Existing law provides that the State Treasurer: (1) shall have charge of all investments of money and the sale of all securities of the State Permanent School Fund; and (2) if there is a sufficient amount of uninvested money in the Fund, shall negotiate for the investment of the money in certain investments. (NRS 355.050, 355.060) Section 1 of this bill expands the list of authorized investments for money in the State Permanent School Fund to include: (1) certain commercial paper issued by certain corporations, trusts and limited-liability companies organized and operating in the United States and depository institutions licensed by the United States; and (2) certain notes, bonds and other unconditional obligations issued by certain corporations organized and operating in the United States or depository institutions licensed by the United States. Under existing law, the State Treasurer is prohibited from making certain investments of money in the State Permanent School Fund unless the State Treasurer obtains a judicial determination that such an investment does not violate the prohibition in the Nevada Constitution against the State of Nevada donating or loaning state money or credit, or subscribing to or being interested in the stock of any company, association or corporation, except a corporation that is formed for educational or charitable purposes. (Nev. Const. Art. 8, § 9; NRS 355.060) Section 1 prohibits the State Treasurer from investing in such commercial paper and notes, bonds and other unconditional obligations issued by certain corporations, trusts, limited-liability companies and depository institutions without obtaining a judicial determination that such an investment does not violate the prohibition in the Nevada Constitution. Upon obtaining a judicial determination that an investment does not violate the Nevada Constitution, existing law authorizes the State Treasurer to transfer up to $75,000,000 from the State Permanent School Fund to a corporation for public benefit and requires the corporation by agreement to provide private equity funding to businesses engaged in certain industries, at least 70 percent of which funding must be provided to businesses located or seeking to locate in Nevada. (NRS 355.280) Section 4 of this bill: (1) decreases the amount of private equity funding such a corporation for public benefit must agree to provide to certain businesses located in this State or seeking to locate in this State from at least 70 percent to more than 50 percent; and (2) provides that the corporation for public benefit may provide private equity funding to a pooled fund that includes businesses located outside of this State provided that more than 50 percent of the funding is provided to certain businesses located in this State or seeking to locate in this State. Existing law authorizes the State Treasurer to invest money from the General Portfolio of the State in certain categories of bonds and other securities. (NRS 355.140) Section 2 of this bill: (1) increases from 20 to 25 percent the maximum share of the aggregate value of the General Portfolio that is authorized to be invested in bankers' acceptances of the kind and maturities made eligible by law for rediscount with Federal Reserve banks or trust companies which are members of the Federal Reserve System; and (2) authorizes investment in commercial paper issued by certain trusts or limited-liability companies, in addition to the existing authority to invest in commercial paper issued by certain corporations. Existing law prescribes the bonds and other securities that are proper and lawful investments for a local government and certain administrative entities. (NRS 355.170) Section 3 of this bill revises these authorized investments to require that investments in negotiable certificates of deposit: (1) must have a remaining term to maturity of 5 years or less at the time of purchase; and (2) must, under certain circumstances, be rated by a nationally recognized rating service as “A-1,” “P-1” or its equivalent, or better. Section 3 also provides that not more than 5 percent of the total par value of the portfolio may be invested in notes, bonds and other unconditional obligations issued by any one commercial bank, insured credit union, savings and loan association or savings bank. Section 3 further increases from 20 to 25 percent the maximum share of the money available to a local government for investment that is authorized to be invested in bankers' acceptances of the kind and maturities made eligible by law for rediscount with Federal Reserve banks or trust companies which are members of the Federal Reserve System. Lastly, section 3 removes the requirement that to invest in obligations of state and local governments, the interest on the obligation must be exempt from gross income for federal income tax purposes.

Statutes affected:
As Introduced: 355.060, 355.140, 355.170, 355.280
Reprint 1: 355.060, 355.140, 355.170, 355.280
As Enrolled: 355.060, 355.140, 355.170, 355.280
BDR: 355.060, 355.140, 355.170, 355.280