(REPRINTED WITH ADOPTED AMENDMENTS)
SECOND REPRINT S.B. 487
Senate Bill No. 487–Committee on Government Affairs
(On Behalf of Office of the State Treasurer)
March 26, 2001
____________
Referred to Committee on Government Affairs
SUMMARY—Authorizes additional types of investments for money in certain public funds. (BDR 31‑359)
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.
Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).
AN ACT relating to public investments; authorizing additional types of investments for money in certain public funds; 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. NRS 355.060 is hereby amended to read as follows:
1-2 355.060 1. The state controller shall notify the state treasurer
1-3 monthly of the amount of uninvested money in the state permanent school
1-4 fund.
1-5 2. Whenever there is a sufficient amount of money for investment in
1-6 the state permanent school fund, the state treasurer shall proceed to
1-7 negotiate for the investment of the money in:
1-8 (a) United States bonds . [;]
1-9 (b) Obligations or certificates of the Federal National Mortgage
1-10 Association, the Federal Home Loan Banks, the Federal Home Loan
1-11 Mortgage Corporation, the Federal Farm Credit Banks Funding
1-12 Corporation or the Student Loan Marketing Association, whether or not
1-13 guaranteed by the United States . [;]
1-14 (c) Bonds of this state or of other states . [;]
1-15 (d) Bonds of any county of the State of Nevada . [;]
1-16 (e) United States treasury notes . [;]
1-17 (f) Farm mortgage loans fully insured and guaranteed by the Farmers
1-18 Home Administration of the United States Department of Agriculture . [;]
1-19 (g) Loans at a rate of interest of not less than 6 percent per annum,
1-20 secured by mortgage on agricultural lands in this state of not less than three
2-1 times the value of the amount loaned, exclusive of perishable
2-2 improvements, of unexceptional title and free from all encumbrances . [;
2-3 or]
2-4 (h) Money market mutual funds that:
2-5 (1) Are registered with the Securities and Exchange Commission;
2-6 (2) Are rated by a nationally recognized rating service as “AAA” or
2-7 its equivalent; and
2-8 (3) Invest only in securities issued or guaranteed as to payment of
2-9 principal and interest by the Federal Government, or its agencies or
2-10 instrumentalities, or in repurchase agreements that are fully collateralized
2-11 by such securities.
2-12 (i) Common or preferred stock of a corporation created by or existing
2-13 under the laws of the United States or of a state, district or territory of the
2-14 United States, if:
2-15 (1) The stock of the corporation is:
2-16 (I) Listed on a national stock exchange; or
2-17 (II) Traded in the over-the-counter market, if the price
2-18 quotations for the over-the-counter stock are quoted by the National
2-19 Association of Securities Dealers Automated Quotations System
2-20 (NASDAQ);
2-21 (2) The outstanding shares of the corporation have a total market
2-22 value of not less than $50,000,000;
2-23 (3) The maximum investment in stock is not greater than 50 percent
2-24 of the book value of the total investments of the state permanent school
2-25 fund;
2-26 (4) Except for investments made pursuant to paragraph (k), the
2-27 amount of an investment in a single corporation is not greater than 3
2-28 percent of the book value of the assets of the state permanent school
2-29 fund; and
2-30 (5) Except for investments made pursuant to paragraph (k), the
2-31 total amount of shares owned by the state permanent school fund is not
2-32 greater than 5 percent of the outstanding stock of a single corporation.
2-33 (j) A pooled or commingled real estate fund or a real estate security
2-34 that is managed by a corporate trustee or by an investment advisory firm
2-35 that is registered with the Securities and Exchange Commission, either of
2-36 which may be retained by the state treasurer as an investment manager.
2-37 The shares and the pooled or commingled fund must be held in trust.
2-38 The total book value of an investment made under this paragraph must
2-39 not at any time be greater than 5 percent of the total book value of all
2-40 investments of the state permanent school fund.
2-41 (k) Mutual funds or common trust funds that consist of any
2-42 combination of the investments listed in paragraphs (a) to (j), inclusive.
2-43 3. The state treasurer shall not invest any money in the state
2-44 permanent school fund pursuant to paragraph (i), (j) or (k) of subsection
2-45 2 unless the state treasurer obtains a judicial determination that the
2-46 proposed investment or category of investments will not violate the
2-47 provisions of section 9 of article 8 of the constitution of the State of
2-48 Nevada. The state treasurer shall contract for the services of independent
2-49 contractors to manage any investments of the state treasurer made
3-1 pursuant to paragraph (i), (j) or (k) of subsection 2. The state treasurer
3-2 shall establish such criteria for the qualifications of such an independent
3-3 contractor as are appropriate to ensure that each independent contractor
3-4 has expertise in the management of such investments.
3-5 4. In addition to the investments authorized by subsection 2, the state
3-6 treasurer may make loans of money from the state permanent school fund
3-7 to school districts pursuant to NRS 387.526.
