A.B. 655 Assembly Bill No. 655--Committee on Commerce May 24, 1995 _____________ Referred to Committee on Commerce SUMMARY--Converts housing division of department of business and industry into Nevada housing agency. (BDR 25-1896) FISCAL NOTE: Effect on Local Government: No. Effect on the State or on Industrial Insurance: Yes. EXPLANATION--Matter in italics is new; matter in bra ckets [ ] is material to be omitted. AN ACT relating to the state executive department; converting the housing division of the department of business and industry into the Nevada housing agency; providing that the housing agency is exempt from certain provisions relating to public records, public meetings, public purchasing and public finances; providing that the housing agency is to be subject to audit by the legislative auditor; 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 319 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 6, inclusive, of this act. Sec. 2. \"Agency" means the Nevada housing agency. \\Sec. 3. \1. The Nevada housing agency is hereby created. 2. The board of the Nevada housing agency is hereby created, consisting of the state treasurer, the director of the department of business and industry and seven members appointed by the governor. The governor shall appoint five members who are knowledgeable in the areas of residential construction, real estate sales and marketing, property management, mortgage banking and corporate finance and two members with experience in the development or management of nonprofit housing. 3. Each member of the board must be appointed to a term of 4 years and may be reappointed. If a vacancy occurs during a member's term, the governor shall appoint a person to replace that member for the remainder of the unexpired term. 4. The board shall appoint an executive director of the agency. \\Sec. 4. \1. The executive director: (a) Shall administer the provisions of law relating to the agency. (b) Shall devote his entire time and attention to the business of his office and shall not pursue any other business or occupation or hold any other office of profit, except for temporary and part-time teaching duties on a university campus. (c) Is in the unclassified service of the state. (d) May appoint a deputy executive director and a chief assistant, who are in the unclassified service of the state. 2. The deputy executive director and chief assistant, if appointed, shall devote their entire time and attention to the business of their respective offices and shall not pursue any other business or occupation or hold any other office of profit. \\Sec. 5. \1. The executive director shall appoint a chief financial officer of the agency, who is in the unclassified service of the state. 2. The chief financial officer must: (a) Be a certified public accountant licensed by this state or another state of the United States; (b) Have 5 years of responsible experience in investment banking and general accounting; or (c) Have a comprehensive knowledge of the principles and practices of public finance and 5 years of responsible experience in that field. 3. The chief financial officer is directly responsible to the executive director. \\Sec. 6. \The agency is exempted from the provisions of chapters 233F, 239, 241, 281, 331 and 333 of NRS, NRS 353.249 to 353.353, inclusive, and chapters 353A, 355, 356 and 378 of NRS. \\Sec. 7. NRS 319.020 is hereby amended to read as follows: 319.020 The legislature finds and declares that: 1. There exists a serious shortage of decent, safe and sanitary housing in this state available to persons and families of low and moderate income and that many other persons and families are unable to secure or afford, without assistance, decent, safe and sanitary housing. 2. This condition is conducive to disease, crime, environmental decline and poverty, impairs the economic value of large areas, which are characterized by depreciated value, impaired investments, reduced capacity to pay taxes, and lack of new development to meet the needs of area residents, and is a menace to the health, safety, morals and welfare of the residents of this state. 3. This condition results in a loss of population and further deterioration accompanied by added costs to communities for creation of new public facilities and services elsewhere. 4. It is difficult and uneconomic for individual owners independently to remedy this condition. 5. One major cause of this condition has been recurrent shortages of money from private sources, and such shortages have contributed to reductions in construction of new residential housing and have made the sale and purchase of existing residential housing a virtual impossibility in certain parts of the state. Other causes of this condition include increases in rental values and decreases in the availability of federal funding for housing. 6. The ordinary operations of private enterprise have not in the past corrected these conditions. 7. The reduction in housing construction has caused substantial unemployment and underemployment in the construction industry which, together with the shortage of affordable housing, results in hardships, wastes human resources, increases the public assistance burdens of the state, impairs the security of family life, impedes the economic and physical development of the state and adversely affects the welfare, health and prosperity of all the people of this state. 8. A stable supply of adequate money for the financing and provision of other assistance to obtain housing is required to encourage new housing in an orderly and sustained manner, to increase the availability of affordable housing, and thereby to reduce these detrimental results. 9. It is necessary to create [a housing division in the department of business and industry] \the Nevada housing agency\\ to encourage the investment of private capital and stimulate the financing of housing through the use of public financing to provide mortgage loans and to make loans to and purchase mortgage loans from mortgage lenders, and to perform any other function authorized by this chapter. 10. It is appropriate for the \Nevada\\ housing [division] \agency\\ to issue obligations regardless of their characterization for the purposes of federal income taxation by the United States Department of the Treasury. 11. All of the purposes set forth in this chapter are public purposes and uses for which public money may be borrowed, expended, advanced, loaned or granted. This chapter must be liberally construed to accomplish the public purposes and alleviate the detrimental conditions set forth in this section. Sec. 8. NRS 319.030 is hereby amended to read as follows: 319.030 As used in this chapter, \unless the context otherwise requires,\\ the words and terms defined in NRS 319.040 to 319.135, inclusive, \and section 2 of this act,\\ have the meanings ascribed to them in those sections. Sec. 9. NRS 319.040 is hereby amended to read as follows: 319.040 ["Administrator"] \"Executive director"\\ means the [administrator] \executive director\\ of the [division.] \agency.\\ Sec. 10. NRS 319.060 is hereby amended to read as follows: 319.060 "Eligible family" means a person or family, selected without regard to race, creed, national origin or sex, determined by the [division] \agency\\ to require such assistance as is made available by this chapter on account of insufficient personal or family income after taking into consideration, without limitation, such factors as: 1. The amount of the total income of that person or family available for housing needs; 2. The size of the family; 3. The cost and condition of housing facilities available; 4. The ability of the person or family to compete successfully in the normal private housing market and to pay the amounts at which private enterprise is providing decent, safe and sanitary housing; 5. If appropriate, standards established for various federal programs determining eligibility based on income of those persons and families; and 6. Service in the Armed Forces of the United States with a minimum of 90 days on active duty at some time between: (a) April 21, 1898, and June 15, 1903; (b) April 6, 1917, and November 11, 1918; (c) December 7, 1941, and December 31, 1946; (d) June 25, 1950, and January 31, 1955; or (e) January 1, 1961, and May 7, 1975, and at least 2 years' continuous residence in Nevada immediately preceding any application for assistance under this chapter. Sec. 11. NRS 319.100 is hereby amended to read as follows: 319.100 "Mortgage" means a mortgage deed, deed of trust or other instrument which constitutes a lien on real property in fee simple or on a leasehold under a lease whose remaining term, at the time [such] \the\\ mortgage is acquired, does not expire for at least that number of years beyond the maturity date of the obligation secured by [such] \the\\ mortgage as is established by the [division] \agency\\ as necessary to protect its interest as mortgagee. Sec. 12. NRS 319.130 is hereby amended to read as follows: 319.130 "Residential housing" means one or more new or existing residential dwelling units financed pursuant to the provisions of this chapter for the primary purpose of providing decent, safe and sanitary dwelling accommodations for eligible families in need of housing, including any buildings, manufactured homes, mobile homes, mobile home parks, land, improvements, equipment, facilities, other real or personal property, or other related nonhousing facilities which are necessary, convenient or desirable in connection therewith, and \,\\ including \,\\ but not limited to \,\\ streets, sewers, utilities, parks, site preparation, landscaping and other nonhousing facilities such as administrative, community, transportation, health, recreational, educational, commercial, retail, welfare and public facilities which the [division] \agency\\ determines improve the quality of the residential living for eligible families. Sec. 13. NRS 319.135 is hereby amended to read as follows: 319.135 "Sponsor" means any natural person, association, corporation, joint venture, partnership, trust, state agency, municipality or other legal entity, or any combination thereof, which: 1. Has been approved by the [division] \agency\\ to acquire, own, construct, rehabilitate, operate, lease, manage or maintain a housing project; and 2. Except for a state agency or municipality, has agreed to subject itself to regulation by the [division.] \agency.