NRS 350.155 Sale by competitive bid: Requirements; exceptions; contents of certificate required for certain bonds; filing and approval of certificate; publication of invitation for competitive bids.

878 words·~4 min read·/nv/chapter-350-municipal-obligations/350-155·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

1. Except as otherwise provided in subsection 2, a municipality shall sell the bonds it issues by competitive bid if the credit rating for the bonds or any other bonds of the municipality with the same security, determined without regard to insurance for the bonds or any other independent enhancement of credit, is rated by a nationally recognized rating service as “A-,” “A,” “AA,” “AAA,” or their equivalents, 90 days before and on the day the bonds are sold and:

(a)The bonds are general obligation bonds;

(b)The primary security for the bonds is an excise tax; or

(c)The bonds are issued pursuant to chapter 271 of NRS and are secured by a pledge of the taxing power and the general fund of the municipality.

2. The provisions of subsection 1 and NRS 350.175 and 350.185 do not apply to:

(a)Any bond which is issued with a variable rate of interest.

(b)A bond issue whose principal amount is $1,000,000 or less.

(c)A bond issue with a term of 3 years or less.

(d)A bond issue for which an invitation for competitive bids was issued and for which no bids were received or all bids were rejected.

(e)Leases, contracts for purchase by installment and certificates of participation if the obligations of the municipality thereunder will terminate when the municipality fails to appropriate money to pay that obligation for the next fiscal year.

(f)Economic development revenue bonds issued pursuant to the city economic development revenue bond law or the county economic development revenue bond law.

(g)Bonds sold by the municipality to:

(1)The United States or any agency or instrumentality thereof;

(2)The State of Nevada;

(3)Any other municipality; or

(4)Not more than 10 investors, each of whom certifies that he or she:

(I)Has a net worth of $500,000 or more; and

(II)Is purchasing for investment and not for resale.

(h)Bonds which require unusual methods of financing, if the chief administrative officer of the municipality certifies in writing that the proposed method of financing:

(1)Has not been used previously by any municipality in this state; and

(2)May provide a substantial benefit to the municipality.

(i)Refunding bonds, if the chief administrative officer of the municipality certifies in writing that the use of a negotiated sale may provide a substantial benefit to the municipality which would not be available if the bonds were sold by competitive bid.

(j)Bonds which are sold at a time when, because of particular conditions in the market, a negotiated sale may provide a benefit to the municipality which would not be available if the bonds were sold by competitive bid, if the chief administrative officer of the municipality so certifies in writing.

(k)Bonds which are issued pursuant to chapter 271 of NRS and are not secured by a pledge of the taxing power and general fund of the municipality.

(l)Revenue bonds which are issued pursuant to chapter 350A of NRS and are secured by a pledge of the allocable local revenues of the municipality.

3. The certificate required by paragraph

(h)of subsection 2 must specifically describe the proposed method of financing. The certificate required by paragraph

(i)of subsection 2 must specifically describe the circumstances that may provide a substantial benefit if the refunding bonds are negotiated. The certificate required by paragraph

(j)of subsection 2 must specifically describe the particular conditions in the market which indicate that a negotiated sale of the bonds may provide a benefit to the municipality. Each certificate required pursuant to subsection 2 must be submitted to the governing body of the municipality at a regularly scheduled meeting of that body and include:

(a)The estimated amount of the benefit which will accrue to the municipality.

(b)If the municipality has a financial adviser, a written report prepared by that financial adviser which specifically describes the method of sale which will be used for the proposed financing.

4. A copy of:

(a)The certificate required by paragraph (h),

(i)or

(j)of subsection 2; and

(b)The report required pursuant to subsection 3,

Ê must be filed with the debt management commission of the county where the municipality is located, the county clerk and the Department of Taxation. Before entering into a contract to sell bonds, at least two-thirds of the members of the governing body of the municipality must approve the certificate.

5. If a municipality is required to sell the bonds it issues by competitive bid pursuant to the provisions of this section, it must cause an invitation for competitive bids, or notice thereof, to be published before the date of the sale in the daily or weekly version of the Bond Buyer, published at One State Street Plaza in New York City, New York, or any successor publication.

6. As used in this section, “invitation for competitive bids” means a process by which sealed bids or the reasonable equivalent thereof, as approved by the governing body of a municipality, are solicited, received and publicly opened at a specified time, place and date.