3-8 [4.] 5. No part of the state permanent school fund may be invested
3-9 pursuant to a reverse-repurchase agreement.
3-10 Sec. 2. NRS 355.140 is hereby amended to read as follows:
3-11 355.140 1. In addition to other investments provided for by a specific
3-12 statute, the following bonds and other securities are proper and lawful
3-13 investments of any of the money of this state, of its various departments,
3-14 institutions and agencies, and of the state insurance fund:
3-15 (a) Bonds and certificates of the United States;
3-16 (b) Bonds, notes, debentures and loans if they are underwritten by or
3-17 their payment is guaranteed by the United States;
3-18 (c) Obligations or certificates of the United States Postal Service, the
3-19 Federal National Mortgage Association, the Government National
3-20 Mortgage Association, the Federal Agricultural Mortgage Corporation,
3-21 the Federal Home Loan Banks, the Federal Home Loan Mortgage
3-22 Corporation or the Student Loan Marketing Association, whether or not
3-23 guaranteed by the United States;
3-24 (d) Bonds of this state or other states of the Union;
3-25 (e) Bonds of any county of this state or of other states;
3-26 (f) Bonds of incorporated cities in this state or in other states of the
3-27 Union, including special assessment district bonds if those bonds provide
3-28 that any deficiencies in the proceeds to pay the bonds are to be paid from
3-29 the general fund of the incorporated city;
3-30 (g) General obligation bonds of irrigation districts and drainage districts
3-31 in this state which are liens upon the property within those districts, if the
3-32 value of the property is found by the board or commission making the
3-33 investments to render the bonds financially sound over all other obligations
3-34 of the districts;
3-35 (h) Bonds of school districts within this state;
3-36 (i) Bonds of any general improvement district whose population is
3-37 200,000 or more and which is situated in two or more counties of this state
3-38 or of any other state, if:
3-39 (1) The bonds are general obligation bonds and constitute a lien upon
3-40 the property within the district which is subject to taxation; and
3-41 (2) That property is of an assessed valuation of not less than five
3-42 times the amount of the bonded indebtedness of the district;
3-43 (j) Medium-term obligations for counties, cities and school districts
3-44 authorized pursuant to chapter 350 of NRS;
3-45 (k) Loans bearing interest at a rate determined by the state board of
3-46 finance when secured by first mortgages on agricultural lands in this state
3-47 of not less than three times the value of the amount loaned, exclusive of
3-48 perishable improvements, and of unexceptional title and free from all
3-49 encumbrances;
4-1 (l) Farm loan bonds, consolidated farm loan bonds, debentures,
4-2 consolidated debentures and other obligations issued by federal land banks
4-3 and federal intermediate credit banks under the authority of the Federal
4-4 Farm Loan Act, formerly 12 U.S.C. §§ 636 to 1012, inclusive, and §§ 1021
4-5 to 1129, inclusive, and the Farm Credit Act of 1971, 12 U.S.C. §§ 2001 to
4-6 2259, inclusive, and bonds, debentures, consolidated debentures and other
4-7 obligations issued by banks for cooperatives under the authority of the
4-8 Farm Credit Act of 1933, formerly 12 U.S.C. §§ 1131 to 1138e, inclusive,
4-9 and the Farm Credit Act of 1971, 12 U.S.C. §§ 2001 to 2259, inclusive,
4-10 excluding such money thereof as has been received or which may be
4-11 received hereafter from the Federal Government or received pursuant to
4-12 some federal law which governs the investment thereof;
4-13 (m) Negotiable certificates of deposit issued by commercial banks,
4-14 insured credit unions or savings and loan associations;
4-15 (n) Bankers’ acceptances of the kind and maturities made eligible by
4-16 law for rediscount with Federal Reserve banks or trust companies which
4-17 are members of the Federal Reserve System, except that acceptances may
4-18 not exceed 180 days’ maturity, and may not, in aggregate value, exceed 20
4-19 percent of the total par value of the portfolio as determined on the date of
4-20 purchase;
4-21 (o) Commercial paper issued by a corporation organized and operating
4-22 in the United States or by a depository institution licensed by the United
4-23 States or any state and operating in the United States that:
4-24 (1) At the time of purchase has a remaining term to maturity of not
4-25 more than 270 days; and
4-26 (2) Is rated by a nationally recognized rating service as “A-1,” “P-1”
4-27 or its equivalent, or better,
4-28 except that investments pursuant to this paragraph may not, in aggregate
4-29 value, exceed 20 percent of the total par value of the portfolio as
4-30 determined on the date of purchase, and if the rating of an obligation is
4-31 reduced to a level that does not meet the requirements of this paragraph, it
4-32 must be sold as soon as possible;
4-33 (p) Notes, bonds and other unconditional obligations for the payment of
4-34 money, except certificates of deposit that do not qualify pursuant to
4-35 paragraph (m), issued by corporations organized and operating in the
4-36 United States or by depository institutions licensed by the United States or
4-37 any state and operating in the United States that:
4-38 (1) Are purchased from a registered broker-dealer;
4-39 (2) At the time of purchase have a remaining term to maturity of not
4-40 more than 5 years; and
4-41 (3) Are rated by a nationally recognized rating service as “A” or its
4-42 equivalent, or better,
4-43 except that investments pursuant to this paragraph may not, in aggregate
4-44 value, exceed 20 percent of the total par value of the portfolio, and if the
4-45 rating of an obligation is reduced to a level that does not meet the
4-46 requirements of this paragraph, it must be sold as soon as possible;
4-47 (q) Money market mutual funds which:
4-48 (1) Are registered with the Securities and Exchange Commission;
5-1 (2) Are rated by a nationally recognized rating service as “AAA” or
5-2 its equivalent; and
5-3 (3) Invest only in securities issued by the Federal Government or
5-4 agencies of the Federal Government or in repurchase agreements fully
5-5 collateralized by such securities;
5-6 (r) Collateralized mortgage obligations that are rated by a nationally
5-7 recognized rating service as “AAA” or its equivalent; and
5-8 (s) Asset-backed securities that are rated by a nationally recognized
5-9 rating service as “AAA” or its equivalent.