\\ Sec. 14. NRS 319.140 is hereby amended to read as follows: 319.140 1. The [division] \agency\\ shall administer the provisions of this chapter. The [administrator] \executive director\\ may adopt, amend or rescind regulations, consistent with the provisions of this chapter, appropriate to carry out its purposes. 2. The [administrator] \executive director\\ may make copies of all proceedings and other records and documents of the [division] \agency\\ and issue certificates under the seal of the [division] \agency\\ to the effect that the copies are true copies, and all persons dealing with the [division] \agency\\ may rely upon such certificates. 3. The [division] \agency\\ may employ or contract for the services of attorneys, accountants, financial experts and any other advisers, employees, consultants and agents as the [administrator] \executive director\\ may determine to be necessary. \All employees of the agency are in the unclassified service of the state.\\ 4. Before September 1 of each even-numbered year the [division] \agency\\ shall submit a report of its activities for the biennium ending June 30 of that year to the governor, state treasurer and the legislature. [Each such report shall] \The report must\\ set forth a complete operating and financial statement of the [division during such] \agency during the\\ biennium. The [division] \agency\\ shall cause an audit of its books and accounts to be made at least once in each fiscal year by a certified public accountant. The certified public accountant may audit the [division's] \agency's\\ books and accounts for consecutive audit periods as requested by the [division.] \agency.\\ Sec. 15. NRS 319.145 is hereby amended to read as follows: 319.145 1. The [division] \agency\\ is hereby designated as the housing credit agency for the State of Nevada, as that term is defined in 26 U.S.C. § [42(h)(7)(A),] \42(h)(8)(A),\\ for the purpose of allocating and distributing credits for low-income housing pursuant to 26 U.S.C. § 42. 2. The [division:] \agency:\\ (a) May adopt regulations establishing procedures necessary for the proper allocation and distribution of credits for low-income housing pursuant to 26 U.S.C. § 42; and (b) Shall exercise all powers necessary to administer the allocation and distribution of those credits. 3. The [division] \agency\\ may act for the State of Nevada as the agency to facilitate the state's designation as a participating jurisdiction in the HOME Investment [Partnership] \Partnerships\\ Act (42 U.S.C. §§ 12701 et seq.). Upon receiving such a designation, the [division] \agency\\ may exercise all powers necessary to administer the program. Sec. 16. NRS 319.150 is hereby amended to read as follows: 319.150 The [division] \agency\\ may: 1. Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter with any governmental agency, private corporation or other entity, or natural person. 2. Enter into agreements or other transactions with, and accept grants from and cooperate with any governmental agency or other source in furtherance of the purposes of this chapter. Sec. 17. NRS 319.160 is hereby amended to read as follows: 319.160 The [division] \agency\\ may provide advice, technical information, training and educational services, conduct research and promote the development of housing, building technology and related fields. Sec. 18. NRS 319.165 is hereby amended to read as follows: 319.165 1. The [division] \agency\\ may create or cause to be created: (a) Nonprofit corporations, pursuant to chapter 82 of NRS; (b) Grantor trusts; or (c) Other instrumentalities, which the [division] \agency\\ determines are necessary or convenient for the exercise of its powers and duties pursuant to this chapter. 2. Any corporation created pursuant to subsection 1 [must be] \is\\ subject to the control of the [administrator.] \executive director.\\ The purposes, powers and operation of the corporation must be consistent with the purposes, powers and duties of the [division.] \agency.\\ 3. Any notes, bonds or other obligations issued by a corporation, trust or other instrumentality created pursuant to subsection 1 are subject to the same requirements prescribed for notes, bonds and other obligations of the [division] \agency\\ in NRS 319.171, 319.270, 319.280, 319.323 and 319.327. Sec. 19. NRS 319.170 is hereby amended to read as follows: 319.170 Except as otherwise provided in NRS 319.500, the [division may:] \agency shall:\\ 1. Establish such funds or accounts as may be necessary or desirable for \the\\ furtherance of the purposes of this chapter. 2. Invest or deposit its money, subject to any agreement with bondholders or noteholders \.\\ [, and is not required to keep any of its money in the state treasury.] The provisions of chapters 355 and 356 of NRS do not apply to such investments or deposits. Sec. 20. NRS 319.171 is hereby amended to read as follows: 319.171 Except as otherwise provided in NRS 319.500, the [division] \agency\\ may invest its money in collateralized mortgage obligations or in trusts created to finance, acquire or invest in collateralized mortgage obligations if the collateralized mortgage obligations or trusts so created are: 1. In furtherance of the purposes of the [division;] \agency;\\ and 2. Rated within one of the top three rating categories of a national rating service at the time the investment is made. Sec. 21. NRS 319.173 is hereby amended to read as follows: 319.173 1. The [administrator] \executive director\\ shall appoint an advisory committee on housing to advise him, pursuant to subsection 4, on the investment of money or issuance of obligations. 2. The advisory committee consists of five members as follows: (a) One representative of an association of mortgage bankers in this state chosen by the [administrator,] \executive director,\\ selected from a list of names submitted to the [administrator] \executive director\\ by that association. (b) One representative of persons engaged in residential construction in this state. (c) One representative of banks in this state. (d) One representative of savings and loan associations in this state. (e) One representative of financial institutions in general that loan money for mortgages. 3. The advisory committee shall meet from time to time at the written request of the [administrator] \executive director\\ or a majority of the members of the committee. 4. At least 15 days before the [: (a) Investment] \investment\\ of money of the [division] \agency\\ pursuant to NRS 319.171 [; or (b) Submission of findings to the state board of finance pursuant to subsection 4 of NRS 319.323, the administrator] \, the executive director\\ shall submit a plan of investment or a plan of financing with any proposed findings to the advisory committee for its review and comment. 5. The [administrator] \executive director\\ shall report at least twice each year to the committee on the activities of the [division.] \agency.\\ Sec. 22. NRS 319.175 is hereby amended to read as follows: 319.175 The [division, with the approval of the state board of finance:] \agency:\\ 1. May acquire land from any governmental agency; 2. Shall sell the land for the purpose of \the\\ development of housing for persons of low or moderate income pursuant to this chapter; and 3. Shall charge a price for the land which is equal to its cost of acquiring and transferring the land. Sec. 23. NRS 319.180 is hereby amended to read as follows: 319.180 The [division] \agency\\ may, in connection with any property of which it is the mortgagee: 1. Acquire or contract to acquire real or personal property, or any interest therein, on a temporary or permanent basis in its own name by gift, purchase, transfer, foreclosure, lease or otherwise, including rights or easements in property; 2. Hold, sell, assign, lease, encumber, mortgage or otherwise dispose of any real or personal property or any interest therein; 3. Hold, sell, assign or otherwise dispose of any mortgage interest owned by it or under its control, custody or in its possession; 4. Release or relinquish any right, title, claim, lien, interest, easement or demand however acquired, including any equity or right of redemption in property foreclosed by it; and 5. Make any such disposition by private sale, with or without public bidding. Sec. 24. NRS 319.190 is hereby amended to read as follows: 319.190 1. The [division] \agency\\ may make, undertake commitments to make and participate with lending institutions in the making of mortgage loans, make temporary loans and advances in anticipation of mortgage loans, and issue letters of credit pursuant to subsection 2 to finance the acquisition, construction or rehabilitation of residential housing, including multifamily housing. Any loan made by the [division] \agency\\ pursuant to this section must be insured or guaranteed unless it is financed by an issue of obligations of the [division] \agency\\ that are insured or secured by surety bonds, letters of credit not issued by the [division,] \agency,\\ guaranties or other means of assuring repayment of those obligations. Such loans may be made or letters of credit issued only after a determination by the [administrator] \executive director\\ that mortgage loans or letters of credit are not otherwise available from private lenders upon reasonable equivalent terms and conditions. 