Senate Bill No. 456--Senators Porter and O'Connell CHAPTER........ AN ACT relating to local governments; authorizing a local government to establish funds for the extraordinary maintenance, repair or improvement of local governmental facilities and capital projects, the construction of capital projects and the stabilization of the operation of local government; requiring certain local governments to establish a fund for the extraordinary maintenance, repair or improvement of capital projects; and providing other matters properly relating thereto. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 354 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 8, inclusive, of this act. Sec. 2. \"Extraordinary maintenance, repair or improvement" means all expenses ordinarily incurred not more than once every 5 years to maintain a local governmental facility or capital project in a fit operating condition. \\Sec. 3. \1. The governing body of a local government may, by resolution, establish a fund for the extraordinary maintenance, repair or improvement of local governmental facilities. 2. Any interest and income earned on the money in the fund in excess of any amount which is reserved for rebate payments to the Federal Government pursuant to 26 U.S.C. § 148, as amended, or is otherwise required to be applied in a specific manner by the Internal Revenue Code of 1986, as amended, must be credited to the fund. 3. The money in the fund must be used only for the extraordinary maintenance, repair or improvement of existing local government facilities or facilities which replace those facilities. The money in the fund at the end of the fiscal year may not revert to any other fund or be a surplus for any purpose other than the purpose specified in this subsection. 4. If the fund is established, the local government shall establish a plan for the extraordinary maintenance, repair or improvement of its local governmental facilities. 5. The annual budget and audit report of the local government prepared pursuant to NRS 354.624 must specifically identify the fund and: (a) Indicate in detail the extraordinary maintenance, repairs or improvements of the local governmental facilities that have been funded with money from the fund; (b) Specify the amount of money, if any, that will be deposited in the fund for the next fiscal year; (c) Specify any proposed extraordinary maintenance, repairs or improvements of local governmental facilities that will be funded with money from the fund during the next fiscal year; and (d) Identify any planned accumulation of the money in the fund. The audit report must include a statement by the auditor whether the local government has complied with the provisions of this subsection. \\Sec. 4. \1. The governing body of a local government may, by resolution, establish a fund for the construction of capital projects. 2. Any interest or income earned on money in the fund in excess of any amount which is reserved for rebate payments to the Federal Government pursuant to 26 U.S.C. § 148, as amended, or is otherwise required to be applied in a specific manner by the Internal Revenue Code of 1986, as amended, must be credited to the fund. 3. The money in the fund must be used only for the construction of capital projects which are included in the plan for capital improvement of the local government prepared pursuant to NRS 350.0035. The money in the fund at the end of the fiscal year may not revert to any other fund or be a surplus for any purpose other than the purpose specified in this subsection. 4. The annual budget and audit report of the local government prepared pursuant to NRS 354.624 must specifically identify the fund and: (a) Indicate in detail the capital projects that have been constructed with money from the fund; (b) Specify the amount of money, if any, that will be deposited in the fund for the next fiscal year; (c) Specify any proposed capital projects that will be constructed with money from the fund during the next fiscal year; and (d) Identify any planned accumulation of the money in the fund. The audit report must include a statement by the auditor whether the local government has complied with the provisions of this subsection. \\Sec. 5. \1. A local government in a county whose population is 100,000 or more shall establish a fund for the extraordinary maintenance, repair or improvement of capital projects. The local government shall establish within that fund a separate account for each capital project it undertakes, except a capital project for the construction of public roads or a capital project for the control of floods. The local government shall allocate an amount equal to one-half of 1 percent of the total amount of the bonds sold for each capital project and deposit that amount in the separate account established for that capital project. The proceeds from the sale of those bonds or any other money of the local government may be used to carry out the provisions of this subsection. 2. Any interest and income earned on the money in an account within the fund in excess of any amount which is reserved for rebate payments to the Federal Government pursuant to 26 U.S.C. § 148, as amended, or is otherwise required to be applied in a specific manner by the Internal Revenue Code of 1986, as amended, must be credited to that account. 3. The money in each account within the fund may be used only for the extraordinary maintenance, repair or improvement of the capital project or a facility which replaces that capital project. The money in each account within the fund at the end of the fiscal year may not revert to any other fund or be a surplus for any purpose other than the purpose specified in this subsection. If the local government sells any capital project for which an account within the fund was established, any balance remaining in that account must be used to reduce the debt of the local government. 