NAC: CHAPTER 350 - MUNICIPAL OBLIGATIONS

[Rev. 11/21/2013 4:07:18 PM--2013]

[NAC-350 Revised Date: 7-11]

CHAPTER 350 - MUNICIPAL OBLIGATIONS

GENERAL PROVISIONS

350.010            Annual statement and report by municipalities.

MEDIUM-TERM OBLIGATIONS

350.100            Medium-term obligation as appropriation or augmentation.

350.110            Notice of intent.

350.120            Forwarding of documents to Department of Taxation following authorization.

350.130            Authorization void after 18 months.

350.140            Interest.

350.151            Conversion of temporary interfund loan into medium-term obligation

350.160            Repayment.

350.170            Calculation of weighted average useful life of certain assets.

DEBT MANAGEMENT COMMISSION

350.200            “Commission” defined.

350.210            Failure or refusal of governing body to adopt resolution approving or objecting to proposal resulting in increase of rate of property taxes.

350.220            Approval of request of municipality to reserve percentage of remaining allowable increase of property taxes for future use.

350.230            Establishment and notification of deadline for submission by municipality of certain proposals.

350.240            Denial of certain proposals if increase in rate of property taxes exceeds statutory limitation on total rate.

350.250            Notice of certain decisions of commission.

 

 

 

GENERAL PROVISIONS

      NAC 350.010  Annual statement and report by municipalities. (NRS 350.009, 350.013, 354.107, 354.6025, 360.090)

     1.  The statement and report which is required by NRS 350.013 must include:

     (a) A brief narrative which describes each type of indebtedness used or contemplated for use by the governing body or board;

     (b) A schedule which sets forth:

          (1) The contemplated date of the sale and the amount of any bonds which have been approved by election but not yet sold;

          (2) The contemplated date of an election or other authorization and the amount of any bonds which are contemplated to be issued before the end of the fiscal year following the date of the schedule; and

          (3) The amount of any other debts, such as mortgages or capital leases, which the governing body or board contemplates incurring before the end of the fiscal year following the date of the schedule;

     (c) A schedule which sets forth, on a form provided by the Department of Taxation, the amount of general obligation debt of the political subdivision or general improvement district;

     (d) A schedule which sets forth, on a form provided by the Department of Taxation, the total amount of indebtedness of the political subdivision or general improvement district;

     (e) A schedule which sets forth, on a form provided by the Department of Taxation, the amount of money required to satisfy the indebtedness of the political subdivision or general improvement district for the 5 years immediately following the date of the statement or report; and

     (f) A schedule which sets forth, on a form provided by the Department of Taxation, the amount of money required to satisfy each debt of the political subdivision or general improvement district for each year until the debt is retired.

     2.  The submission to the Department of Taxation before July 1 of a copy of the statement and report submitted for the same year to a debt management commission pursuant to NRS 350.013 fulfills the requirements set forth in subsection 1 of NRS 354.6025.

     3.  For the purposes of this section, “indebtedness” includes a debt which is:

     (a) Legally payable from general revenues and is backed by the full faith and credit of a governmental unit;

     (b) Represented by securities of a local government issued pursuant to chapter 350 of NRS;

     (c) A medium-term obligation created pursuant to NRS 350.087 to 350.095, inclusive; or

     (d) Represented by revenue bonds of the governmental unit.

     [Tax Comm’n, Local Gov’t Reg. No. 23, eff. 7-2-82]—(NAC A by R028-99, 1-27-2000; A by Com. on Local Gov’t Finance by R027-03, 12-16-2003)

MEDIUM-TERM OBLIGATIONS

      NAC 350.100  Medium-term obligation as appropriation or augmentation. (NRS 350.087, 360.090)  A medium-term obligation authorized pursuant to NRS 350.087 may constitute an appropriation or budget augmentation or may augment resources as permitted by statute and as specified in the resolution of the governing body of the local government.

     (Added to NAC by Tax Comm’n, eff. 7-9-96)

      NAC 350.110  Notice of intent. (NRS 350.087, 360.090)  The notice of intent to act on a resolution which authorizes a medium-term obligation that is published by the governing body of a local government as required pursuant to NRS 350.087 must include:

     1.  The time and place of the public hearing during which the resolution will be voted on by the governing body;

     2.  The proposed method of repayment of the medium-term obligation;

     3.  The total amount of the debt of the medium-term obligation; and

     4.  The manner in which the money received from the medium-term obligation will be used and the purpose thereof.

     (Added to NAC by Tax Comm’n, eff. 7-9-96)

      NAC 350.120  Forwarding of documents to Department of Taxation following authorization. (NRS 350.089, 360.090)  After the adoption of a resolution which authorizes a medium-term obligation, the governing body of the local government shall forward to the Department of Taxation:

     1.  A copy of the final resolution;

     2.  Excerpts from the minutes of the meeting of the governing body during which the resolution was adopted, which include, without limitation, the vote on the resolution and any comments made by the governing body or a member of the public at the meeting;

     3.  Proof of the publication of the notice to act on the resolution which authorizes a medium-term obligation as required pursuant to NRS 350.087;

     4.  A written statement specifying:

     (a) The source of the money to be used to repay the debt incurred by the medium-term obligation; and

     (b) All pertinent data supporting the ability of the local government to repay the debt without affecting its tax rate, including, without limitation, and only if applicable:

          (1) Anticipated increases in revenues available for repayment after determining anticipated reductions in revenues;

          (2) Anticipated reductions in expenditures available for repayment after determining anticipated increases in expenditures; and

          (3) Any amount of money which may be available for repayment from the balance of a fund, reserve or contingency account;

     5.  The anticipated time required to enter into the medium-term obligation;

     6.  The proposed amortization schedule for repayment of the debt incurred by the medium-term obligation; and

     7.  Any other supporting data which the governing body of the local government deems pertinent.

     (Added to NAC by Tax Comm’n, eff. 7-9-96)

      NAC 350.130  Authorization void after 18 months. (NRS 350.089, 360.090)  The governing body of a local government which adopts a resolution authorizing a medium-term obligation must act on such authorization not later than 18 months following the approval of the Executive Director of the Department of Taxation, except when the obligation is issued to pay for a contract for long-term construction or for a program to acquire land. If the governing body does not act within the time required, the authorization is void and a new resolution authorizing a medium-term obligation must be adopted.

     (Added to NAC by Tax Comm’n, eff. 7-9-96)

      NAC 350.140  Interest. (NRS 350.009, 350.087, 350.089, 360.090)

     1.  If the money for a medium-term obligation is obtained from an existing fund of a local government, the resolution authorizing the medium-term obligation must specify whether interest will be charged and the rate thereof, if any. If the resolution specifies such a rate of interest, the Executive Director of the Department of Taxation may, in determining whether to approve the resolution pursuant to NRS 350.089, consider whether that rate of interest reasonably reflects current market conditions and the duration of the medium-term obligation.

     2.  If the resolution does not specify whether interest will be charged on the medium-term obligation, no interest may be charged.

     (Added to NAC by Tax Comm’n, eff. 7-9-96; A by Com. on Local Gov’t Finance by R135-10, 12-16-2010)

      NAC 350.151  Conversion of temporary interfund loan into medium-term obligation. (NRS 350.009)

     1.  Unless otherwise prohibited by law, the terms of a temporary interfund loan may be revised in such a manner as to convert the temporary interfund loan into a medium-term obligation if:

     (a) The borrowing local government:

          (1) Requests the revision at least 61 days before the date upon which the term of that temporary interfund loan expires;

          (2) Complies with the provisions of NRS 350.087 to 350.095, inclusive, and NAC 350.100 to 350.170, inclusive, regarding that medium-term obligation; and

          (3) Provides for the repayment of that medium-term obligation without adopting a budget that includes a negative fund balance in violation of subsection 5 of NRS 354.598;

     (b) The accounting procedures of the borrowing local government comply with generally accepted accounting principles for government as prescribed by the Governmental Accounting Standards Board; and

     (c) The lending local government agrees to the revision.

     2.  As used in this section:

     (a) “Borrowing local government” means a local government or component unit of a local government which has obtained a temporary interfund loan.

     (b) “Component unit” means a separate legal entity from a local government whose financial statements must be included in the annual audit of that local government conducted pursuant to NRS 354.624.

     (c) “Lending local government” means a local government or component unit of a local government which has made a temporary interfund loan.

     (d) “Temporary interfund loan” has the meaning ascribed to it in NAC 354.290.

     (Added to NAC by Com. on Local Gov’t Finance by R135-10, eff. 12-16-2010)

      NAC 350.160  Repayment. (NRS 360.090)  The period for repayment of the debt incurred by a medium-term obligation begins on the date on which the debt is incurred. If the governing body of the local government enters into a medium-term obligation in a manner in which the debt will be incurred in installments, each installment must have a separate period of repayment effective from the date on which the debt is incurred.

     (Added to NAC by Tax Comm’n, eff. 7-9-96)

      NAC 350.170  Calculation of weighted average useful life of certain assets. (NRS 350.009, 350.091)

     1.  If a local government finances assets with a medium-term obligation or an installment-purchase agreement having a term of more than 5 years, the local government shall calculate the weighted average useful life of the assets for the purpose of complying with the provisions of subsection 4 of NRS 350.091.