2. The [division] \agency\\ may issue a letter of credit only if sufficient reserves in the funds established by the [division] \agency\\ are deposited in a separate account to be used to pay any liabilities that may be incurred by issuing the letter of credit. The aggregate amount of outstanding letters of credit issued by the [division] \agency\\ must not exceed $5,000,000. Sec. 25. NRS 319.200 is hereby amended to read as follows: 319.200 Any insured mortgage loan made by the [division shall:] \agency must:\\ 1. Not exceed the amount permitted under the insurance program under which the mortgage is insured. 2. Be secured in such manner, be repaid in such period and bear interest at \such\\ a rate \as is\\ determined by the [division] \agency\\ and permitted under the insurance program under which the mortgage is insured. In addition to such interest charges, the [division] \agency\\ may charge and collect such fees and charges, including reimbursement of the [division's] \agency's\\ operating expenses, financing costs, service charges, insurance premiums and mortgage insurance premiums as the [division] \agency\\ determines to be reasonable. Sec. 26. NRS 319.210 is hereby amended to read as follows: 319.210 1. The [division] \agency\\ may: (a) Invest in, purchase or make commitments to purchase, and take assignments from lending institutions of mortgage loans and promissory notes accompanying [such] \the\\ mortgage loans, including federally insured mortgage loans or participations with lending institutions in such promissory notes and mortgage loans, for the construction, rehabilitation, purchase, leasing or refinancing of residential housing within this state. (b) Sell, at public or private sale, with or without public bidding, any mortgage or other obligation held by the [division.] \agency.\\ 2. At or before the time of purchase, the lending institution shall certify to the [division] \agency\\ with respect to all mortgage loans transferred to the [division:] \agency:\\ (a) That the mortgage loans [transferred to the division] are for residential housing for eligible families within this state; or (b) That the proceeds of sale or its equivalent will be reinvested in mortgage loans for residential housing for eligible families within this state in an aggregate principal amount equal to the amount of [such] \the\\ sale proceeds. Sec. 27. NRS 319.220 is hereby amended to read as follows: 319.220 The [division] \agency\\ may: 1. Renegotiate, refinance or foreclose, or contract for the foreclosure of, any mortgage in default; 2. Waive any default or consent to the modification of the terms of any mortgage; 3. Commence any action to protect or enforce any right conferred upon it by any law, mortgage, contract or other agreement; 4. Bid for and purchase property upon which it holds a mortgage at any foreclosure or at any other sale, or acquire and take possession of any such property; 5. Operate, manage, lease, dispose of and otherwise deal with such property in such manner as may be necessary to protect the interest of the [division] \agency\\ and the holders of its bonds, notes and other obligations; and 6. Consent to any modification with respect to rate of interest, time and payment of any installment of principal or interest, security or any other term of any contract, mortgage, mortgage loan, mortgage loan commitment, contract or agreement of any kind to which the [division] \agency\\ is a party, subject to any agreement with bondholders or noteholders. Sec. 28. NRS 319.230 is hereby amended to read as follows: 319.230 1. The [division] \agency\\ may: (a) Make loans to lending institutions under terms and conditions requiring the proceeds of the loans to be used by the lending institutions for the making of new mortgage loans for residential housing; (b) Purchase securities from lending institutions under terms and conditions requiring that the securities finance mortgage loans for residential housing; \and\\ (c) Require that loans to or securities purchased from lending institutions be additionally secured as to payment of both principal and interest by a pledge of and lien upon collateral security in such amounts and consisting of such obligations, securities, and mortgage loans as the [administrator] \executive director\\ determines to be necessary to assure the payment of the loans or securities purchased and the interest on them as they become due. 2. The [division] \agency\\ may require in the case of any lending institution that any required collateral be lodged with a bank or trust company, located either within or outside the state, designated by the [division] \agency\\ as custodian therefor. In the absence of this requirement, a lending institution shall, if collateral is to be provided for the loan or securities purchased, upon receipt of the proceeds from the [division,] \agency,\\ enter into an agreement with the [division] \agency\\ containing any provisions the [division] \agency\\ deems necessary to identify adequately and maintain and service the collateral and providing that the lending institution [shall] \must\\ hold the collateral as trustee for the benefit of the [division and shall] \agency and must\\ be held accountable as the trustee of an express trust for the application and disposition thereof and the income therefrom solely to the uses and purposes in accordance with the provisions of the agreement. A copy of the agreement and any of its revisions or supplements, which revisions or supplements may add to, delete from, or substitute items of collateral pledged by the agreement, must be filed with the secretary of state. The filing shall be deemed to perfect the security interest of the [division] \agency\\ in the collateral and no filing, recording, possession or other action required under any other law of this state is necessary, and the lien and trust for the benefit of the [division] \agency\\ so created is binding from the time made against all parties having any prior unperfected claim or claims of any kind in tort, contract or otherwise or any subsequent security interests against the lending institution. The [division] \agency\\ may also establish any additional requirements the [administrator] \executive director\\ deems necessary with respect to the pledging, assigning, setting aside or holding of the collateral and the making of substitutions for it or additions to it and the disposition of income and receipts from it. 3. The [division] \agency\\ may collect, enforce the collection of and foreclose on any collateral securing its loan to or purchase of securities from lending institutions and acquire or take possession of the collateral and sell the collateral at public or private sale, with or without public bidding, and otherwise deal with the collateral as may be necessary to protect the interest of the [division] \agency\\ in it, all subject to any agreement with bondholders or noteholders. Sec. 29. NRS 319.235 is hereby amended to read as follows: 319.235 The [division] \agency\\ may finance, through the use of any power conferred on it by this chapter: 1. The acquisition and improvement of real property to be used for rental sites for mobile homes, whether or not the mobile homes are to be financed pursuant to this chapter; and 2. The purchase and installation of equipment and materials to be used in residential dwelling units for conservation of energy or for use of energy from alternative sources, and any related improvements appropriate to any of these purposes. Sec. 30. NRS 319.240 is hereby amended to read as follows: 319.240 The [division] \agency\\ may charge and collect such fees and charges as the [division] \agency\\ may establish from time to time for its lending and mortgage purchase programs. Sec. 31. NRS 319.250 is hereby amended to read as follows: 319.250 The [division] \agency\\ may procure insurance against any loss in connection with its property and other assets, including mortgages and mortgage loans, in such amounts and from such insurers as it deems desirable. Sec. 32. NRS 319.260 is hereby amended to read as follows: 319.260 The [division] \agency\\ shall not finance any residential housing unless, [prior to such] \before that\\ financing, the [administrator] \executive director\\ finds that: 1. There exists a shortage of decent, safe and sanitary housing at rentals or prices which eligible families can afford within the general housing market area as determined by the [administrator.] \executive director.\\ 2. Private enterprise and investment have been unable, without assistance, to provide an adequate supply of decent, safe and sanitary housing in [such] \the\\ housing market area at rentals or prices which persons or families of low and moderate income can afford or to provide sufficient mortgage financing for residential housing for occupancy by such persons or families. 3. The proposed residential housing will increase the supply or improve the quality of decent, safe and sanitary housing for eligible families. 4. The residential housing to be developed or assisted by the [division] \agency\\ pursuant to the provisions of this chapter will be of public use and will provide a public benefit. 5. The [division's] \agency's\\ estimates of its revenues from the financing of the residential housing, together with all subsidies, grants or other financial assistance from governmental agencies or other entities to be received in connection with the residential housing, will be sufficient to pay the amount estimated by the [division] \agency\\ as necessary for debt service on its notes and bonds to be issued for the financing of the residential housing. Sec. 33. NRS 319.270 is hereby amended to read as follows: 319.270 1. Subject to the limitation imposed by subsections 4 and 5, the [division] \agency\\ may issue its negotiable notes and bonds in such principal amount as the [administrator] \executive director\\ determines to be necessary to provide sufficient money for achieving any of its statutory purposes, including the payment of interest on notes and bonds of the [division,] \agency,\\ establishment of bond reserve funds and other reserves to secure the notes and bonds, and all other expenditures of the [division] \agency\\ necessary or convenient to carry out its statutory purposes and powers. 