State Obligations - GRANTS FOR WATER CONSERVATION AND IMPROVEMENTS TO CERTAIN WATER SYSTEMS AND SEWAGE DISPOSAL SYSTEMS - Duties of recipient of grant before commencement of bidding and construction.

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[Rev. 11/21/2013 4:06:45 PM--2013]

[NAC-349 Revised Date: 7-11]

CHAPTER 349 - STATE OBLIGATIONS

REVENUE BONDS FOR INDUSTRIAL DEVELOPMENT

349.010            Definitions.

349.012            “Bond facilitator” defined.

349.013            “Bonds” defined.

349.014            “Department” defined.

349.015            “Director” defined.

349.016            “Finance” and “financing” defined.

349.018            “Obligor” defined.

349.019            “Project” defined.

349.020            Purpose and objectives.

349.025            Issuance of bonds.

349.030            Financing.

349.033            Bond facilitators: Availability of, application and conditions for placement on, and removal from list of approved bond facilitators; authority.

349.036            Bond facilitators: Duties.

349.040            Application for financing: Contents and form; fees; deposit; reimbursement of costs of Department; action by Director.

349.045            Requirements for bonds.

349.048            Duties of Director: Determinations of ratio of taxable to tax-exempt bonds; selection of investment banking companies and financial institutions for financing.

349.050            Authorized investments.

349.070            Examination of books and records.

349.080            Requests for clarification, relief or information.

FINANCING OF WATER PROJECTS

General Provisions

349.100            Definitions.

349.105            “Applicant” defined.

349.110            “Application” defined.

349.115            “Board” defined.

349.120            “Cost of water project” defined.

349.125            “Dam” defined.

349.130            “Department” defined.

349.135            “Director” defined.

349.140            “Division” defined.

349.145            “Expense of operation and maintenance” defined.

349.150            “Letter of intent” defined.

349.155            “Mortgage” defined.

349.157            “Municipal obligor” defined.

349.160            “Obligor” defined.

349.165            “Public lands” defined.

349.170            “Revenue bonds” defined.

349.175            “State securities” defined.

349.180            “Tax” defined.

349.185            “Water project” defined.

349.190            “Water right” defined.

349.195            Requests for clarification, relief or information.

349.200            General criteria and policies for consideration and approval of projects.

349.205            General considerations: Effect on existing rights; development of resources in State; expected cost; severability of commitments for loans.

349.210            Priorities for projects.

 

Preliminary Procedures

349.215            Letter of intent: Filing; contents.

349.220            Letter of intent: Address.

349.225            Letter of intent: Procedure upon receipt.

349.230            Letter of intent: Forwarding comments to Board; consideration without comments or deferral of action.

349.235            Requesting advice and information from State Engineer.

349.240            Factors for determination by Board.

349.245            Approval of letter; right to prepare and file application.

349.250            Assistance with preliminary plan and application; issuance of certificate of inducement.

349.255            Disapproval of letter; finality of decision.

349.260            Subsequent application after disapproval of letter.

349.265            Period for filing application.

349.270            Effect of approval of letter.

 

Filing, Review and Approval of Applications

349.275            Submission of application and preliminary plan.

349.280            Form for application.

349.285            Addressing and filing application.

349.290            Application fee: Payment; use; liability for additional expenses; action by Director.

349.295            Documentation required with application.

349.300            Preparation of data and studies for Board.

349.305            Initial review of application.

349.310            Determining marketability of bonds or securities and financial feasibility of project.

349.315            Referral of application to other agencies.

349.320            Certification by State Engineer.

349.325            Analysis of application: Preparation; contents.

349.330            Obtaining necessary permits or authorization to proceed.

349.335            Procedure for disapproval of applications.

349.340            Public hearing on proposal.

349.345            Procedure after tentative approval of project.

349.350            Review of final plan; resolution of final approval.

349.355            Referral of application for further study or correction of deficiencies.

349.360            Contents of resolution giving final approval; setting final terms of bonds.

349.365            Notification of final approval.

349.370            Submission of processing fee; sending letter of inducement.

349.375            Use of processing fee.

349.380            Review and findings of Director; commitment for loan.

 

Miscellaneous Provisions

349.385            Trustee: Selection or appointment; qualifications; resignation or discharge.

349.390            Security for repayment of loan.

349.395            Appraisal of real property used as security.

349.400            Documents relating to advance liens.

349.405            Granting partial release of lien.

349.410            Ensuring proper operation and maintenance of project.

349.415            Examination of books and records.

349.420            Application by municipal obligor: Effect; filing; fee; form and contents.

349.425            Application by municipal obligor: Action by Board; processing by Director.

GRANTS FOR WATER CONSERVATION AND IMPROVEMENTS TO CERTAIN WATER SYSTEMS AND SEWAGE DISPOSAL SYSTEMS

349.430            Definitions.

349.432            “Account for the Revolving Fund” defined.

349.435            “Board” defined.

349.440            “Bureau” defined.

349.443            “Community sewage disposal system” defined.

349.445            “Community water system” defined.

349.450            “Department” defined.

349.455            “Director” defined.

349.458            “Eligible recipient” defined.

349.461            “Fund” defined.

349.4615          “Individual sewage disposal system” defined.

349.462            “Irrigation district” defined.

349.463            “Nontransient water system” defined.

349.464            “Program” defined.

349.465            “Public water system” defined.

349.466            “Purveyor of water” defined.

349.467            “Requirements for public water systems” defined.

349.469            “Viable” defined.

349.471            “Costs traditionally associated with capital improvements” interpreted.

349.475            Eligibility for grant; filing of letter of intent.

349.480            Procedure following receipt of letter of intent.

349.485            Approval of letter of intent.

349.490            Disapproval of letter of intent; finality of decision of Board; reapplication.

349.495            Application: Submission.

349.500            Application: Required items and information; waiver of requirements.

349.505            Determination of financial feasibility of proposed improvement; evaluation of certain abilities of applicant and charge for water; determination of exceptional circumstances.

349.510            Review of application and feasibility reports; incomplete application; reports to Board.

349.515            Receipt of permits or authority to proceed required; exceptions; determination of sufficient water rights.

349.520            Disapproval of application: Procedure; notice.

349.525            Public meeting on proposed improvement or costs; correction of deficiencies in application.

349.530            Review of completed application; determinations by Board.

349.535            Determination to provide grant: Action by Board; amount of grant; duties of Division of Environmental Protection of the Department.

349.540            Request for issuance of general obligation bonds.

349.549            Administrative fee; funding agreement.

349.554            Duties of recipient of grant before commencement of bidding and construction.

349.559            Duties of recipient of grant: Submission of information to Division of Environmental Protection of Department.

349.564            Disbursement of money pursuant to grant.

349.569            Award of credit toward amount of money recipient of grant is required to provide.

349.574            Procedure following completion of improvement.

 

REVENUE BONDS FOR INDUSTRIAL DEVELOPMENT

      NAC 349.010  Definitions. (NRS 349.630)  As used in NAC 349.010 to 349.080, inclusive, unless the context otherwise requires, the words and terms defined in NAC 349.012 to 349.019, inclusive, have the meanings ascribed to them in those sections.

     [Dep’t of Commerce, Industrial Development Revenue Bond Reg. § 2, eff. 12-30-81]—(NAC A by Dep’t of Business & Industry by R039-02, 6-26-2002)

      NAC 349.012  “Bond facilitator” defined. (NRS 349.630)  “Bond facilitator” means a person or business entity with special education or experience in the financing of revenue bonds that is hired to provide any or all of the following services:

     1.  Consultation with applicants or prospective applicants regarding the requirements for issuance of revenue bonds and the making of preliminary assessments regarding eligibility.

     2.  Management of the application process for the applicant, including the preparation, distribution and review of the application.

     3.  Management of the process for completing a financing pursuant to the program for the issuance of revenue bonds, including, without limitation, communicating with the finance team, local agencies, underwriters, bond counsel and trustee, reviewing financing documents and coordinating public meetings.

     4.  Coordination of the activity of all participants in each financing.

     (Added to NAC by Dep’t of Business & Industry by R039-02, eff. 6-26-2002)

      NAC 349.013  “Bonds” defined. (NRS 349.630)  “Bonds” has the meaning ascribed to it in NRS 349.420.

     (Added to NAC by Dep’t of Business & Industry by R039-02, eff. 6-26-2002)

      NAC 349.014  “Department” defined. (NRS 349.630)  “Department” means the Department of Business and Industry.

     (Added to NAC by Dep’t of Business & Industry by R039-02, eff. 6-26-2002)

      NAC 349.015  “Director” defined. (NRS 349.630)  “Director” means the Director of the Department.

     (Added to NAC by Dep’t of Business & Industry by R039-02, eff. 6-26-2002)

      NAC 349.016  “Finance” and “financing” defined. (NRS 349.630)  “Finance” or “financing” has the meaning ascribed to it in NRS 349.460.

     (Added to NAC by Dep’t of Business & Industry by R039-02, eff. 6-26-2002)

      NAC 349.018  “Obligor” defined. (NRS 349.630)  “Obligor” has the meaning ascribed to it in NRS 349.500.

     (Added to NAC by Dep’t of Business & Industry by R039-02, eff. 6-26-2002)

      NAC 349.019  “Project” defined. (NRS 349.630)  “Project” has the meaning ascribed to it in NRS 349.510.

     (Added to NAC by Dep’t of Business & Industry by R039-02, eff. 6-26-2002)

      NAC 349.020  Purpose and objectives. (NRS 349.630)  The provisions of NAC 349.010 to 349.080, inclusive, are established to effectuate and will be applied so as to accomplish the general purposes of chapter 349 of NRS and the specific objectives of NRS 349.560.

     [Dep’t of Commerce, Industrial Development Revenue Bond Reg. § 2, eff. 12-30-81]—(NAC A by Dep’t of Business & Industry by R039-02, 6-26-2002)

      NAC 349.025  Issuance of bonds. (NRS 349.630)  Any bonds issued pursuant to NAC 349.010 to 349.080, inclusive, must:

     1.  Be at the lowest cost of capital to the obligor, as measured by a standard true interest cost calculation;

     2.  Have an interest rate commensurate with the level of risk of the bonds, as determined by the Director; and

     3.  Have their proposed structure approved by the State Board of Finance.

     (Added to NAC by Dep’t of Business & Industry by R104-08, eff. 12-17-2008)

      NAC 349.030  Financing. (NRS 349.630)  The Department will finance:

     1.  Construction loans for the interim financing of the new construction, improvement, rehabilitation or redevelopment of a project.

     2.  Loans for the permanent financing of projects, including their acquisition.

     [Dep’t of Commerce, Industrial Development Revenue Bond Reg. § 4, eff. 12-30-81]

      NAC 349.033  Bond facilitators: Availability of, application and conditions for placement on, and removal from list of approved bond facilitators; authority. (NRS 349.630)

     1.  The Director may maintain and make available a list of approved bond facilitators to applicants and prospective applicants.