5-10 2. Repurchase agreements are proper and lawful investments of money
5-11 of the state and the state insurance fund for the purchase or sale of
5-12 securities which are negotiable and of the types listed in subsection 1 if
5-13 made in accordance with the following conditions:
5-14 (a) The state treasurer shall designate in advance and thereafter maintain
5-15 a list of qualified counterparties which:
5-16 (1) Regularly provide audited and, if available, unaudited financial
5-17 statements to the state treasurer;
5-18 (2) The state treasurer has determined to have adequate capitalization
5-19 and earnings and appropriate assets to be highly credit worthy; and
5-20 (3) Have executed a written master repurchase agreement in a form
5-21 satisfactory to the state treasurer and the state board of finance pursuant to
5-22 which all repurchase agreements are entered into. The master repurchase
5-23 agreement must require the prompt delivery to the state treasurer and the
5-24 appointed custodian of written confirmations of all transactions conducted
5-25 thereunder, and must be developed giving consideration to the Federal
5-26 Bankruptcy Act, 11 U.S.C. §§ 101 et seq.
5-27 (b) In all repurchase agreements:
5-28 (1) At or before the time money to pay the purchase price is
5-29 transferred, title to the purchased securities must be recorded in the name
5-30 of the appointed custodian, or the purchased securities must be delivered
5-31 with all appropriate, executed transfer instruments by physical delivery to
5-32 the custodian;
5-33 (2) The state must enter into a written contract with the custodian
5-34 appointed pursuant to subparagraph (1) which requires the custodian to:
5-35 (I) Disburse cash for repurchase agreements only upon receipt of
5-36 the underlying securities;
5-37 (II) Notify the state when the securities are marked to the market if
5-38 the required margin on the agreement is not maintained;
5-39 (III) Hold the securities separate from the assets of the custodian;
5-40 and
5-41 (IV) Report periodically to the state concerning the market value of
5-42 the securities;
5-43 (3) The market value of the purchased securities must exceed 102
5-44 percent of the repurchase price to be paid by the counterparty and the value
5-45 of the purchased securities must be marked to the market weekly;
5-46 (4) The date on which the securities are to be repurchased must not
5-47 be more than 90 days after the date of purchase; and
5-48 (5) The purchased securities must not have a term to maturity at the
5-49 time of purchase in excess of 10 years.
6-1 3. As used in subsection 2:
6-2 (a) “Counterparty” means a bank organized and operating or licensed to
6-3 operate in the United States pursuant to federal or state law or a securities
6-4 dealer which is:
6-5 (1) A registered broker-dealer;
6-6 (2) Designated by the Federal Reserve Bank of New York as a
6-7 “primary” dealer in United States government securities; and
6-8 (3) In full compliance with all applicable capital requirements.
6-9 (b) “Repurchase agreement” means a purchase of securities by the state
6-10 or state insurance fund from a counterparty which commits to repurchase
6-11 those securities or securities of the same issuer, description, issue date and
6-12 maturity on or before a specified date for a specified price.
6-13 4. No money of this state may be invested pursuant to a reverse-
6-14 repurchase agreement, except money invested pursuant to chapter 286 of
6-15 NRS.
6-16 Sec. 3. NRS 355.170 is hereby amended to read as follows:
6-17 355.170 1. Except as otherwise provided in this section and in NRS
6-18 354.750, a board of county commissioners, a board of trustees of a county
6-19 school district or the governing body of an incorporated city may purchase
6-20 for investment the following securities and no others:
6-21 (a) Bonds and debentures of the United States, the maturity dates of
6-22 which do not extend more than 10 years after the date of purchase.