2. Subject to any agreements with holders of notes or bonds, all notes and bonds issued by the [division] \agency\\ are special obligations of the [division] \agency\\ payable out of any revenues, money or other assets of the [division] \agency\\ pledged thereto. 3. In issuing the notes and bonds, the [division] \agency\\ acts as an agency or instrumentality of the State of Nevada. 4. Before any notes or bonds may be issued pursuant to this section, except those issued for the purpose of refunding outstanding notes or bonds, the [administrator] \executive director\\ shall submit a copy of his finding of the conditions prerequisite to the financing of residential housing under this chapter to the state board of finance. If that board approves, the [division] \agency\\ may proceed to issue its notes or bonds in the amount approved, subject to the further limitation of subsection 5. 5. The aggregate principal amount of outstanding bonds, notes and other obligations of the [division] \agency\\ must not exceed $1,250,000,000, of which $100,000,000 must be allocated to veterans who qualify for loans under this chapter, exclusive of any bonds, notes or obligations which have been refunded. The establishment of this debt limitation does not prohibit the [division] \agency\\ from issuing additional bonds, notes or other obligations if the debt limitation is subsequently increased. Sec. 34. NRS 319.280 is hereby amended to read as follows: 319.280 1. The notes and bonds must be signed by the [administrator,] \executive director,\\ who may use a facsimile signature for this purpose, must bear the date or dates and must mature at such a time or times as the [administrator] \executive director\\ determines. The bonds may be issued as serial bonds payable in annual installments or as term bonds or as a combination thereof. The notes and bonds must bear interest at such a rate or rates, be in such denominations, have such registration privileges, be executed in such a manner, be payable in such a medium of payment, at such a place or places within or outside of the state, and be subject to such terms of redemption as the [administrator] \executive director\\ determines. The notes and bonds of the [division] \agency\\ may be sold by the [division] \agency\\ at public or private sale at such a price or prices as the [administrator] \executive director\\ determines except that no note, bond or other obligation issued by the [division] \agency\\ may be initially distributed to the public unless it has received a rating in one of the three highest rating categories from a national rating service. 2. If the [administrator] \executive director\\ whose signature appears on any notes or bonds or coupons ceases to act in that capacity before the delivery of the notes or bonds, his signature is valid and sufficient for all purposes as if he had remained in office until their delivery. 3. The provisions of chapter 349 of NRS do not apply to any bonds, notes or other obligations issued by the [division] \agency\\ under the provisions of this chapter. Sec. 35. NRS 319.290 is hereby amended to read as follows: 319.290 The [division] \agency\\ in issuing any notes or bonds may contract with the holders thereof as to: 1. Pledging all or any part of the revenues of the [division] \agency\\ to secure the payment of the notes or bonds subject to such agreements with noteholders or bondholders as may then exist. 2. Pledging all or any part of the assets of the [division,] \agency,\\ including mortgages and obligations securing such assets, to secure the payment of the notes or bonds subject to such agreements with noteholders or bondholders as may then exist. 3. The use and disposition of the gross income from mortgages owned by the [division] \agency\\ and the payment of principal of mortgages owned by the [division.] \agency.\\ 4. The setting aside of reserves or sinking funds and the regulation and disposition thereof. 5. Limitations on the purpose to which the proceeds of sale of notes or bonds may be applied and pledging [such] \the\\ proceeds to secure the payment of the notes or bonds or of any issue thereof. 6. Limitations on the issuance of additional notes or bonds, the terms upon which additional notes or bonds may be issued and secured, and the refunding of outstanding or other notes or bonds. 7. The procedure, if any, by which the terms of any contract with noteholders or bondholders may be amended or abrogated, the amount of notes or bonds the holders of which must consent thereto, and the manner in which such consent may be given. 8. Limitations on the amount of [moneys] \money\\ to be expended by the [division] \agency\\ for operating expenses of the [division.] \agency.\\ 9. Vesting in a trustee or trustees such property, rights, powers and duties in trust as the [administrator] \executive director\\ may determine, which may include any or all of the rights, powers and duties of the trustee appointed by the bondholders pursuant to this chapter and limiting or abrogating the right of the bondholders to appoint a trustee under this [act] \chapter\\ or limiting the rights, powers and duties of [such] \that\\ trustee. 10. Defining the acts or omissions which [shall] constitute a default in the obligations and duties of the [division] \agency\\ to the holders of the notes or bonds and providing for the rights and remedies of the holders of the notes or bonds in case of such \a\\ default, including as a matter of right the appointment of a receiver, but [such] \the\\ rights and remedies [shall] \must\\ not be inconsistent with the general laws of this state and the other provisions of this chapter. 11. Any other matters, of like or different character, which in any way affect the security or protection of the holders of the notes or bonds. Any pledge made by the [division] \agency\\ is valid and binding from the time when the pledge is made. The revenues, [moneys] \money\\ or property so pledged and thereafter received by the [division] \agency\\ are immediately subject to the lien of [such] \the\\ pledge without any physical delivery thereof or further act, and the lien of any such pledge is valid and binding as against all persons having claims of any kind in tort, contract or otherwise against the [division,] \agency,\\ whether or not [such] \those\\ persons have notice thereof. Neither the proceedings of the [division] \agency\\ relating to the bonds or notes nor any other instrument by which a pledge is created need be recorded. Sec. 36. NRS 319.300 is hereby amended to read as follows: 319.300 In the discretion of the [administrator,] \executive director,\\ bonds issued by the [division] \agency\\ may be secured by a trust indenture or trust indentures by and between the [division] \agency\\ and a corporate trustee, which may be any trust company or bank having the power of a trust company within or outside this state. [Such] \The\\ trust indenture may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the [division] \agency\\ in relation to the exercise of its statutory powers and the custody, safeguarding and application of all [moneys. The division] \money. The agency\\ may provide by [such] \the\\ trust indenture for the payment of the proceeds of the bonds and the revenues to the trustee under [such] \the\\ trust indenture or other depository, and for the method of disbursement thereof, with such safeguards and restrictions as the [administrator] \executive director\\ may determine. All expenses incurred in carrying out [such] \the\\ trust indenture may be treated as part of the operating expenses of the [division. Such] \agency. The\\ trust indenture may limit or abrogate the right of the holders of any bonds, notes or other obligations of the [division] \agency\\ to appoint a trustee under this chapter or limit the rights, powers and duties of [such] \the\\ trustee. Sec. 37. NRS 319.310 is hereby amended to read as follows: 319.310 The [division] \agency\\ may procure or agree to the procurement of insurance or guarantees from any governmental agency or from any private insurance company, of the payment of any bonds or notes or any other evidences of indebtedness thereof issued by the [division] \agency\\ or by any lending institution, and may pay premiums on [such] \that\\ insurance. Sec. 38. NRS 319.320 is hereby amended to read as follows: 319.320 1. The [division,] \agency,\\ subject to such agreements with noteholders or bondholders as may then exist, may, out of any money available therefor, purchase its notes or bonds to retire and cancel them. The price must not exceed: (a) The redemption price then applicable plus accrued interest to the next interest payment thereon if the notes or bonds are then redeemable; or (b) The redemption price applicable on the first date after the purchase upon which the notes or bonds become subject to redemption plus accrued interest to that date if the notes or bonds are not redeemable. 2. The [division] \agency\\ may, in connection with any remarketing or refunding of its notes or bonds or for any of its purposes, acquire, or cause to be acquired, its notes or bonds without retiring and canceling them. Sec. 39. NRS 319.323 is hereby amended to read as follows: 319.323 1. The [division] \agency\\ may, in addition to the notes and bonds authorized by NRS 319.270, issue from time to time its collateralized mortgage obligations or other negotiable notes, bonds or obligations which may be secured by collateral consisting of, otherwise secured in whole or in part by, or which may evidence loans or participations or other interests in loans or participations. Any money acquired from such an issuance must be applied by the [division] \agency\\ to carry out its purposes. 