     2.  A person or business entity may apply to the Director for placement on the list of approved bond facilitators.

     3.  The Director will place a person or business entity on the list of approved bond facilitators if the person or business entity:

     (a) Presents evidence satisfactory to the Director that the person or business entity is qualified by education or experience to assist applicants and prospective applicants in the financing of revenue bonds pursuant to the provisions of NAC 349.010 to 349.080, inclusive; and

     (b) Agrees to follow the provisions for bond facilitators as set forth in NAC 349.036.

     4.  The Director may remove a person or business entity from the list of approved bond facilitators if, in the judgment of the Director, the person or business entity:

     (a) Fails to follow the provisions set forth in NAC 349.036; or

     (b) Charges excessive fees for the services provided to applicants and prospective applicants.

     5.  An approved bond facilitator may:

     (a) Provide recommendations to the Director on ways to improve the administration of the bond program such as amending statutes, regulations, application materials or marketing materials;

     (b) Develop new programs for the issuance of revenue bonds for the Director; and

     (c) Receive compensation, as set by the Director, for providing such recommendations and developments.

     (Added to NAC by Dep’t of Business & Industry by R039-02, eff. 6-26-2002)

      NAC 349.036  Bond facilitators: Duties. (NRS 349.630)  An approved bond facilitator shall inform:

     1.  The applicant or prospective applicant, at the earliest time practicable, that the decision to use the services of a bond facilitator is solely that of the applicant or prospective applicant and that the applicant or prospective applicant is not required to use those services in order to apply for or obtain the financing of revenue bonds.

     2.  The applicant or prospective applicant, at the earliest time practicable, that the bond facilitator acts as the sole agent of the applicant or prospective applicant and does not represent or have any influence over the Director in his or her decision to issue revenue bonds pursuant to the provisions of NAC 349.010 to 349.080, inclusive.

     3.  The applicant or prospective applicant, at the earliest time practicable, that the Director is not responsible or liable for the acts of the bond facilitator.

     4.  The Director, upon his or her request, of the financial arrangement between the bond facilitator and the applicant or prospective applicant.

     (Added to NAC by Dep’t of Business & Industry by R039-02, eff. 6-26-2002)

      NAC 349.040  Application for financing: Contents and form; fees; deposit; reimbursement of costs of Department; action by Director. (NRS 232.520, 349.630)

     1.  The application must include, but is not limited to:

     (a) A description of the purpose, objective and function of the proposed project;

     (b) A description of all the costs of the project in sufficient detail to allow for an analysis of all legal and tax issues, including, without limitation:

          (1) Expected transaction costs;

          (2) Costs expected to be reimbursed to the project’s developer; and

          (3) A timing schedule for when costs will be incurred;

     (c) A description of the management of the project, including, without limitation:

          (1) A copy of the partnership agreement or articles of incorporation of the sponsor;

          (2) If the amount of the requested bonds is $5,000,000 or more:

               (I) For the 5 years before the filing of the application, audited financial statements of the corporation or partnership; and

               (II) For the 5 years before the filing of the application, the federal income tax returns of the corporation or principals of the partnership;

          (3) If the amount of the requested bonds is less than $5,000,000:

               (I) For the 3 years before the filing of the application, a financial operating history of the corporation or partnership; and

               (II) For the 3 years before the filing of the application, the federal income tax returns of the corporation or principals of the partnership;

          (4) If applicable, the certificate of registration issued by the Secretary of State pursuant to NRS 86.545 or 88.580 for the sponsor; and

          (5) Any resolutions or operating agreements of the sponsor that establish the authority of a person to sign documents associated with the financing of the project;

     (d) Information on the site of the project, the proposed facilities, and the status of any required environmental permits, including, without limitation:

          (1) A copy of the most recent Phase I Environmental Report which was done for the site of the project and must have been completed within 1 year before the application is filed;

          (2) A copy of the most recent geotechnical report which was done for the site of the project and must have been completed within 1 year before the application is filed;

          (3) A copy of a certified “as-built” survey which was done for the site of the project, must have been completed within 1 year before the application is filed, is American Land Title Association qualified and shows the project in its proper place on the site and all exceptions to title;

          (4) A copy of the most recent parcel map of the site of the project that is recorded with the county recorder;

          (5) A copy of the zoning restrictions on the site of the project showing that the applicable zoning laws and regulations allow for the development of the project on the site; and

          (6) If the site of the project is located on a flood zone as designated by the Federal Emergency Management Agency, a map that shows the bounds of the flood zone, the property on which the project is to be located and the project;

     (e) Information on the location of the project, including, without limitation:

          (1) A description of the relationship of the project to any existing facilities adjacent to the site;

          (2) A copy of a written contract to purchase or option to purchase or lease agreement regarding the property on which the project is to be built;

          (3) A description of any relationship between any parties referred to or involved with the written contract, lease agreement or title report described in subparagraphs (2) and (5);

          (4) A description of the proposed final sources for funds for the lease or purchase of land for the project; and

          (5) A copy of a title report for the site of the project that includes a list of all exceptions and a pro forma American Land Title Association policy to be issued to the lending organization;

     (f) A description of all proposed sources and uses of funds for the project, including, without limitation:

          (1) A list of any anticipated net bond proceeds, tax-credit equity, grants, subordinated debt or other forms of debt or equity;

          (2) A detailed timing or draw schedule for the payment of costs out of available funds; and

          (3) A detailed description of the machinery and equipment to be acquired by the financing;

     (g) A description of the economic feasibility of the project, including, without limitation, at least one of the following:

          (1) A copy of a certified appraisal of the site of the project that was completed:

               (I) Within 1 year before the filing of the application; and

               (II) By an appraiser certified pursuant to chapter 645C of NRS;

          (2) A copy of a market study performed by a market analysis firm approved by the Director; or

          (3) A copy of:

               (I) A loan underwriting package from a credit enhancement institution that is approved by the Director; and

               (II) An appraisal that is approved by a credit enhancement institution that is approved by the Director;

     (h) A business history of the applicant, including, without limitation, a copy of any development, general contractor or management agreement between the sponsor and another party regarding the project;

     (i) Information required by the Director for an energy and weatherization audit of the project; and

     (j) Any other information required by the Director.

     2.  The applicant must submit an original and four copies of his or her application for financing on a form provided by the Director. The application must be accompanied by a nonrefundable application fee of:

     (a) Five hundred dollars if the amount of the requested bonds is less than $5,000,000; or

     (b) One thousand two hundred and fifty dollars if the amount of the requested bonds is $5,000,000 or more.

     3.  The Director will, within 30 days after receipt of a completed application, notify the applicant whether or not the application is accepted.

     4.  If the completed application is not accepted, the Director will provide the applicant an opportunity to discuss the reasons for denial and may allow up to an additional 30 days for the applicant to submit an updated version of the application.

     5.  If the application is accepted, the Director will:

     (a) Direct the applicant to submit a deposit of $75,000 towards the total costs of the Department to process the application and finance the project, and such costs will not exceed the lower of any limit prescribed by the Internal Revenue Code of 1986, as amended, including, without limitation, any regulations, circulars, letter rulings and policies adopted by the Internal Revenue Service pursuant to the Code, or 2 percent of the principal amount of the financing, payable before or at the time the bonds are issued.

     (b) Send the applicant an inducement letter:

          (1) Stating the intention of the Director to issue bonds to finance the project subject to the continuing ability of the project to meet local, state and federal requirements;

          (2) Stating the principal amount of the financing that the Director will include in any findings submitted to a local or state governmental agency;

          (3) Directing the applicant to submit any additional documentation as may be required by the Director; and

          (4) Stating that the term of the Director’s commitment is 1 year. At the expiration of the term, the Director may extend the commitment once for a similar term if there has been a demonstration of good faith by the applicant in preparing and submitting additional supporting documents. An extension fee in the amount of $1,250 will be charged for the costs of the extension, including, without limitation, the cost of redrafting an inducement certificate or other similar document.

     6.  Whether or not the bonds are issued, the deposit received on behalf of the Director will be used to reimburse the Department for the cost of a project incurred in processing the application and financing the project, including, without limitation, any costs for financial, legal and banking services engaged for the project. The portion of the deposit that is not required to reimburse the Department for its costs relating to the project will be refunded to the applicant by the time the bonds are issued. The cost of a project incurred by the Director in excess of the deposit will be charged to the applicant and must be paid by the time the bonds are issued.

     7.  If bonds are issued and by agreement or as the result of a default in payment of the bonds, the bankruptcy of the obligor or any other reason, the Director is required to provide ongoing services, expend additional resources or incur additional costs in relation to the bonds, including, without limitation, supervising, monitoring or reviewing on a regular basis the activity of the obligor or any other party to the transaction or the documentation relating to the transaction, the Director may charge and recover from the obligor a reasonable fee for such services, resources or costs.

     8.  The Director may modify the principal amount of the financing downward and may modify the other terms and conditions of the financing before the closing if the modifications are consistent with the approval of the project given by the State Board of Finance.

     9.  The Director will establish an annual inspection and compliance fee to be charged to the obligor for the financing. The fee will be based upon the percentage of bonds outstanding at the end of each year. If appropriate, or otherwise in accordance with the terms of the financing agreement, the Director may adjust the fee.

     10.  For each financing issued pursuant to NAC 349.010 to 349.080, inclusive, the Director will:

     (a) Analyze similar types of financing issued for at least the 30 days before the anticipated date the bonds will be issued, including, without limitation, analyzing the differences in credit risk between other similar types of financings and the bonds at issue; and

     (b) Maintain, in the file for each financing, records of the relevant financial markets containing similar types of financing for at least the 30 days before the anticipated date the bonds will be issued.

     11.  The Director will use the fees collected pursuant to this section exclusively to support the operations of his or her office that are in connection with the programs administered pursuant to the provisions of chapters 348A and 349 of NRS and any regulations adopted pursuant thereto.

     12.  The Director will establish with an appropriate fiduciary bank the appropriate accounts and procedures for the deposit and expenditure of money received from financing pursuant to NAC 349.010 to 349.080, inclusive.

     13.  As used in this section, “cost of a project” has the meaning ascribed to it in NRS 349.430.

     [Dep’t of Commerce, Industrial Development Revenue Bond Reg. § 5, eff. 12-30-81]—(NAC A 7-6-92; A by Dep’t of Business & Industry by R039-02, 6-26-2002; R104-08, 12-17-2008)

      NAC 349.045  Requirements for bonds. (NRS 349.630)

     1.  Bonds issued pursuant to NAC 349.010 to 349.080, inclusive, whether tax-exempt or taxable:

     (a) If the amount of the requested bonds is $5,000,000 or more, must have a credit enhancement and be sold into the public bond market;

     (b) If the amount of the requested bonds is less than $5,000,000, may be:

          (1) Sold into the public bond market; or

          (2) Privately placed with sophisticated investors if all bond purchase agreements and transaction documents ensure that the bonds are only sold or transferred to other sophisticated investors;

     (c) If variable-rate bonds, must:

          (1) Use hedging or interest rate protection mechanisms to maintain the interest rate of the bonds within an acceptable range, as determined by the Director, for so long as the bonds are outstanding; and

          (2) Have the cost of any hedging or interest rate protection mechanisms fully accounted for when calculating the cost of the bonds for comparison with alternative bond structures;

     (d) Must have the proposed costs of bond issuance preapproved by the Director before any preliminary official statement or marketing materials are released; and

     (e) Must be for a project which:

          (1) Does not have less than 25 percent of its total financing from equity sources;

          (2) Maintains its funds from equity sources in the form of cash or other similarly liquid assets; and

          (3) Conforms with all applicable environmental and energy-efficiency related federal and state laws and regulations.