6-23 (b) Farm loan bonds, consolidated farm loan bonds, debentures,
6-24 consolidated debentures and other obligations issued by federal land banks
6-25 and federal intermediate credit banks under the authority of the Federal
6-26 Farm Loan Act, formerly 12 U.S.C. §§ 636 to 1012, inclusive, and §§ 1021
6-27 to 1129, inclusive, and the Farm Credit Act of 1971, 12 U.S.C. §§ 2001 to
6-28 2259, inclusive, and bonds, debentures, consolidated debentures and other
6-29 obligations issued by banks for cooperatives under the authority of the
6-30 Farm Credit Act of 1933, formerly 12 U.S.C. §§ 1131 to 1138e, inclusive,
6-31 and the Farm Credit Act of 1971, 12 U.S.C. §§ 2001 to 2259, inclusive.
6-32 (c) Bills and notes of the United States Treasury, the maturity date of
6-33 which is not more than 10 years after the date of purchase.
6-34 (d) Obligations of an agency or instrumentality of the United States of
6-35 America or a corporation sponsored by the government, the maturity date
6-36 of which is not more than 10 years after the date of purchase.
6-37 (e) Negotiable certificates of deposit issued by commercial banks,
6-38 insured credit unions or savings and loan associations.
6-39 (f) Securities which have been expressly authorized as investments for
6-40 local governments or agencies, as defined in NRS 354.474, by any
6-41 provision of Nevada Revised Statutes or by any special law.
6-42 (g) Subject to the limitations contained in NRS 355.177, negotiable
6-43 notes or short-time negotiable bonds issued by local governments of the
6-44 State of Nevada pursuant to NRS 350.091.
6-45 (h) Bankers’ acceptances of the kind and maturities made eligible by
6-46 law for rediscount with Federal Reserve Banks, and generally accepted by
6-47 banks or trust companies which are members of the Federal Reserve
6-48 System. Eligible bankers’ acceptances may not exceed 180 days’ maturity.
6-49 Purchases of bankers’ acceptances may not exceed 20 percent of the
7-1 money available to a local government for investment as determined on the
7-2 date of purchase.
7-3 (i) Obligations of state and local governments if:
7-4 (1) The interest on the obligation is exempt from gross income for
7-5 federal income tax purposes; and
7-6 (2) The obligation has been rated “A” or higher by one or more
7-7 nationally recognized bond credit rating agencies.
7-8 (j) Commercial paper issued by a corporation organized and operating
7-9 in the United States or by a depository institution licensed by the United
7-10 States or any state and operating in the United States that:
7-11 (1) Is purchased from a registered broker-dealer;
7-12 (2) At the time of purchase has a remaining term to maturity of no
7-13 more than 270 days; and
7-14 (3) Is rated by a nationally recognized rating service as “A-1,” “P-1”
7-15 or its equivalent, or better,
7-16 except that investments pursuant to this paragraph may not, in aggregate
7-17 value, exceed 20 percent of the total portfolio as determined on the date of
7-18 purchase, and if the rating of an obligation is reduced to a level that does
7-19 not meet the requirements of this paragraph, it must be sold as soon as
7-20 possible.
7-21 (k) Money market mutual funds which:
7-22 (1) Are registered with the Securities and Exchange Commission;
7-23 (2) Are rated by a nationally recognized rating service as “AAA” or
7-24 its equivalent; and
7-25 (3) Invest only in securities issued by the Federal Government or
7-26 agencies of the Federal Government or in repurchase agreements fully
7-27 collateralized by such securities.
7-28 (l) Obligations of the Federal Agricultural Mortgage Corporation.
7-29 2. Repurchase agreements are proper and lawful investments of money
7-30 of a board of county commissioners, a board of trustees of a county school
7-31 district or a governing body of an incorporated city for the purchase or sale
7-32 of securities which are negotiable and of the types listed in subsection 1 if
7-33 made in accordance with the following conditions:
7-34 (a) The board of county commissioners, the board of trustees of the
7-35 school district or the governing body of the city shall designate in advance
7-36 and thereafter maintain a list of qualified counterparties which:
7-37 (1) Regularly provide audited and, if available, unaudited financial
7-38 statements;
7-39 (2) The board of county commissioners, the board of trustees of the
7-40 school district or the governing body of the city has determined to have
7-41 adequate capitalization and earnings and appropriate assets to be highly
7-42 credit worthy; and
7-43 (3) Have executed a written master repurchase agreement in a form
7-44 satisfactory to the board of county commissioners, the board of trustees of
7-45 the school district or the governing body of the city pursuant to which all
7-46 repurchase agreements are entered into. The master repurchase agreement
7-47 must require the prompt delivery to the board of county commissioners, the
7-48 board of trustees of the school district or the governing body of the city and
7-49 the appointed custodian of written confirmations of all transactions
8-1 conducted thereunder, and must be developed giving consideration to the
8-2 Federal Bankruptcy Act.
