1999 Statutes of Nevada, Pages 3179-3272

[Rev. 2/11/2019 1:13:04 PM]

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ê1999 Statutes of Nevada, Page 3179 (CHAPTER 590, AB 564)ê

Sec. 3. NRS 444A.040 is hereby amended to read as follows:

444A.040 1. The board of county commissioners in a county whose population is more than 100,000, or its designee, shall make available for use in that county a program for:

(a) The separation at the source of recyclable material from other solid waste originating from the residential premises and public buildings where services for the collection of solid waste are provided.

(b) The establishment of recycling centers for the collection and disposal of recyclable material where existing recycling centers do not carry out the purposes of the program.

(c) The disposal of hazardous household products which are capable of causing harmful physical effects if inhaled, absorbed or ingested. This program may be included as a part of any other program made available pursuant to this subsection.

2. The board of county commissioners of a county whose population is more than 25,000 but not more than 100,000, or its designee:

(a) May make available for use in that county a program for the separation at the source of recyclable material from other solid waste originating from the residential premises and public buildings where services for the collection of solid waste are provided.

(b) Shall make available for use in that county a program for:

(1) The establishment of recycling centers for the collection and disposal of recyclable material where existing recycling centers do not carry out the purposes of the program established pursuant to paragraph (a).

(2) The disposal of hazardous household products which are capable of causing harmful physical effects if inhaled, absorbed or ingested. This program may be included as a part of any other program made available pursuant to this subsection.

3. The board of county commissioners of a county whose population is not more than 25,000, or its designee, may make available for use in that county a program for:

(b) The establishment of recycling centers for the collection and disposal of recyclable material where existing recycling centers do not carry out the purposes of the program.

4. Any program made available pursuant to this section:

(a) Must not:

(1) Conflict with the standards adopted by the state environmental commission pursuant to NRS 444A.020; and

(2) Become effective until approved by the department.

(b) May be based on the model plans adopted pursuant to NRS 444A.030.

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ê1999 Statutes of Nevada, Page 3180 (CHAPTER 590, AB 564)ê

5. The governing body of a municipality may adopt and carry out within the municipality such programs made available pursuant to this section as are deemed necessary and appropriate for that municipality.

6. Any municipality may, with the approval of the governing body of an adjoining municipality, participate in any program adopted by the adjoining municipality pursuant to subsection 5.

7. Persons residing on an Indian reservation or Indian colony may participate in any program adopted pursuant to subsection 5 by a municipality in which the reservation or colony is located if the governing body of the reservation or colony adopts an ordinance requesting such participation. Upon receipt of such a request, the governing body of the municipality shall make available to the residents of the reservation or colony those programs requested.

Sec. 4. NRS 444A.050 is hereby amended to read as follows:

444A.050 1. A county or health district that adopts a program pursuant to NRS 444A.040 shall:

(a) On or before July 1 of each year, submit a report to the department of the number of tons of material disposed of in the area covered by the program.

(b) Within 6 months after adopting the program, and at least once every 6 months thereafter, notify all persons occupying residential, commercial , governmental and institutional premises within the area covered by the program of the local recycling opportunities and the need to reduce the amount of waste generated.

2. The governing body of a municipality that adopts a program pursuant to NRS 444A.040 shall:

(a) Adopt such ordinances as are necessary for the enforcement of the program.

(b) At least once every 36 months, conduct a review of the program and make such revisions to the program and any ordinances adopted pursuant thereto as are deemed necessary and appropriate.

Sec. 5. NRS 444A.110 is hereby amended to read as follows:

444A.110 1. The division of environmental protection of the state department of conservation and natural resources shall develop a program of public education to provide information, increase public awareness of the individual responsibility of properly disposing of solid waste and encouraging public participation in recycling, reuse and waste reduction. The program must be designed in accordance with the plans to provide for a solid waste management system approved pursuant to NRS 444.510 to communicate the importance of conserving natural resources, in addition to the importance of protecting public health and the environment. The program must include promotion of the private and public efforts to accomplish conservation, recovery and reuse.

2. The division of environmental protection of the state department of conservation and natural resources shall encourage the reduction of waste and litter by:

(a) Providing, upon request, advice to persons regarding techniques to reduce waste and general information on recycling.

(b) Establishing a computer data base to process related information.

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ê1999 Statutes of Nevada, Page 3181 (CHAPTER 590, AB 564)ê

(d) Sponsoring or cosponsoring technical workshops and seminars on waste reduction.

(e) Assisting local programs for the research and development of plans to reduce waste.

(f) Coordinating the dissemination of publications on waste reduction, regardless of the source of those publications.

(g) Assisting in the development and promotion of programs of continuing education for educators and administrators to enable them to teach and encourage methods of waste reduction.

(h) Developing an emblem to signify and advertise the efforts in Nevada to encourage recycling.

(i) Recommending to educational institutions courses and curricula relating to recycling and the reduction of waste.

(j) Assisting state agencies, upon request, to develop and carry out programs for recycling within state buildings.

3. The division of environmental protection of the state department of conservation and natural resources shall coordinate the technical assistance available from the various state agencies. The administrator of that division shall prepare and deliver biennial reports to the governor regarding the progress of the program.

Sec. 6. NRS 1.115 is hereby amended to read as follows:

1.115 1. Except as otherwise provided in this section, each court of justice for this state shall recycle or cause to be recycled the paper and paper products it uses. This subsection does not apply to confidential documents if there is an additional cost for recycling those documents.

2. A court of justice may apply for a waiver from the requirements of subsection 1. For such a waiver, the supreme court must apply to the interim finance committee, a district court or a justice’s court must apply to the board of county commissioners of the county in which it is located and a municipal court must apply to the governing body of the city in which it is located. A waiver must be granted if it is determined that the cost to recycle or cause to be recycled the paper and paper products used by the court is unreasonable and would place an undue burden on the operations of the court.

3. The court administrator shall, after consulting with the state department of conservation and natural resources, prescribe the procedure for the disposition of the paper and paper products to be recycled. The court administrator may prescribe a procedure for the recycling of other waste materials produced on the premises of the court building.

4. Any money received by a court of justice for recycling or causing to be recycled the paper and paper products it uses must be paid by the clerk of that court to the state treasurer for credit to the state general fund.

5. As used in this section:

(a) “Paper” includes newspaper, high-grade office paper, fine paper, bond paper, offset paper, xerographic paper, mimeo paper, duplicator paper and any other cellulosic material which contains not more than 10 percent by weight or volume of a noncellulosic material, including, but not limited to, a laminate, binder, coating and saturant.

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ê1999 Statutes of Nevada, Page 3182 (CHAPTER 590, AB 564)ê

(b) “Paper product” means any paper article or commodity, including, but not limited to, paper napkins, towels, cardboard, construction material, paper and any other cellulosic material which contains not more than 10 percent by weight or volume of a noncellulosic material, including, but not limited to, a laminate, binder, coating and saturant.

Sec. 7. NRS 218.655 is hereby amended to read as follows:

218.655 1. Except as otherwise provided in this section, the legislative counsel bureau shall recycle or cause to be recycled the paper and paper products it uses. This subsection does not apply to confidential documents if there is an additional cost for recycling those documents.

2. The director of the legislative counsel bureau may apply to the legislative commission for a waiver from the requirements of subsection 1. The legislative commission shall grant a waiver if it determines that the cost to recycle or cause to be recycled the paper and paper products used by the bureau is unreasonable and would place an undue burden on the operations of the bureau.

3. The legislative commission shall, after consulting with the state department of conservation and natural resources, adopt regulations which prescribe the procedure for the disposition of the paper and paper products to be recycled. The legislative commission may prescribe a procedure for the recycling of other waste materials produced on the premises of the legislative building.

4. Any money received by the legislative counsel bureau for recycling or causing to be recycled the paper and paper products it uses must be paid by the director of the legislative counsel bureau to the state treasurer for credit to the state general fund.

5. As used in this section:

Sec. 8. NRS 232.007 is hereby amended to read as follows:

232.007 1. Except as otherwise provided in this section, each state agency shall recycle or cause to be recycled the paper and paper products it uses. This subsection does not apply to confidential documents if there is an additional cost for recycling those documents.

2. A state agency may apply to the chief of the budget division of the department of administration for a waiver from the requirements of subsection 1. The chief shall grant a waiver to the state agency if he determines that the cost to recycle or cause to be recycled the paper and paper products used by the agency is unreasonable and would place an undue burden on the operations of the agency.

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ê1999 Statutes of Nevada, Page 3183 (CHAPTER 590, AB 564)ê

3. The state environmental commission shall, through the state department of conservation and natural resources, adopt regulations which prescribe the procedure for the disposition of the paper and paper products to be recycled. In adopting such regulations, the commission [shall] :

(a) Shall consult with any other state agencies which are coordinating or have coordinated programs for recycling paper and paper products.

(b) May prescribe a procedure for the recycling of other waste materials produced by state agencies.

4. Any money received by a state agency for recycling or causing to be recycled the paper and paper products it uses must be paid by the chief administrative officer of that agency to the state treasurer for credit to the state general fund.

5. As used in this section:

(a) “Paper” includes newspaper, high‑grade office paper, fine paper, bond paper, offset paper, xerographic paper, mimeo paper, duplicator paper and any other cellulosic material which contains not more than 10 percent by weight or volume of a noncellulosic material, including, but not limited to, a laminate, binder, coating and saturant.

(c) “State agency” means every public agency, bureau, board, commission, department, division, officer or employee of the executive department of state government.

Sec. 9. Chapter 386 of NRS is hereby amended by adding thereto a new section to read as follows:

1. Except as otherwise provided in this section, each school district shall recycle or cause to be recycled the paper and paper products it uses. This subsection does not apply to confidential documents if there is an additional cost for recycling those documents.

2. A school district is not required to comply with the requirements of subsection 1 if the board of trustees of the school district determines that the cost to recycle or cause to be recycled the paper and paper products used by the schools in the district is unreasonable and would place an undue burden on the operations of the district or a particular school.

3. The board of trustees shall adopt rules which prescribe the procedure for the disposition of the paper and paper products to be recycled. The board of trustees may prescribe a procedure for the recycling of other waste material produced on the premises of the schools in the school district and the administrative offices of the school district.

4. Any money received by the school district for recycling or causing to be recycled the paper and paper products it uses must be paid by the board of trustees for credit to the general fund of the school district.

5. As used in this section:

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ê1999 Statutes of Nevada, Page 3184 (CHAPTER 590, AB 564)ê

percent by weight or volume of a noncellulosic material, including, but not limited to, a laminate, binder, coating and saturant.