     2.  As used in this section, “sophisticated investor” means an investor viewed by an issuer or underwriter as having sufficient resources, market knowledge and experience to understand and bear the risks involved in a particular investment.

     (Added to NAC by Dep’t of Business & Industry by R104-08, eff. 12-17-2008)

      NAC 349.048  Duties of Director: Determinations of ratio of taxable to tax-exempt bonds; selection of investment banking companies and financial institutions for financing. (NRS 349.630)  The Director will:

     1.  Determine the ratio of taxable to tax-exempt bonds that a project may receive, taking into consideration the volume cap for tax-exempt private activity bonds authorized by 26 U.S.C. § 146;

     2.  For investment banking services for financing pursuant to NAC 349.010 to 349.080, inclusive:

     (a) Establish criteria for use in selecting an investment banking company; and

     (b) Based on a competitive selection process, assign an investment banking company for every issuance of publicly sold bonds; and

     3.  For fiduciary services for financing pursuant to NAC 349.010 to 349.080:

     (a) Establish criteria for use in selecting a fiduciary, including, without limitation:

          (1) The difference between the costs charged for fiduciary services by a financial institution and other similar institutions; and

          (2) The amount of demonstrated experience and competency as a trustee of a financial institution; and

     (b) Periodically make requests for proposals for fiduciary services.

     (Added to NAC by Dep’t of Business & Industry by R104-08, eff. 12-17-2008)

      NAC 349.050  Authorized investments. (NRS 349.630)  The obligor will direct the trustee, if any, of the applicable bond issue, to invest and reinvest the proceeds from the sale of the bonds, subject to the bond certificate, indenture or resolution, in any of the investments listed in subsection 1 of NRS 349.630.

     [Dep’t of Commerce, Industrial Development Revenue Bond Reg. § 6, eff. 12-30-81]

      NAC 349.070  Examination of books and records. (NRS 349.630)  The obligor’s books, accounts and other records pertaining to the project must be open to inspection by representatives of the Department during regular business hours. The Department will conduct such examinations of the records as it deems appropriate to determine compliance with chapter 349 of NRS and NAC 349.010 to 349.080, inclusive. The Department may require each obligor to pay the costs of any examination.

     [Dep’t of Commerce, Industrial Development Revenue Bond Reg. § 8, eff. 12-30-81]

      NAC 349.080  Requests for clarification, relief or information. (NRS 349.630)  Any person desiring clarification of NAC 349.010 to 349.080, inclusive, relief from the strict application of any of the terms of those sections or information concerning procedures for dealing with the Department may address a written request to the Director at:

 

Director of the Department of Business and Industry

901 South Stewart Street, Suite 1003

Carson City, Nevada 89701

 

     [Dep’t of Commerce, Industrial Development Revenue Bond Reg. § 2, eff. 12-30-81]—(NAC A by Dep’t of Business & Industry by R039-02, 6-26-2002; R104-08, 12-17-2008)

FINANCING OF WATER PROJECTS

General Provisions

     NAC 349.100  Definitions. (NRS 349.946)  As used in NAC 349.100 to 349.425, inclusive, unless the context otherwise requires, the words and terms defined in NAC 349.105 to 349.190, inclusive, have the meanings ascribed to them in those sections.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.105  “Applicant” defined. (NRS 349.946)  “Applicant” means the person or legal entity which has the legal authority to represent the obligor of a water project. The term includes any partnership, corporation or business entity qualified to do business in the State of Nevada, any person as defined in NRS 533.010, any municipality, any political subdivision of the State of Nevada, any water district or quasi-governmental agency, any governmental agency, any citizen of the United States, and any public utility, association, trust, estate or other legal entity.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.110  “Application” defined. (NRS 349.946)  “Application” means the form used to officially commence proceedings for the financing of a water project pursuant to NRS 349.935 to 349.961, inclusive, and NAC 349.275 to 349.320, inclusive.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.115  “Board” defined. (NRS 349.946)  “Board” has the meaning ascribed to it in NRS 349.936.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.120  “Cost of water project” defined. (NRS 349.946)  “Cost of water project” has the meaning ascribed to it in NRS 349.937.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.125  “Dam” defined. (NRS 349.946)  “Dam” means any structure of earth or concrete constructed to impound or divert water.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.130  “Department” defined. (NRS 349.946)  “Department” means the Department of Business and Industry.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.135  “Director” defined. (NRS 349.946)  “Director” means the Director of the Department.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.140  “Division” defined. (NRS 349.946)  “Division” means the Division of Water Resources in the State Department of Conservation and Natural Resources.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.145  “Expense of operation and maintenance” defined. (NRS 349.946)  “Expense of operation and maintenance” has the meaning ascribed to it in NRS 349.939.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.150  “Letter of intent” defined. (NRS 349.946)  “Letter of intent” means any written document addressed to the Board to initiate an application pursuant to the requirements of NAC 349.100 to 349.415, inclusive.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.155  “Mortgage” defined. (NRS 349.946)  “Mortgage” has the meaning ascribed to it in NRS 349.940.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.157  “Municipal obligor” defined. (NRS 349.946)  “Municipal obligor” means a municipality, political subdivision or state agency that agrees to make the payments sufficient to pay the principal of, premium, if any, and interest on the state securities by issuing to the Director, on behalf of the State, general obligations additionally secured by the revenues of the water project.

     (Added to NAC by Dep’t of Commerce, eff. 11-13-90)

      NAC 349.160  “Obligor” defined. (NRS 349.946)  “Obligor” has the meaning ascribed to it in NRS 349.941.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.165  “Public lands” defined. (NRS 349.946)  “Public lands” has the meaning ascribed to it in NRS 321.655.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.170  “Revenue bonds” defined. (NRS 349.946)  “Revenue bonds” has the meaning ascribed to it in NRS 349.942.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.175  “State securities” defined. (NRS 349.946)  “State securities” has the meaning ascribed to it in NRS 349.943.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.180  “Tax” defined. (NRS 349.946)  “Tax” means a general tax upon property.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.185  “Water project” defined. (NRS 349.946)  “Water project” has the meaning ascribed to it in NRS 349.945.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.190  “Water right” defined. (NRS 349.946)  “Water right” means the legal right to use water which has been appropriated pursuant to chapters 533 and 534 of NRS by means of application, permit, certificate, decree or claim of vested right.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.195  Requests for clarification, relief or information. (NRS 349.946)  Any person desiring clarification of any provision of NAC 349.100 to 349.415, inclusive, relief from the strict application of any provision of NAC 349.100 to 349.415, inclusive, or information concerning procedures for submitting any forms or information to the Director may address a written request to the Director at:

 

Department of Business and Industry

555 East Washington Avenue, Suite 4900

Las Vegas, Nevada 89101-1075

 

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A by Dep’t of Business & Industry by R039-02, 6-26-2002)

      NAC 349.200  General criteria and policies for consideration and approval of projects. (NRS 349.946)

     1.  Except as otherwise provided in NAC 349.420 and 349.425, the Board and the Director will consider only those water projects which comply with NAC 349.100 to 349.415, inclusive, and the procedures and policies established by the Board related to the planning, selection, financing, construction, acquisition and operation of a project for the management, control, delivery, use or distribution of water necessary to preserve or increase the water available in the State of Nevada for beneficial use.

     2.  Any water project approved by the Board must encourage:

     (a) The development of water facilities which will preserve or increase the water available for beneficial use in this State; and

     (b) One or more of the following:

          (1) The reduction of damage sustained from floods.

          (2) The abatement of pollution.

          (3) The preservation and development of fish and wildlife resources.

          (4) The protection and improvement of public lands.

          (5) The utilization or conservation of the waters of this State for any beneficial use, including, but not limited to, municipal, domestic, agricultural, industrial, mining, instream flows, hydroelectric power, wildlife, and recreational purposes, the conservation of land resources and the protection of the health, safety and general welfare of the people of the State of Nevada.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.205  General considerations: Effect on existing rights; development of resources in State; expected cost; severability of commitments for loans. (NRS 349.946)

     1.  Any proposed water project submitted by an applicant or obligor, other than a municipal obligor, to the Board for its review must not adversely affect or impair existing water rights.

     2.  Except as otherwise provided in NAC 349.420 and 349.425, the proposed water project must contribute to the optimum development of water resources within the State and must be supported by reliable and persuasive evidence which demonstrates that:

     (a) The project would promote the public interests of the State by achieving the objectives set forth in NAC 349.200 and one or more of the priorities set forth in NAC 349.210; and

     (b) If the project requires the appropriation or transfer of water rights, the applicant can put the water to beneficial use within a reasonable time or that the applicant has entered into operating agreements with entities which can put the water to beneficial use within a reasonable time.

     3.  Any application submitted pursuant to NAC 349.100 to 349.415, inclusive, must clearly identify the expected cost of the proposed water project, including the principal amount of any loan, which may include the obligor’s pro rata share of the cost of the bond sale and related costs, such as escrow and closing fees, premiums for title insurance, recording fees, attorney’s fees and fees for special services. All items of cost to be added to the principal amount of each loan must be itemized and added to the total of the loan requested before the sale of bonds takes place.

     4.  Each loan commitment for a water project must be considered a separate action and the subject of its own separate application. Each application must be judged pursuant to the procedures set forth in NAC 349.100 to 349.425, inclusive, and the process for review and evaluation established by the Board and the Director. Each application must be approved or disapproved on its own merits.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.210  Priorities for projects. (NRS 349.946)  To be eligible for consideration by the Board, any proposed water project must satisfy one or more of the following priorities:

     1.  Resolve or abate an emergency situation.

     2.  Provide for the best utilization of surface and ground waters.

     3.  Promote reclamation.

     4.  Provide storage.

     5.  Facilitate offstream storage.

     6.  Accomplish aquifer recharge.

     7.  Achieve the acquisition of a site for a reservoir or the protection of a site for a reservoir, or both.

     8.  Generate or develop benefits from the rehabilitation or modernization of existing facilities or projects.

     9.  Obtain significant economic, environmental and water conservation benefits directly from the project.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

Preliminary Procedures

      NAC 349.215  Letter of intent: Filing; contents. (NRS 349.946)  Any applicant or obligor, other than a municipal obligor, who wishes to apply for the financing of a water project must file with the Board a letter of intent. The letter must include:

     1.  The name, address and telephone number of the applicant or the name, address and telephone number of the obligor or principal representative of the obligor.

     2.  The title or name, location and a brief description of the proposed water project, including maps or preliminary plans.

     3.  A preliminary estimate of the cost of the water project and any additional costs necessary for financing the water project.

     4.  A brief description of the general benefits to be realized by the water project and a statement indicating how the project will contribute to the optimum development of water resources within the State and otherwise promote the public interest of the State by achieving one or more of the priorities listed in NAC 349.210 and the objectives listed in NAC 349.200.

     5.  A statement of the obligor’s willingness to prepare or cause to be prepared any necessary engineering and economic feasibility studies, if the Board determines the water project is feasible.