2. Any such collateralized mortgage obligations or other notes, bonds or obligations are subject to the limitations of subsection 5 of NRS 319.270 to the extent they constitute a debt under generally accepted accounting principles. 3. Using the proceeds of collateralized mortgage obligations or other available money, the [division] \agency\\ may purchase or otherwise acquire the loans or participations or other interests in loans or participations which are collateral for, secure or evidence or are evidenced by collateralized mortgage obligations or other notes, bonds or obligations issued by the [division] \agency\\ pursuant to this section. [Such] \The\\ loans may be secured by mortgages on real property outside of this state. [4. Before the issuance of any collateralized mortgage obligations or other bonds, notes or obligations pursuant to this section, the administrator shall submit to the state board of finance a copy of his findings that: (a) The issuance of the obligation is in furtherance of the purposes of the division; and (b) The estimate of the revenues and other amounts to be derived from such financing is sufficient to pay the amount estimated to be necessary for debt service on the collateralized mortgage obligations or other notes, bonds or obligations issued pursuant to this section. If that board approves, the division may proceed to issue such collateralized mortgage obligations or other notes, bonds or obligations in the amount approved.] Sec. 40. NRS 319.325 is hereby amended to read as follows: 319.325 The [division] \agency\\ may: 1. Provide that any bonds or notes issued by the [division] \agency\\ be insured or be secured by surety bonds, letters of credit not issued by the [division,] \agency,\\ guaranties or other means of assuring repayment of [such] \those\\ bonds or notes. 2. Require that any loans, including a mortgage loan, made or purchased by the [division] \agency\\ be insured or be secured by surety bonds, letters of credit not issued by the [division,] \agency,\\ guaranties or other means of assuring repayment of [such] \the\\ loans. 3. Pay the fees, charges, premiums and any other costs associated with obtaining and maintaining insurance, or other means of assuring repayment, from any available money of the [division] \agency\\ including premiums, fees and charges assessed against sponsors, lending institutions or other participants or beneficiaries of the programs of the [division.] \agency.\\ Sec. 41. NRS 319.327 is hereby amended to read as follows: 319.327 The [division] \agency\\ may: 1. Waive, by such means as the [division] \agency\\ deems appropriate, any exemption from federal income taxation of interest on the [division's] \agency's\\ bonds, notes or other obligations provided by 26 U.S.C. §§ 103 and 141 to 149, inclusive, and related portions of the Internal Revenue Code or any succeeding code or other federal statute providing a similar exemption; or 2. Issue notes, bonds or other obligations, the interest on which is not exempt from federal income taxation or excluded from gross revenue for the purpose of federal income taxation, if necessary to carry out the purposes of this chapter. Sec. 42. NRS 319.330 is hereby amended to read as follows: 319.330 1. The [division] \agency\\ may issue refunding obligations to refund any obligations then outstanding which have been issued under the provisions of this chapter, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption of the obligations and for any statutory purpose of the [division.] \agency.\\ The issuance of the obligations, the maturities and other details thereof, the rights of the holders thereof, and the rights, duties and obligations of the [division] \agency\\ in respect to them are governed by the provisions of this chapter which relate to the issuance of original obligations insofar as appropriate. 2. Refunding obligations issued as provided in this section may be sold or exchanged for outstanding obligations issued under this chapter and, if they are sold, the proceeds thereof may be applied, in addition to any other authorized purposes, to the purchase, redemption or payment of the outstanding obligations. Pending the application of the proceeds of the refunding obligations, with any other available funds, to the purpose for which they are issued, the proceeds may be invested in direct obligations of, or obligations the principal of and the interest on which are unconditionally guaranteed by, the United States of America, or obligations of any agency or instrumentality of the United States, which mature or which are subject to redemption by the holders thereof, at the option of [such] \those\\ holders, not later than the respective dates when the proceeds, together with the interest accruing thereon, will be required for the purposes intended. Sec. 43. NRS 319.340 is hereby amended to read as follows: 319.340 1. The [division] \agency\\ may establish one or more bond reserve funds, and shall pay into each such bond reserve fund: (a) Any money appropriated by the legislature for the purpose of the fund; (b) Any proceeds of sale of notes or bonds to the extent provided in connection with the issuance thereof; and (c) Any other money which may be available to the [division] \agency\\ for the purpose of the fund from any other source or sources. All money held in any bond reserve fund, except as otherwise expressly provided in this chapter, must be used, as required, solely for the payment of the principal of bonds secured in whole or in part by the fund or of the sinking fund payments with respect to such bonds, the purchase or redemption of such bonds, the payment of interest on such bonds or the payment of any redemption premium required to be paid when the bonds are redeemed before maturity. 2. Money in such a fund must not be withdrawn from the fund at any time in an amount that would reduce the amount of the fund below the requirement established for that fund, except to pay when due, with respect to bonds secured in whole or in part by that fund, principal, interest, redemption premiums and sinking fund payments for the payment of which other money of the [division] \agency\\ is not available. Any income or interest earned by or incremental to any bond reserve fund resulting from the investment thereof may be transferred by the [division] \agency\\ to other funds or accounts of the [division] \agency\\ and to the account for low-income housing created pursuant to NRS 319.500, to the extent that the amount of that bond reserve fund is not reduced below the requirement for the fund. Sec. 44. NRS 319.350 is hereby amended to read as follows: 319.350 The [division] \agency\\ shall not at any time issue bonds, secured in whole or in part by a bond reserve fund, if upon the issuance of those bonds, the amount in that bond reserve fund will be less than the bond reserve fund requirement for that fund, unless the [division] \agency\\ at the time of issuance of those bonds deposits in that fund from the proceeds of the bonds issued, or from other sources, an amount which, together with the amount then in that fund, will not be less than the bond reserve fund requirement for that fund. The bond reserve fund requirement, as of any particular date of computation, is an amount of money, specified in the proceedings of the [division] \agency\\ authorizing the bonds with respect to which the fund is established, necessary to provide adequate reserves for debt service on the bonds. Sec. 45. NRS 319.360 is hereby amended to read as follows: 319.360 The provision of bond reserve fund requirements is designed to assure the continued operation and solvency of the [division] \agency\\ for the carrying out of its statutory purposes. The [administrator] \executive director\\ shall, on or before the date of convening of any regular session of the Nevada legislature, make and deliver to the governor, the president of the senate and the speaker of the assembly his report giving the status of this fund. Sec. 46. NRS 319.370 is hereby amended to read as follows: 319.370 1. If the [division] \agency\\ defaults in the payment of principal of or interest on any bonds or notes issued under this chapter after it is due, whether at maturity or upon call for redemption, and [such] \the\\ default continues for a period of 30 days, or if the [division] \agency\\ fails or refuses to comply with the provisions of this chapter or defaults in any agreement made with the holders of an issue of its bonds or notes, the holders of 25 percent in aggregate principal amount of the bonds or notes of [such] \the\\ issue then outstanding, by instrument or instruments filed in the office of the secretary of state and proved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the holders of [such] \the\\ bonds or notes for the purposes provided in this section. 2. The trustee may, and upon written request of the holders of 25 percent in principal amount of [such] \the\\ bonds or notes then outstanding shall, in his or its own name: (a) Enforce the right of the bondholders or noteholders to require the [division] \agency\\ to collect interest and amortization payments on the mortgages held by it adequate to carry out any agreement as to, or pledge of, such interest and amortization payments, and to require the [division] \agency\\ to carry out any other agreements with the holders of [such] \the\\ bonds or notes and to perform its duties under this [act.] \chapter.