Sec. 10. NRS 396.437 is hereby amended to read as follows:

396.437 1. Except as otherwise provided in this section, the system shall recycle or cause to be recycled the paper and paper products it uses. This subsection does not apply to confidential documents if there is an additional cost for recycling those documents.

2. The system is not required to comply with the requirements of subsection 1 if the board of regents determines that the cost to recycle or cause to be recycled the paper and paper products used by the system or one of its branches or facilities is unreasonable and would place an undue burden on the operations of the system, branch or facility.

3. The board of regents shall adopt regulations which prescribe the procedure for the disposition of the paper and paper products to be recycled. The board of regents may prescribe a procedure for the recycling of other waste material produced on the premises of the system, a branch or a facility.

4. Any money received by the system for recycling or causing to be recycled the paper and paper products it uses must be paid by the board of regents to the state treasurer for credit to the state general fund.

5. As used in this section:

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ê1999 Statutes of Nevada, Page 3185ê

CHAPTER 591, AB 521

Assembly Bill No. 521–Assemblymen Dini, Perkins, Buckley, Arberry, Evans, Giunchigliani, Parks, Price, Williams, Manendo, Chowning, Koivisto, de Braga, Bache, Ohrenschall, Lee, Neighbors, Thomas, Mortenson, Leslie, Goldwater, Anderson, McClain, Segerblom, Collins, Freeman, Parnell, Claborn, Hettrick, Gibbons, Beers, Marvel, Carpenter, Nolan, Von Tobel, Tiffany and Humke

CHAPTER 591

AN ACT relating to education; making various changes relating to the discipline of pupils; requiring the superintendent of public instruction to establish a pilot project for alternative programs of education for disruptive pupils; requiring certain selected schools to participate in the pilot project and establish alternative programs of education for disruptive pupils; making an appropriation; and providing other matters properly relating thereto.

[Approved June 9, 1999]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Chapter 392 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 8, inclusive, of this act.

Sec. 2. As used in sections 2 to 8, inclusive, of this act, unless the context otherwise requires, “principal” means the principal of a school or his designee.

Sec. 3. The principal of each public school shall establish a plan to provide for the progressive discipline of pupils and on-site review of disciplinary decisions. The plan must:

1. Be developed with the input and participation of teachers and parents of pupils who are enrolled in the school.

2. Be consistent with the written rules of behavior prescribed in accordance with NRS 392.463.

3. Include, without limitation, provisions designed to address the specific disciplinary needs and concerns of the school.

4. Provide for the temporary removal of a pupil from a classroom in accordance with section 4 of this act.

Sec. 4. 1. The plan established pursuant to section 3 of this act must provide for the temporary removal of a pupil from a classroom if, in the judgment of the teacher, the pupil has engaged in behavior that seriously interferes with the ability of the teacher to teach the other pupils in the classroom and with the ability of the other pupils to learn. The plan must provide that, upon the removal of a pupil from a classroom pursuant to this section, the principal of the school shall provide an explanation of the reason for the removal of the pupil to the pupil and offer the pupil an opportunity to respond to the explanation. Within 24 hours after the removal of a pupil pursuant to this section, the principal of the school shall notify the parent or legal guardian of the pupil of the removal.

2. Except as otherwise provided in subsection 3, a pupil who is removed from a classroom pursuant to this section must be assigned to a temporary alternative placement pursuant to which the pupil:

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ê1999 Statutes of Nevada, Page 3186 (CHAPTER 591, AB 521)ê

(a) Is separated, to the extent practicable, from pupils who are not assigned to a temporary alternative placement;

(b) Studies under the supervision of appropriate personnel of the school district; and

3. The principal shall not assign a pupil to a temporary alternative placement if the suspension or expulsion of a pupil who is removed from the classroom pursuant to this section is:

(a) Required by NRS 392.466; or

(b) Authorized by NRS 392.467 and the principal decides to proceed in accordance with that section.

If the principal proceeds in accordance with NRS 392.466 or 392.467, the pupil must be removed from school in accordance with those sections and the provisions of sections 2 to 8, inclusive, of this act do not apply to the pupil.

Sec. 5. 1. Except as otherwise provided in this section, not later than 3 school days after a pupil is removed from a classroom pursuant to section 4 of this act, a conference must be held with:

(a) The pupil;

(b) A parent or legal guardian of the pupil;

(d) The teacher who removed the pupil.

The principal shall give an oral or written notice of the conference, as appropriate, to each person who is required to participate.

2. After receipt of the notice required pursuant to subsection 1, the parent or legal guardian of the pupil may, not later than 3 school days after the removal of the pupil, request that the date of the conference be postponed. The principal shall accommodate such a request. If the date of the conference is postponed pursuant to this subsection, the principal shall send written notice to the parent or legal guardian confirming that the conference has been postponed at the request of the parent or legal guardian.

3. If a parent or legal guardian of a pupil refuses to attend a conference, the principal of the school shall send a written notice to the parent or legal guardian confirming that the parent or legal guardian has waived the right to a conference provided by this section and authorized the principal to recommend the placement of the pupil pursuant to subsection 6.

4. Except as otherwise provided in this subsection, a pupil must not return to the classroom from which he was removed before the conference is held. If the conference is not held within 3 school days after the removal of the pupil, the pupil must be allowed to return to the classroom unless:

(a) The parent or legal guardian of the pupil refuses to attend the conference;

(b) The failure to hold a conference is attributed to the action or inaction of the pupil or the parent or legal guardian of the pupil; or

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ê1999 Statutes of Nevada, Page 3187 (CHAPTER 591, AB 521)ê

5. During the conference, the teacher who removed the pupil from the classroom or the principal shall provide the pupil and his parent or legal guardian with an explanation of the reason for the removal of the pupil from the classroom. The pupil and his parent or legal guardian must be granted an opportunity to respond to the explanation of the pupil’s behavior and to indicate whether the removal of the pupil from the classroom was appropriate in their opinion based upon the behavior of the pupil.

6. Upon conclusion of the conference or, if a conference is not held pursuant to subsection 3 not later than 3 school days after the removal of a pupil from a classroom, the principal shall recommend whether to return the pupil to the classroom or continue the temporary alternative placement of the pupil.

Sec. 6. 1. The principal of each public school shall establish at least one committee to review the temporary alternative placement of pupils. A committee established pursuant to this section must consist of the principal and two regular members who are teachers selected for membership by a majority of the teachers who are employed at the school. One additional teacher must be selected in the same manner to serve as an alternate member.

2. If a pupil is removed from the classroom pursuant to section 4 of this act by a teacher who is a member of a committee established pursuant to this section, the teacher shall not participate in the review of the placement of the pupil and the alternate member shall serve on the committee for that review.

Sec. 7. If, in accordance with subsection 6 of section 5 of this act, the principal recommends that a pupil be returned to the classroom from which he was removed and the teacher who removed the pupil does not agree with the recommendation, the principal shall continue the temporary alternative placement of the pupil and shall immediately convene a meeting of the committee created pursuant to section 6 of this act. The principal shall inform the parent or legal guardian of the pupil that the committee will be conducting a meeting. The committee shall review the circumstances of the pupil’s removal from the classroom and the pupil’s behavior that caused him to be removed from the classroom. Based upon its review, the committee shall assess the best placement available for the pupil and shall, without limitation:

1. Direct that the pupil be returned to the classroom from which he was removed;

2. Assign the pupil to another appropriate classroom;

3. Assign the pupil to an alternative program of education, if available;

4. Recommend the suspension or expulsion of the pupil in accordance with NRS 392.467; or

5. Take any other appropriate disciplinary action against the pupil that the committee deems necessary.

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ê1999 Statutes of Nevada, Page 3188 (CHAPTER 591, AB 521)ê

Sec. 8. An action must not be taken pursuant to the provisions of sections 2 to 8, inclusive, of this act against a pupil with a disability who is participating in a program of special education pursuant to NRS 388.440 to 388.520, inclusive, unless the action complies with:

1. The Individuals with Disabilities Education Act, 20 U.S.C. §§ 1400 et seq.;

2. The Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101 et seq.;

3. Title V of the Rehabilitation Act of 1973, 29 U.S.C. §§ 791 et seq.;

4. Any other federal law applicable to children with disabilities; and

5. The procedural policy adopted by the board of trustees of the school district for such matters.

Sec. 9. 1. The superintendent of public instruction shall establish a pilot project for alternative programs of education for disruptive pupils.

2. The superintendent of public instruction shall select eight schools to participate in the pilot project, which must include:

(a) One elementary school located in a rural area;

(b) One secondary school located in a rural area;

(d) Two middle schools located in an urban area; and

(e) Two high schools located in an urban area.

3. Each school selected pursuant to subsection 2 shall establish an alternative program of education for disruptive pupils, which may be located on the grounds of the school or at another location. The alternative program must:

(a) Be provided in a setting outside the regular classroom of the pupil;

(b) Ensure that pupils who are participating in the program are separated from pupils who are not participating in the program;

(d) Provide and emphasize instruction in language arts, mathematics, science and history, as appropriate to the grade level of the pupils participating in the program; and

(e) Provide and emphasize training in self-discipline.

Sec. 10. 1. There is hereby appropriated from the state general fund to the department of education for the pilot project established pursuant to section 9 of this act:

For the fiscal year 1999-2000............................................................................................................................ $500,000

For the fiscal year 2000-2001 ........................................................................................................................... $500,000

2. The department shall allocate the money appropriated pursuant to subsection 1 to the schools selected pursuant to section 9 of this act.

3. The money allocated to the schools selected pursuant to section 9 of this act must not be used by those schools to:

(a) Settle or arbitrate disputes or negotiate settlements between an organization that represents licensed employees of the school district and the school district; or

(b) Adjust the schedules of salaries and benefits of the employees of the school district.

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ê1999 Statutes of Nevada, Page 3189 (CHAPTER 591, AB 521)ê

4. Any balance of the sums appropriated by subsection 1 remaining at the end of the respective fiscal years must not be committed for expenditure after June 30 of the respective fiscal years and reverts to the state general fund as soon as all payments of money committed have been made.

Sec. 11. 1. On or before October 1, 2000, the schools selected pursuant to section 9 of this act shall report to the department of education for the period ending September 1, 2000:

(a) The manner in which the alternative program that the school established pursuant to section 9 of this act was carried out;

(b) The expenditures made by the school for the alternative program;

(c) The number of pupils who were removed temporarily from the classroom pursuant to section 4 of this act and the number of those pupils who were permanently removed from the classroom;

(d) The reasons for which pupils were removed from the classroom pursuant to section 4 of this act;

(e) The average length of time during which pupils who were removed from the classroom pursuant to section 4 of this act remained out of the classroom;

(f) The number of disciplinary referrals, suspensions and expulsions that occurred at the school before and after the establishment of the alternative program; and

(g) An analysis of the academic achievement and performance of the pupils before and after the pupils participated in the alternative program.