     6.  A statement indicating whether an environmental assessment or environmental impact statement is or is not required, if known, and a statement that the obligor will resolve any environmental problems identified in connection with the review of the project which are subject to any state or federal environmental law or regulation.

     7.  Additional information as required by the Board or its authorized representative to explain fully the intent of the request and to assure that the information required pursuant to subsections 1, 2 and 3 of NAC 349.205 is included with the letter of intent.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.220  Letter of intent: Address. (NRS 349.946)  A letter of intent must be addressed to:

 

Board For Financing Water Projects

Division of Environmental Protection

333 West Nye Lane

Carson City, Nevada 89706-0851

 

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A by Dep’t of Business & Industry by R039-02, 6-26-2002)

      NAC 349.225  Letter of intent: Procedure upon receipt. (NRS 349.946)  Upon receipt of a letter of intent, the Department will:

     1.  Record the date of receipt;

     2.  Maintain an updated file containing all documents and information pertaining to the financing of the proposed water project; and

     3.  Promptly forward a copy of the letter of intent to the State Engineer, the Nevada State Energy Office for a review to be performed by the State Clearinghouse Coordinator, and the Board for its review.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.230  Letter of intent: Forwarding comments to Board; consideration without comments or deferral of action. (NRS 349.946)  If the Department receives comments from the Nevada State Energy Office within 30 days after forwarding a copy of a letter of intent for a review to be performed by the State Clearinghouse Coordinator, the comments will be forwarded to the Board as soon as practicable. If the Board does not receive comments as a result of such a review within 30 days after receipt of a letter of intent, it may proceed to consider the letter of intent without the review or may defer taking any action until written comments are received from the Department reporting the results of the review.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.235  Requesting advice and information from State Engineer. (NRS 349.946)  The Board may request advice and pertinent information from the State Engineer on the existence and status of any water rights which affect a proposed water project described in a letter of intent.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.240  Factors for determination by Board. (NRS 349.946)  The Board shall consider any letter of intent forwarded from the Department and shall, in a motion or resolution adopted by the Board, determine the following:

     1.  Whether the obligor is a person or an entity eligible for financing pursuant to NRS 349.941;

     2.  Whether the obligor has reasonably demonstrated its ability to generate sufficient revenues from the proposed water project or other sources to amortize the requested loan and cost of financing;

     3.  Whether the benefits of the proposed water project, including social, economic and environmental benefits, are greater than any identifiable or known adverse costs or detriments;

     4.  Whether the proposed water project, when completed, would conform to all applicable provisions of law; and

     5.  Whether the proposed water project complies with the policies and criteria set forth in NAC 349.200.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.245  Approval of letter; right to prepare and file application. (NRS 349.946)  If the Board makes the determinations set forth in NAC 349.240 and finds that the proposed water project satisfies the general policies in NAC 349.200 and at least one of the priorities set forth in NAC 349.210, the Board shall approve the letter of intent, and the applicant or obligor may then prepare and file an application pursuant to NAC 349.275.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.250  Assistance with preliminary plan and application; issuance of certificate of inducement. (NRS 349.946)  If the Board has approved a letter of intent, it may request the State Engineer and the Director, within the limits of available resources, to assist the applicant or obligor to prepare a preliminary plan and application. The Board may also request the Director to issue an inducement certificate or other document evidencing an intent to proceed with a comprehensive review of the proposed water project and final consideration of the financing.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.255  Disapproval of letter; finality of decision. (NRS 349.946)

     1.  If the Board cannot make the determinations required by NAC 349.240 and finds that the letter of intent does not meet any essential requirement of NAC 349.100 to 349.415, inclusive, it shall disapprove the letter of intent, by motion or resolution, and promptly notify the Director and the applicant or obligor of its decision, listing the reasons for disapproval.

     2.  The Board’s decision is final for the purposes of judicial review.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.260  Subsequent application after disapproval of letter. (NRS 349.946)  If a letter of intent is disapproved by the Board, the applicant or obligor may reapply 12 months after the date of disapproval or at such time as permitted by the Board, whichever is earlier.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.265  Period for filing application. (NRS 349.946)  Upon approval of a letter of intent by the Board, the applicant or obligor must file an application for the financing of the proposed water project within 1 year after the date of approval or within a time specified by the Board.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.270  Effect of approval of letter. (NRS 349.946)  The approval of a letter of intent by the Board does not guarantee or assure that any proposed water project will be financed, and only constitutes a preliminary step by which the Board may reasonably determine the likelihood that a viable water project can be developed, necessary permits obtained, and a feasible financial plan presented after an application is filed and processed.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

Filing, Review and Approval of Applications

      NAC 349.275  Submission of application and preliminary plan. (NRS 349.946)  Except as otherwise provided in NAC 349.420 and 349.425, after a letter of intent for a proposed water project is approved, an application and preliminary plan may be submitted to the Board for review and possible approval, subject to the conditions stated in NAC 349.280 to 349.320, inclusive.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.280  Form for application. (NRS 349.946)  An application must be in the form provided by the Director.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.285  Addressing and filing application. (NRS 349.946)  The application must be addressed to the Board and filed in the same manner as provided in NAC 349.220.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.290  Application fee: Payment; use; liability for additional expenses; action by Director. (NRS 349.946)

     1.  A nonrefundable application fee of $2,000 or 0.25 percent of the principal amount of the total financing for the water project, whichever is less, must be paid to the Director at the time an application is filed. The Director will use the application fee exclusively to support the operations of his or her office that are in connection with the administration of the provisions of NRS 349.935 to 349.961, inclusive, and any regulations adopted pursuant thereto. For the purpose of calculating the fee charged to the obligor pursuant to subsection 1 of NRS 349.951, the amount of the application fee must be included in the total amount of all fees charged to the obligor by the Director for issuing revenue bonds or state securities.

     2.  All expenses incurred by the Director in excess of the application fee will be charged to the applicant.

     3.  The Director will establish the appropriate accounts and procedures for the deposit and expenditure of money received pursuant to this section.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 7-6-92)

      NAC 349.295  Documentation required with application. (NRS 349.946)

     1.  Except as otherwise provided in subsection 2 and NAC 349.420 and 349.425, an application must contain or be accompanied by documentation providing the following items and information:

     (a) A feasibility study for the construction, operation and maintenance of the proposed water project, including the expected costs and benefits of the project.

     (b) A complete and legible legal description of the entire area of the project, including a map showing the layout of the project and the location and number of acres served by the project in relation to maps of the United States Public Lands Survey, assessor’s maps, or aerial or other similar maps showing sections and townships.

     (c) A complete and legible copy of the legal description of the property and deed of trust, if any, being offered as security for the proposed financing, including the assessor’s plot maps on which the proposed security may be identified.

     (d) A review of the amount of water required to satisfy the needs of the project, the source and amounts of supply, rights to the water, the quality of the water, and a schedule of flows to meet the requirements of the project.

     (e) A complete and itemized list of the total cost of the proposed water project.

     (f) Proof of ownership, easements or agreements, showing that the obligor holds or can acquire all lands, other than public lands, interests therein and water rights necessary for the construction of the proposed project. Copies of deeds to lands to be served, easements or agreements and water rights permits may be used as proof.

     (g) Information which demonstrates that the project complies with applicable local regulations governing the use of land and water and other applicable regulations and ordinances.

     (h) Data and information deemed necessary by the Director or by the Director’s authorized financial advisers, bond underwriters, bond legal counsel or other consultants.

     (i) Requirements for energy and related costs to the total project.

     (j) A statement indicating whether revenue bonds or state securities will be used to finance the proposed project. If revenue bonds are identified as the source of financing, a written statement from the obligor must be included affirming that the obligor will not undertake to commit the State, or any political subdivision or municipality thereof, other than the obligor, to incur any pecuniary liability in connection with the repayment of bonds for the project.

     (k) Preliminary plans, consisting of documents containing:

          (1) A physical description of the project and an explanation of the engineering features to be addressed;

          (2) The costs of the project;

          (3) The benefits of the project;

          (4) A proposed finance program and repayment plan, including payments for interest and a timetable for repayment;

          (5) Past financial history and credit references;

          (6) Water rights available for the project;

          (7) Easements and rights-of-way needed for the project;

          (8) The qualifications of the obligor; and

          (9) The amount of money available for the project other than the money to be derived from bonds.

     2.  The Board may waive any of the requirements of subsection 1 upon written request of the applicant or obligor.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.300  Preparation of data and studies for Board. (NRS 349.946)  The applicant or obligor, other than a municipal obligor, must acknowledge in writing that the obligor will prepare all necessary data and feasibility studies for presentation of the application and preliminary plan for the proposed water project to the Board for approval.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.305  Initial review of application. (NRS 349.946)

     1.  Upon the filing of an application, the required fee and, if applicable, a preliminary plan, the Director will review the material to determine if all information required on the application has been provided.

     2.  Except for an application filed by a municipal obligor, the Director will promptly submit the application and all preliminary plans, permits, specifications and feasibility reports to the State Engineer for initial review and preparation of a report to the Board.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90; 7-6-92)

      NAC 349.310  Determining marketability of bonds or securities and financial feasibility of project. (NRS 349.946)  Upon receipt of an application, the Director will forward all data and information contained therein to the authorized financial advisers, bond underwriters, bond counsel and attorneys and other persons or entities retained by the Director to determine the marketability of the proposed bonds or securities and the financial feasibility of the proposed water project.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.315  Referral of application to other agencies. (NRS 349.946)  The State Engineer or the Director may refer an application to any local, state or federal agency for review and, if necessary, for approval.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.320  Certification by State Engineer. (NRS 349.946)  Except for an application filed by a municipal obligor, the State Engineer shall certify to the Board and the Director that an application and preliminary plans are complete and that the project meets the criteria set forth in NAC 349.200 and 349.205.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.325  Analysis of application: Preparation; contents. (NRS 349.946)  Except for an application filed by a municipal obligor, after the State Engineer has certified that an application and preliminary plans are complete pursuant to NAC 349.320, the Director and State Engineer shall jointly prepare an analysis of the application for submission to the Board. The analysis must contain:

     1.  The physical factors and engineering features of the proposed water project.

     2.  The costs of the project.

     3.  The benefits of the project.

     4.  The applicant’s financial program and repayment plan, including the rate of interest and repayment period.

     5.  The applicant’s credit references and past credit history.

     6.  The water rights available for the project.

     7.  Easements and rights-of-way.

     8.  The names of legal counsel and engineers retained to assist the obligor.

     9.  The qualifications of the obligor.

     10.  The status of the development of money available to the obligor.

     11.  The marketability of any bonds to be sold, including an analysis of their legal status.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.330  Obtaining necessary permits or authorization to proceed. (NRS 349.946)  Except for an application filed by a municipal obligor, an application must not be approved by the Board until the necessary permits are obtained or until each agency issuing permits has given written authorization to proceed with the proposed water project in lieu of a permit. This requirement may be waived by the Board if it has received through advice of counsel or other reliable source that the proposed water project will receive or has received all approvals by any governmental entity which may be necessary to proceed with the construction, improvement, rehabilitation or redevelopment of the project.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.335  Procedure for disapproval of applications. (NRS 349.946)

     1.  If the Board determines that an application cannot be approved, it shall prepare appropriate findings and conclusions and adopt a resolution stating the reasons for the disapproval.

