(REPRINTED WITH ADOPTED AMENDMENTS)

 

Senate Bill No. 60–Committee on Government Affairs

 

Prefiled January 30, 2001

 

____________

 

Referred to Committee on Government Affairs

 

SUMMARY—Makes various changes concerning limitation on building permit fees charged by local governments. (BDR 31‑232)

 

FISCAL NOTE:            Effect on Local Government: No.

                                    Effect on the State: No.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to 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:

 

1-1    Section 1. NRS 354.59891 is hereby amended to read as follows:

1-2    354.59891  1.  As used in this section:

1-3    (a) “Building permit” means the official document or certificate

1-4  issued by the building officer of a local government which authorizes the

1-5  construction of a structure.

1-6    (b) “Building permit basis” means the combination of the rate and the

1-7  valuation method used to calculate the total building permit fee.

1-8    [(b) “Building permit” means the official document or certificate issued

1-9  by the building officer of a local government which authorizes the

1-10  construction of a structure.]

1-11    (c) “Building permit fee” means the total fees that must be paid before

1-12  the issuance of a building permit, including , without limitation, all permit

1-13  fees and inspection fees. The term does not include, without limitation, fees

1-14  relating to water, sewer or other utilities, residential construction tax, tax

1-15  for the improvement of transportation imposed pursuant to NRS 278.710,

1-16  any fee imposed pursuant to NRS 244.386 or any amount expended to

1-17  change the zoning of the property.

 

2-1    (d) “Current asset” means any cash maintained in an enterprise fund

2-2  and any interest or other income earned on the money in the enterprise

2-3  fund that, at the end of the current fiscal year, is anticipated by a local

2-4  government to be consumed or converted into cash during the next

2-5  ensuing fiscal year.

2-6    (e) “Current liability” means any debt incurred by a local government

2-7  to provide the services associated with issuing building permits that, at

2-8  the end of the current fiscal year, is determined by the local government

2-9  to require payment within the next ensuing fiscal year.

2-10    (f) “Operating cost” means the amount paid by a local government for

2-11  supplies, services, salaries, wages and employee benefits to provide the

2-12  services associated with issuing building permits.

2-13    (g) “Working capital” means the excess of current assets over current

2-14  liabilities, as determined by the local government at the end of the

2-15  current fiscal year.

2-16    2.  Except as otherwise provided in subsections 3 and 4, a local

2-17  government shall not increase its building permit basis by more than an

2-18  amount equal to the building permit basis on June 30, 1989, multiplied by a

2-19  percentage equal to the percentage increase in the consumer price index

2-20  from January 1, 1988, to the January 1 next preceding the fiscal year for

2-21  which the calculation is made.

2-22    3.  A local government may submit an application to increase its

2-23  building permit basis by an amount greater than otherwise allowable

2-24  pursuant to subsection 2 to the Nevada tax commission. The Nevada tax

2-25  commission may allow the increase only if it finds that:

2-26    (a) Emergency conditions exist which impair the ability of the local

2-27  government to perform the basic functions for which it was created; or

2-28    (b) The building permit basis of the local government is substantially

2-29  below that of other local governments in the state and the cost of providing

2-30  the services associated with the issuance of building permits in the

2-31  previous fiscal year exceeded the total revenue received from building

2-32  permit fees, excluding any amount of residential construction tax collected,

2-33  for that fiscal year.

2-34    4.  Upon application by a local government, the Nevada tax

2-35  commission shall exempt the local government from the limitation on the

2-36  increase of its building permit basis if:

2-37    (a) The local government creates an enterprise fund exclusively for

2-38  building permit fees ; [for building permits;]

2-39    (b) Any interest or other income earned on the money in the enterprise

2-40  fund is credited to the fund; [and]

2-41    (c) Except as otherwise provided in subsection 5, the local government

2-42  maintains a balance of unreserved working capital in the enterprise fund

2-43  that does not exceed an amount equal to 9 months’ operating costs for

2-44  the program for the issuance of building permits of the local

2-45  government; and

2-46    (d) The local government does not use any of the money in the

2-47  enterprise fund for any purpose other than the actual direct and indirect

2-48  costs of the program for the issuance of building permits, including ,

2-49  without limitation, the cost of checking plans, issuing permits, inspecting

3-1  buildings and administering the program. The executive director of the

3-2  department of taxation shall adopt regulations governing the permissible

3-3  expenditures from an enterprise fund pursuant to this paragraph.

3-4    5.  In addition to the balance of unreserved working capital

3-5  authorized pursuant to subsection 4, the local government may maintain

3-6  in an enterprise fund created pursuant to this section an amount of

3-7  working capital for the following purposes:

3-8    (a) An amount sufficient to pay the debt service for 1 year on any debt

3-9  incurred by the local government to provide the services associated with

3-10  issuing building permits;

3-11    (b) An amount that does not exceed the total amount of expenditures

3-12  for the program for the issuance of building permits of the local

3-13  government set forth in the capital improvement plan of the local

3-14  government prepared pursuant to NRS 354.5945 for the current fiscal

3-15  year; and

3-16    (c) An amount that does not exceed 4 percent of the annual operating

3-17  costs of the program for the issuance of building permits of the local

3-18  government which must be used to pay for unanticipated capital

3-19  replacement.

3-20    6.  Any amount in an enterprise fund created pursuant to this section

3-21  that is designated for special use, including, without limitation, prepaid

3-22  fees and any other amount subject to a contractual agreement, must be

3-23  identified as a restricted asset and must not be included as a current asset

3-24  in the calculation of working capital.

3-25    7.  If a balance in excess of the amount authorized pursuant to

3-26  subsections 4 and 5 is maintained in an enterprise fund created pursuant

3-27  to this section at the close of 2 consecutive fiscal years, the local

3-28  government shall reduce the building permit fees it charges by an

3-29  amount that is sufficient to ensure that the balance in the enterprise fund

3-30  at the close of the fiscal year next following those 2 consecutive fiscal

3-31  years does not exceed the amount authorized pursuant to subsections
4 and 5.

3-32    Sec. 2.  NRS 354.6241 is hereby amended to read as follows:

3-33    354.6241  1.  The statement required by paragraph (c) of subsection 4

3-34  of NRS 354.624 must indicate for each fund set forth in that paragraph:

3-35    (a) Whether the fund is being used in accordance with the provisions of

3-36  this chapter.

3-37    (b) Whether the fund is being administered in accordance with generally

3-38  accepted accounting procedures.

3-39    (c) Whether the reserve in the fund is limited to an amount that is

3-40  reasonable and necessary to carry out the purposes of the fund.

3-41    (d) The sources of revenues available for the fund during the fiscal year,

3-42  including transfers from any other funds.

3-43    (e) The statutory and regulatory requirements applicable to the fund.

3-44    (f) The balance and retained earnings of the fund.

3-45    2.  [To] Except as otherwise provided in NRS 354.59891, to the extent

3-46  that the reserve in any fund set forth in paragraph (c) of subsection 4 of

3-47  §RS 354.624 exceeds the amount that is reasonable and necessary to carry

3-48  out the purposes for which the fund was created, the reserve may be

4-1  expended by the local government pursuant to the provisions of chapter

4-2  288 of NRS.

4-3    Sec. 3.  This act becomes effective on July 1, 2001.

 

4-4  H