\\ (b) Enforce the right of the bondholders or noteholders to collect and enforce the payment of principal of and interest due or becoming due on loans to lending institutions and collect and enforce any rights in respect to collateral securing such loans or sell such collateral, so as to carry out any contract as to, or pledge of revenues, and to require the [division] \agency\\ to carry out any contract as to, or pledge of revenues, and to require the [division] \agency\\ to perform its duties under this chapter. (c) Bring suit upon all or any part of [such] \the\\ bonds or notes. (d) By civil action, require the agency to account as if it were the trustee of an express trust for the holders of [such] \the\\ bonds or notes. (e) By civil action, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of [such] \the\\ bonds or notes. (f) Declare all [such] \the\\ bonds or notes due and payable, and if all defaults are made good then with the consent of the holders of 25 percent of the principal amount of [such] \the\\ bonds or notes then outstanding, to annul [such] \the\\ declaration and its consequences. (g) Enforce any other right of the bondholders or noteholders conferred by law or by the proceedings of the [division] \agency\\ authorizing the issuance of the bonds or notes. 3. The trustee shall, in addition to the powers listed in subsection 2, have all the powers necessary or appropriate for the exercise of any functions specifically set forth in this section or incident to the general representation of bondholders or noteholders in the enforcement and protection of their rights. 4. Before declaring the principal of bonds or notes due and payable, the trustee shall give 30 days' notice in writing to the governor, to the [administrator] \executive director\\ and to the attorney general of this state. 5. The district court of the first judicial district has jurisdiction of any suit, action or proceeding by the trustee on behalf of bondholders or noteholders. Sec. 47. NRS 319.380 is hereby amended to read as follows: 319.380 1. The State of Nevada hereby pledges to and agrees with the holders of any notes or bonds issued under this chapter that the state will not limit or alter the rights vested in the [division] \agency\\ by this chapter to fulfill the terms of any agreements made with [such] \the\\ holders or in any way impair the rights and remedies of [such] \the\\ holders until [such] \the\\ notes and bonds, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of [such] \the\\ holders, are fully met and discharged. The [division] \agency\\ may include this pledge and agreement of the state in any agreement with the holders of [such] \the\\ notes or bonds. 2. Obligations issued under the provisions of this chapter, including letters of credit issued by the [division,] \agency,\\ do not constitute a debt, liability or obligation of this state or of any political subdivision thereof, or a pledge of the faith and credit of this state or of any political subdivision thereof, but are payable solely from the revenues or assets of the [division.] \agency.\\ Each obligation, including a letter of credit, issued under this chapter must contain on the face thereof a statement to the effect that the [division] \agency\\ is not obligated to pay the obligation or the interest thereon except from the revenues or assets pledged therefor and that neither the faith and credit nor the taxing power of this state or of any political subdivision thereof is pledged to the payment of the principal of or the interest on the obligation. Sec. 48. NRS 319.390 is hereby amended to read as follows: 319.390 1. The notes and bonds of the [division] \agency\\ are legal investments in which all public officers and public bodies of the state, its political subdivisions, all municipalities and municipal subdivisions, all insurance companies and associations and other persons carrying on an insurance business, all banks, savings and loan associations and trust companies, all administrators, guardians, executors, trustees and other fiduciaries, and all other persons who are authorized on or after July 1, 1975, to invest in bonds or in other obligations of this state, may properly and legally invest funds, including capital, in their control or belonging to them. The notes and bonds are securities which may properly and legally be deposited with and received by all public officers and public bodies of the state or any agency or political subdivision of the state and all municipalities and public corporations for any purpose for which the deposit of bonds or other obligations of this state is authorized by law on and after July 1, 1975, and may be used as collateral to secure any deposit of public [moneys.] \money.\\ 2. The notes and bonds of the [division] \agency\\ are securities within the meaning of the Uniform Commercial Code--Investment Securities. Sec. 49. NRS 319.500 is hereby amended to read as follows: 319.500 [1.] There is hereby created [in the state general fund] the account for low-income housing, to be administered by the [division. All] \agency. The agency shall deposit all\\ money that is collected for the use of the account from any source, including pursuant to a specific statute, tax, legislative appropriation, gift or grant, or from interest earned on specified public or private accounts, [must be deposited in the account. 2. The money in the account must be invested as provided in chapters 355 and 356 of NRS.] \in the account for low-income housing in a depository institution qualified to receive public money.\\ The interest and income earned on the money in the account, after deducting any applicable charges, must be credited to the account. All claims against the account must be paid as other claims against the state are paid. Sec. 50. NRS 319.510 is hereby amended to read as follows: 319.510 1. Money deposited in the account for low- income housing must be used: (a) For the acquisition, construction or rehabilitation of housing for eligible families by public or private nonprofit charitable organizations, housing authorities or local governments through loans, grants or subsidies; (b) To provide technical and financial assistance to public or private nonprofit charitable organizations, housing authorities and local governments for the acquisition, construction or rehabilitation of housing for eligible families; (c) To provide funding for projects of public or private nonprofit charitable organizations, housing authorities or local governments that provide assistance to or guarantee the payment of rent or deposits as security for rent for eligible families, including homeless persons; (d) To reimburse the [division] \agency\\ for the costs of administering the account; and (e) In any other manner consistent with this section to assist eligible families in obtaining or keeping housing, including use as the state's contribution to facilitate the receipt of related federal money. 2. Except as otherwise provided in this subsection, the [division] \agency\\ may expend money from the account as reimbursement for the necessary costs of efficiently administering the account and any money received pursuant to 42 U.S.C. §§ 12701 et seq. In no case may the [division] \agency\\ expend more than $40,000 per year or an amount equal to 6 percent of any money made available to the state pursuant to 42 U.S.C. §§ 12701 et seq., whichever is greater. Of the remaining money allocated from the account: (a) Except as otherwise provided in subsection 3, 15 percent must be distributed to the welfare division of the department of human resources for use in its program developed pursuant to 45 C.F.R. § 233.120 to provide emergency assistance to needy families with children, subject to the following: (1) The welfare division shall adopt regulations governing the use of the money that are consistent with the provisions of this section. (2) The money must be used solely for activities relating to low-income housing that are consistent with the provisions of this section. (3) The money must be made available to families that have children and whose income is at or below the federally designated level signifying poverty. (4) All money provided by the Federal Government to match the money distributed to the welfare division pursuant to this section must be expended for activities consistent with the provisions of this section. (b) Eighty-five percent must be distributed to public or private nonprofit charitable organizations, housing authorities and local governments for the acquisition, construction and rehabilitation of housing for eligible families, subject to the following: (1) Priority must be given to those projects that qualify for the federal tax credit relating to low-income housing. (2) Priority must be given to those projects that anticipate receiving federal money to match the state money distributed to them. (3) Priority must be given to those projects that have the commitment of a local government to provide assistance to them. (4) All money must be used to benefit families whose income does not exceed 60 percent of the median income for families residing in the same county, as defined by the United States Department of Housing and Urban Development. (5) Not less than 15 percent of the units acquired, constructed or rehabilitated must be affordable to persons whose income is at or below the federally designated level signifying poverty. For the purposes of this subparagraph, a unit is affordable if a family does not have to pay more than 30 percent of its gross income for housing costs, including both utility and mortgage or rental costs. (6) To be eligible to receive money pursuant to this paragraph, a project must be sponsored by a local government. 3. The [division] \agency\\ may, pursuant to contract and in lieu of distributing money to the welfare division pursuant to paragraph (a) of subsection 2, distribute any amount of that money to private or public nonprofit entities for use consistent with the provisions of this section. Sec. 51. NRS 319.520 is hereby amended to read as follows: 319.520 1. The [administrator] \executive director\\ shall consult with representatives of housing authorities, organizations of persons with low income, providers of housing, financial institutions and other persons interested in the provision of low-income housing, and adopt regulations establishing: (a) Criteria for the distribution and use of money from the account for low-income housing; and (b) Procedures for the [division] \agency\\ and the local governments that receive money pursuant to NRS 319.510 to monitor the use of money from the account and to enforce the provisions of this section and NRS 319.500 and 319.510. The regulations must be designed to maximize the efficient use of money in the account and to promote the participation and assistance of local governments. 