     2.  The Board shall give the applicant or obligor notice of its action.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.340  Public hearing on proposal. (NRS 349.946)  Before approving an application, the Board shall schedule a public hearing on the proposed water project, providing reasonable notice to the members of the public who may be affected by the project.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.345  Procedure after tentative approval of project. (NRS 349.946)  If after a public hearing the Board tentatively approves a proposed water project, the Board may, depending on the size and scope of the project:

     1.  Grant final approval of the application by adopting a resolution containing the findings set forth in NAC 349.350 or, if the application was filed by a municipal obligor, as set forth in NAC 349.425, and direct the Department to proceed with financing; or

     2.  If required, direct the applicant to proceed with the preparation of final plans, specifications and contract documents for submission to the Board for its subsequent review and final approval.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.350  Review of final plan; resolution of final approval. (NRS 349.946)

     1.  Upon receipt of a final plan, if required, the Board shall review the plan. Except for a water project proposed by a municipal obligor, the Board shall determine whether, based on all the records and documents submitted to the Board in connection with the proposed water project:

     (a) The proposed project is feasible from an engineering and legal standpoint and is economically and financially feasible and justified.

     (b) The plan for development of the proposed project is satisfactory.

     (c) The applicant is qualified and responsible.

     (d) There is adequate assurance that the borrower can repay the loan.

     (e) The loan to be made from bond proceeds will be conditioned upon the successful issuance of bonds.

     (f) The proposed water project does not conflict with any regional master plan of any local, state or federal governing authority.

     (g) If revenue bonds are to be issued, the obligor has executed a legally binding statement not to undertake to commit the State and any other political subdivision or municipality thereof other than the obligor to incur any pecuniary liability in connection with the repayment of those bonds.

     (h) A complete statement of the total amount of money necessary to be provided by the Director for financing the proposed water project has been filed with the Board, including any cost to be incurred in financing the project.

     2.  If the Board grants final approval of the proposed water project, it shall adopt a resolution giving final approval and setting forth its findings of fact.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.355  Referral of application for further study or correction of deficiencies. (NRS 349.946)  Before adopting a resolution giving final approval to a proposed water project, the Board may refer the application to the Director or State Engineer for further study or refer the application back to the applicant or obligor for the correction of any deficiencies.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.360  Contents of resolution giving final approval; setting final terms of bonds. (NRS 349.946)

     1.  In addition to setting forth findings of fact, the resolution of the Board giving final approval to a proposed water project, other than a water project proposed by a municipal obligor, must also identify:

     (a) The applicant;

     (b) The purpose of the loan;

     (c) The location of the project;

     (d) The maximum amount of the loan;

     (e) A range of permissible rates of interest and the repayment period; and

     (f) Any conditions to be placed on the loan commitment.

     2.  The final terms, including the rates of interest and repayment period must be set by the date of the successful issuance of the bonds. A rate of interest will be charged which includes the current interest on the principal amount of the bonds.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90)

      NAC 349.365  Notification of final approval. (NRS 349.946)  The Director will, within 10 days after the Board’s resolution granting final approval to a proposed water project, notify the obligor and State Engineer of the Board’s decision.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.370  Submission of processing fee; sending letter of inducement. (NRS 349.946)  Upon receipt of notice of the Board’s resolution granting final approval for a proposed water project, the Director will, if not already accomplished:

     1.  Direct the applicant or obligor to submit a processing fee of not more than 1.75 percent of the principal amount of the total financing for the water project which must be remitted to the Director in the time designated by the Director. The processing fee will be deposited with the State Treasurer for credit to the Fund for Water Projects and will be used to defray the cost of a water project incurred by the Director related to the financing of the water project.

     2.  Except for a municipal obligor, send the applicant an inducement letter:

     (a) Stating the intention of the Director to issue bonds to finance the water project subject to the continuing ability of the water project to meet local, state and federal requirements;

     (b) Stating the principal amount of the financing;

     (c) Directing the applicant to submit any supporting documentation as may be required by the Director; and

     (d) Stating the term of the Director’s commitment. The term will be determined on a case by case basis, but in no event will it exceed 1 year. At the expiration of the term, the Director may extend the commitment for a similar term if good cause is shown.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90; 7-6-92)

      NAC 349.375  Use of processing fee. (NRS 349.946)  Whether or not bonds or securities are issued, the processing fee remitted to the Director will be used to reimburse any cost of a water project incurred by the Director pursuant to NAC 349.100 to 349.415, inclusive, or any other interagency agreement made in connection with the financing of the proposed water project, including the preparation of a final plan for a water project and expenses of the Board in reviewing the project.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88; A 11-13-90; 7-6-92)

      NAC 349.380  Review and findings of Director; commitment for loan. (NRS 349.946)

     1.  Upon receipt of a resolution of the Board giving final approval to a water project, the Director will review all documents pertaining to the project. If the project complies with all applicable legal requirements, the Director will prepare findings and submit them to the State Board of Examiners for approval as required by law.

     2.  If the State Board of Examiners approves the Director’s findings, a loan commitment may be made by the Director. If such a commitment is made, the Director will enter into a contract specifying the amount of the loan, schedule of the loan, charges for interest, schedule for repayment, escrow agent, and other terms covering security and the operation and maintenance of the water project.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

Miscellaneous Provisions

      NAC 349.385  Trustee: Selection or appointment; qualifications; resignation or discharge. (NRS 349.946)

     1.  An applicant may select, with the approval of the Director, a bank or trust company to serve as trustee under a bond certificate, indenture or resolution for the applicable bond issue if a trustee is required. The Director may appoint a trustee if no trustee is selected by the applicant.

     2.  In determining the qualifications of a trustee, the Director will consider:

     (a) The experience of the bank or trust company in acting as a trustee for public issuers;

     (b) The amount of its capital stock, surplus or undivided profits;

     (c) Its investment capabilities;

     (d) The size and experience of its professional staff; and

     (e) The cost of the services to be provided in relation to the number of services to be offered, and the quality and experience of the professional staff which will provide the services.

     3.  Unless otherwise provided for in the applicable bond certificate, indenture or resolution, a trustee may at any time resign or be discharged from his or her duties if he or she gives the Director at least a 60-day written notice and provides any notice that is required by the respective bond certificate, indenture or resolution.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.390  Security for repayment of loan. (NRS 349.946)

     1.  The State of Nevada has a lien on any property used for securing a loan for a water project, unless otherwise prohibited by law, in which event an alternate arrangement acceptable to the Director will be made to secure the State’s interest in repayment of such loan.

     2.  The security must be a mortgage, deed of trust or other security agreement upon the applicant’s property which may include, but is not limited to, all facilities, equipment, easements, real property and water rights related to the water project.

     3.  The amount of the security must be sufficient to recover the amount of the loan, together with the interest thereon, including other costs specified in the loan agreement.

     4.  The lien may be assigned to a bond trustee if the bonds involved are revenue bonds.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.395  Appraisal of real property used as security. (NRS 349.946)  Real property used for securing a loan must be appraised by a licensed or qualified appraiser within 1 year after the date of the application. A copy of the appraisal report must be provided to the Department or the State Engineer.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.400  Documents relating to advance liens. (NRS 349.946)  No documents relating to advance liens are required at the time of filing a letter of intent.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.405  Granting partial release of lien. (NRS 349.946)  A partial release of a lien may be granted by the Director, upon approval by the Board, upon written request of an obligor if the remaining property provides adequate security as required by law.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.410  Ensuring proper operation and maintenance of project. (NRS 349.946)  Reports may be required by the Board or a person designated by the Board to ensure that a project is being properly operated and maintained during the payout period of the loan. Findings will be presented to the Board at a regular meeting of the Board.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.415  Examination of books and records. (NRS 349.946)

     1.  An obligor’s books, accounts and other records pertaining to a water project must be open to inspection by representatives of the Director during regular business hours. The Director will conduct such examinations of the records as he or she deems appropriate to determine compliance with Nevada law.

     2.  The Director may require the obligor to pay the costs of any examination.

     (Added to NAC by Dep’t of Commerce, eff. 4-22-88)

      NAC 349.420  Application by municipal obligor: Effect; filing; fee; form and contents. (NRS 349.946)  If prior written approval is given by the Director, an application of a municipal obligor constitutes the preliminary and final plan for the water project. The application must:

     1.  Be filed with the Board at the address provided in NAC 349.220;

     2.  Be accompanied by the application fee required by subsection 1 of NAC 349.290; and

     3.  Be in the form provided by the Director. The application must include:

     (a) The name of the municipal obligor;

     (b) The qualifications of the municipal obligor;

     (c) The location of the water project;

     (d) The costs of the water project;

     (e) The benefits of the water project;

     (f) The marketability of any bonds to be sold, including an analysis of their legal status; and

     (g) The names of legal counsel and engineers retained to assist the municipal obligor.

     (Added to NAC by Dep’t of Commerce, eff. 11-13-90; A 7-6-92)

      NAC 349.425  Application by municipal obligor: Action by Board; processing by Director. (NRS 349.946)

     1.  The Board shall:

     (a) Review an application submitted by a municipal obligor;

     (b) Determine if the water project will preserve or increase the water available for beneficial use in the State; and

     (c) Approve or disapprove the project in the manner provided in NAC 349.335, 349.340, 349.345 and 349.355.

     2.  If an application submitted by a municipal obligor is approved by the Board, the application will be processed by the Director in the manner provided in NAC 349.365 to 349.380, inclusive.

     (Added to NAC by Dep’t of Commerce, eff. 11-13-90)

GRANTS FOR WATER CONSERVATION AND IMPROVEMENTS TO CERTAIN WATER SYSTEMS AND SEWAGE DISPOSAL SYSTEMS

      NAC 349.430  Definitions. (NRS 349.982)  As used in NAC 349.430 to 349.574, inclusive, unless the context otherwise requires, the words and terms defined in NAC 349.432 to 349.469, inclusive, have the meanings ascribed to them in those sections.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.432  “Account for the Revolving Fund” defined. (NRS 349.982)  “Account for the Revolving Fund” has the meaning ascribed to it in NRS 445A.203.

     (Added to NAC by Bd. for Financing Water Projects by R104-04, eff. 9-18-2006)

      NAC 349.435  “Board” defined. (NRS 349.982)  “Board” means the Board for Financing Water Projects created pursuant to NRS 349.957.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91)

      NAC 349.440  “Bureau” defined. (NRS 349.982)  “Bureau” means the Bureau of Safe Drinking Water of the Division of Environmental Protection of the Department.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R104-04, 9-18-2006)

      NAC 349.443  “Community sewage disposal system” defined. (NRS 349.982)  “Community sewage disposal system” has the meaning ascribed to it in NRS 349.980.

     (Added to NAC by Bd. for Financing Water Projects by R104-04, eff. 9-18-2006)

      NAC 349.445  “Community water system” defined. (NRS 349.982)  “Community water system” has the meaning ascribed to it in NRS 349.980.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R104-04, 9-18-2006)

      NAC 349.450  “Department” defined. (NRS 349.982)  “Department” means the State Department of Conservation and Natural Resources.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91)

      NAC 349.455  “Director” defined. (NRS 349.982)  “Director” means the Director of the Department.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91)

      NAC 349.458  “Eligible recipient” defined. (NRS 349.982)  “Eligible recipient” means a political subdivision of this State, including, without limitation, a city, county, unincorporated town, water authority, conservation district, irrigation district, water district, water conservancy district or general improvement district.

