AB 170, a bill amending NRS 350.020 passed by the Nevada Legislature, was signed by the Governor on June 11, 2015. It amends subsection 3 of NRS 350.020 which specifies the procedures to be followed to issue general obligation bonds that are expected to be paid from non-property tax “pledged revenues.” (These bonds are called “Revenue Backed G.O. Bonds” in this Advisory Notice.) AB 170 (1) clarifies that a general obligation bond issued or incurred by a municipality or school district must be used only for the stated purpose for which the general obligation bond was originally issued or incurred and not for any other purpose; (2) requires a publication of a resolution of the intent of a municipality or school district to issue or incur a Revenue Backed G.O. Bond to include certain information relating to the filing of a petition to hold an election on the issuance of the obligation; and (3) requires the publication of the notice of the public hearing concerning the incurrence of the Revenue Backed G.O. Bond to be made at least three times, once a week for 3 consecutive weeks, in a newspaper of general circulation in the municipality or school district. The effective date of AB 170 is October 1, 2015. Governments expecting to issue Revenue Backed G.O. Bonds on or after October 1, 2015, should follow the amended publication requirements for the notice of the resolution of intent and the notice of public hearing.

A. GENERAL OBLIGATION BONDS USED FOR STATED PURPOSE ONLY

The change described in (1) above will affect only local governments that desire to change the purpose of general obligation bonds after the bonds have been authorized. This applies to all general obligation bonds in addition to Revenue Backed G.O. Bonds. Changing the purpose of bonds after issuance sometimes occurs but is rare, and in situations where a process is available for amending the purpose for which bonds are issued, it typically is lengthy and expensive.

B. AMENDMENT TO PUBLICATION OF NOTICE OF RESOLUTION OF INTENT

The change described in (2) above requires that the publication of the resolution of intent include additional information. The publication of the resolution of intent commences the 90 day petition period in the statute. The amendment requires that the notice state the date by which the registered voters of the municipality or school district must file a petition with the governing body to hold an election on the issuance of the Revenue Backed G.O. Bonds, the location at which the petition must be filed with the governing body and the location at which a person may obtain additional information regarding the contents of and filing requirements for the petition.

C. AMENDMENT TO PUBLICATION OF NOTICE OF PUBLIC HEARING

The change described in (3) above requires the notice of public hearing be published 3 times rather than 1 time. When published, this notice must be at least as large as 5 inches high by 4 inches wide and the amendment will increase the costs of this publication by requiring 3 publications of this particular size rather than 1 publication.

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