8-3 (b) In all repurchase agreements:
8-4 (1) At or before the time money to pay the purchase price is
8-5 transferred, title to the purchased securities must be recorded in the name
8-6 of the appointed custodian, or the purchased securities must be delivered
8-7 with all appropriate, executed transfer instruments by physical delivery to
8-8 the custodian;
8-9 (2) The board of county commissioners, the board of trustees of the
8-10 school district or the governing body of the city must enter a written
8-11 contract with the custodian appointed pursuant to subparagraph (1) which
8-12 requires the custodian to:
8-13 (I) Disburse cash for repurchase agreements only upon receipt of
8-14 the underlying securities;
8-15 (II) Notify the board of county commissioners, the board of
8-16 trustees of the school district or the governing body of the city when the
8-17 securities are marked to the market if the required margin on the agreement
8-18 is not maintained;
8-19 (III) Hold the securities separate from the assets of the custodian;
8-20 and
8-21 (IV) Report periodically to the board of county commissioners, the
8-22 board of trustees of the school district or the governing body of the city
8-23 concerning the market value of the securities;
8-24 (3) The market value of the purchased securities must exceed 102
8-25 percent of the repurchase price to be paid by the counterparty and the value
8-26 of the purchased securities must be marked to the market weekly;
8-27 (4) The date on which the securities are to be repurchased must not
8-28 be more than 90 days after the date of purchase; and
8-29 (5) The purchased securities must not have a term to maturity at the
8-30 time of purchase in excess of 10 years.
8-31 3. The securities described in paragraphs (a), (b) and (c) of subsection
8-32 1 and the repurchase agreements described in subsection 2 may be
8-33 purchased when, in the opinion of the board of county commissioners, the
8-34 board of trustees of a county school district or the governing body of the
8-35 city, there is sufficient money in any fund of the county, the school district
8-36 or city to purchase those securities and the purchase will not result in the
8-37 impairment of the fund for the purposes for which it was created.
8-38 4. When the board of county commissioners, the board of trustees of a
8-39 county school district or governing body of the city has determined that
8-40 there is available money in any fund or funds for the purchase of bonds as
8-41 set out in subsection 1 or 2, those purchases may be made and the bonds
8-42 paid for out of any one or more of the funds, but the bonds must be
8-43 credited to the funds in the amounts purchased, and the money received
8-44 from the redemption of the bonds, as and when redeemed, must go back
8-45 into the fund or funds from which the purchase money was taken
8-46 originally.
8-47 5. Any interest earned on money invested pursuant to subsection 3,
8-48 may, at the discretion of the board of county commissioners, the board of
8-49 trustees of a county school district or governing body of the city, be
9-1 credited to the fund from which the principal was taken or to the general
9-2 fund of the county, school district or incorporated city.
9-3 6. The board of county commissioners, the board of trustees of a
9-4 county school district or governing body of an incorporated city may invest
9-5 any money apportioned into funds and not invested pursuant to subsection
9-6 3 and any money not apportioned into funds in bills and notes of the United
9-7 States Treasury, the maturity date of which is not more than 1 year after the
9-8 date of investment. These investments must be considered as cash for
9-9 accounting purposes, and all the interest earned on them must be credited
9-10 to the general fund of the county, school district or incorporated city.
9-11 7. This section does not authorize the investment of money
9-12 administered pursuant to a contract, debenture agreement or grant in a
9-13 manner not authorized by the terms of the contract, agreement or grant.
9-14 8. As used in this section:
9-15 (a) “Counterparty” means a bank organized and operating or licensed to
9-16 operate in the United States pursuant to federal or state law or a securities
9-17 dealer which is:
9-18 (1) A registered broker-dealer;
9-19 (2) Designated by the Federal Reserve Bank of New York as a
9-20 “primary” dealer in United States government securities; and
9-21 (3) In full compliance with all applicable capital requirements.
9-22 (b) “Repurchase agreement” means a purchase of securities by a board
9-23 of county commissioners, the board of trustees of a county school district
9-24 or the governing body of an incorporated city from a counterparty which
9-25 commits to repurchase those securities or securities of the same issuer,
9-26 description, issue date and maturity on or before a specified date for a
9-27 specified price.
9-28 Sec. 4. NRS 396.926 is hereby amended to read as follows:
9-29 396.926 1. The millennium scholarship trust fund is hereby created
9-30 in the state treasury. The state treasurer may accept gifts, grants, bequests
9-31 and donations for deposit in the trust fund.
9-32 2. The state treasurer shall deposit in the trust fund:
9-33 (a) Forty percent of all money received by the State of Nevada pursuant
9-34 to any settlement entered into by the State of Nevada and a manufacturer of
9-35 tobacco products;
9-36 (b) Forty percent of all money recovered by the State of Nevada from a
9-37 judgment in a civil action against a manufacturer of tobacco products; and
9-38 (c) Any gifts, grants, bequests or donations specifically designated for
9-39 the trust fund by the donor.