     (Added to NAC by Bd. for Financing Water Projects by R104-04, eff. 9-18-2006)

      NAC 349.461  “Fund” defined. (NRS 349.982)  “Fund” means the fund created pursuant to NRS 349.984.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98; A by R104-04, 9-18-2006)

      NAC 349.4615  “Individual sewage disposal system” defined. (NRS 349.982)  “Individual sewage disposal system” has the meaning ascribed to it in NRS 349.980.

     (Added to NAC by Bd. for Financing Water Projects by R104-04, eff. 9-18-2006)

      NAC 349.462  “Irrigation district” defined. (NRS 349.982)  “Irrigation district” has the meaning ascribed to it in NRS 539.013.

     (Added to NAC by Bd. for Financing Water Projects by R104-04, eff. 9-18-2006)

      NAC 349.463  “Nontransient water system” defined. (NRS 349.982)  “Nontransient water system” has the meaning ascribed to it in NRS 349.980.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98)

      NAC 349.464  “Program” defined. (NRS 349.982)  “Program” means the program established pursuant to NRS 349.981 to provide grants of money to purveyors of water and eligible recipients to pay for costs of improvements and for costs associated with:

     1.  Connecting to a municipal water system; or

     2.  Abandoning an individual sewage disposal system and connecting the property formerly served by the abandoned individual sewage disposal system to a community sewage disposal system.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98; A by R104-04, 9-18-2006)

      NAC 349.465  “Public water system” defined. (NRS 349.982)  “Public water system” has the meaning ascribed to it in NRS 445A.840.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91)

      NAC 349.466  “Purveyor of water” defined. (NRS 349.982)  “Purveyor of water” has the meaning ascribed to it in NRS 349.980.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98)

      NAC 349.467  “Requirements for public water systems” defined. (NRS 349.982)  “Requirements for public water systems” means the requirements imposed:

     1.  By the State Board of Health pursuant to NRS 445A.800 to 445A.955, inclusive; or

     2.  Pursuant to the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98)

      NAC 349.469  “Viable” defined. (NRS 349.982)  “Viable” means:

     1.  For a purveyor of water, having the financial, managerial and technical ability to sustain over a long term the operation of a community water system or nontransient water system and to remain in compliance with the requirements for public water systems; and

     2.  For eligible recipients, having the financial, managerial and technical ability to remain in compliance with applicable federal, state and local requirements for the system for which the application for the grant was made.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98; A by R104-04, 9-18-2006)

      NAC 349.471  “Costs traditionally associated with capital improvements” interpreted. (NRS 349.982)  For the purposes of NRS 349.980, the Board interprets “costs traditionally associated with capital improvements” to include:

     1.  The costs to carry out any feasible and appropriate changes in operations necessary for a purveyor of water to become viable, including, without limitation, changes in ownership, management, accounting, rates, maintenance, consolidation and alternative supplies of water; and

     2.  Any costs that are not directly related to the actual construction of the capital improvement, including, without limitation, costs:

     (a) For engineering, design, construction, legal and financial services;

     (b) Incurred in obtaining a loan from the Account for the Revolving Fund; and

     (c) For acquisition of water rights, easements and rights-of-way.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98; A by R104-04, 9-18-2006)

      NAC 349.475  Eligibility for grant; filing of letter of intent. (NRS 349.982)

     1.  The Board will provide a grant to a purveyor of water or an eligible recipient only if:

     (a) The grant will assist:

          (1) The purveyor of water in constructing a capital improvement to the community water system or nontransient water system that will directly enable the purveyor of water to comply with the requirements for public water systems; or

          (2) The eligible recipient in carrying out an improvement set forth in paragraph (b), (c), (d) or (e) of subsection 1 of NRS 349.981;

     (b) The purveyor of water or eligible recipient is unable to finance from its own resources the proposed improvement or costs associated with connecting to a municipal water system or community sewage disposal system;

     (c) The purveyor of water is currently included on the priority list for the Account for the Revolving Fund; and

     (d) Water meters or other approved devices which will measure water delivered to each water user are installed and used in any community water system or nontransient water system for which an application for a grant is made, unless the Board determines that water meters or such other devices are not required to ensure effective monitoring and conservation of water in that community water system or nontransient water system.

     2.  To apply for a grant, a purveyor of water or eligible recipient must file with the Board a letter of intent. The letter must include:

     (a) The name, address and telephone number of the applicant.

     (b) The date on which the service was first provided by the community water system, nontransient water system, sewage disposal system or other system for which the application for a grant was made. If the exact date is not known, the month and year must be provided.

     (c) The title or name, the location and a brief description of the proposed improvement, including maps or preliminary plans.

     (d) The number of persons or other entities served and the assessed value of the property within the area that is served by the community water system, nontransient water system, sewage disposal system or other system for which the application for a grant was made.

     (e) A preliminary estimate of the cost of the proposed improvement or costs associated with connecting to a municipal water system or community sewage disposal system, including, without limitation, the cost of construction, engineering, contingencies and any additional costs necessary for financing the improvement.

     (f) A description of future improvements planned by the applicant, if any, that are not part of the proposed improvement for which the application for a grant is made.

     (g) A brief description of how the proposed improvement will assist the purveyor of water in complying with the requirements for public water systems or the eligible recipient in carrying out the purpose of the proposed improvement.

     (h) Documentation concerning the inability of the applicant to finance the proposed improvement or costs associated with connecting to a municipal water system or community sewage disposal system, including, but not limited to:

          (1) Letters from local lending institutions;

          (2) Letters from financial advisers, accountants or fiscal agents, if applicable;

          (3) Copies of any applications for funding the proposed improvement or costsfiled by the applicant and, if the application is for a loan, a copy of any documentation indicating that the loan was approved or denied or the likelihood that the loan will be approved, including, without limitation, such an application and documentation concerning a loan from:

               (I) The Account for the Revolving Fund;

               (II) The fund described in NAC 445A.728; or

               (III) Any other governmental agency that provides financial assistance for improvements and with which the applicant has applied for a loan; and

          (4) A statement justifying the inability of the applicant to finance the proposed improvement or costs.

     (i) A brief demonstration that the applicant will be viable upon completion of the proposed improvement which includes, without limitation, audited financial statements for the 3 years immediately preceding the date that the letter of intent is filed with the Board and a recently approved budget.

     (j) If applicable, a statement that the plan of water conservation adopted pursuant to NRS 540.131 will be filed with the Water Planning Section of the Division of Water Resources of the Department before receipt of the grant.

     (k) Any additional information required by the Board.

     3.  A letter of intent must be directed to the Board at either:

     (a) The address specified in the application for a grant provided by the Division of Environmental Protection of the Department to the applicant; or

     (b) The address otherwise provided by the Division of Environmental Protection of the Department to the applicant for that purpose.

     4.  An applicant shall provide nine copies of the letter of intent to the Division of Environmental Protection of the Department.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.480  Procedure following receipt of letter of intent. (NRS 349.982)

     1.  Upon receipt of a letter of intent, the Division of Environmental Protection of the Department shall:

     (a) Record the date of receipt;

     (b) Maintain a file containing all documents and information pertaining to the financing of the proposed improvement or costs; and

     (c) Promptly forward a copy of the letter of intent to the Bureauor the Water Planning Section of the Division of Water Resources of the Department, as appropriate given the type of improvement or costs proposed in the letter of intent.

     2.  The Division of Environmental Protection of the Department and the entity which received a copy of the letter of intent pursuant to paragraph (c) of subsection 1 shall review the letter of intent and forward their comments to the Board within 30 days after receipt of the letter of intent.

     3.  The Board will consider a letter of intent forwarded from the Division of Environmental Protection of the Department and will, in a motion or resolution adopted by the Board, determine whether:

     (a) If the applicant is a purveyor of water other than the Lincoln County Water District, the community water system or nontransient water system was in existence on January 1, 1995, and is currently publicly owned;

     (b) If the applicant is a conservation district, irrigation district, conservancy district or general improvement district, the applicant was in existence on January 1, 1995;

     (c) The proposed improvements will be publicly owned;

     (d) The applicant is eligible for the program pursuant to NRS 349.981 or 349.983; and

     (e) The proposed improvement is likely to be economically justified and financially feasible pursuant to the provisions of NAC 349.430 to 349.574, inclusive.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.485  Approval of letter of intent. (NRS 349.982)

     1.  The Board will approve the letter of intent in a motion or resolution adopted by the Board if the Board:

     (a) Makes the determinations required pursuant to subsection 3 of NAC 349.480; and

     (b) Finds that the proposed improvement or costs qualify for a grant pursuant to NRS 349.981 or 349.983.

     2.  Upon approval of a letter of intent by the Board, the applicant must file an application for the proposed improvement or costs within 1 year after the date of approval or by a date specified by the Board, except that:

     (a) Upon the request of the applicant and based upon the occurrence of circumstances beyond the control of the applicant, the Division of Environmental Protection of the Department may once authorize the applicant to file the application at a later date, which must not be later than 18 months after the date of approval or 6 months after the date originally specified by the Board; or

     (b) The Board may, upon good cause shown, extend the period for the applicant to file the application.

     3.  If the Board has approved a letter of intent, it may request that the Division of Environmental Protection or the Water Planning Section of the Division of Water Resources of the Department, as appropriate and within the limits of their available resources, assist the applicant with preparing an application. The Board may also request the Division of Environmental Protection of the Department to issue a letter evidencing an intent to proceed with the program.

     4.  The approval of a letter of intent by the Board does not guarantee or ensure that any proposed improvement or costs will be provided a grant.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.490  Disapproval of letter of intent; finality of decision of Board; reapplication. (NRS 349.982)

     1.  If the Board does not make the affirmative determinations required by subsection 3 of NAC 349.480 or finds that the letter of intent does not meet the requirements of NAC 349.475, the Board will disapprove the letter of intent, by motion or resolution, and promptly notify the Division of Environmental Protection of the Department and the applicant of its decision, listing the reasons for disapproval.

     2.  The decision of the Board is final.

     3.  If a letter of intent is disapproved by the Board, the applicant may reapply not less than 6 months after the date of disapproval or at such time as is permitted by the Board, whichever is earlier.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R104-04, 9-18-2006)

      NAC 349.495  Application: Submission. (NRS 349.982)

     1.  If a letter of intent for a proposed improvement or proposed costs is approved, an applicant must submit an original and eight copies of an application to the Board.

     2.  An application submitted pursuant to subsection 1 must be:

     (a) In the form provided by the Division of Environmental Protection of the Department; and

     (b) Addressed to the Board as provided in subsection 3 of NAC 349.475.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.500  Application: Required items and information; waiver of requirements. (NRS 349.982)

     1.  Except as otherwise provided in subsections 2 and 3, the application must include the following items and information:

     (a) A preliminary engineering report for the construction, operation and maintenance of the proposed improvement, including:

          (1) The expected costs and benefits of the project;

          (2) Plans for the development of the facilities of the applicant; and

          (3) The economic justification for and expected feasibility of the project,

Ê as prepared by a person licensed as a professional engineer pursuant to chapter 625 of NRS.