2. The department of education shall evaluate the effectiveness of the pilot project for alternative programs of education for disruptive pupils established pursuant to section 9 of this act based on the reports submitted by the schools pursuant to subsection 1. In addition, the department shall solicit and analyze data from schools that were not included in the pilot project but have established alternative programs of education for disruptive pupils. The department may spend not more than $10,000 of the amount appropriated pursuant to section 10 of this act during the fiscal years 1999-2001 to hire a contractor to assist with the evaluation.

3. After conducting an evaluation pursuant to subsection 2, the department of education shall submit a report of its findings to the legislative committee on education created pursuant to NRS 218.5352 on or before November 1, 2000, and shall submit a final report to the director of the legislative counsel bureau for transmission to the next regular session of the legislature on or before February 15, 2001.

Sec. 12. 1. This section and section 10 of this act become effective upon passage and approval.

2. Sections 1 to 9, inclusive, and 11 of this act become effective on July 1, 1999.

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ê1999 Statutes of Nevada, Page 3190ê

CHAPTER 592, AB 477

Assembly Bill No. 477–Committee on Commerce and Labor

CHAPTER 592

AN ACT relating to mobile home parks; requiring a landlord of a mobile home park to remove snow from certain areas of the park; requiring a landlord to trim the trees within the park and dispose of the trimmings from those trees; increasing the fee for a late monthly rental payment; authorizing a landlord to give a discount on the monthly rental payment to a tenant who pays his rent in a timely manner or pays his rent by check, money order or electronic means; prohibiting a tenant from harassing a landlord, manager or assistant manager of a mobile home park, or an employee or agent of a landlord; providing remedies for failure of the buyer and tenant of a mobile home to gain prior approval of landlord where required; providing a civil penalty; and providing other matters properly relating thereto.

[Approved June 9, 1999]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY,

DO ENACT AS FOLLOWS:

Section 1. NRS 118B.090 is hereby amended to read as follows:

118B.090 The landlord shall:

1. Maintain all common areas of the park in a clean and safe condition;

2. Maintain in good working order all electrical, plumbing and sanitary facilities, appliances and recreational facilities which he furnishes;

3. Maintain in a safe and secure location individual mail boxes for the tenants if the mail is delivered to the landlord for distribution to the tenants; [and]

4. Maintain all driveways within the park and sidewalks adjacent to the street [.] ; and

5. Remove snow from the sidewalks and streets within the park, and from sidewalks adjacent to the street.

Sec. 2. NRS 118B.120 is hereby amended to read as follows:

118B.120 1. The landlord or his agent or employee may:

(a) Require that the tenant landscape and maintain the tenant’s lot if the landlord advises the tenant in writing of reasonable requirements for the landscaping.

(b) If the tenant does not comply with the provisions of paragraph (a), maintain the tenant’s lot and charge the tenant a service fee for the actual cost of that maintenance.

(c) Require that the mobile home be removed from the park if it is unoccupied for more than 90 consecutive days and the tenant or dealer is not making good faith and diligent efforts to sell it.

2. The landlord shall maintain, in the manner required for the other tenants, any lot on which is located a mobile home within the park which has been repossessed, abandoned or held for rent or taxes. The landlord is entitled to reimbursement for the cost of that maintenance from the repossessor or lien holder or from the proceeds of any sale for taxes, as the case may be.

3. The landlord shall trim all the trees located within the park and dispose of the trimmings from those trees absent a voluntary assumption of that duty by the tenant for trees on the tenant’s lot.

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ê1999 Statutes of Nevada, Page 3191 (CHAPTER 592, AB 477)ê

4. For the purposes of this section, a mobile home shall be deemed to be abandoned if:

(a) It is located on a lot in a mobile home park for which no rent has been paid for at least 60 days;

(b) It is unoccupied; and

Sec. 3. NRS 118B.140 is hereby amended to read as follows:

118B.140 The landlord or his agent or employee shall not:

1. Require a person to purchase a mobile home from him or any other person as a condition to renting a mobile home lot to the purchaser or give an adjustment of rent or fees, or provide any other incentive to induce the purchase of a mobile home from him or any other person.

2. Charge or receive:

(a) Any entrance or exit fee for assuming or leaving occupancy of a mobile home lot.

(b) Any transfer or selling fee or commission as a condition to permitting a tenant to sell his mobile home or recreational vehicle within the mobile home park even if the mobile home or recreational vehicle is to remain within the park, unless the landlord is licensed as a dealer of mobile homes pursuant to NRS 489.311 and has acted as the tenant’s agent in the sale pursuant to a written contract.

(d) Any fee for pets kept by a tenant in the park. If special facilities or services are provided, the landlord may also charge a fee reasonably related to the cost of maintenance of the facility or service and the number of pets kept in the facility.

(e) Any additional service fee unless the landlord provides an additional service which is needed to protect the health and welfare of the tenants, and written notice advising each tenant of the additional fee is sent to the tenant 90 days in advance of the first payment to be made, and written notice of the additional fee is given to prospective tenants on or before commencement of their tenancy. A tenant may only be required to pay the additional service fee for the duration of the additional service.

(f) Any fee for a late monthly rental payment within 4 days [of] after the date the rental payment is due or which exceeds [$1] $5 for each day , excluding Saturdays, Sundays and legal holidays, which the payment is overdue, beginning on the day after the payment was due. Any fee for late payment of charges for utilities must be in accordance with the requirements prescribed by the public utilities commission of Nevada.

(g) Any fee, surcharge or rent increase to recover from his tenants the costs resulting from converting from a master-metered water system to individual water meters for each mobile home lot.

(h) Any fee, surcharge or rent increase to recover from his tenants any amount that exceeds the amount of the cost for a governmentally mandated service or tax that was paid by the landlord.

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ê1999 Statutes of Nevada, Page 3192 (CHAPTER 592, AB 477)ê

Sec. 4. NRS 118B.150 is hereby amended to read as follows:

118B.150 The landlord or his agent or employee shall not:

1. Increase rent or additional charges unless:

(a) The rent charged after the increase is the same rent charged for mobile homes of the same size or lots of the same size or of a similar location within the park, except that a discount may be selectively given to persons who [are:

(1) Handicapped;

(2) Fifty-five] :

(1) Are handicapped;

(2) Are 55 years of age or older; [or

(3) Long-term]

(3) Are long-term tenants of the park if the landlord has specified in the rental agreement or lease the period of tenancy required to qualify for such a discount;

(4) Pay their rent in a timely manner; or

(5) Pay their rent by check, money order or electronic means;

(b) Any increase in additional charges for special services is the same amount for each tenant using the special service; and

(c) Written notice advising a tenant of the increase is received by the tenant 90 days before the first payment to be increased and written notice of the increase is given to prospective tenants before commencement of their tenancy. In addition to the notice provided to a tenant pursuant to this paragraph, if the landlord or his agent or employee knows or reasonably should know that the tenant receives assistance from the fund created pursuant to NRS 118B.215, the landlord or his agent or employee shall provide to the administrator written notice of the increase 90 days before the first payment to be increased.

2. Require a tenant to pay for an improvement to the common area of a mobile home park unless the landlord is required to make the improvement pursuant to an ordinance of a local government.

3. Require a tenant to pay for a capital improvement to the mobile home park unless the tenant has notice of the requirement at the time he enters into the rental agreement. A tenant may not be required to pay for a capital improvement after the tenant enters into the rental agreement unless the tenant consents to it in writing or is given 60 days’ notice of the requirement in writing. The landlord may not establish such a requirement unless a meeting of the tenants is held to discuss the proposal and the landlord provides each tenant with notice of the proposal and the date, time and place of the meeting not less than 60 days before the meeting. The notice must include a copy of the proposal. A notice in a periodic publication of the park does not constitute notice for the purposes of this subsection.

4. Require a tenant to pay his rent by check or money order.

5. Require a tenant who pays his rent in cash to apply any change to which he is entitled to the next periodic payment that is due. The landlord or his agent or employee shall have an adequate amount of money available to provide change to such a tenant.

6. Prohibit or require fees or deposits for any meetings held in the park’s community or recreational facility by the tenants or occupants of any mobile home or recreational vehicle in the park to discuss the park’s affairs, or any political or social meeting sponsored by a tenant, if the meetings are held at reasonable hours and when the facility is not otherwise in use, or prohibit the distribution of notices of those meetings.

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ê1999 Statutes of Nevada, Page 3193 (CHAPTER 592, AB 477)ê

political or social meeting sponsored by a tenant, if the meetings are held at reasonable hours and when the facility is not otherwise in use, or prohibit the distribution of notices of those meetings.

7. Interrupt, with the intent to terminate occupancy, any utility service furnished the tenant except for nonpayment of utility charges when due. Any landlord who violates this subsection is liable to the tenant for actual damages.

8. Prohibit a tenant from having guests, but he may require the tenant to register the guest within 48 hours after his arrival, Sundays and legal holidays excluded, and if the park is a secured park, a guest may be required to register upon entering and leaving.

9. Charge a fee for a guest who does not stay with the tenant for more than a total of 60 days in a calendar year. The tenant of a mobile home lot who is living alone may allow one other person to live in his home without paying an additional charge or fee, unless such a living arrangement constitutes a violation of chapter 315 of NRS. No agreement between a tenant and his guest alters or varies the terms of the rental contract between the tenant and the landlord , and the guest is subject to the rules and regulations of the landlord.

10. Prohibit a tenant from erecting a fence along the perimeter of the tenant’s lot if the fence complies with any standards for fences established by the landlord, including limitations established for the height of fences, the materials used for fences and the manner in which fences are to be constructed.

11. Prohibit any tenant from soliciting membership in any association which is formed by the tenants who live in the park. As used in this subsection, “solicit” means to make an oral or written request for membership or the payment of dues or to distribute, circulate or post a notice for payment of those dues.

12. Prohibit a public officer or candidate for public office from walking through the park to talk with the tenants.

13. If a tenant has voluntarily assumed responsibility to trim the trees on his lot, require the tenant to trim any particular tree located on the lot or dispose of the trimmings unless a danger or hazard exists.