9-40 3. The state treasurer shall administer the trust fund. As administrator
9-41 of the trust fund, the state treasurer[:] , except as otherwise provided in
9-42 this section:
9-43 (a) Shall maintain the financial records of the trust fund;
9-44 (b) Shall invest the money in the trust fund as the money in other state
9-45 funds is invested;
9-46 (c) Shall manage any account associated with the trust fund;
9-47 (d) Shall maintain any instruments that evidence investments made with
9-48 the money in the trust fund;
10-1 (e) May contract with vendors for any good or service that is necessary
10-2 to carry out the provisions of this section; and
10-3 (f) May perform any other duties necessary to administer the trust fund.
10-4 4. In addition to the investments authorized pursuant to paragraph
10-5 (b) of subsection 3, the state treasurer may, except as otherwise provided
10-6 in subsection 5, invest the money in the trust fund in:
10-7 (a) Common or preferred stock of a corporation created by or existing
10-8 under the laws of the United States or of a state, district or territory of the
10-9 United States, if:
10-10 (1) The stock of the corporation is:
10-11 (I) Listed on a national stock exchange; or
10-12 (II) Traded in the over-the-counter market, if the price
10-13 quotations for the over-the-counter stock are quoted by the National
10-14 Association of Securities Dealers Automated Quotations System
10-15 (NASDAQ);
10-16 (2) The outstanding shares of the corporation have a total market
10-17 value of not less than $50,000,000;
10-18 (3) The maximum investment in stock is not greater than 50 percent
10-19 of the book value of the total investments of the trust fund;
10-20 (4) Except for investments made pursuant to paragraph (c), the
10-21 amount of an investment in a single corporation is not greater than 3
10-22 percent of the book value of the assets of the trust fund; and
10-23 (5) Except for investments made pursuant to paragraph (c), the
10-24 total amount of shares owned by the trust fund is not greater than 5
10-25 percent of the outstanding stock of a single corporation.
10-26 (b) A pooled or commingled real estate fund or a real estate security
10-27 that is managed by a corporate trustee or by an investment advisory firm
10-28 that is registered with the Securities and Exchange Commission, either of
10-29 which may be retained by the state treasurer as an investment manager.
10-30 The shares and the pooled or commingled fund must be held in trust.
10-31 The total book value of an investment made under this paragraph must
10-32 not at any time be greater than 5 percent of the total book value of all
10-33 investments of the trust fund.
10-34 (c) Mutual funds or common trust funds that consist of any
10-35 combination of the investments authorized pursuant to paragraph (b) of
10-36 subsection 3 and paragraphs (a) and (b) of this subsection.
10-37 5. The state treasurer shall not invest any money in the trust fund
10-38 pursuant to subsection 4 unless the state treasurer obtains a judicial
10-39 determination that the proposed investment or category of investments
10-40 will not violate the provisions of section 9 of article 8 of the constitution
10-41 of the State of Nevada. The state treasurer shall contract for the services
10-42 of independent contractors to manage any investments of the state
10-43 treasurer made pursuant to subsection 4. The state treasurer shall
10-44 establish such criteria for the qualifications of such an independent
10-45 contractor as are appropriate to ensure that each independent contractor
10-46 has expertise in the management of such investments.
10-47 6. All interest and income earned on the money in the trust fund must,
10-48 after deducting any applicable charges, be credited to the trust fund. All
11-1 claims against the trust fund must be paid as other claims against the state
11-2 are paid.
11-3 [5.] 7. Not more than 2 percent of the amount of money in the trust
11-4 fund may be used to pay the costs of administering the trust fund.
11-5 [6.] 8. The money in the trust fund remains in the fund and does not
11-6 revert to the state general fund at the end of any fiscal year.
11-7 [7.] 9. Money in the trust fund may be used only for the purposes set
11-8 forth in NRS 396.914 to 396.934, inclusive.
11-9 Sec. 5. NRS 439.605 is hereby amended to read as follows:
11-10 439.605 1. The trust fund for public health is hereby created in the
11-11 state treasury. The state treasurer shall deposit in the trust fund:
11-12 (a) Ten percent of all money received by this state pursuant to any
11-13 settlement entered into by the State of Nevada and a manufacturer of
11-14 tobacco products; and
11-15 (b) Ten percent of all money recovered by this state from a judgment in
11-16 a civil action against a manufacturer of tobacco products.
11-17 2. The state treasurer shall administer the trust fund. As administrator
11-18 of the trust fund, the state treasurer[:] , except as otherwise provided in
11-19 this section:
11-20 (a) Shall maintain the financial records of the trust fund;
11-21 (b) Shall invest the money in the trust fund as the money in other state
11-22 funds is invested;
11-23 (c) Shall manage any account associated with the trust fund;
11-24 (d) Shall maintain any instruments that evidence investments made with
11-25 the money in the trust fund;
11-26 (e) May contract with vendors for any good or service that is necessary
11-27 to carry out the provisions of this section; and
11-28 (f) May perform any other duties necessary to administer the trust fund.