     (b) A complete and legible legal description of the entire area of service for the proposed improvement, including a map showing the layout of the proposed improvement and the location and number of persons served by the proposed improvement in relation to maps of the United States Public Lands Survey, assessor’s maps, or aerial or other similar maps showing sections and townships.

     (c) A complete and legible copy of the legal description of the property that will be occupied by the proposed improvement, including the assessor’s plot maps on which the proposed improvement is identified.

     (d) Proof of ownership, rights-of-way, easements or agreements, showing that the applicant holds or is able to acquire all lands, other than public lands, interests therein and water rights necessary for the construction of the proposed improvement. Copies of deeds to lands to be occupied, records of surveys, easements, agreements or permits to appropriate water may be used as evidence of ownership.

     (e) A report concerning the amount of water required to satisfy the needs of the proposed improvement, including:

          (1) The source and amounts of supply;

          (2) The rights to the water;

          (3) The quality of the water going into the proposed improvement;

          (4) The quality of treated water flowing out of the proposed improvement; and

          (5) A schedule indicating the volume of water required each month from the proposed improvement to meet the needs of the customers of the community water system or nontransient water system.

     (f) A report concerning the implementation of the plan of water conservation adopted by the applicant pursuant to NRS 540.131, including:

          (1) A copy of the plan;

          (2) The most recent schedule established by the applicant for carrying out the plan; and

          (3) An analysis of the effectiveness of the plan.

     (g) A complete and itemized list of the total estimated cost of the proposed improvement, including an estimate for construction costs, contingencies, engineering fees, administrative fees, legal fees and financing fees.

     (h) An estimate of the capital costs required for the installation of water meters on all service connections to the community water system or nontransient water system, including an analysis of the feasibility of installing the water meters.

     (i) Information which demonstrates that the proposed improvement complies with applicable local regulations governing the use of land and water and any other applicable regulations and ordinances.

     (j) A list of the permits required to carry out the proposed improvement, with the anticipated dates and conditions for approval of those permits.

     (k) The estimated cost of operation and maintenance for the proposed improvement.

     (l) The amount of money available for the proposed improvement other than the money to be derived from the program, including terms of repayment if short-term or long-term financing is contemplated as a source of funding.

     (m) A plan for the construction of any related improvements during the next 5 years.

     (n) Copies of the current documents prepared by or on behalf of the applicant pursuant to NRS 350.013, which depict the effect of the proposed improvement on the financial capacity of the applicant.

     (o) Data and information deemed necessary by the Division of Environmental Protection of the Department or by the financial advisers or other consultants of the Division.

     2.  The Board may waive any of the requirements of subsection 1 upon written request of the applicant.

     3.  An applicant is not required to include an item and information required by subsection 1 if the item or information is not applicable to the type of improvement proposed in the application.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.505  Determination of financial feasibility of proposed improvement; evaluation of certain abilities of applicant and charge for water; determination of exceptional circumstances. (NRS 349.982)  Upon receipt of an application, the Division of Environmental Protection of the Department shall:

     1.  If necessary, forward all data and information contained in the application to any financial adviser, attorney and other person retained by the Division to determine the financial feasibility of the proposed improvement.

     2.  If applicable, evaluate the ability of the applicant to provide for:

     (a) The continuing replacement of components of the water system that are functionally obsolete or worn out;

     (b) Current and anticipated debt service; and

     (c) Current and future expenses of operation and maintenance.

     3.  If applicable, evaluate the charge for water that customers of the community water system or nontransient water system are paying and determine if the charge is sufficient to satisfy expenses related to:

     (a) The operation and maintenance of the community water system or nontransient water system; and

     (b) Periodically replacing components of the community water system or nontransient water system that are functionally obsolete or worn out.

     4.  If applicable, determine whether any exceptional circumstances exist in the area served by the community water system or nontransient water system.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.510  Review of application and feasibility reports; incomplete application; reports to Board. (NRS 349.982)

     1.  Within 20 working days after receipt of an application, the Division of Environmental Protection of the Department shall review the application and determine if all information required by the Board has been provided.

     2.  If the Division of Environmental Protection of the Department determines that the application is incomplete, the Division of Environmental Protection of the Department shall, within 30 working days after the receipt of the application, notify the applicant of the deficiencies and provide the applicant with instructions for satisfying those deficiencies. The applicant must comply with those instructions within 45 working days after the receipt of the instructions, except that, upon written request by the applicant and for good cause, the Division of Environmental Protection of the Department may once extend the period for compliance by the applicant. If the applicant submits any additional information concerning the application within the appropriate period, the Division of Environmental Protection of the Department shall, within 30 working days after receipt of that information, determine whether the application is complete. If the applicant does not complete the application because the applicant failed to comply with the instructions provided to the applicant by the Division of Environmental Protection of the Department or failed to submit any additional information required by the Division of Environmental Protection of the Department within the appropriate period, the Division of Environmental Protection of the Department shall recommend that the Board deny the application.

     3.  Within 30 working days after the Division of Environmental Protection of the Department determines that the application is complete, the Division of Environmental Protection of the Department and the Bureau or the Water Planning Section of the Division of Water Resources of the Department, as appropriate given the type of improvement proposed in the application, shall review the application and feasibility reports to determine if the proposed improvement complies with:

     (a) The requirements for public water systems if the applicant is a purveyor of water; or

     (b) The applicable federal, state and local requirements for the system for which the application for a grant was made if the applicant is an eligible recipient.

     4.  The Division of Environmental Protection of the Department shall prepare a report to the Board concerning the proposed improvement or costs within 60 working days after receipt of the completed application. The Division of Environmental Protection of the Department shall ensure that:

     (a) It receives information concerning the review of the application by the Bureau or the Water Planning Section of the Division of Water Resources of the Department, as applicable; and

     (b) The information received pursuant to paragraph (a) is incorporated in the report prepared by the Division of Environmental Protection of the Department.

     5.  The report to the Board prepared by the Division of Environmental Protection of the Department must contain:

     (a) The application;

     (b) A summary of the economic justification for and financial feasibility of the proposed improvement;

     (c) The status of the funding available to the applicant for the proposed improvement or costs; and

     (d) Evaluations by the Division of Environmental Protection of the Department concerning:

          (1) Whether the applicant will be viable upon completion of the proposed improvement;

          (2) If applicable, the effectiveness of the applicant’s efforts to conserve water and of the plan of water conservation adopted by the applicant pursuant to NRS 540.131;

          (3) The need for and the feasibility of installing water meters on all service connections to the community water system or nontransient water system; and

          (4) The information that results from the evaluations and determinations conducted pursuant to subsections 3 and 4 of NAC 349.505.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.515  Receipt of permits or authority to proceed required; exceptions; determination of sufficient water rights. (NRS 349.982)

     1.  Except as otherwise provided in subsections 2 and 3, an application must not be approved by the Board until:

     (a) Copies of any permits necessary for compliance with any requirements for planning and zoning, including any necessary variances or special use permits, are received by the Board; or

     (b) Each agency issuing a permit specified in paragraph (a) has given written authorization to proceed with the proposed improvement and a copy of the authorization is received by the Board.

     2.  The Board may waive the requirements of subsection 1 if it has received information from its counsel or any other reliable source that the proposed improvement will receive or has received all permits required by any governmental agency which are necessary to proceed with the construction, improvement, rehabilitation or redevelopment of the proposed improvement.

     3.  The Board may, before it receives any permit required pursuant to subsection 1 that requires the submission of a detailed engineering design, approve an application if there are no foreseeable conditions threatening the feasibility of the proposed improvement.

     4.  The Board will not approve an application until it determines that the applicant owns sufficient water rights to carry out the proposed improvement or there are water rights otherwise available and committed to the proposed improvement.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.520  Disapproval of application: Procedure; notice. (NRS 349.982)

     1.  If the Board determines not to approve an application, it will prepare findings and conclusions concerning its determination and adopt a resolution stating the reasons for the disapproval.

     2.  The Board will give the applicant and the Division of Environmental Protection of the Department notice of its action.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R104-04, 9-18-2006)

      NAC 349.525  Public meeting on proposed improvement or costs; correction of deficiencies in application. (NRS 349.982)  Before approving an application, the Board or its designated representative:

     1.  Will hold a public meeting on the proposed improvement or costs and provide reasonable notice to the members of the public who may be affected by the proposed improvement or costs.

     2.  May return the application to the applicant for the correction of any deficiencies.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R104-04, 9-18-2006)

      NAC 349.530  Review of completed application; determinations by Board. (NRS 349.982)

     1.  Except as otherwise provided in subsection 2, the Board will review the completed application and determine whether, based on the records and documents submitted to the Board concerning the proposed improvement or costs:

     (a) The proposed improvement is economically justified and financially feasible.

     (b) The proposed improvement complies with the provisions of NRS 349.980 to 349.987, inclusive.

     (c) The plan for development of the proposed improvement is satisfactory.

     (d) The applicant is able to obtain the financing required to complete the proposed improvement.

     (e) The applicant has taken sufficient and reasonable efforts to determine whether the proposed improvement conflicts with any regional master plan of any local, state or federal governing authority, and those efforts have not revealed such a conflict.

     (f) The proposed improvement will not use or waste excessive quantities of water.

     2.  If the Board determines pursuant to paragraph (a) of subsection 1 that the proposed improvement is not economically justified and financially feasible, the Board will, based on the records and documents submitted to the Board concerning the proposed improvement, determine whether the construction of the proposed improvement is in the interest of the State and brings the purveyor of water into compliance with the requirements for public water systems or brings the eligible recipient into compliance with any applicable federal, state or local laws with which the eligible recipient is not in compliance. In making its determination, the Board will consider, if applicable:

     (a) Whether there are any communities located near the community water system or nontransient water system that offer similar living conditions with potable water;

     (b) Whether the applicant has taken sufficient and reasonable efforts to discover an alternate source of potable water for the community water system or nontransient water system; and

     (c) Whether any other useable source of potable water for the community water system or nontransient water system has been discovered.

     3.  The Board will approve or disapprove the proposed improvement or costs taking into consideration the determinations made pursuant to subsections 1 and 2. If the Board approves the proposed improvement or costs, it will take into consideration the amount of money in the Fund and determine whether to provide a grant for the proposed improvement or costs. The Board may give precedence to improvements which provide maximum benefits to the State.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.535  Determination to provide grant: Action by Board; amount of grant; duties of Division of Environmental Protection of the Department. (NRS 349.982)

     1.  If the Board determines to provide a grant, it will adopt a resolution which must include:

     (a) A statement of the approval of the Board that sets forth its findings of fact concerning its determinations made pursuant to NAC 349.530;

     (b) The application; and

     (c) The terms for providing the grant to the applicant.