2. A recipient of money from the account shall comply with the regulations of the [administrator] \executive director\\ and provide such reports to the [division] \agency\\ and the local governments that receive money pursuant to NRS 319.510 upon the use of the money as the [administrator] \executive director\\ requires. Sec. 52. NRS 319.900 is hereby amended to read as follows: 319.900 Any person who knowingly makes or causes to be made, either directly or indirectly, or through any agency whatsoever, any false statement in writing concerning an applicant's income, employment, financial position, the size of his family, his intent to occupy premises as his primary residence or the cost of the residence, with intent that the statement be relied upon for the purpose of obtaining financial assistance from the [division] \agency\\ is guilty of a gross misdemeanor. Sec. 53. NRS 41.0338 is hereby amended to read as follows: 41.0338 \1. \\As used in NRS 41.0339 to 41.0349, inclusive, "official attorney" means: [1.] \(a)\\ The attorney general, in an action which involves a present or former legislator, officer or employee of this state, immune contractor or member of a state board or commission. [2.] \(b)\\ The chief legal officer or other authorized legal representative of a political subdivision, in an action which involves a present or former officer or employee of that political subdivision or a present or former member of a local board or commission. \2. As used in this section, "employee of this state" includes an employee of the Nevada housing agency.\\ Sec. 54. NRS 41.0339 is hereby amended to read as follows: 41.0339 \1.\\ The official attorney shall provide for the defense, including the defense of cross- claims and counterclaims, of any present or former officer or employee of the state or a political subdivision, immune contractor or state legislator in any civil action brought against that person based on any alleged act or omission relating to his public duties or employment if: [1.] \(a)\\ Within 15 days after service of a copy of the summons and complaint or other legal document commencing the action, he submits a written request for defense: [(a)] \(1)\\ To the official attorney; or [(b)] \(2)\\ If the officer, employee or immune contractor has an administrative superior, to the administrator of his agency and the official attorney; and [2.] \(b)\\ The official attorney has determined that the act or omission on which the action is based appears to be within the course and scope of public duty or employment and appears to have been performed or omitted in good faith. \2. As used in this section, "employee of the state" includes an employee of the Nevada housing agency.\\ Sec. 55. NRS 218.775 is hereby amended to read as follows: 218.775 1. The legislative auditor shall perform a postaudit of all accounts, funds and other financial records of all agencies of the state to determine one or any combination of the following: (a) Whether the financial statements of the audited agency comply with generally accepted principles of accounting. (b) The honesty and integrity of fiscal affairs, the accuracy and reliability of financial statements and reports, and the effectiveness of the system of internal financial control of the audited agency. (c) Compliance with all applicable laws and regulations. (d) Whether the operations of the agency of the state have been conducted in accordance with its contractual obligations. (e) Whether control by management and the system of information provide an adequate and efficient system of records and accounting. 2. Every officer and employee of an agency of the state shall aid and assist the legislative auditor at such times as he requires in the inspection, examination and audit of any books, accounts and records in [their possession.] \the possession of the officer or employee.\\ \3. As used in this section, "agency of the state" includes the Nevada housing agency. \\Sec. 56. NRS 232.510 is hereby amended to read as follows: 232.510 1. The department of business and industry is hereby created. 2. The department consists of a director and the following: (a) Consumer affairs division. (b) Division of financial institutions. (c) [Housing division. (d)] Manufactured housing division. [(e)] \(d)\\ Real estate division. [(f)] \(e)\\ Division of unclaimed property. [(g)] \(f)\\ Division of agriculture. [(h)] \(g)\\ Division of minerals. [(i)] \(h)\\ Division of insurance. [(j)] \(i)\\ Division of industrial relations. [(k)] \(j)\\ Office of labor commissioner. [(l)] \(k)\\ Taxicab authority. Sec. 57. NRS 232.520 is hereby amended to read as follows: 232.520 The director: 1. Shall appoint a chief of each of the divisions of the department. In making the appointments, the director may obtain lists of qualified persons from professional organizations, associations or other groups recognized by the department, if any. The chief of the consumer affairs division is the commissioner of consumer affairs, the chief of the division of financial institutions is the commissioner of financial institutions, [the chief of the housing division is the administrator of the housing division,] the chief of the manufactured housing division is the administrator of the manufactured housing division, the chief of the real estate division is the real estate administrator and the chief of the division of unclaimed property is the administrator of unclaimed property. 2. Is responsible for the administration of all provisions of law relating to the jurisdiction, duties and functions of the department. The director may, if he deems it necessary to carry out his administrative responsibilities, be considered as a member of the staff of any division of the department for the purpose of budget administration or for the performance of any duty or the exercise of any power with respect to the division. 3. May, within the limits of the financial resources made available to him, promote, participate in the operation of, and create or cause to be created, any nonprofit corporation, pursuant to chapter 82 of NRS, which he determines is necessary or convenient for the exercise of the powers and duties of the department. The purposes, powers and operation of the corporation must be consistent with the purposes, powers and duties of the department. 4. For any bonds which he is otherwise authorized to issue, may issue bonds the interest on which is not exempt from federal income tax or excluded from gross revenue for the purposes of federal income tax. 5. May, except as otherwise provided by specific statute, adopt by regulation a schedule of fees and deposits to be charged in connection with the programs administered by him pursuant to chapters 348A and 349 of NRS. Except as so provided, the amount of any such fee or deposit must not exceed 2 percent of the principal amount of the financing. 6. May designate any person within the department to perform any of the duties or responsibilities, or exercise any of the authority, of the director on his behalf. Sec. 58. NRS 284.013 is hereby amended to read as follows: 284.013 1. Except as otherwise provided in subsection 4, this chapter does not apply to: (a) Agencies, bureaus, commissions, officers or personnel in the legislative department or the judicial department of state government; (b) Any person who is employed by a board, commission, committee or council created in chapters 590, 623 to 625A, inclusive, 628, 630 to 644, inclusive, 648, 652, 654 and 656 of NRS; [or] (c) Officers or employees of any agency of the executive department of the state government who are exempted by specific statute [.] \; or (d) The Nevada housing agency.\\ 2. Except as otherwise provided in subsection 3, the terms and conditions of employment of all persons referred to in subsection 1, including salaries not prescribed by law and leaves of absence, including, without limitation, annual leave and sick and disability leave, must be fixed by the appointing or employing authority within the limits of legislative appropriations or authorizations. 3. Except as otherwise provided in this subsection, leaves of absence prescribed pursuant to subsection 2 must not be of lesser duration than those provided for other state officers and employees pursuant to the provisions of this chapter. The provisions of this subsection do not govern the legislative commission with respect to the personnel of the legislative counsel bureau. 4. Any board, commission, committee or council created in chapters 590, 623 to 625A, inclusive, 628, 630 to 644, inclusive, 648, 652, 654 and 656 of NRS which contracts for the services of a person, shall require the contract for those services to be in writing. The contract must be approved by the state board of examiners before those services may be provided. Sec. 59. NRS 284.173 is hereby amended to read as follows: 284.173 1. Elective officers and heads of departments, boards, commissions or institutions may contract for the services of persons as independent contractors. 2. An independent contractor is a natural person, firm or corporation who agrees to perform services for a fixed price according to his or its own methods and without subjection to the supervision or control of the other contracting party, except as to the results of the work, and not as to the means by which the services are accomplished. 