1. Except as otherwise provided in this section and NRS 354.750 and 355.171, the governing body of a local government or an administrative entity established pursuant to NRS 277.080 to 277.180, inclusive, that is not a local government may purchase for investment the following securities and no others:
(a) Bonds and debentures of the United States, the maturity dates of which do not extend more than 10 years after the date of purchase.
(b) A bond, note or other obligation issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, the International Finance Corporation or the Inter-American Development Bank that:
(1) Is denominated in United States dollars;
(2) Is a senior unsecured unsubordinated obligation;
(3) At the time of purchase has a remaining term to maturity of 5 years or less; and
(4) Is rated by a nationally recognized rating service as "AA" or its equivalent, or better,
except that investments pursuant to this paragraph may not, in aggregate value, exceed 15 percent of the total par value of the portfolio as determined at the time of purchase.
(c) A bond, note or other obligation publicly issued in the United States by a foreign financial institution, corporation or government that:
(1) Is denominated in United States dollars;
(2) Is a senior unsecured unsubordinated obligation;
(3) Is registered with the Securities and Exchange Commission in accordance with the provisions of the Securities Act of 1933, §§ 77a et seq., as amended;
(4) Is publicly traded;
(5) Is purchased from a registered broker-dealer;
(6) At the time of purchase has a remaining term to maturity of 5 years or less; and
(7) Is rated by a nationally recognized rating service as "AA" or its equivalent, or better,
except that investments pursuant to this paragraph may not, in aggregate value, exceed 10 percent of the total par value of the portfolio as determined at the time of purchase.
(d) Farm loan bonds, consolidated farm loan bonds, debentures, consolidated debentures and other obligations issued by federal land banks and federal intermediate credit banks under the authority of the Federal Farm Loan Act, formerly 12 U.S.C. §§ 636 to 1012, inclusive, and §§ 1021 to 1129, inclusive, and the Farm Credit Act of 1971, 12 U.S.C. §§ 2001 to 2259, inclusive, and bonds, debentures, consolidated debentures and other obligations issued by banks for cooperatives under the authority of the Farm Credit Act of 1933, formerly 12 U.S.C. §§ 1131 to 1138e, inclusive, and the Farm Credit Act of 1971, 12 U.S.C. §§ 2001 to 2259, inclusive.
(e) Bills and notes of the United States Treasury, the maturity date of which is not more than 10 years after the date of purchase.
(f) Obligations of an agency or instrumentality of the United States of America or a corporation sponsored by the government, the maturity date of which is not more than 10 years after the date of purchase.
(g) Negotiable certificates of deposit issued by commercial banks, insured credit unions, savings and loan associations or savings banks.
(h) Securities which have been expressly authorized as investments for local governments by any provision of Nevada Revised Statutes or by any special law.
(i) Nonnegotiable certificates of deposit issued by insured commercial banks, insured credit unions, insured savings and loan associations or insured savings banks, except certificates that are not within the limits of insurance provided by an instrumentality of the United States, unless those certificates are collateralized in the same manner as is required for uninsured deposits by a county treasurer pursuant to NRS 356.133. For the purposes of this paragraph, any reference in NRS 356.133 to a "county treasurer" or "board of county commissioners" shall be deemed to refer to the appropriate financial officer or governing body of the local government purchasing the certificates.
(j) Subject to the limitations contained in NRS 355.177, negotiable notes or medium-term obligations issued by local governments of the State of Nevada pursuant to NRS 350.087 to 350.095, inclusive.
(k) Bankers’ acceptances of the kind and maturities made eligible by law for rediscount with Federal Reserve Banks, and generally accepted by banks or trust companies which are members of the Federal Reserve System. Eligible bankers’ acceptances may not exceed 180 days’ maturity. Purchases of bankers’ acceptances may not exceed 20 percent of the money available to a local government for investment as determined at the time of purchase.
(l) Obligations of state and local governments:
(1) If:
(I) The interest on the obligation is exempt from gross income for federal income tax purposes; and
(II) The obligation has been rated "A" or higher by one or more nationally recognized bond credit rating agencies; or
(2) If the obligation is secured by the proceeds that are paid into the tax increment account of a tax increment area created by a municipality pursuant to NRS 278C.220.
(m) Commercial paper issued by a corporation organized and operating in the United States or by a depository institution licensed by the United States or any state and operating in the United States that:
(1) At the time of purchase has a remaining term to maturity of no more than 270 days; and
(2) Is rated by a nationally recognized rating service as "A-1," "P-1" or its equivalent, or better,
except that investments pursuant to this paragraph may not, in aggregate value, exceed 25 percent of the total par value of the portfolio as determined at the time of purchase, and not more than 5 percent of the total par value of the portfolio may be invested in commercial paper issued by any one corporation or depository institution. If the rating of an obligation is reduced to a level that does not meet the requirements of this paragraph, the investment advisor must report the reduction in the rating to the governing body of the local government that purchased the investment, the governing body of the local government or, if the purchase was effected by the State Treasurer pursuant to his or her investment of a pool of money from local governments, the State Treasurer must take such action as the governing body or State Treasurer deems appropriate to preserve the principal value and integrity of the portfolio as a whole and the governing body or State Treasurer, as applicable, must report to the State Board of Finance any action taken pursuant to this paragraph.