     2.  To determine the amount of a grant to a purveyor of water, the Board will, pursuant to NRS 349.983, develop and use a scale which the Board may periodically revise. The factors the Board will consider in developing the scale include, without limitation:

     (a) Whether the improvement for which the grant is requested is included on the priority list for the Account for the Revolving Fund for the current year;

     (b) If applicable, the rank of the improvement for which the grant is requested in relation to other projects on the priority list for the Account for the Revolving Fund for the current year;

     (c) The median household income for the community or area that is served by the community water system or nontransient water system for which the grant is requested as compared to the median household income in this State;

     (d) The number of persons served by the community water system or nontransient water system for which the grant is requested;

     (e) The amount of reduction in the leakage of water, if any, in the community water system or nontransient water system for which the grant is requested;

     (f) The effectiveness of any water conservation in the area that is served by the community water system or nontransient water system for which the grant is requested; and

     (g) The monthly charge for water that residential customers of the community water system or nontransient water system for which the grant is requested are paying for the month in which the application for a grant is submitted.

     3.  The Board will send a copy of the resolution to the Division of Environmental Protection of the Department.

     4.  Within 10 days after receipt of the resolution of the Board, the Division shall:

     (a) Notify the applicant and the Director of the decision of the Board.

     (b) Send the applicant an inducement letter which:

          (1) States the intention of the Director to issue the grant to be paid as other claims against the State are paid if the improvement meets local, state and federal requirements;

          (2) States the amount of the grant;

          (3) States that if the grant is to be made from the proceeds of bonds, it will be conditioned upon the successful issuance of the bonds;

          (4) Directs the applicant to submit any supporting documentation required by the Division; and

          (5) Directs the applicant to comply with any conditions imposed upon the grant and to enter into the funding agreement required pursuant to NAC 349.549 within 6 months after the date the Board approves the grant or such other date as the Board specifies.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.540  Request for issuance of general obligation bonds. (NRS 349.982)  Upon receipt of a resolution of the Board approving the improvement or costs, the Division of Environmental Protection of the Department may request the Office of the State Treasurer to issue general obligation bonds in an amount sufficient to fund the grant.

     (Added to NAC by Bd. for Financing Water Projects, eff. 12-24-91; A by R113-96, 1-23-98; R104-04, 9-18-2006)

      NAC 349.549  Administrative fee;funding agreement. (NRS 349.982)

     1.  The recipient of a grant under the program shall pay to the Division of Environmental Protection of the Department an administrative fee of $1,000. The money must be used for the purposes set forth in subsection 4 of NRS 349.982.

     2.  The recipient of a grant under the program and the Director shall, if all conditions of the grant have been met, execute a funding agreement that complies with the requirements of this section.

     3.  The funding agreement must:

     (a) Be for a term of not more than 5 years.

     (b) Set forth the maximum amount disbursable pursuant to the grant, the percentage of eligible costs that will be paid and the amount of the minimum contribution to be paid by the recipient.

     (c) Distinguish costs that are eligible and ineligible for payment pursuant to the grant, and set forth formulas for sharing the cost of components of the improvement that are partially eligible for payment pursuant to the grant.

     (d) Describe procedures for the disbursement of the grant.

     (e) Set forth any state requirements regarding:

          (1) Compliance with the laws of this State;

          (2) Access by the State to any accounts and books of the recipient that relate to the improvement;

          (3) Access to the site of the improvement for inspection by state personnel;

          (4) Indemnification of the State;

          (5) The acknowledgment of the amount contributed by the State pursuant to the grant;

          (6) The submission of financial reports and reports concerning the progress of the improvement;

          (7) The maintenance of records;

          (8) The provision of addresses for notification and other communication;

          (9) The approval of plans and specifications;

          (10) The submission of proof of the receipt of any required permits;

          (11) The notification of the State concerning any difficulties in the construction or funding of the improvement that could adversely affect the improvement;

          (12) The notification of the State concerning any claims made against the recipient of the grant, the engineer or contractor for the improvement, or any other person associated with the improvement; and

          (13) The submission, review and approval of contract change orders.

     (f) Set forth provisions concerning:

          (1) Requirements for the methods of procurement and applicability of the provisions of chapter 332 of NRS;

          (2) Any default or termination;

          (3) The rights of the State if the agreement is terminated;

          (4) The right of the State to commence legal proceedings;

          (5) The right of the State to require audits at the expense of the recipient;

          (6) The amendment of the agreement;

          (7) Requirements for notification of the parties to the agreement; and

          (8) The release of any liability arising from a default.

     (g) Set forth any other contractual provisions relevant to the grant or improvement.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98; A by R104-04, 9-18-2006)

      NAC 349.554  Duties of recipient of grant before commencement of bidding and construction. (NRS 349.982)  The recipient of a grant under the program:

     1.  Shall, before:

     (a) Bids for the improvement are advertised, submit to the Division of Environmental Protection of the Department the engineering design, plans and specifications for the improvement.

     (b) Bids for the improvement are opened, submit to the Division the bidding schedules and item descriptions for measurement and payment.

     (c) Construction of the improvement is begun, submit to the Division:

          (1) Proof of the receipt of all necessary permits.

          (2) Documentation that any procedures for purchasing and contracting required by the State are being followed.

          (3) The agendas for any conferences held before bidding and construction.

          (4) Schedules for procurement and construction.

          (5) Proof that the funding required to be contributed by the recipient of the grant has been committed to the improvement.

          (6) Any other documents that the Division deems necessary to verify compliance with the goals of the program.

     2.  Shall not allow the commencement of any construction relating to the improvement until the Division provides the recipient of the grant with a written notice to proceed with the improvement. The Division shall, upon its approval of the items received pursuant to subsection 1, provide the recipient with that notice.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98; A by R104-04, 9-18-2006)

      NAC 349.559  Duties of recipient of grant: Submission of information to Division of Environmental Protection of Department. (NRS 349.982)  The recipient of a grant under the program shall:

     1.  During the construction of the improvement, provide the Division of Environmental Protection of the Department with such documents as the Division deems necessary to determine compliance with the funding agreement.

     2.  Submit to the Division monthly reports concerning the progress of the construction of the improvement. Each report must include:

     (a) A brief description of any work performed on the improvement after the date of the report submitted by the recipient pursuant to this subsection for the immediately preceding month;

     (b) A discussion of any problems encountered that may cause a deviation from the schedule of construction for the improvement or an adjustment to the budget for the improvement; and

     (c) Copies of any work directives and change orders issued to the contractor during the period specified in paragraph (a), regardless of whether the contractor approved the directives or orders.

     3.  Submit to the Division quarterly financial reports concerning the construction of the improvement. Each report must:

     (a) Include a current budget for the completion of the improvement that accurately reflects:

          (1) Any costs incurred up to the date of the report;

          (2) The anticipated monthly costs to complete the improvement; and

          (3) The status of available funding; and

     (b) Be accompanied by copies of any change orders affecting the scope or cost of any components of the improvement that are eligible for payment pursuant to the grant.

     4.  Provide the Division with current schedules for the construction of the improvement and such other current information as the Division deems necessary to ensure that:

     (a) The components of the improvement that are eligible for payment pursuant to the grant will be completed; and

     (b) The health needs of the community will be met.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98; A by R104-04, 9-18-2006)

      NAC 349.564  Disbursement of money pursuant to grant. (NRS 349.982)

     1.  The recipient of a grant under the program shall:

     (a) Submit periodic requests for the disbursement of money pursuant to the grant on forms provided by the Division of Environmental Protection of the Department.

     (b) Provide the Division with:

          (1) Copies of all contracts related to the improvement, including contracts for construction, procurement and the provision of professional services. Any invoice submitted by the recipient of the grant for the payment of reimbursable costs must include references to the authorizing contracts and, if such a contract is divided into separate tasks, references to those tasks.

          (2) Proof that any prior disbursements of money pursuant to the grant have been distributed in an appropriate manner and that any disbursements made pursuant to a present request for the disbursement of money pursuant to the grant will be distributed in an appropriate manner. The proof must consist of:

               (I) Copies of the front of cancelled checks issued by the recipient of the grant; or

               (II) A signed letter from a vendor stating that the vendor has been paid in full for an invoice that is to be reimbursed by a disbursement made pursuant to the present request for the disbursement.

     2.  The disbursement of any money pursuant to a grant under the program must comply with the funding agreement. Each payment must be approved based on the actual costs to date.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98; A by R104-04, 9-18-2006)

      NAC 349.569  Award of credit toward amount of money recipient of grant is required to provide. (NRS 349.982)

     1.  The Division of Environmental Protection of the Department may give a recipient of a grant pursuant to the program credit toward the amount of money the recipient is required to provide for the capital improvement pursuant to subsection 3 of NRS 349.983 if the recipient contributes to the capital improvement:

     (a) All of the money the recipient has available for that purpose; and

     (b) Material, labor, equipment or any other contribution approved by the Division other than money.

Ê The credit must not exceed the unpaid balance of the amount the recipient is required to provide pursuant to that subsection.

     2.  To obtain credit pursuant to subsection 1:

     (a) A recipient of a grant pursuant to the program must submit to the Division:

          (1) Documentation for each contribution made to the capital improvement by the recipient for material, labor, equipment or other contribution approved by the Division;

          (2) A postconstruction audit of each contribution made to the capital improvement by the recipient; and

          (3) Any other information the Division deems appropriate.

     (b) All forms, rates and documentation submitted by the recipient of the grant must be approved by the Division.

     3.  If the Division approves the credit, the amount of the credit must be determined by the Division based on:

     (a) The prevailing wage for similar classifications of work;

     (b) The rates paid by the Department of Transportation for the rental of equipment; or

     (c) The actual costs sustained by the recipient of the grant.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98; A by R104-04, 9-18-2006)

      NAC 349.574  Procedure following completion of improvement. (NRS 349.982)

     1.  After the recipient of a grant pursuant to the program has completed the improvement, the recipient shall submit to the Division of Environmental Protection of the Department for its approval:

     (a) A final engineering report that includes a certificate of completion executed by an engineer indicating that:

          (1) The improvement has been completed in accordance with the provisions of the funding agreement;

          (2) The improvement as constructed has been tested and satisfies the objectives for which it was designed and performs the functions for which it was intended; and

          (3) Based on the results of the test specified in subparagraph (2), the quality of materials and workmanship are consistent with the plans and specifications approved for the improvement;

     (b) Drawings of the improvement as constructed that depict any material changes from the initial plans for the improvement;

     (c) The dates the improvement was tested, accepted and placed into service;

     (d) A statement of the final costs for the improvement; and

     (e) If required by the Division, proof that the improvement performs the tasks for which it was designed.

     2.  The recipient of the grant may submit its final request for disbursement of the grant only after the Division has approved the final engineering report submitted pursuant to subsection 1.

     3.  If the final engineering report, certificate of completion and statement of final costs submitted pursuant to subsection 1 are approved by the Division:

     (a) The Division shall release the recipient of the grant from any liability arising pursuant to the funding agreement; and

     (b) The recipient of the grant shall discharge the Division and the State of Nevada from any claims or demands arising pursuant to the funding agreement.

     4.  Upon completion of the requirements of this section and payment of the final request submitted pursuant to subsection 2, any undisbursed amount of the sum authorized for the grant will be made available for other grants pursuant to the program.

     (Added to NAC by Bd. for Financing Water Projects by R113-96, eff. 1-23-98; A by R104-04, 9-18-2006)