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) “Barricade permit” means the official document issued by

1-5  the building officer of a local government which authorizes the

1-6  placement of barricade appurtenances or structures within a

1-7  public right-of-way.

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

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

1-10  authorizes the construction of a structure.

1-11      [(b)] (c) “Building permit basis” means the combination of the

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

1-13  permit fee.

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

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

1-16  limitation, all permit fees and inspection fees. The term does not

1-17  include, without limitation, fees relating to water, sewer or other

1-18  utilities, residential construction tax, tax for the improvement of

1-19  transportation imposed pursuant to NRS 278.710, any fee imposed

2-1  pursuant to NRS 244.386 or any amount expended to change the

2-2  zoning of the property.

2-3  [(d)] (e) “Current asset” means any cash maintained in an

2-4  enterprise fund and any interest or other income earned on the

2-5  money in the enterprise fund that, at the end of the current fiscal

2-6  year, is anticipated by a local government to be consumed or

2-7  converted into cash during the next ensuing fiscal year.

2-8  [(e)] (f) “Current liability” means any debt incurred by a local

2-9  government to provide the services associated with issuing building

2-10  permits that, at the end of the current fiscal year, is determined by

2-11  the local government to require payment within the next ensuing

2-12  fiscal year.

2-13      [(f)] (g) “Encroachment permit” means the official document

2-14  issued by the building officer of a local government which

2-15  authorizes construction activity within a public right-of-way.

2-16      (h) “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)] (i) “Working capital” means the excess of current assets

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

2-22  end 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  multiplied by a percentage equal to the percentage increase in the

2-27  Western Urban Nonseasonally Adjusted Consumer Price Index , as

2-28  published by the United States Department of Labor from

2-29  January 1, 1988, to the January 1 next preceding the fiscal year for

2-30  which the calculation is made.

2-31      3.  A local government may submit an application to increase

2-32  its building permit basis by an amount greater than otherwise

2-33  allowable pursuant to subsection 2 to the Nevada Tax Commission.

2-34  The Nevada Tax Commission may allow the increase only if it finds

2-35  that:

2-36      (a) Emergency conditions exist which impair the ability of the

2-37  local government to perform the basic functions for which it was

2-38  created; or

2-39      (b) The building permit basis of the local government is

2-40  substantially below that of other local governments in the State and

2-41  the cost of providing the services associated with the issuance of

2-42  building permits in the previous fiscal year exceeded the total

2-43  revenue received from building permit fees, excluding any amount

2-44  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 [;] , fees imposed for the issuance of

3-6  barricade permits and fees imposed for encroachment permits;

3-7  (b) Any interest or other income earned on the money in the

3-8  enterprise fund is credited to the fund;

3-9  (c) Except as otherwise provided in subsection 5, the local

3-10  government maintains a balance of unreserved working capital in

3-11  the enterprise fund that does not exceed an amount equal to 9

3-12  months’ operating costs for the program for the issuance of

3-13  barricade permits, encroachment permits and building permits of

3-14  the local government; and

3-15      (d) The local government does not use any of the money in the

3-16  enterprise fund for any purpose other than the actual direct and

3-17  indirect costs of the program for the issuance of barricade permits,

3-18  encroachment permits and building permits, including, without

3-19  limitation, the cost of checking plans, issuing permits, inspecting

3-20  buildings and administering the program. The Committee on Local

3-21  Government Finance shall adopt regulations governing the

3-22  permissible expenditures from an enterprise fund pursuant to this

3-23  paragraph.

3-24      5.  In addition to the balance of unreserved working capital

3-25  authorized pursuant to subsection 4, the local government may

3-26  maintain in an enterprise fund created pursuant to this section an

3-27  amount of working capital for the following purposes:

3-28      (a) An amount sufficient to pay the debt service for 1 year on

3-29  any debt incurred by the local government to provide the services

3-30  associated with issuing barricade permits, encroachment permits

3-31  and building permits;

3-32      (b) An amount that does not exceed the total amount of

3-33  expenditures for the program for the issuance of barricade permits,

3-34  encroachment permits and building permits of the local

3-35  government set forth in the capital improvement plan of the local

3-36  government prepared pursuant to NRS 354.5945 for the current

3-37  fiscal year; and

3-38      (c) An amount that does not exceed 4 percent of the annual

3-39  operating costs of the program for the issuance of barricade

3-40  permits, encroachment permits and building permits of the local

3-41  government which must be used to pay for unanticipated capital

3-42  replacement.

3-43      6.  Any amount in an enterprise fund created pursuant to this

3-44  section that is designated for special use, including, without

3-45  limitation, prepaid fees and any other amount subject to a

4-1  contractual agreement, must be identified as a restricted asset and

4-2  must not be included as a current asset in the calculation of working

4-3  capital.

4-4  7.  If a balance in excess of the amount authorized pursuant to

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

4-6  pursuant to this section at the close of 2 consecutive fiscal years, the

4-7  local government shall reduce the [building permit] fees for

4-8  barricade permits, encroachment permits and building permits it

4-9  charges by an amount that is sufficient to ensure that the balance in

4-10  the enterprise fund at the close of the fiscal year next following

4-11  those 2 consecutive fiscal years does not exceed the amount

4-12  authorized pursuant to subsections 4 and 5.

4-13      Sec. 2.  This act becomes effective on July 1, 2003.

 

4-14  H