to the board for payment or

reimbursement from the subsequent injury [fund] account for self-insured

employers and recommend to the board any appropriate action to be taken

concerning the claim; and

(b) Submit to the board any other recommendations relating to the

[fund.] account.

Sec. 26. NRS 616B.557 is hereby amended to read as follows:

616B.557 Except as otherwise provided in NRS 616B.560:

1. If an employee of a self-insured employer has a permanent physical

impairment from any cause or origin and incurs a subsequent disability by

injury arising out of and in the course of his employment which entitles

him to compensation for disability that is substantially greater by reason of

the combined effects of the preexisting impairment and the subsequent

injury than that which would have resulted from the subsequent injury

alone, the compensation due must be charged to the subsequent injury

[fund] account for self-insured employers in accordance with regulations

adopted by the board.

2. If the subsequent injury of such an employee results in his death and

it is determined that the death would not have occurred except for the

preexisting permanent physical impairment, the compensation due must be

charged to the subsequent injury [fund] account for self-insured

employers in accordance with regulations adopted by the board.

3. As used in this section, “permanent physical impairment” means

any permanent condition, whether congenital or caused by injury or

disease, of such seriousness as to constitute a hindrance or obstacle to

obtaining employment or to obtaining reemployment if the employee is

unemployed. For the purposes of this section, a condition is not a

“permanent physical impairment” unless it would support a rating of

permanent impairment of 6 percent or more of the whole man if evaluated

according to the American Medical Association’s Guides to the Evaluation

of Permanent Impairment as adopted and supplemented by the division

pursuant to NRS 616C.110.

4. To qualify under this section for reimbursement from the

subsequent injury [fund] account for self-insured employers, the self

-insured employer must establish by written records that the self-insured

employer had knowledge of the “permanent physical impairment” at the

time the employee was hired or that the employee was retained in

employment after the self-insured employer acquired such knowledge.

5. A self-insured employer shall notify the board of any possible claim

against the subsequent injury [fund] account for self-insured employers as

soon as practicable, but not later than 100 weeks after the injury or death.

6. The board shall adopt regulations establishing procedures for

submitting claims against the subsequent injury [fund] account for self

-insured employers. The board shall notify the self-insured employer of his

decision on such a claim within 90 days after the claim is received.

7. An appeal of any decision made concerning a claim against the

subsequent injury [fund] account for self-insured employers must be

submitted directly to the district court.

Sec. 27. NRS 616B.560 is hereby amended to read as follows:

616B.560 1. A self-insured employer who pays compensation due to

an employee who has a permanent physical impairment from any cause or

origin and incurs a subsequent disability by injury arising out of and in the

course of his employment which entitles him to compensation for

disability that is substantially greater by reason of the combined effects of

the preexisting impairment and the subsequent injury than that which

would have resulted from the subsequent injury alone is entitled to be

reimbursed from the subsequent injury [fund] account for self-insured

employers if:

(a) The employee knowingly made a false representation as to his

physical condition at the time he was hired by the self-insured employer;

(b) The self-insured employer relied upon the false representation and

this reliance formed a substantial basis of the employment; and

subsequent disability.

If the subsequent injury of the employee results in his death and it is

determined that the death would not have occurred except for the

preexisting permanent physical impairment, any compensation paid is

entitled to be reimbursed from the subsequent injury [fund] account for

self-insured employers.

2. A self-insured employer shall notify the board of any possible claim

against the subsequent injury [fund] account for self-insured employers

pursuant to this section no later than 60 days after the date of the

subsequent injury or the date the self-insured employer learns of the

employee’s false representation, whichever is later.

Sec. 28. NRS 616B.563 is hereby amended to read as follows:

616B.563 As used in NRS 616B.563 to 616B.581, inclusive, unless

the context otherwise requires, “board” means the board for the

administration of the subsequent injury [fund] account for associations of

self-insured public or private employers created pursuant to

NRS 616B.569.

Sec. 29. NRS 616B.569 is hereby amended to read as follows:

616B.569 1. There is hereby created the board for the administration

of the subsequent injury [fund] account for associations of self-insured

public or private employers, consisting of five members who are members

of an association of self-insured public or private employers. The members

of the board must be appointed by the governor.