4. The annual budget and audit report of the local government prepared pursuant to NRS 354.624 must specifically identify: (a) Each fund and every account within that fund established pursuant to this section and indicate in detail any extraordinary maintenance, repairs or improvements of the capital project that have been paid for with money from the fund; and (b) Any planned accumulation of money in each fund and every account within the fund. The audit report must include a statement by the auditor whether the local government has complied with the provisions of this subsection. \\Sec. 6. \1. A local government in a county whose population is less than 100,000 may establish a fund for the extraordinary maintenance, repair or improvement of capital projects. If the local government establishes such a fund, the local government must establish within that fund a separate account for each capital project it undertakes, except a capital project for the construction of public roads or a capital project for the control of floods. 2. Any interest and income earned on the money in an account within the fund in excess of any amount which is reserved for rebate payments to the Federal Government pursuant to 26 U.S.C. § 148, as amended, or is otherwise required to be applied in a specific manner by the Internal Revenue Code of 1986, as amended, must be credited to that account. 3. The money in each account within the fund may be used only for the extraordinary maintenance, repair or improvement of the capital project or a facility which replaces that capital project. The money in each account within the fund at the end of the fiscal year may not revert to any other fund or be a surplus for any purpose other than the purpose specified in this subsection. If the local government sells any capital project for which an account within the fund was established, any balance remaining in that account must be used to reduce the debt of the local government. 4. The annual budget and audit report of the local government prepared pursuant to NRS 354.624 must specifically identify: (a) Each fund and every account within that fund established pursuant to this section and indicate in detail any extraordinary maintenance, repairs or improvements of the capital project that have been paid for with money from the fund; and (b) Any planned accumulation of money in each fund and every account within the fund. The audit report must include a statement by the auditor whether the local government has complied with the provisions of this subsection. \\Sec. 7. \1. The governing body of a local government may, by resolution, establish a fund to stabilize the operation of the local government. 2. The money in the fund must be used only if the total actual revenue of the local government falls short of the total anticipated revenue in the general fund for the fiscal year in which the local government uses that money. The money in the fund at the end of the fiscal year may not revert to any other fund or be a surplus for any purpose other than the purpose specified in this subsection. 3. The balance in the fund must not exceed 10 percent of the expenditures from the general fund for the previous fiscal year, excluding any federal funds expended by the local government. \\Sec. 8. \The total amount of money which may be transferred in a fiscal year from the general fund of a local government to the funds established pursuant to sections 3, 4 and 7 of this act must not exceed 10 percent of the total amount of the budgeted expenditures of the general fund, plus any money transferred from the general fund, other than the money transferred to those funds, for that fiscal year. \\Sec. 9. NRS 354.470 is hereby amended to read as follows: 354.470 NRS 354.470 to 354.626, inclusive, \and sections 2 to 8, inclusive, of this act,\\ may be cited as the Local Government Budget Act. Sec. 10. NRS 354.474 is hereby amended to read as follows: 354.474 1. Except as otherwise provided in subsections 2 and 3, the provisions of NRS 354.470 to 354.626, inclusive,\ and sections 2 to 8, inclusive, of this act,\\ apply to all local governments. For the purpose of NRS 354.470 to 354.626, inclusive [:] \, and sections 2 to 8, inclusive, of this act:\\ (a) "Local government" means every political subdivision or other entity which the right to levy or receive money from ad valorem or other taxes or any mandatory assessments, and includes \,\\ without limitation \,\\ counties, cities, towns, boards, school districts and other districts organized pursuant to chapters 244A, 309, 318, 379, 474, 541, 543 and 555 of NRS, NRS 450.550 to 450.700, inclusive, and any agency or department of a county or city which prepares a budget separate from that of the parent political subdivision. (b) "Local government" does not include the Nevada rural housing authority. 2. An irrigation district organized pursuant to chapter 539 of NRS shall fix rates and levy assessments as provided in NRS 539.667 to 539.683, inclusive. The levy of such assessments and the posting and publication of claims and annual financial statements as required by chapter 539 of NRS shall be deemed compliance with the budgeting, filing and publication requirements of NRS 354.470 to 354.626, inclusive, but any such irrigation district which levies an ad valorem tax shall comply with the filing and publication requirements of NRS 354.470 to 354.626, inclusive, in addition to the requirements of chapter 539 of NRS. 3. An electric light and power district created pursuant to chapter 318 of NRS shall be deemed to have fulfilled the requirements of NRS 354.470 to 354.626, inclusive, \and sections 2 to 8, inclusive, of this act,\\ for a year in which the district does not issue bonds or levy an assessment if the district files with the department of taxation a copy of all documents relating to its budget for that year which the district submitted to the Rural Electrification Administration of the United States Department of Agriculture. Sec. 11. NRS 354.476 is hereby amended to read as follows: 354.476 As used in NRS 354.470 to 354.626, inclusive,\ and sections 2 to 8, inclusive, of this act,\\ unless the context otherwise requires, the words and terms defined in NRS 354.478 to 354.580, inclusive, \and section 2 of this act,\\ have the meanings ascribed to them in those sections. Sec. 12. Section 10 of this act becomes effective at 12:01 a.m. on October 1, 1995. -30-