Sec. 5. NRS 118B.170 is hereby amended to read as follows:

118B.170 1. The landlord may require approval of a prospective buyer and tenant before the sale of a tenant’s mobile home or recreational vehicle, if the mobile home or vehicle will remain in the park. The landlord shall consider the record, if any, of the prospective buyer and tenant concerning the payment of rent. The landlord shall not unreasonably withhold his consent.

2. If a tenant sells his mobile home or recreational vehicle, the landlord may require that the mobile home or recreational vehicle be removed from the park if it is deemed by the park’s written rules or regulations in the possession of the tenants to be in a run-down condition or in disrepair or does not meet the safety standards set forth in NRS 461A.120. If the mobile home must be inspected to determine compliance with the standards, the person requesting the inspection shall pay for it.

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ê1999 Statutes of Nevada, Page 3194 (CHAPTER 592, AB 477)ê

3. If the landlord requires the approval of a prospective buyer and tenant, he shall post and maintain a sign which is clearly readable at the entrance to the park which advises the reader that before a mobile home in the park is sold, the prospective buyer must be approved by the landlord.

4. If the landlord requires the approval of a prospective buyer and tenant of a mobile home or recreational vehicle and the mobile home or recreational vehicle is sold without the approval of the landlord, the landlord may:

(a) After providing at least 10 days’ written notice to the buyer and tenant, bring an action for an unlawful detainer in the manner prescribed in chapter 40 of NRS; or

(b) Require the buyer and tenant to sign a rental agreement. If the buyer and tenant refuse to sign the rental agreement within 5 days after such a request, the landlord may, after providing at least 10 days’ written notice to the buyer and tenant, bring an action for an unlawful detainer in the manner provided in chapter 40 of NRS.

5. For the purposes of NRS 40.251, a person who:

(a) Purchases a mobile home or recreational vehicle from a tenant of a mobile home park which will remain in the park;

(b) Was required to be approved by the landlord of the mobile home park before the sale of the mobile home or recreational vehicle; and

shall be deemed a tenant at will and a lessee of the mobile home park.

Sec. 6. NRS 118B.210 is hereby amended to read as follows:

118B.210 1. The landlord shall not terminate a tenancy, refuse to renew a tenancy, increase rent or decrease services he normally supplies, or bring or threaten to bring an action for possession of a mobile home lot as retaliation upon the tenant because:

(a) He has complained in good faith about a violation of a building, safety or health code or regulation pertaining to a mobile home park to the governmental agency responsible for enforcing the code or regulation.

(b) He has complained to the landlord concerning the maintenance, condition or operation of the park or a violation of any provision of NRS 118B.040 to 118B.220, inclusive, and 118B.240.

(d) He has requested the reduction in rent required by:

(1) NRS 118.165 as a result of a reduction in property taxes.

(2) NRS 118B.153 when a service, utility or amenity is decreased or eliminated by the landlord.

(e) A citation has been issued to the landlord as the result of a complaint of the tenant.

(f) In a judicial proceeding or arbitration between the landlord and the tenant, an issue has been determined adversely to the landlord.

2. A landlord, manager or assistant manager of a mobile home park shall not willfully harass a tenant.

3. A tenant shall not willfully harass a landlord, manager, assistant manager of a mobile home park or an employee or agent of the landlord.

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ê1999 Statutes of Nevada, Page 3195 (CHAPTER 592, AB 477)ê

4. As used in this section, “harass” means to threaten or intimidate, through words or conduct, with the intent to affect the terms or conditions of a tenancy or [the tenant’s] a person’s exercise of his rights pursuant to this chapter.

Sec. 7. NRS 118B.260 is hereby amended to read as follows:

118B.260 Any landlord who violates any of the provisions of this chapter [:] and any other person who violates NRS 118B.210:

1. For the first violation, shall pay a civil penalty of not more than $1,000.

2. For the second violation, shall pay a civil penalty of not more than $2,500.

3. For the third or subsequent violation, shall pay a civil penalty of not more than $5,000 for each violation.

If a civil penalty is imposed pursuant to this section, the costs of the proceeding, including investigative costs and attorney’s fees, must be recovered by the administrator, if possible.

Sec. 8. NRS 40.251 is hereby amended to read as follows:

40.251 A tenant of real property, a recreational vehicle or a mobile home for a term less than life is guilty of an unlawful detainer when having leased:

1. Real property, except as otherwise provided in this section, or a mobile home for an indefinite time, with monthly or other periodic rent reserved, he continues in possession thereof, in person or by subtenant, without the landlord’s consent after the expiration of a notice of:

(a) For tenancies from week to week, at least 7 days;

(b) For all other periodic tenancies, at least 30 days; or

2. A dwelling unit subject to the provisions of chapter 118A of NRS, he continues in possession, in person or by subtenant, without the landlord’s consent after expiration of:

(a) The term of the rental agreement or its termination and, except as otherwise provided in paragraph (b), the expiration of a notice of at least 7 days for tenancies from week to week and 30 days for all other periodic tenancies; or

(b) A notice of at least 5 days where the tenant has failed to perform his basic or contractual obligations under chapter 118A of NRS.

3. A mobile home lot subject to the provisions of chapter 118B of NRS, or a lot for a recreational vehicle in an area of a mobile home park other than an area designated as a recreational vehicle lot pursuant to the provisions of subsection 6 of NRS 40.215, he continues in possession, in person or by subtenant, without the landlord’s consent, after notice has been given pursuant to NRS 118B.170 or 118B.190 and the period of the notice has expired.

4. A recreational vehicle lot, he continues in possession, in person or by subtenant, without the landlord’s consent, after the expiration of a notice of at least 5 days.

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ê1999 Statutes of Nevada, Page 3196ê

CHAPTER 593, AB 472

Assembly Bill No. 472–Assemblymen Arberry, Buckley, Goldwater, Mortenson, Parks, Anderson, Dini, Claborn, de Braga, Chowning, Parnell, Koivisto, McClain, Williams, Neighbors, Lee, Thomas, Segerblom and Perkins

CHAPTER 593

AN ACT relating to the judicial system; increasing the additional salary for longevity paid to certain justices and judges; making an appropriation; and providing other matters properly relating thereto.

[Approved June 9, 1999]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY,

DO ENACT AS FOLLOWS:

Section 1. NRS 3.030 is hereby amended to read as follows:

3.030 1. Until the first Monday in January 1997, the annual base salary of each district judge is $79,000. From and after the first Monday in January 1997, the annual base salary of each district judge is $100,000.

2. If a district judge has served in his office for at least [5] 4 years, he is entitled to an additional salary of [1] 2 percent of his base salary for each year of service. The additional salary must not exceed 22 percent of his base salary.

3. The base salaries and the additional salary for longevity must be paid in biweekly installments out of the district judges’ salary account of the supreme court.

4. No salary of any district judge may be paid in advance.

Sec. 2. NRS 213.015 is hereby amended to read as follows:

213.015 1. A member of the board who has served as a district judge or as a justice of the supreme court, or any combination thereof, for at least [6] 4 years, is entitled to compensation as a member of the board in the amount of [1] 2 percent of his annual salary as a justice of the supreme court for each year of service as a district judge or as a justice of the supreme court, or any combination thereof. The compensation received by a justice for his service on the board must not exceed 22 percent of his annual salary as a justice of the supreme court.

2. The salaries provided for in this section must be paid out of money provided by direct legislative appropriation from the state general fund.

Sec. 3. 1. There is hereby appropriated from the state general fund to the Supreme Court for carrying out the amendatory provisions of this act:

For the fiscal year 1999-2000............................................................................................................................ $182,612

For the fiscal year 2000-2001............................................................................................................................ $205,367

2. Any balance of the sums appropriated by subsection 1 remaining at the end of the respective fiscal years must not be committed for expenditure after June 30 of the respective fiscal years and reverts to the state general fund as soon as all payments of money committed have been made.

Sec. 4. This act becomes effective on July 1, 1999.

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ê1999 Statutes of Nevada, Page 3197ê

CHAPTER 594, SB 521

Senate Bill No. 521–Committee on Taxation

CHAPTER 594

AN ACT relating to taxation; revising the provisions governing the exemption of works of fine art from certain taxes; and providing other matters properly relating thereto.

[Approved June 9, 1999]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY,

DO ENACT AS FOLLOWS:

Section 1. Chapter 361 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 and 3 of this act.

Sec. 2. 1. A taxpayer may collect an admission fee for the exhibition of fine art otherwise exempt from taxation pursuant to NRS 361.068 if the taxpayer offers to residents of the State of Nevada a discount of 50 percent from any admission fee charged to nonresidents. The discounted admission fee for residents must be offered at any time the exhibition is open to the public and admission fees are being charged.

2. Except as otherwise provided in subsection 5, if a taxpayer collects a fee for the exhibition of fine art otherwise exempt from taxation pursuant to NRS 361.068, the exemption pertaining to that fine art for the fiscal year must be reduced by the net revenue derived by the taxpayer for that fiscal year. The exemption pertaining to fine art for a particular fiscal year must not be reduced below zero, regardless of the amount of the net revenue derived by the taxpayer for that fiscal year.

3. A tax resulting from the operation of this section is due with the tax otherwise due under the taxpayer’s first statement filed pursuant to NRS 361.265 after the 15th day of the fourth month after the end of the fiscal year in which the net revenue was received or, if no such statement is required to be filed, under a statement of the net revenue filed on or before the last day of the fourth month after the end of that fiscal year.

4. A taxpayer who is required to pay a tax resulting from the operation of this section may receive a credit against the tax for any donations made by the taxpayer to the state arts council, the division of museums and history dedicated trust fund established pursuant to NRS 381.0031, a museum that provides exhibits specifically related to nature or a museum that provides exhibits specifically related to children, if the taxpayer:

(a) Made the donation before the date that either statement required pursuant to subsection 3 is due; and

(b) Provides to the county assessor documentation of the donation at the time that he files the statement required pursuant to subsection 3.

5. If a taxpayer qualifies for and avails himself of both of the exemptions from taxation provided by NRS 361.068 and 374.291, the reduction of the exemptions by the net revenue derived by the taxpayer, as required pursuant to subsection 2 of this section and subsection 2 of section 6 of this act, must be carried out in such a manner that the total net revenue derived by the taxpayer is first applied to reduce the exemption provided pursuant to NRS 374.291. If the net revenue exceeds the amount of the exemption provided pursuant to NRS 374.291, the remaining net revenue must be applied to reduce the exemption provided pursuant to NRS 361.068.

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ê1999 Statutes of Nevada, Page 3198 (CHAPTER 594, SB 521)ê

revenue must be applied to reduce the exemption provided pursuant to NRS 361.068. If the net revenue is less than or equal to the exemption provided pursuant to NRS 374.291 for that fiscal year, the exemption provided pursuant to NRS 361.068 must not be reduced.