3. For the purposes of this section: (a) Travel, subsistence and other personal expenses may be paid to an independent contractor, if provided for in the contract, in such amounts as provided for in the contract. Those expenses must not be paid under the provisions of NRS 281.160. (b) There must be no: (1) Withholding of income taxes by the state; (2) Industrial insurance coverage provided by the state; (3) Participation in group insurance plans which may be available to employees of the state; (4) Participation or contributions by either the independent contractor or the state to the public employees' retirement system; (5) Accumulation of vacation leave or sick leave; or (6) Unemployment compensation coverage provided by the state if the requirements of NRS 612.085 for independent contractors are met. 4. An independent contractor is not in the classified or unclassified service of the state, and has none of the rights or privileges available to officers or employees of the State of Nevada. 5. Except as otherwise provided in this subsection, each contract for the services of an independent contractor must be in writing. The form of the contract must be first approved by the attorney general, and, except as otherwise provided in subsection 7, an executed copy of each contract must be filed with the fiscal analysis division of the legislative counsel bureau and the clerk of the state board of examiners. The state board of examiners may waive the requirements of this subsection in the case of contracts which are for amounts less than $750. 6. Except as otherwise provided in subsection 7, and except contracts entered into by the University and Community College System of Nevada, each proposed contract with an independent contractor must be submitted to the state board of examiners. The contracts do not become effective without the prior approval of the state board of examiners, but the state board of examiners may authorize its clerk to approve contracts which are for amounts less than $2,000 or, in contracts necessary to preserve life and property, for amounts less than $5,000. The state board of examiners shall adopt regulations to carry out the provisions of this section. 7. Copies of the following types of contracts need not be filed or approved as provided in subsections 5 and 6: (a) Contracts executed by the department of transportation for any work of construction or reconstruction of highways. (b) Contracts executed by the state public works board or any other state department or agency for any work of construction or major repairs of state buildings if the contracting process was controlled by the rules of open competitive bidding. (c) Contracts executed by the \Nevada\\ housing [division of the department of business and industry.] \agency.\\ (d) Contracts executed with business entities for any work of maintenance or repair of office machines and equipment. 8. The state board of examiners shall review each contract submitted for approval pursuant to subsection 6 to consider: (a) Whether sufficient authority exists to expend the money required by the contract; and (b) Whether the service which is the subject of the contract could be provided by a state agency in a more cost- effective manner. If the contract submitted for approval continues an existing contractual relationship, the board shall ask each agency to ensure that the state is receiving the services that the contract purports to provide. 9. If the services of an independent contractor are contracted for to represent an agency of the state in any proceeding in any court, the contract must require the independent contractor to identify in all pleadings the specific state agency which he is representing. Sec. 60. NRS 353.210 is hereby amended to read as follows: 353.210 1. Except as otherwise provided in subsection 3, on or before September 1 of each even-numbered year, all departments, institutions and other agencies of the executive department of the state government, and all agencies of the executive department of the state government receiving state money, fees or other money under the authority of the state, including those operating on money designated for specific purposes by the constitution or otherwise, shall prepare, on blanks furnished them by the chief, and submit to the chief estimates of their expenditure requirements, together with all anticipated income from fees and all other sources, for the next 2 fiscal years compared with the corresponding figures of the last completed fiscal year and the estimated figures for the current fiscal year. The chief shall direct that one copy of the completed forms, accompanied by every supporting schedule and any other related material, be delivered directly to the fiscal analysis division of the legislative counsel bureau on or before September 1 of each even- numbered year. The fiscal analysis division of the legislative counsel bureau must be given advance notice of any conference between the budget division of the department of administration and personnel of other state agencies regarding budget estimates, and a fiscal analyst of the legislative counsel bureau or his designated representative may attend any such conference. 2. The expenditure estimates must be classified to set forth the data of funds, organization units, and the character and objects of expenditures, and must include a mission statement and measurement indicators for each program. The organization units may be subclassified by functions and activities, or in any other manner at the discretion of the chief. If any department, institution or other agency of the executive department of the state government, whether its money is derived from state money or from other money collected under the authority of the state, fails or neglects to submit estimates of its expenditure requirements as provided in this section, the chief may from any data at hand in his office or which he may examine or obtain elsewhere, make and enter an arbitrary budget for the department, institution or agency in accordance with such data. 3. Agencies, bureaus, commissions and officers of the legislative department, the public employees' retirement system, the state industrial insurance system \, the Nevada housing agency\\ and the judicial department of the state government shall submit to the chief for his information in preparing the executive budget the budgets which they propose to submit to the legislature. Sec. 61. NRS 353.246 is hereby amended to read as follows: 353.246 1. Except as otherwise provided in subsection 2 of this section and subsection 3 of NRS 353.210, the provisions of NRS 353.150 to 353.245, inclusive, do not apply to agencies, bureaus, commissions and officers of the legislative department, the public employees' retirement system, the state industrial insurance system \, the Nevada housing agency\\ and the judicial department of the state government. 2. The legislative department, the public employees' retirement system, the state industrial insurance system \, the Nevada housing agency\\ and the judicial department of the state government shall submit their budgets to the legislature in the same format as the executive budget unless otherwise provided by the legislative commission. All revenue projections and any other information concerning future state revenue contained in those budgets must be based upon the projections and estimates prepared by the economic forum pursuant to NRS 353.228. Sec. 62. NRS 353A.010 is hereby amended to read as follows: 353A.010 As used in this chapter, unless the context otherwise requires: 1. "Agency" means every agency, department, division, board, commission or similar body, or elected officer, of the executive [branch] \department\\ of the state, except: (a) A board or commission created by the provisions of chapters 623 to 625, inclusive, 628 to 644, inclusive, 654 and 656 of NRS. (b) The University and Community College System of Nevada. (c) The public employees' retirement system. (d) The state industrial insurance system. (e) The \Nevada\\ housing [division of the department of business and industry.] \agency.\\ (f) The Colorado River commission. 2. "Director" means the director of the department of administration. 3. "Internal accounting and administrative control" means a method through which agencies can safeguard assets, check the accuracy and reliability of their accounting information, promote efficient operations and encourage adherence to prescribed managerial policies. Sec. 63. NRS 232.540 and 319.050 are hereby repealed. Sec. 64. On July 1, 1996, the state controller shall transfer all money in the accounts of the housing division of the department of business and industry to the executive director of the Nevada housing agency who shall create such accounts as required by chapter 319 of NRS and administer the money in those accounts as required by that chapter. The Nevada housing agency assumes all outstanding obligations of the housing division of the department of business and industry on July 1, 1996. Sec. 65. This act becomes effective on July 1, 1996. "T T" TEXT OF REPEALED SECTIONS "T T" 232.540 Chief of housing division: Appointment of chief financial officer for division. 1. The chief of the housing division of the department shall appoint, with the consent of the director, a chief financial officer for the housing division. 2. The chief financial officer for the housing division must: (a) Be a certified public accountant licensed by this state or another state of the United States; (b) Have 5 years of responsible experience in investment banking and general accounting; or (c) Have a comprehensive knowledge of the principles and practices of public finance and 5 years of responsible experience in that field. 3. The chief financial officer for the housing division is: (a) In the unclassified service of the state. (b) Directly responsible to the chief of the housing division. 319.050 "Division" defined. "Division" means the housing division of the department of business and industry. -30-