     2.  To determine the useful life of the assets, the local government may use:

     (a) Publication 946 of the Internal Revenue Service entitled “How to Depreciate Property,” which may be obtained free of charge on the Internet from the website of the Internal Revenue Service at http://www.irs.gov/; or

     (b) Any other manual or source of information that provides useful life if the local government, in the resolution adopted pursuant to NRS 350.087 authorizing the medium-term obligation or installment-purchase agreement, makes a finding that the weighted average term of the medium-term obligation or installment-purchase agreement will not exceed the estimated weighted average useful life of the assets being financed with the medium-term obligation or installment-purchase agreement. If the Executive Director of the Department of Taxation determines that the finding by the local government is unreasonable or arbitrary, he or she may disapprove the resolution pursuant to NRS 350.089.

     (Added to NAC by Com. on Local Gov’t Finance by R027-03, eff. 12-16-2003)

DEBT MANAGEMENT COMMISSION

      NAC 350.200  “Commission” defined. (NRS 350.009)  As used in NAC 350.200 to 350.250, inclusive, unless the context otherwise requires, “commission” means a debt management commission established pursuant to NRS 350.0115.

     (Added to NAC by Com. on Local Gov’t Finance by R030-05, eff. 5-4-2006)

      NAC 350.210  Failure or refusal of governing body to adopt resolution approving or objecting to proposal resulting in increase of rate of property taxes. (NRS 350.009, 350.0135)  If the governing body of an entity that receives a notification of a proposal that will result in an increase in the rate of property taxes pursuant to subsection 1 of NRS 350.0135 fails, neglects or refuses to adopt a resolution approving or objecting to the proposal described in the notice not later than 60 days after the date of the postmark on the notification, the governing body shall be deemed to have waived its right to object to the proposal.

     (Added to NAC by Com. on Local Gov’t Finance by R030-05, eff. 5-4-2006)

      NAC 350.220  Approval of request of municipality to reserve percentage of remaining allowable increase of property taxes for future use. (NRS 350.009, 350.0135)  If a commission approves the request of a municipality to reserve a percentage of the remaining allowable increase of property taxes for use in the future pursuant to subsection 7 of NRS 350.0135:

     1.  The commission may limit the amount of time that such a percentage may be reserved by the municipality.

     2.  Before March 15 of the current fiscal year, the commission may express the amount of the reservation of the remaining allowable increase of property taxes as a percentage of:

     (a) The rate of property taxes allowable pursuant to NRS 354.59811 for the current fiscal year; or

     (b) The rate of property taxes for the current fiscal year as certified by the Nevada Tax Commission pursuant to NRS 361.4547.

     3.  After March 15 of the current fiscal year, the commission shall express the amount of the reservation of the remaining allowable increase of property taxes as a percentage of the rate of property taxes allowable pursuant to NRS 354.59811 for the following fiscal year.

     4.  Based on the percentage determined pursuant to subsection 2 or 3, as applicable, the commission shall express the amount of the reservation as a limitation on the number of cents which may be levied.

     (Added to NAC by Com. on Local Gov’t Finance by R030-05, eff. 5-4-2006)

      NAC 350.230  Establishment and notification of deadline for submission by municipality of certain proposals. (NRS 350.009, 350.0135)

     1.  A commission may establish a deadline for the submission by a municipality of a proposal that will result in an increase in the rate of property taxes or a request to reserve a percentage of the remaining allowable increase of property taxes for use in the future.

     2.  If a commission establishes a deadline pursuant to subsection 1, the commission shall notify all municipalities with tax-levying powers within the county of the deadline within 30 days after establishing the deadline.

     (Added to NAC by Com. on Local Gov’t Finance by R030-05, eff. 5-4-2006)

      NAC 350.240  Denial of certain proposals if increase in rate of property taxes exceeds statutory limitation on total rate. (NRS 350.009, 350.0135)  A commission shall not approve a proposal that will result in an increase in the rate of property taxes or a request to reserve a percentage of the remaining allowable increase of property taxes for use in the future if the increase in the rate of property taxes exceeds the limitation on the total rate of ad valorem taxes set forth in NRS 361.453.

     (Added to NAC by Com. on Local Gov’t Finance by R030-05, eff. 5-4-2006)

      NAC 350.250  Notice of certain decisions of commission. (NRS 350.009, 350.0135)  A commission shall provide notice, in writing, of the decision of the commission to the municipality requesting an increase in the rate of property taxes or a reservation of a percentage of the remaining allowable increase of property taxes for use in the future and to any other municipalities affected by the decision.

     (Added to NAC by Com. on Local Gov’t Finance by R030-05, eff. 5-4-2006)