6. For the purposes of this section:

(a) “Direct costs of owning and exhibiting the fine art” does not include any allocation of the general and administrative expense of a business or organization that conducts activities in addition to the operation of the facility in which the fine art is displayed, including, without limitation, an allocation of the salary and benefits of a senior executive who is responsible for the oversight of the facility in which the fine art is displayed and who has substantial responsibilities related to the other activities of the business or organization.

(b) “Net revenue” means the amount of the fees collected for exhibiting the fine art during that fiscal year less the following paid or made during that fiscal year:

(1) The direct costs of owning and exhibiting the fine art; and

(2) The cost of educational programs associated with the taxpayer’s public display of fine art, including the cost of meeting the requirements of sub-subparagraph (IV) of subparagraph (1) of paragraph (b) of subsection 5 of NRS 361.068.

Sec. 3. The exemption provided in paragraph (j) of subsection 1 of NRS 361.068 applies to taxes on personal property otherwise due from the owner of a work of fine art that is leased to a person who publicly displays the work. The price or value to which that section refers is the price or value of the work that is leased.

Sec. 4. NRS 361.068 is hereby amended to read as follows:

361.068 1. The following personal property is exempt from taxation:

(a) Personal property held for sale by a merchant;

(b) Personal property held for sale by a manufacturer;

(c) Raw materials and components held by a manufacturer for manufacture into products, and supplies to be consumed in the process of manufacture;

(d) Tangible personal property purchased by a business which will be consumed during the operation of the business;

(e) Livestock;

(f) Colonies of bees;

(g) Pipe and other agricultural equipment used to convey water for the irrigation of legal crops;

(h) All boats;

(i) Slide-in campers and camper shells;

(j) [Fine] Except as otherwise provided in section 2 of this act, fine art for public display; and

(k) Computers and related equipment donated for use in schools in this state.

2. The Nevada tax commission may exempt from taxation that personal property for which the annual taxes would be less than the cost of collecting those taxes. If such an exemption is provided, the Nevada tax commission shall annually determine the average cost of collecting property taxes in this state which must be used in determining the applicability of the exemption.

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ê1999 Statutes of Nevada, Page 3199 (CHAPTER 594, SB 521)ê

shall annually determine the average cost of collecting property taxes in this state which must be used in determining the applicability of the exemption.

3. A person claiming the exemption provided for in paragraph (j) of subsection 1 shall [, on] :

(a) On or before June 15 for the next ensuing fiscal year, file with the county assessor an affidavit declaring that the fine art [:

(a) Was purchased in an arm’s length transaction for $25,000 or more, or has an appraised value of $25,000 or more;

(b) Will be on public display in a public or private art gallery, museum or other building or area in this state for at least 20 hours per week during at least 35 weeks of the year for which the exemption is claimed; and

(c) Will be available for educational purposes.] will, during that ensuing fiscal year, meet all the criteria set forth in paragraph (b) of subsection 5; and

(b) During any fiscal year in which he claims the exemption, make available for educational purposes and not for resale, upon written request and without charge to any public school as defined in NRS 385.007, private school as defined in NRS 394.103 and parent of a child who receives instruction in a home pursuant to NRS 392.070, one copy of a poster depicting the fine art that the facility has on public display if such a poster is available for purchase by the public at the time of the request.

4. To qualify for the exemption provided in paragraph (k) of subsection 1, a taxpayer must donate the property through a foundation or organization, not for profit, that accepts such property for use in schools in this state. The foundation or organization shall issue a voucher identifying each item of property donated. To obtain the benefit of the exemption, the taxpayer must apply to the county assessor and tender the voucher. The county assessor shall compute the assessed value of the property for the year in which the donation was made using the original cost and the year of acquisition. The county assessor shall allow a credit of that amount against the personal property assessment for the year following the donation.

5. As used in this section:

(a) “Boat” includes any vessel or other watercraft, other than a seaplane, used or capable of being used as a means of transportation on the water.

(b) “Fine art for public display” :

(1) Except as otherwise provided in subparagraph (2), means a work of art which:

[(1)] (I) Is an original painting in oil, mineral, water colors, vitreous enamel, pastel or other medium, an original mosaic, drawing or sketch, an original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a similar material, an original work of mixed media or a lithograph;

[(2)] (II) Was purchased in an arm’s length transaction for $25,000 or more, or has an appraised value of $25,000 or more;

[(3)] (III) Is on public display in a public or private art gallery, museum or other building or area in this state for at least 20 hours per week during at least 35 weeks of each year for which the exemption is claimed [;] or, if the facility displaying the fine art disposes of it before the end of that year, during at least two-thirds of the full weeks during which the facility had possession of it, or if the gallery, museum or other building or area in which the fine art will be displayed will not be opened until after the beginning of the fiscal year for which the exemption is claimed, these display requirements must instead be met for the first full fiscal year after the date of opening, and the date of opening must not be later than 2 years after the purchase of the fine art being displayed; and

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ê1999 Statutes of Nevada, Page 3200 (CHAPTER 594, SB 521)ê

which the fine art will be displayed will not be opened until after the beginning of the fiscal year for which the exemption is claimed, these display requirements must instead be met for the first full fiscal year after the date of opening, and the date of opening must not be later than 2 years after the purchase of the fine art being displayed; and

[(4)] (IV) Is on display in a facility that is available for [educational purposes.] group tours by pupils or students for at least 5 hours on at least 60 days of each full year for which the exemption is claimed, during which the facility in which it is displayed is open, by prior appointment and at reasonable times, without charge; and

(2) Does not include:

(I) A work of fine art that is a fixture or an improvement to real property;

(II) A work of fine art that constitutes a copy of an original work of fine art, unless the work is a lithograph that is a limited edition and that is signed and numbered by the artist;

(III) Products of filmmaking or photography, including, without limitation, motion pictures;

(IV) Literary works;

(V) Property used in the performing arts, including, without limitation, scenery or props for a stage; or

(VI) Property that was created for a functional use other than, or in addition to, its aesthetic qualities, including, without limitation, a classic or custom-built automobile or boat, a sign that advertises a business, and custom or antique furniture, lamps, chandeliers, jewelry, mirrors, doors or windows.

(1) Meets the requirements of sub-subparagraphs (I) and (II) of subparagraph (1) of paragraph (b);

(2) Is made available for sale within 2 years after it is acquired; and

(3) Is made available for viewing by the public or prospective purchasers, or both, within 2 years after it is acquired, whether or not a fee is charged for viewing it and whether or not it is also used for purposes other than viewing.

(d) “Public display” means the display of a work of fine art where members of the public have access to the work of fine art for viewing during publicly advertised hours. The term does not include the display of a work of fine art in an area where the public does not generally have access, including, without limitation, a private office, hallway or meeting room of a business, a room of a business used for private lodging and a private residence.

(e) “Pupil” means a person who:

(1) Is enrolled for the current academic year in a public school as defined in NRS 385.007 or a private school as defined in NRS 394.103; or

(2) Receives instruction in a home and is excused from compulsory attendance pursuant to NRS 392.070.

(f) “Student” means a person who is enrolled for the current academic year in:

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ê1999 Statutes of Nevada, Page 3201 (CHAPTER 594, SB 521)ê

(1) A community college or university; or

(2) A licensed postsecondary educational institution as defined in NRS 394.099 and a course concerning fine art.

Sec. 5. NRS 361.068 is hereby amended to read as follows:

361.068 1. The following personal property is exempt from taxation:

(a) Personal property held for sale by a merchant;

(b) Personal property held for sale by a manufacturer;

(c) Raw materials and components held by a manufacturer for manufacture into products, and supplies to be consumed in the process of manufacture;

(d) Tangible personal property purchased by a business which will be consumed during the operation of the business;

(e) Livestock;

(f) Colonies of bees;

(g) Pipe and other agricultural equipment used to convey water for the irrigation of legal crops;

(h) All boats;

(i) Slide-in campers and camper shells; and

(j) [Fine] Except as otherwise provided in section 2 of this act, fine art for public display.

3. A person claiming the exemption provided for in paragraph (j) of subsection 1 shall [, on] :

(a) On or before June 15 for the next ensuing fiscal year, file with the county assessor an affidavit declaring that the fine art [:

(a) Was purchased in an arm’s length transaction for $25,000 or more, or has an appraised value of $25,000 or more;

(c) Will be available for educational purposes.] will, during that ensuing fiscal year, meet all the criteria set forth in paragraph (b) of subsection 4; and

4. As used in this section:

(a) “Boat” includes any vessel or other watercraft, other than a seaplane, used or capable of being used as a means of transportation on the water.

(b) “Fine art for public display” :

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ê1999 Statutes of Nevada, Page 3202 (CHAPTER 594, SB 521)ê

(1) Except as otherwise provided in subparagraph (2), means a work of art which:

[(2)] (II) Was purchased in an arm’s length transaction for $25,000 or more, or has an appraised value of $25,000 or more;

[(3)] (III) Is on public display in a public or private art gallery, museum or other building or area in this state for at least 20 hours per week during at least 35 weeks of each year for which the exemption is claimed [;] or, if the facility displaying the fine art disposes of it before the end of that year, during at least two-thirds of the full weeks during which the facility had possession of it, or if the gallery, museum or other building or area in which the fine art will be displayed will not be opened until after the beginning of the fiscal year for which the exemption is claimed, these display requirements must be met for the first full fiscal year after the date of opening, and the date of opening must not be later than 2 years after the purchase of the fine art being displayed; and

(2) Does not include:

(I) A work of fine art that is a fixture or an improvement to real property;

(II) A work of fine art that constitutes a copy of an original work of fine art, unless the work is a lithograph that is a limited edition and that is signed and numbered by the artist;

(III) Products of filmmaking or photography, including, without limitation, motion pictures;

(IV) Literary works;

(V) Property used in the performing arts, including, without limitation, scenery or props for a stage; or

(1) Meets the requirements of sub-subparagraphs (I) and (II) of subparagraph (1) of paragraph (b);

(2) Is made available for sale within 2 years after it is acquired; and

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ê1999 Statutes of Nevada, Page 3203 (CHAPTER 594, SB 521)ê

(e) “Pupil” means a person who:

(1) Is enrolled for the current academic year in a public school as defined in NRS 385.007 or a private school as defined in NRS 394.103; or

(2) Receives instruction in a home and is excused from compulsory attendance pursuant to NRS 392.070.