2. The members of the board shall elect a chairman and vice chairman

from among the members appointed. After the initial election of a

chairman and vice chairman, each of those officers shall hold office for a

term of 2 years commencing on July 1 of each odd-numbered year. If a

vacancy occurs in the chairmanship or vice chairmanship, the members of

the board shall elect a replacement for the remainder of the unexpired

term.

3. Vacancies on the board must be filled in the same manner as

original appointments.

4. The members of the board serve without compensation.

5. A legal counsel that has been appointed by or has contracted with

the division pursuant to NRS 232.660 shall serve as legal counsel of the

board.

Sec. 30. NRS 616B.572 is hereby amended to read as follows:

616B.572 1. The members of the board may meet throughout each

year at the times and places specified by a call of the chairman or a

majority of the board. The board may prescribe rules and regulations for

its own management and government. Three members of the board

constitute a quorum, and a quorum may exercise all the power and

authority conferred on the board. If a member of the board submits a claim

against the subsequent injury [fund] account for associations of self

-insured public or private employers, that member shall not vote on or

otherwise participate in the decision of the board concerning that claim.

2. The board shall administer the subsequent injury [fund] account for

associations of self-insured public or private employers in accordance with

the provisions of NRS 616B.575, 616B.578 and 616B.581.

Sec. 31. NRS 616B.575 is hereby amended to read as follows:

616B.575 1. There is hereby [established as a special revenue fund]

created in the fund for workers’ compensation and safety in the state

treasury the subsequent injury [fund] account for associations of self

-insured public or private employers, which may be used only to make

payments in accordance with the provisions of NRS 616B.578 and

616B.581. The board shall administer the [fund] account based upon

recommendations made by the administrator pursuant to subsection 8.

2. All assessments, penalties, bonds, securities and all other properties

received, collected or acquired by the board for the subsequent injury

[fund] account for associations of self-insured public or private employers

must be delivered to the custody of the state treasurer.

3. All money and securities in the [fund] account must be held by the

state treasurer as custodian thereof to be used solely for workers’

compensation for employees of members of associations of self-insured

public or private employers.

4. The state treasurer may disburse money from the [fund] account

only upon written order of the board.

5. The state treasurer shall invest money of the [fund] account in the

same manner and in the same securities in which he is authorized to invest

state general funds which are in his custody. Income realized from the

investment of the assets of the [fund] account must be credited to the

[fund.] account.

6. The board shall adopt regulations for the establishment and

administration of assessment rates, payments and penalties. Assessment

rates must result in an equitable distribution of costs among the

associations of self-insured public or private employers and must be based

upon expected annual expenditures for claims for payments from the

subsequent injury [fund] account for associations of self-insured public or

private employers.

7. The commissioner shall assign an actuary to review the

establishment of assessment rates. The rates must be filed with the

commissioner 30 days before their effective date. Any association of self

-insured public or private employers that wishes to appeal the rate so filed

must do so pursuant to NRS 679B.310.

8. The administrator shall:

(a) Evaluate any claim submitted to the board for payment or

reimbursement from the subsequent injury [fund] account for associations

of self-insured public or private employers and recommend to the board

any appropriate action to be taken concerning the claim; and

(b) Submit to the board any other recommendations relating to the

[fund.] account.

Sec. 32. NRS 616B.578 is hereby amended to read as follows:

616B.578 Except as otherwise provided in NRS 616B.581:

1. If an employee of a member of an association of self-insured public

or private employers has a permanent physical impairment from any cause

or origin and incurs a subsequent disability by injury arising out of and in

the course of his employment which entitles him to compensation for

disability that is substantially greater by reason of the combined effects of

the preexisting impairment and the subsequent injury than that which

would have resulted from the subsequent injury alone, the compensation

due must be charged to the subsequent injury [fund] account for

associations of self-insured public or private employers in accordance with

regulations adopted by the board.

2. If the subsequent injury of such an employee results in his death and

it is determined that the death would not have occurred except for the

preexisting permanent physical impairment, the compensation due must be

charged to the subsequent injury [fund] account for associations of self

-insured public or private employers in accordance with regulations