11-29 3. In addition to the investments authorized pursuant to paragraph
11-30 (b) of subsection 2, the state treasurer may, except as otherwise provided
11-31 in subsection 4, invest the money in the trust fund in:
11-32 (a) Common or preferred stock of a corporation created by or existing
11-33 under the laws of the United States or of a state, district or territory of the
11-34 United States, if:
11-35 (1) The stock of the corporation is:
11-36 (I) Listed on a national stock exchange; or
11-37 (II) Traded in the over-the-counter market, if the price
11-38 quotations for the over-the-counter stock are quoted by the National
11-39 Association of Securities Dealers Automated Quotations System
11-40 (NASDAQ);
11-41 (2) The outstanding shares of the corporation have a total market
11-42 value of not less than $50,000,000;
11-43 (3) The maximum investment in stock is not greater than 50 percent
11-44 of the book value of the total investments of the trust fund;
11-45 (4) Except for investments made pursuant to paragraph (c), the
11-46 amount of an investment in a single corporation is not greater than 3
11-47 percent of the book value of the assets of the trust fund; and
12-1 (5) Except for investments made pursuant to paragraph (c), the
12-2 total amount of shares owned by the trust fund is not greater than 5
12-3 percent of the outstanding stock of a single corporation.
12-4 (b) A pooled or commingled real estate fund or a real estate security
12-5 that is managed by a corporate trustee or by an investment advisory firm
12-6 that is registered with the Securities and Exchange Commission, either of
12-7 which may be retained by the state treasurer as an investment manager.
12-8 The shares and the pooled or commingled fund must be held in trust.
12-9 The total book value of an investment made under this paragraph must
12-10 not at any time be greater than 5 percent of the total book value of all
12-11 investments of the trust fund.
12-12 (c) Mutual funds or common trust funds that consist of any
12-13 combination of the investments authorized pursuant to paragraph (b) of
12-14 subsection 2 and paragraphs (a) and (b) of this subsection.
12-15 4. The state treasurer shall not invest any money in the trust fund
12-16 pursuant to subsection 3 unless the state treasurer obtains a judicial
12-17 determination that the proposed investment or category of investments
12-18 will not violate the provisions of section 9 of article 8 of the constitution
12-19 of the State of Nevada. The state treasurer shall contract for the services
12-20 of independent contractors to manage any investments of the state
12-21 treasurer made pursuant to subsection 3. The state treasurer shall
12-22 establish such criteria for the qualifications of such an independent
12-23 contractor as are appropriate to ensure that each independent contractor
12-24 has expertise in the management of such investments.
12-25 5. The interest and income earned on the money in the trust fund is
12-26 hereby appropriated to the board of trustees of the trust fund for public
12-27 health and must, after deducting any applicable charges, be credited to the
12-28 fund and accounted for separately. All claims against the fund must be paid
12-29 as other claims against the state are paid.
12-30 [4.] 6. Only the interest and income earned on the money in the trust
12-31 fund may be expended. Such expenditures may only be made for:
12-32 (a) Grants made pursuant to NRS 439.615 for:
12-33 (1) The promotion of public health and programs for the prevention
12-34 of disease or illness;
12-35 (2) Research on issues related to public health; and
12-36 (3) The provision of direct health care services to children and senior
12-37 citizens;
12-38 (b) Expenses related to the operation of the board of trustees of the trust
12-39 fund; and
12-40 (c) Actual costs incurred by the health division for providing
12-41 administrative assistance to the board, but in no event may more than 2
12-42 percent of the money in the fund be used for administrative expenses or
12-43 other indirect costs.
12-44 [5.] 7. The money in the trust fund remains in the fund and does not
12-45 revert to the state general fund at the end of any fiscal year.
12-46 Sec. 6. NRS 439.615 is hereby amended to read as follows:
12-47 439.615 1. The board of trustees shall:
13-1 (a) In accordance with the provisions set forth in subsection [4] 6 of
13-2 NRS 439.605, develop policies and procedures for the expenditure of the
13-3 interest and income earned on the money in the trust fund for public health.
13-4 (b) After deducting authorized expenses, annually make grants in a
13-5 cumulative amount equal to the interest and income earned on the money
13-6 in the trust fund for public health.
13-7 (c) Develop forms for requests for proposals for grants and disseminate
13-8 information about the grant program. A condition of each such grant must
13-9 be that not more than 8 percent of the grant may be used for administrative
13-10 expenses and other indirect costs.
13-11 (d) Publish an annual report of the activities of the board and the grants
13-12 made by the board. A copy of each such report must be transmitted to the
13-13 governor and to the director of the legislative counsel bureau for
13-14 transmittal to the legislature.