(f) “Student” means a person who is enrolled for the current academic year in:

(1) A community college or university; or

(2) A licensed postsecondary educational institution as defined in NRS 394.099 and a course concerning fine art.

Sec. 6. Chapter 374 of NRS is hereby amended by adding thereto a new section to read as follows:

1. A taxpayer may collect an admission fee for the exhibition of fine art otherwise exempt from taxation on its sale, storage, use or other consumption pursuant to NRS 374.291 if the taxpayer offers to residents of the State of Nevada a discount of 50 percent from any admission fee charged to nonresidents. The discounted admission fee for residents must be offered at any time the exhibition is open to the public and admission fees are being charged.

2. If a taxpayer collects a fee for the exhibition of fine art otherwise exempt from taxation on its sale, storage, use or other consumption pursuant to NRS 374.291 and the fee is collected during the first full fiscal year after the purchase of the fine art, the exemption pertaining to that fine art must be reduced by the net revenue derived by the taxpayer for that first full fiscal year. The exemption pertaining to fine art must not be reduced below zero, regardless of the amount of the net revenue derived by the taxpayer for that first full fiscal year.

3. Any tax due pursuant to this section must be paid with the first sales and use tax return otherwise required to be filed by the taxpayer following the 15th day of the fourth month after the end of the first full fiscal year following the purchase of the fine art or, if no sales and use tax return is otherwise required to be filed by the taxpayer, with a sales and use tax return filed specifically for this purpose on or before the last day of the fourth month after the end of the first full fiscal year following the purchase of the fine art.

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ê1999 Statutes of Nevada, Page 3204 (CHAPTER 594, SB 521)ê

(a) Made the donation before the date that either return required pursuant to subsection 3 is due; and

(b) Provides the department documentation of the donation at the time that he files the return required pursuant to subsection 3.

5. For the purposes of this section:

(b) “Net revenue” means the amount of the fees collected for exhibiting the fine art during the fiscal year less the following paid or made during the fiscal year:

(1) The direct costs of owning and exhibiting the fine art; and

(2) The cost of educational programs associated with the taxpayer’s public display of fine art, including the cost of meeting the requirements of paragraph (d) of subsection 4 of NRS 374.291.

Sec. 7. NRS 374.055 is hereby amended to read as follows:

374.055 1. “Retail sale” or “sale at retail” means a sale for any purpose other than resale in the regular course of business of tangible personal property. The terms do not include a sale of property that:

(a) Meets the requirements of subparagraphs (1) and (2) of paragraph (a) of subsection 4 of NRS 374.291;

(b) Is made available for sale within 2 years after it is acquired; and

(c) Is made available for viewing by the public or prospective purchasers, or both, within 2 years after it is acquired, whether or not a fee is charged for viewing it and whether or not it is also used for purposes other than viewing.

2. The delivery in a county of tangible personal property by an owner or former owner thereof or by a factor, or agent of such owner, former owner or factor, if the delivery is to a consumer or person for redelivery to a consumer, pursuant to a retail sale made by a retailer not engaged in business in the county, is a retail sale in the county by the person making the delivery. He shall include the retail selling price of the property in his gross receipts.

Sec. 8. (Deleted by amendment.)

Sec. 9. NRS 374.085 is hereby amended to read as follows:

374.085 “Storage [” and “use” do] , use or other consumption” does not include [the] :

1. The keeping, retaining or exercising any right or power over tangible personal property for the purpose of subsequently transporting it outside the state for use thereafter solely outside the state, or for the purpose of being processed, fabricated or manufactured into, attached to, or incorporated into, other tangible personal property to be transported outside the state and thereafter used solely outside the state [.] ; or

2. The keeping, retaining or exercising any right or power over tangible property that:

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ê1999 Statutes of Nevada, Page 3205 (CHAPTER 594, SB 521)ê

(a) Meets the requirements of subparagraphs (1) and (2) of paragraph (a) of subsection 4 of NRS 374.291;

(b) Is made available for sale within 2 years after it is acquired; and

Sec. 10. NRS 374.291 is hereby amended to read as follows:

374.291 1. [There] Except as otherwise provided in section 6 of this act, there are exempted from the taxes imposed by this chapter the gross receipts from the sales of, and the storage, use or other consumption in a county of, works of fine art for public display.

2. In determining whether a payment made pursuant to a lease of a work of fine art is exempt under subsection 1, the value for the purpose of paragraph (b) of subsection 4 is the value of the work and not the value of possession for the term of the lease, and the year described in paragraphs (c) and (d) of subsection 4 is the first full calendar year after the payment is made.

3. During the first full fiscal year following the purchase of fine art for which a taxpayer receives the exemption provided in this section, make available, upon written request and without charge to any public school as defined in NRS 385.007, private school as defined in NRS 394.103 and parent of a child who receives instruction in a home pursuant to NRS 392.070, one copy of a poster depicting the fine art that the facility has on public display and that the facility makes available for purchase by the public at the time of the request.

4. As used in this section [, “fine] :

(a) “Fine art for public display” :

(1) Except as otherwise provided in subparagraph (2), means a work of art which:

[(a)] (I) Is an original painting in oil, mineral, water colors, vitreous enamel, pastel or other medium, an original mosaic, drawing or sketch, an original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a similar material, an original work of mixed media or a lithograph;

[(b)] (II) Is purchased in an arm’s length transaction for $25,000 or more, or has an appraised value of $25,000 or more;

[(c)] (III) Will be on public display in a public or private art gallery, museum or other building or area in this state for at least 20 hours per week during at least 35 weeks of the first full calendar year after the date on which it is purchased [;] , or if the facility displaying the fine art disposes of it before the end of that year, during at least two-thirds of the full weeks during which the facility had possession of it, or if the gallery, museum, or other building or area in which the fine art will be displayed will not be opened until after the beginning of the first full calendar year after the date on which the fine art is purchased, these display requirements must instead be met for the first full fiscal year after the date of opening, and the date of opening must not be later than 2 years after the purchase of the fine art being displayed; and

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ê1999 Statutes of Nevada, Page 3206 (CHAPTER 594, SB 521)ê

[(d)] (IV) Will be on display in a facility that is available for [educational purposes.] group tours by pupils or students for at least 5 hours on at least 60 days of the first full fiscal year after the purchase of the fine art, during which the facility in which it is displayed is open, by prior appointment and at reasonable times, without charge; and

(2) Does not include:

(I) A work of fine art that is a fixture or an improvement to real property;

(II) Materials purchased by an artist for consumption in the production of a work of art that is to be a fixture or an improvement to real property;

(III) A work of fine art that constitutes a copy of an original work of fine art, unless the work is a lithograph that is a limited edition and that is signed and numbered by the artist;

(IV) Products of filmmaking or photography, including, without limitation, motion pictures;

(V) Literary works;

(VI) Property used in the performing arts, including, without limitation, scenery or props for a stage; or

(VII) Property that was created for a functional use other than, or in addition to, its aesthetic qualities, including, without limitation, a classic or custom-built automobile or boat, a sign that advertises a business, and custom or antique furniture, lamps, chandeliers, jewelry, mirrors, doors or windows.

(b) “Public display” means the display of a work of fine art where members of the public have access to the work of fine art for viewing during publicly advertised hours. The term does not include the display of a work of fine art in an area where the public does not generally have access, including, without limitation, a private office, hallway or meeting room of a business, a room of a business used for private lodging and a private residence.

(1) Is enrolled for the current academic year in a public school as defined in NRS 385.007 or a private school as defined in NRS 394.103; or

(2) Receives instruction in a home and is excused from compulsory attendance pursuant to NRS 392.070.

(d) “Student” means a person who is enrolled for the current academic year in:

(1) A community college or university; or

(2) A licensed postsecondary educational institution as defined in NRS 394.099 and a course concerning fine art.

Sec. 11. If a facility containing a public or private art gallery, museum or other building or area for exhibition was under development or construction on July 1, 1997, sections 1 and 2 of chapter 592, Statutes of Nevada 1997, at pages 2979 and 2980, apply to works of art purchased before that date and displayed in the gallery, museum or other building or area within 2 years after their purchase. In that case, the required period of display is the later of the year for which the exemption is claimed or the first full year after the gallery, museum or other area or building is first opened for exhibition, and the affidavit required by section 1 of chapter 592, Statutes of Nevada 1997, at page 2979, must be filed on or before June 15 preceding the applicable year.

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ê1999 Statutes of Nevada, Page 3207 (CHAPTER 594, SB 521)ê

exhibition, and the affidavit required by section 1 of chapter 592, Statutes of Nevada 1997, at page 2979, must be filed on or before June 15 preceding the applicable year. As used in this section, “year” means fiscal year for purposes of section 1 of chapter 592, Statutes of Nevada 1997, and calendar year for purposes of section 2 of chapter 592, Statutes of Nevada 1997.

Sec. 12. 1. This section and sections 1 to 4, inclusive, and 6 to 11, inclusive, of this act become effective on July 1, 1999, and apply to sales, leases, dispositions, keeping and retention of property, and to property held, before, on or after that date except that the provisions of subsection 1 of sections 2 and 6 of this act do not apply to require the taxpayer to have offered discounted admission fees for residents before July 1, 1999.

2. Section 4 of this act expires by limitation on June 30, 2003.

3. Section 5 of this act becomes effective on July 1, 2003.

________

CHAPTER 595, AB 635

Assembly Bill No. 635–Committee on Commerce and Labor

CHAPTER 595

AN ACT relating to insurance; providing for the regulation of captive insurers; establishing requirements for licensure in this state as a captive insurer; establishing minimum required amounts of capital and surplus that must be maintained by a captive insurer; providing for a premium tax; exempting licensed captive insurers from certain taxes; authorizing the commissioner of insurance to adopt regulations; prohibiting a captive insurer from transacting insurance without a license; providing a penalty; and providing other matters properly relating thereto.

[Approved June 9, 1999]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY,

DO ENACT AS FOLLOWS:

Section 1. Title 57 of NRS is hereby amended by adding thereto a new chapter to consist of the provisions set forth as sections 2 to 40, inclusive, of this act.

Sec. 2. As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 3 to 16, inclusive, of this act have the meanings ascribed to them in those sections.

Sec. 3. “Affiliated company” means a company in the same corporate system as its parent or a member organization by virtue of common ownership, control, operation or management.

Sec. 4. “Agency captive insurer” means a captive insurer that is owned by an insurance agency or brokerage and that only insures risks of policies which are placed by or through the agency or brokerage.

Sec. 5. “Association” means a legal entity consisting of two or more corporations, partnerships, associations or other forms of business organizations.

