Senate Bill No. 60–Committee on Government Affairs

 

CHAPTER..........

 

AN ACT relating to local governments; restricting the amount a local government may place in an enterprise fund for building permit fees; authorizing a local government to maintain an amount of working capital in such an enterprise fund for certain purposes; requiring a local government to reduce the building permit fees it charges if an excess amount exists in such an enterprise fund at certain times; 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 354.59891 is hereby amended to read as follows:

   354.59891  1.  As used in this section:

   (a) “Building permit” means the official document or certificate

 issued by the building officer of a local government which authorizes the

 construction of a structure.

   (b) “Building permit basis” means the combination of the rate and the

 valuation method used to calculate the total building permit fee.

   [(b) “Building permit” means the official document or certificate issued

 by the building officer of a local government which authorizes the

 construction of a structure.]

   (c) “Building permit fee” means the total fees that must be paid before

 the issuance of a building permit, including , without limitation, all permit

 fees and inspection fees. The term does not include, without limitation,

 fees relating to water, sewer or other utilities, residential construction tax,

 tax for the improvement of transportation imposed pursuant to NRS

 278.710, any fee imposed pursuant to NRS 244.386 or any amount

 expended to change the zoning of the property.

   (d) “Current asset” means any cash maintained in an enterprise fund

 and any interest or other income earned on the money in the enterprise

 fund that, at the end of the current fiscal year, is anticipated by a local

 government to be consumed or converted into cash during the next

 ensuing fiscal year.

   (e) “Current liability” means any debt incurred by a local government

 to provide the services associated with issuing building permits that, at

 the end of the current fiscal year, is determined by the local government

 to require payment within the next ensuing fiscal year.

   (f) “Operating cost” means the amount paid by a local government for

 supplies, services, salaries, wages and employee benefits to provide the

 services associated with issuing building permits.

   (g) “Working capital” means the excess of current assets over current

 liabilities, as determined by the local government at the end of the

 current fiscal year.

   2.  Except as otherwise provided in subsections 3 and 4, a local

 government shall not increase its building permit basis by more than an

 amount equal to the building permit basis on June 30, 1989, multiplied by

 a percentage equal to the percentage increase in the consumer price index

 from January 1, 1988, to the January 1 next preceding the fiscal year for

 which the calculation is made.

   3.  A local government may submit an application to increase its

building permit basis by an amount greater than otherwise allowable

 pursuant to subsection 2 to the Nevada tax commission. The Nevada tax

 commission may allow the increase only if it finds that:

   (a) Emergency conditions exist which impair the ability of the local

 government to perform the basic functions for which it was created; or

   (b) The building permit basis of the local government is substantially

 below that of other local governments in the state and the cost of providing

 the services associated with the issuance of building permits in the

 previous fiscal year exceeded the total revenue received from building

 permit fees, excluding any amount of residential construction tax

 collected, for that fiscal year.

   4.  Upon application by a local government, the Nevada tax

 commission shall exempt the local government from the limitation on the

 increase of its building permit basis if:

   (a) The local government creates an enterprise fund exclusively for

 building permit fees ; [for building permits;]

   (b) Any interest or other income earned on the money in the enterprise

 fund is credited to the fund; [and]

   (c) Except as otherwise provided in subsection 5, the local government

 maintains a balance of unreserved working capital in the enterprise

 fund that does not exceed an amount equal to 9 months’ operating costs

 for the program for the issuance of building permits of the local

 government; and

   (d) The local government does not use any of the money in the

 enterprise fund for any purpose other than the actual direct and indirect

 costs of the program for the issuance of building permits, including ,

 without limitation, the cost of checking plans, issuing permits, inspecting

 buildings and administering the program. The executive director of the

 department of taxation shall adopt regulations governing the permissible

 expenditures from an enterprise fund pursuant to this paragraph.

   5.  In addition to the balance of unreserved working capital

 authorized pursuant to subsection 4, the local government may maintain

 in an enterprise fund created pursuant to this section an amount of

 working capital for the following purposes:

   (a) An amount sufficient to pay the debt service for 1 year on any debt

 incurred by the local government to provide the services associated with

 issuing building permits;

   (b) An amount that does not exceed the total amount of expenditures

 for the program for the issuance of building permits of the local

 government set forth in the capital improvement plan of the local

 government prepared pursuant to NRS 354.5945 for the current fiscal

 year; and

   (c) An amount that does not exceed 4 percent of the annual operating

 costs of the program for the issuance of building permits of the local

 government which must be used to pay for unanticipated capital

 replacement.

   6.  Any amount in an enterprise fund created pursuant to this section

 that is designated for special use, including, without limitation, prepaid

 fees and any other amount subject to a contractual agreement, must be

identified as a restricted asset and must not be included as a current asset

in the calculation of working capital.

   7.  If a balance in excess of the amount authorized pursuant to

 subsections 4 and 5 is maintained in an enterprise fund created

 pursuant to this section at the close of 2 consecutive fiscal years, the

 local government shall reduce the building permit fees it charges by an

 amount that is sufficient to ensure that the balance in the enterprise

 fund at the close of the fiscal year next following those 2 consecutive

 fiscal years does not exceed the amount authorized pursuant to

 subsections

4 and 5.

   Sec. 2.  NRS 354.6241 is hereby amended to read as follows:

   354.6241  1.  The statement required by paragraph (c) of subsection 4

 of NRS 354.624 must indicate for each fund set forth in that paragraph:

   (a) Whether the fund is being used in accordance with the provisions of

 this chapter.

   (b) Whether the fund is being administered in accordance with generally

 accepted accounting procedures.

   (c) Whether the reserve in the fund is limited to an amount that is

 reasonable and necessary to carry out the purposes of the fund.

   (d) The sources of revenues available for the fund during the fiscal year,

 including transfers from any other funds.

   (e) The statutory and regulatory requirements applicable to the fund.

   (f) The balance and retained earnings of the fund.

   2.  [To] Except as otherwise provided in NRS 354.59891, to the extent

 that the reserve in any fund set forth in paragraph (c) of subsection 4 of

 NRS 354.624 exceeds the amount that is reasonable and necessary to carry

 out the purposes for which the fund was created, the reserve may be

 expended by the local government pursuant to the provisions of chapter

 288 of NRS.

   Sec. 3.  This act becomes effective on July 1, 2001.

 

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