13-15 2. The board may take such other actions as are necessary to carry out
13-16 its duties and the provisions of this section and NRS 439.605 and 439.610.
13-17 Sec. 7. NRS 439.620 is hereby amended to read as follows:
13-18 439.620 1. The fund for a healthy Nevada is hereby created in the
13-19 state treasury. The state treasurer shall deposit in the fund:
13-20 (a) Fifty percent of all money received by this state pursuant to any
13-21 settlement entered into by the State of Nevada and a manufacturer of
13-22 tobacco products; and
13-23 (b) Fifty percent of all money recovered by this state from a judgment
13-24 in a civil action against a manufacturer of tobacco products.
13-25 2. The state treasurer shall administer the fund. As administrator of the
13-26 fund, the state treasurer[:] , except as otherwise provided in this section:
13-27 (a) Shall maintain the financial records of the fund;
13-28 (b) Shall invest the money in the fund as the money in other state funds
13-29 is invested;
13-30 (c) Shall manage any account associated with the fund;
13-31 (d) Shall maintain any instruments that evidence investments made with
13-32 the money in the fund;
13-33 (e) May contract with vendors for any good or service that is necessary
13-34 to carry out the provisions of this section; and
13-35 (f) May perform any other duties necessary to administer the fund.
13-36 3. In addition to the investments authorized pursuant to paragraph
13-37 (b) of subsection 2, the state treasurer may, except as otherwise provided
13-38 in subsection 4, invest the money in the fund in:
13-39 (a) Common or preferred stock of a corporation created by or existing
13-40 under the laws of the United States or of a state, district or territory of the
13-41 United States, if:
13-42 (1) The stock of the corporation is:
13-43 (I) Listed on a national stock exchange; or
13-44 (II) Traded in the over-the-counter market, if the price
13-45 quotations for the over-the-counter stock are quoted by the National
13-46 Association of Securities Dealers Automated Quotations System
13-47 (NASDAQ);
13-48 (2) The outstanding shares of the corporation have a total market
13-49 value of not less than $50,000,000;
14-1 (3) The maximum investment in stock is not greater than 50 percent
14-2 of the book value of the total investments of the fund;
14-3 (4) Except for investments made pursuant to paragraph (c), the
14-4 amount of an investment in a single corporation is not greater than 3
14-5 percent of the book value of the assets of the fund; and
14-6 (5) Except for investments made pursuant to paragraph (c), the
14-7 total amount of shares owned by the fund is not greater than 5 percent of
14-8 the outstanding stock of a single corporation.
14-9 (b) A pooled or commingled real estate fund or a real estate security
14-10 that is managed by a corporate trustee or by an investment advisory firm
14-11 that is registered with the Securities and Exchange Commission, either of
14-12 which may be retained by the state treasurer as an investment manager.
14-13 The shares and the pooled or commingled fund must be held in trust.
14-14 The total book value of an investment made under this paragraph must
14-15 not at any time be greater than 5 percent of the total book value of all
14-16 investments of the fund for a healthy Nevada.
14-17 (c) Mutual funds or common trust funds that consist of any
14-18 combination of the investments authorized pursuant to paragraph (b) of
14-19 subsection 2 and paragraphs (a) and (b) of this subsection.
14-20 4. The state treasurer shall not invest any money in the fund for a
14-21 healthy Nevada pursuant to subsection 3 unless the state treasurer
14-22 obtains a judicial determination that the proposed investment or category
14-23 of investments will not violate the provisions of section 9 of article 8 of
14-24 the constitution of the State of Nevada. The state treasurer shall contract
14-25 for the services of independent contractors to manage any investments of
14-26 the state treasurer made pursuant to subsection 3. The state treasurer
14-27 shall establish such criteria for the qualifications of such an independent
14-28 contractor as are appropriate to ensure that each independent contractor
14-29 has expertise in the management of such investments.
14-30 5. The interest and income earned on the money in the fund must, after
14-31 deducting any applicable charges, be credited to the fund. All claims
14-32 against the fund must be paid as other claims against the state are paid.
14-33 [4.] 6. Not more than 2 percent of the money in the fund may be used
14-34 to pay the costs of administering the fund.
14-35 [5.] 7. The money in the fund remains in the fund and does not revert
14-36 to the state general fund at the end of any fiscal year.
14-37 [6.] 8. All money that is deposited or paid into the fund is hereby
14-38 appropriated to the department and, except as otherwise provided in
14-39 paragraphs (c) and (d) of subsection 1 of NRS 439.630, may only be
14-40 expended pursuant to an allocation made by the task force for the fund for
14-41 a healthy Nevada. Money expended from the fund for a healthy Nevada
14-42 must not be used to supplant existing methods of funding that are available
14-43 to public agencies.
14-44 Sec. 8. This act becomes effective on July 1, 2001.
14-45 H