Sec. 6. “Association captive insurer” means a captive insurer that only insures risks of the member organizations of an association and the affiliated companies of those members, including groups formed pursuant to the Product Liability Risk Retention Act of 1981, as amended, 15 U.S.C. §§ 3901 et seq.

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ê1999 Statutes of Nevada, Page 3208 (CHAPTER 595, AB 635)ê

Sec. 7. “Captive insurer” means any pure captive insurer, association captive insurer, agency captive insurer and rental captive insurer licensed pursuant to this chapter.

Sec. 8. “Commissioner” means the commissioner of insurance.

Sec. 9. “Division” means the division of insurance of the department of business and industry.

Sec. 10. “Member organization” means any corporation, partnership, association or other form of business organization that belongs to an association.

Sec. 11. “Mutual insurer” has the meaning ascribed to it in NRS 680A.030.

Sec. 12. “Parent” means a corporation, partnership, association or other form of business organization that directly or indirectly owns, controls or holds with power to vote more than 50 percent of the outstanding voting securities of a pure captive insurer.

Sec. 13. “Pure captive insurer” means a captive insurer that only insures risks of its parent and affiliated companies.

Sec. 14. “Reciprocal insurer” has the meaning ascribed to it in NRS 680A.040.

Sec. 15. “Rental captive insurer” means a captive insurer formed to enter into contractual agreements with policyholders or associations to offer some or all of the benefits of a program of captive insurance and that only insures risks of such policyholders or associations.

Sec. 16. “Stock insurer” has the meaning ascribed to it in NRS 680A.050.

Sec. 17. 1. A captive insurer, when authorized by its articles of association, articles of incorporation or charter, may apply to the commissioner for a license to transact insurance.

2. A captive insurer shall not transact insurance in this state unless the captive insurer first obtains a license from the commissioner.

3. A person who violates this section is subject to the provisions of, and shall be punished pursuant to, the Unauthorized Insurers Act set forth in NRS 685B.020 to 685B.080, inclusive.

Sec. 18. 1. Except as otherwise provided in this section, a captive insurer licensed pursuant to this chapter may transact any form of insurance described in NRS 681A.020 to 681A.080, inclusive.

2. A captive insurer licensed pursuant to this chapter:

(a) Shall not directly provide personal motor vehicle or homeowners’ insurance coverage, or any component thereof.

(b) Shall not accept or cede reinsurance, except as otherwise provided in section 34 of this act.

(c) May provide excess workers’ compensation insurance to its parent and affiliated companies, unless otherwise prohibited by the laws of the state in which the insurance is transacted.

(d) May reinsure workers’ compensation insurance provided pursuant to a program of self-funded insurance of its parent and affiliated companies if:

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ê1999 Statutes of Nevada, Page 3209 (CHAPTER 595, AB 635)ê

(1) The parent or affiliated company which is providing the self-funded insurance is certified as a self-insured employer by the commissioner, if the insurance is being transacted in this state; or

(2) The program of self-funded insurance is otherwise qualified pursuant to, or in compliance with, the laws of the state in which the insurance is transacted.

3. A pure captive insurer shall not insure any risks other than those of its parent and affiliated companies.

4. An association captive insurer shall not insure any risks other than those of the member organizations of its association and the affiliated companies of the member organizations.

5. An agency captive insurer shall not insure any risks other than those of the policies that are placed by or through the insurance agency or brokerage that owns the captive insurer.

6. A rental captive insurer shall not insure any risks other than those of the policyholders or associations that have entered into agreements with the rental captive insurer for the insurance of those risks. Such agreements must be in a form which has been approved by the commissioner.

7. As used in this section, “excess workers’ compensation insurance” means insurance in excess of the specified per-incident or aggregate limit, if any, established by:

(a) The commissioner, if the insurance is being transacted in this state; or

(b) The chief regulatory officer for insurance in the state in which the insurance is being transacted.

Sec. 19. 1. The board of directors of a captive insurer shall meet at least one time each year in this state. The captive insurer shall:

(a) Maintain its principal place of business in this state; and

(b) Appoint a resident of this state as a registered agent to accept service of process and otherwise act on behalf of the captive insurer in this state. If the registered agent cannot be located with reasonable diligence for the purpose of serving a notice or demand on the captive insurer, the notice or demand may be served on the secretary of state who shall be deemed to be the agent for the captive insurer.

2. A captive insurer shall not transact insurance in this state unless:

(a) The captive insurer has made adequate arrangements with a bank located in this state that is authorized pursuant to state or federal law to transfer money;

(b) If the captive insurer employs or has entered into a contract with a natural person or business organization to manage the affairs of the captive insurer, the natural person or business organization meets the standards of competence and experience satisfactory to the commissioner;

(c) The captive insurer employs or has entered into a contract with a qualified and experienced certified public accountant or a firm of certified public accountants that is nationally recognized;

(d) The captive insurer employs or has entered into a contract with qualified, experienced actuaries to perform reviews and evaluations of the operations of the captive insurer; and

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ê1999 Statutes of Nevada, Page 3210 (CHAPTER 595, AB 635)ê

(e) The captive insurer employs or has entered into a contract with an attorney who is licensed to practice law in this state and who meets the standards of competence and experience in matters concerning the regulation of insurance in this state established by the commissioner by regulation.

Sec. 20. A captive insurer must apply to the commissioner for a license. The application must include:

1. A certified copy of the charter and bylaws of the captive insurer;

2. A pro forma financial statement for the captive insurer that has been prepared by a certified public accountant;

3. Any other statements or documents that the commissioner requires to be filed with the application;

4. Evidence of:

(a) The amount and liquidity of its assets relative to the risks to be assumed by the captive insurer;

(b) The expertise, experience and character of the persons who will manage the captive insurer;

(d) The adequacy of the programs of the captive insurer providing for loss prevention by its parent or member organizations, as applicable; and

5. Such other information deemed to be relevant by the commissioner in ascertaining whether the proposed captive insurer will be able to meet its policy obligations.

Sec. 21. An application by a captive insurer for licensure must include a non-refundable application fee of $500. The commissioner may retain legal, financial and examination services from outside the division to review and make recommendations regarding the qualifying examination of the applicant. The cost of those services must be paid by the applicant. The provisions of NRS 679B.230 to 679B.287, inclusive, apply to examinations, investigations and processing conducted pursuant to this section.

Sec. 22. 1. If the commissioner determines that the documents and statements filed by the captive insurer satisfy the requirements for licensure, the commissioner shall issue a license to the captive insurer. The license is valid for 1 year after the date on which it is issued. The license may be renewed upon the satisfaction of all requirements imposed by the commissioner and payment of the renewal fee.

2. A captive insurer must pay a fee of $300 for the issuance of a license and an annual fee of $300 for the renewal of a license.

Sec. 23. A captive insurer shall include its business plan with its application for the issuance and renewal of a license. If the captive insurer makes any changes to the business plan, the captive insurer shall, as soon as practicable, file a copy of the updated business plan with the commissioner.

Sec. 24. A captive insurer shall not use or adopt a name that is the same, deceptively similar or likely to be confused with or mistaken for any other existing business name registered in this state.

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ê1999 Statutes of Nevada, Page 3211 (CHAPTER 595, AB 635)ê

Sec. 25. 1. A captive insurer must not be issued a license, and shall not hold a license, unless the captive insurer has and maintains, in addition to any other capital required to be maintained pursuant to subsection 3, unimpaired paid-in capital of:

(a) For a pure captive insurer, not less than $100,000;

(b) For an association captive insurer incorporated as a stock insurer, not less than $200,000;

(d) For a rental captive insurer, not less than $400,000.

2. Except as otherwise provided by the commissioner pursuant to subsection 3, the capital required to be maintained pursuant to this section must be in the form of cash or an irrevocable letter of credit.

3. The commissioner may prescribe additional requirements relating to capital based on the type, volume and nature of the insurance business that is transacted by the captive insurer and requirements regarding which capital, if any, may be in the form of an irrevocable letter of credit.

4. A letter of credit used by a captive insurer as evidence of capital required pursuant to this section must:

(a) Be issued by a bank chartered by this state or a bank that is a member of the United States Federal Reserve System and has been approved by the commissioner; and

(b) Include a provision pursuant to which the letter of credit is automatically renewable each year, unless the issuer gives written notice to the commissioner and the captive insurer at least 90 days before the expiration date.

Sec. 26. The commissioner may approve an ongoing plan for the payment of dividends or other distributions by a captive insurer if, at the time of each payment or distribution, the retention of capital by the captive insurer is in excess of the amounts required by the commissioner. The commissioner shall adopt by regulation:

1. A specific amount that a captive insurer must have in excess capital for the approval of an ongoing plan for the payment of dividends or other distributions; or

2. A formula pursuant to which the specific amount of required excess capital may be calculated.

Sec. 27. 1. A captive insurer must not be issued a license, and shall not hold a license, unless the captive insurer has and maintains, in addition to any other surplus required to be maintained pursuant to subsection 3, an unencumbered surplus of:

(a) For a pure captive insurer, not less than $150,000;

(b) For an association captive insurer incorporated as a stock insurer, not less than $300,000;

(d) For a rental captive insurer, not less than $350,000; and

(e) For an association captive insurer incorporated as a mutual insurer or reciprocal insurer, not less than $500,000.

2. Except as otherwise provided in subsection 3, the surplus required to be maintained pursuant to this section must be in the form of cash or an irrevocable letter of credit.

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ê1999 Statutes of Nevada, Page 3212 (CHAPTER 595, AB 635)ê

3. The commissioner may prescribe additional requirements relating to surplus based on the type, volume and nature of the insurance business that is transacted by the captive insurer and requirements regarding which surplus, if any, may be in the form of an irrevocable letter of credit.

4. A letter of credit used by a captive insurer as evidence of required surplus pursuant to this section must:

(a) Be issued by a bank chartered by this state or a bank that is a member of the United States Federal Reserve System and has been approved by the commissioner; and

Sec. 28. Except as otherwise provided in this section, a captive insurer shall pay dividends out of, or make any other distributions from, its capital or surplus, or both, in accordance with the provisions set forth in NRS 693A.140, 693A.150 and 693A.160. A captive insurer shall not pay dividends out of, or make any other distribution with respect to, its capital or surplus, or both, in violation of this section unless the captive insurer has obtained the prior approval of the commissioner to make such a payment or distribution.

Sec. 29. 1. A pure captive insurer, an agency captive insurer or a rental captive insurer shall be incorporated as a stock insurer.