(n) Money market mutual funds which:
(1) Are registered with the Securities and Exchange Commission;
(2) Are rated by a nationally recognized rating service as "AAA" or its equivalent; and
(3) Invest only in:
(I) Securities issued by the Federal Government or agencies of the Federal Government;
(II) Master notes, bank notes or other short-term commercial paper rated by a nationally recognized rating service as "A-1," "P-1" or its equivalent, or better, issued by a corporation organized and operating in the United States or by a depository institution licensed by the United States or any state and operating in the United States; or
(III) Repurchase agreements that are fully collateralized by the obligations described in sub-subparagraphs (I) and (II).
(o) Obligations of the Federal Agricultural Mortgage Corporation.
2. Repurchase agreements are proper and lawful investments of money of a governing body of a local government for the purchase or sale of securities which are negotiable and of the types listed in subsection 1 if made in accordance with the following conditions:
(a) The governing body of the local government shall designate in advance and thereafter maintain a list of qualified counterparties which:
(1) Regularly provide audited and, if available, unaudited financial statements;
(2) The governing body of the local government has determined to have adequate capitalization and earnings and appropriate assets to be highly creditworthy; and
(3) Have executed a written master repurchase agreement in a form satisfactory to the governing body of the local government pursuant to which all repurchase agreements are entered into. The master repurchase agreement must require the prompt delivery to the governing body of the local government and the appointed custodian of written confirmations of all transactions conducted thereunder, and must be developed giving consideration to the Federal Bankruptcy Act.
(b) In all repurchase agreements:
(1) At or before the time money to pay the purchase price is transferred, title to the purchased securities must be recorded in the name of the appointed custodian, or the purchased securities must be delivered with all appropriate, executed transfer instruments by physical delivery to the custodian;
(2) The governing body of the local government must enter a written contract with the custodian appointed pursuant to subparagraph (1) which requires the custodian to:
(I) Disburse cash for repurchase agreements only upon receipt of the underlying securities;
(II) Notify the governing body of the local government when the securities are marked to the market if the required margin on the agreement is not maintained;
(III) Hold the securities separate from the assets of the custodian; and
(IV) Report periodically to the governing body of the local government concerning the market value of the securities;
(3) The market value of the purchased securities must exceed 102 percent of the repurchase price to be paid by the counterparty and the value of the purchased securities must be marked to the market weekly;
(4) The date on which the securities are to be repurchased must not be more than 90 days after the date of purchase; and
(5) The purchased securities must not have a term to maturity at the time of purchase in excess of 10 years.
3. The securities described in paragraphs (a), (d) and (e) of subsection 1 and the repurchase agreements described in subsection 2 may be purchased when, in the opinion of the governing body of the local government, there is sufficient money in any fund of the local government to purchase those securities and the purchase will not result in the impairment of the fund for the purposes for which it was created.
4. When the governing body of the local government has determined that there is available money in any fund or funds for the purchase of bonds as set out in subsection 1 or 2, those purchases may be made and the bonds paid for out of any one or more of the funds, but the bonds must be credited to the funds in the amounts purchased, and the money received from the redemption of the bonds, as and when redeemed, must go back into the fund or funds from which the purchase money was taken originally.
5. Any interest earned on money invested pursuant to subsection 3, may, at the discretion of the governing body of the local government, be credited to the fund from which the principal was taken or to the general fund of the local government.
6. The governing body of a local government may invest any money apportioned into funds and not invested pursuant to subsection 3 and any money not apportioned into funds in bills and notes of the United States Treasury, the maturity date of which is not more than 1 year after the date of investment. These investments must be considered as cash for accounting purposes, and all the interest earned on them must be credited to the general fund of the local government.
7. This section does not authorize the investment of money administered pursuant to a contract, debenture agreement or grant in a manner not authorized by the terms of the contract, agreement or grant.
8. As used in this section:
(a) "Counterparty" means a bank organized and operating or licensed to operate in the United States pursuant to federal or state law or a securities dealer which is:
(1) A registered broker-dealer;
(2) Designated by the Federal Reserve Bank of New York as a "primary" dealer in United States government securities; and
(3) In full compliance with all applicable capital requirements.
(b) "Local government" has the meaning ascribed to it in NRS 354.474.
(c) "Repurchase agreement" means a purchase of securities by the governing body of a local government from a counterparty which commits to repurchase those securities or securities of the same issuer, description, issue date and maturity on or before a specified date for a specified price.
[1:95:1945; 1943 NCL § 1987.01] + [2:95:1945; 1943 NCL § 1987.02] — (NRS A 1959, 36, 424; 1967, 275; 1969, 1087; 1971, 270; 1973, 1091; 1975, 268; 1979, 448, 1887; 1985, 2110; 1989, 1260; 1991, 106, 341, 343; 1993, 211, 2286, 2289; 1995, 1823; 1999, 1481; 2001, 598, 2296, 2327; 2003, 162; 2003, 20th Special Session, 281; 2015, 3209; 2019, 661)