Senate Bill No. 452–Committee on Government Affairs

 

March 24, 2003

____________

 

Referred to Committee on Government Affairs

 

SUMMARY—Revises provisions governing enterprise funds for building permit fees. (BDR 31‑838)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

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

 

AN ACT relating to local governments; revising the provisions governing enterprise funds for building permit fees; 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

1-2  follows:

1-3  354.59891  1.  As used in this section:

1-4  (a) “Building permit” means the official document or certificate

1-5  issued by the building officer of a local government which

1-6  authorizes the construction of a structure[.] and any improvement

1-7  associated with the construction of a structure which supports the

1-8  construction of the structure or the development of a property,

1-9  including, without limitation, a roadway, utility or drainage

1-10  improvement in a public right-of-way or on a private street.

1-11      (b) “Building permit basis” means the combination of the rate

1-12  and the valuation method used to calculate the total building permit

1-13  fee.

1-14      (c) “Building permit fee” means the total fees that must be paid

1-15  before the issuance of a building permit, including , without

1-16  limitation, all permit fees , [and] inspection fees[.] and fees for

1-17  testing and review of technical studies associated with the

1-18  construction of a roadway, utility or drainage improvement or the

1-19  development of a property. The term does not include, without

2-1  limitation, fees relating to water, sewer or other utilities, residential

2-2  construction tax, tax for the improvement of transportation imposed

2-3  pursuant to NRS 278.710, any fee imposed pursuant to NRS

2-4  244.386 or any amount expended to change the zoning of the

2-5  property.

2-6  (d) “Current asset” means any cash maintained in an enterprise

2-7  fund and any interest or other income earned on the money in the

2-8  enterprise fund that, at the end of the current fiscal year, is

2-9  anticipated by a local government to be consumed or converted into

2-10  cash during the next ensuing fiscal year.

2-11      (e) “Current liability” means any debt incurred by a local

2-12  government to provide the services associated with issuing building

2-13  permits that, at the end of the current fiscal year, is determined by

2-14  the local government to require payment within the next ensuing

2-15  fiscal year.

2-16      (f) “Operating cost” means the amount paid by a local

2-17  government for supplies, services, salaries, wages and employee

2-18  benefits to provide the services associated with issuing building

2-19  permits.

2-20      (g) “Working capital” means the excess of current assets over

2-21  current liabilities, as determined by the local government at the end

2-22  of the current fiscal year.

2-23      2.  Except as otherwise provided in subsections 3 and 4, a local

2-24  government shall not increase its building permit basis by more than

2-25  an amount equal to the building permit basis on [June 30, 1989,]

2-26  July 2, 2003, multiplied by a percentage equal to the percentage

2-27  increase in the consumer price index from January 1, [1988,] 2003,

2-28  to the January 1 next preceding the fiscal year for which the

2-29  calculation is made.

2-30      3.  A local government may submit an application to increase

2-31  its building permit basis by an amount greater than otherwise

2-32  allowable pursuant to subsection 2 to the Nevada Tax Commission.

2-33  The Nevada Tax Commission may allow the increase only if it finds

2-34  that:

2-35      (a) Emergency conditions exist which impair the ability of the

2-36  local government to perform the basic functions for which it was

2-37  created; or

2-38      (b) The building permit basis of the local government is

2-39  substantially below that of other local governments in the State and

2-40  the cost of providing the services associated with the issuance of

2-41  building permits in the previous fiscal year exceeded the total

2-42  revenue received from building permit fees, excluding any amount

2-43  of residential construction tax collected, for that fiscal year.

3-1  4.  Upon application by a local government, the Nevada Tax

3-2  Commission shall exempt the local government from the limitation

3-3  on the increase of its building permit basis if:

3-4  (a) The local government creates an enterprise fund exclusively

3-5  for building permit fees;

3-6  (b) Any interest or other income earned on the money in the

3-7  enterprise fund is credited to the fund;

3-8  (c) Except as otherwise provided in subsection 5, the local

3-9  government maintains a balance of unreserved working capital in

3-10  the enterprise fund that does not exceed an amount equal to 9

3-11  months’ operating costs for the program for the issuance of building

3-12  permits of the local government; and

3-13      (d) The local government does not use any of the money in the

3-14  enterprise fund for any purpose other than the actual direct and

3-15  indirect costs of the program for the issuance of building permits,

3-16  including, without limitation, the cost of checking plans, issuing

3-17  permits, inspecting buildings and administering the program. The

3-18  Committee on Local Government Finance shall adopt regulations

3-19  governing the permissible expenditures from an enterprise fund

3-20  pursuant to this paragraph.

3-21      5.  In addition to the balance of unreserved working capital

3-22  authorized pursuant to subsection 4, the local government may

3-23  maintain in an enterprise fund created pursuant to this section an

3-24  amount of working capital for the following purposes:

3-25      (a) An amount sufficient to pay the debt service for 1 year on

3-26  any debt incurred by the local government to provide the services

3-27  associated with issuing building permits;

3-28      (b) An amount that does not exceed the total amount of

3-29  expenditures for the program for the issuance of building permits of

3-30  the local government set forth in the capital improvement plan of the

3-31  local government prepared pursuant to NRS 354.5945 for the

3-32  current fiscal year; and

3-33      (c) An amount that does not exceed 4 percent of the annual

3-34  operating costs of the program for the issuance of building permits

3-35  of the local government which must be used to pay for unanticipated

3-36  capital replacement.

3-37      6.  Any amount in an enterprise fund created pursuant to this

3-38  section that is designated for special use, including, without

3-39  limitation, prepaid fees and any other amount subject to a

3-40  contractual agreement, must be identified as a restricted asset and

3-41  must not be included as a current asset in the calculation of working

3-42  capital.

3-43      7.  If a balance in excess of the amount authorized pursuant to

3-44  subsections 4 and 5 is maintained in an enterprise fund created

3-45  pursuant to this section at the close of 2 consecutive fiscal years, the

4-1  local government shall reduce the building permit fees it charges by

4-2  an amount that is sufficient to ensure that the balance in the

4-3  enterprise fund at the close of the fiscal year next following those 2

4-4  consecutive fiscal years does not exceed the amount authorized

4-5  pursuant to subsections 4 and 5.

4-6  Sec. 2.  This act becomes effective on July 1, 2003.

 

4-7  H