2. An association captive insurer shall be formed as a:

(a) Stock insurer;

(b) Mutual insurer; or

3. A captive insurer shall have not less than three incorporators, at least two of whom must be residents of this state.

4. Before the articles of incorporation of a captive insurer may be filed with the secretary of state, the commissioner must approve the articles of incorporation. In determining whether to grant such approval, the commissioner shall consider:

(a) The character, reputation, financial standing and purposes of the incorporators;

(b) The character, reputation, financial responsibility, experience relating to insurance and business qualifications of the officers and directors of the captive insurer;

(c) The competence of any person who, pursuant to a contract with the captive insurer, will manage the affairs of the captive insurer;

(d) The competence, reputation and experience of the legal counsel of the captive insurer relating to the regulation of insurance;

(e) If the captive insurer is a rental captive insurer, the competence, reputation and experience of the underwriter of the captive insurer;

(f) The business plan of the captive insurer; and

(g) Such other aspects of the captive insurer as the commissioner deems advisable.

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ê1999 Statutes of Nevada, Page 3213 (CHAPTER 595, AB 635)ê

5. The capital stock of a captive insurer incorporated as a stock insurer must be issued at not less than par value.

6. At least one of member of the board of directors of a captive insurer or of its attorney-in-fact must be a resident of this state.

7. A captive insurer formed pursuant to the provisions of this chapter has the privileges of, and is subject to, the provisions of general corporation law set forth in chapter 78 of NRS as well as the applicable provisions contained in this chapter. If the provisions of this chapter conflict with the general provisions in chapter 78 of NRS governing corporations, the provisions of this chapter control. The provisions of chapter 693A of NRS relating to mergers, consolidations, conversions, mutualizations and transfers of domicile to this state apply to determine the procedures to be followed by captive insurers in carrying out any of those transactions in accordance with this chapter.

8. The articles of association, articles of incorporation, charter or bylaws of a captive insurer must require that a quorum of the board of directors consists of not less than one-third of the number of directors prescribed by the articles of association, articles of incorporation, charter or bylaws.

Sec. 30. 1. On or before March 1 of each year, a captive insurer shall submit to the commissioner a report of its financial condition, as prepared by a certified public accountant. A captive insurer shall use generally accepted accounting principles and include any useful or necessary modifications or adaptations thereof that have been approved or accepted by the commissioner for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the commissioner. Except as otherwise provided in this section, each association captive insurer, agency captive insurer or rental captive insurer shall file its report in the form required by NRS 680A.265. The commissioner shall adopt regulations designating the form in which pure captive insurers must report.

2. A pure captive insurer may apply, in writing, for authorization to file its annual report based on a fiscal year that is consistent with the fiscal year of the parent company of the pure captive insurer. If an alternative date is granted:

(a) The annual report is due not later than 60 days after the end of each such fiscal year; and

(b) The pure captive insurer shall file on or before March 1 of each year such forms as required by the commissioner by regulation to provide sufficient detail to support its premium tax return filed pursuant to section 37 of this act.

Sec. 31. 1. Except as otherwise provided in this section, at least once every 3 years, and at such other times as the commissioner determines necessary, the commissioner, or his designee, shall visit each captive insurer and thoroughly inspect and examine the affairs of the captive insurer to ascertain:

(a) The financial condition of the captive insurer;

(b) The ability of the captive insurer to fulfill its obligations; and

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ê1999 Statutes of Nevada, Page 3214 (CHAPTER 595, AB 635)ê

(c) Whether the captive insurer has complied with the provisions of this chapter and the regulations adopted pursuant thereto.

2. Upon the application of a captive insurer, the commissioner may conduct the visits required pursuant to subsection 1 every 5 years if the captive insurer conducts comprehensive annual audits:

(a) The scope of which is satisfactory to the commissioner; and

(b) Which are conducted by an independent auditor appointed by the commissioner.

3. The commissioner may contract to obtain legal, financial and examination services from outside the division to conduct the examination and make recommendations to the commissioner. The cost of the examination must be paid to the commissioner by the captive insurer.

4. The provisions of NRS 679B.230 to 679B.287, inclusive, apply to examinations conducted pursuant to this section.

Sec. 32. 1. The commissioner may suspend or revoke the license of a captive insurer if, after an examination and hearing, the commissioner determines that:

(a) The captive insurer:

(1) Is insolvent or has impaired its required capital or surplus;

(2) Has failed to meet the requirement of sections 25 to 28, inclusive, of this act;

(3) Has refused or failed to submit an annual report, as required by section 30 of this act, or any other report or statement required by law or by order of the commissioner;

(4) Has failed to comply with the provisions of its charter or bylaws;

(5) Has failed to submit to an examination required pursuant to section 31 of this act;

(6) Has refused or failed to pay the cost of an examination required pursuant to section 31 of this act;

(7) Has used any method in transacting insurance pursuant to this chapter which is detrimental to the operation of the captive insurer or would make its condition unsound with respect to its policyholders or the general public; or

(8) Has failed otherwise to comply with the laws of this state; and

(b) The suspension or revocation of the license of the captive insurer is in the best interest of its policyholders or the general public.

2. The provisions of NRS 679B.310 to 679B.370, inclusive, apply to hearings conducted pursuant to this section.

Sec. 33. 1. Except as otherwise provided in this section, an association captive insurer, an agency captive insurer or a rental captive insurer shall comply with the requirements relating to investments set forth in chapter 682A of NRS. Upon the request of the association captive insurer, agency captive insurer or rental captive insurer, the commissioner may approve the use of reliable, alternative methods of valuation and rating.

2. A pure captive insurer is not subject to any restrictions on allowable investments, except that the commissioner may prohibit or limit any investment that threatens the solvency or liquidity of the pure captive insurer.

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ê1999 Statutes of Nevada, Page 3215 (CHAPTER 595, AB 635)ê

3. A pure captive insurer may make a loan to its parent or affiliated company if the loan:

(a) Is first approved in writing by the commissioner;

(b) Is evidenced by a note that is in a form that is approved by the commissioner; and

(c) Does not include any money that has been set aside as capital or surplus as required by subsection 1 of section 25 of this act or subsection 1 of section 27 of this act.

Sec. 34. 1. A captive insurer may provide reinsurance on risks ceded by any other insurer.

2. A captive insurer may take credit for reserves on risks or portions of risks ceded to a reinsurer that is in compliance with NRS 681A.140 to 681A.240, inclusive. A captive insurer shall not take credit for reserves on risks or portions of risks ceded to a reinsurer if the reinsurer is not in compliance with NRS 681A.140 to 681A.240, inclusive.

3. The commissioner may authorize a captive insurer to take credit for reserves on risks or portions of risks ceded to a pool, an exchange or an association acting as a reinsurer. The commissioner may require such documents, financial information or other evidence as he determines necessary to show that the pool, exchange or association will be able to provide adequate security for its financial obligations. The commissioner may deny authorization or impose any limitations on the activities of a reinsurance pool, exchange or association that, in his judgment, are necessary and proper to provide adequate security for the ceding captive insurer and for the protection and benefit of the general public.

4. For the purposes of this chapter, insurance provided by a captive insurer of any plan for workers’ compensation of its parent and affiliated companies which is certified or otherwise qualified in the state in which the insurance is provided as a self-insurance plan shall be deemed to be reinsurance.

Sec. 34.5. Insurance provided by a captive insurer in accordance with this chapter may not be used to satisfy the requirements set forth in chapter 706 of NRS relating to the insurance required to be maintained by vehicles subject to the jurisdiction of the transportation services authority or taxicab authority, unless the transportation services authority or taxicab authority, as appropriate, specifically approves the use of insurance provided by a captive insurer for that purpose.

Sec. 35. A captive insurer is not required to join a rating organization.

Sec. 36. A captive insurer shall not join or contribute financially to any risk-sharing plan, risk pool or insurance insolvency guaranty fund in this state. A captive insurer or its insured, its parent or an affiliated company, or any member organization of its association shall not receive any benefit from such a plan, pool or fund for claims arising out of the operations of the captive insurer.

Sec. 37. 1. Except as otherwise provided in this section, a captive insurer shall pay to the division, not later than March 1 of each year, a tax at the rate of:

(a) Two-fifths of 1 percent on the first $20,000,000 of its net direct premiums;

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ê1999 Statutes of Nevada, Page 3216 (CHAPTER 595, AB 635)ê

(b) One-fifth of 1 percent on the next $20,000,000 of its net direct premiums; and

2. Except as otherwise provided in this section, a captive insurer shall pay to the division, not later than March 1 of each year, a tax at a rate of:

(a) Two hundred twenty-five thousandths of 1 percent on the first $20,000,000 of revenue from assumed reinsurance premiums;

(b) One hundred fifty thousandths of 1 percent on the next $20,000,000 of revenue from assumed reinsurance premiums; and

The tax on reinsurance premiums pursuant to this subsection must not be levied on premiums for risks or portions of risks which are subject to taxation on a direct basis pursuant to subsection 1. A captive insurer is not required to pay any reinsurance premium tax pursuant to this subsection on revenue related to the receipt of assets by the captive insurer in exchange for the assumption of loss reserves and other liabilities of another insurer that is under common ownership and control with the captive insurer, if the transaction is part of a plan to discontinue the operation of the other insurer and the intent of the parties to the transaction is to renew or maintain such business with the captive insurer.

3. If the sum of the taxes to be paid by a captive insurer calculated pursuant to subsections 1 and 2 is less than $5,000 in any given year, the captive insurer shall pay a tax of $5,000 for that year.

4. Two or more captive insurers under common ownership and control must be taxed as if they were a single captive insurer.

5. Notwithstanding any specific statute to the contrary and except as otherwise provided in this subsection, the tax provided for by this section constitutes all the taxes collectible pursuant to the laws of this state from a captive insurer, and no occupation tax or other taxes may be levied or collected from a captive insurer by this state or by any county, city or municipality within this state, except for ad valorem taxes on real or personal property located in this state used in the production of income by the captive insurer.

6. Ten percent of the revenues collected from the tax imposed pursuant to this section must be deposited with the state treasurer for credit to the account for the regulation and supervision of captive insurers created pursuant to section 38 of this act. The remaining 90 percent of the revenues collected must be deposited with the state treasurer for credit to the state general fund.

7. As used in this section, unless the context otherwise requires:

(a) “Common ownership and control” means:

(1) In the case of a stock insurer, the direct or indirect ownership of 80 percent or more of the outstanding voting stock of two or more corporations by the same member or members.

(2) In the case of a mutual insurer, the direct or indirect ownership of 80 percent or more of the surplus and the voting power of two or more corporations by the same member or members.

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ê1999 Statutes of Nevada, Page 3217 (CHAPTER 595, AB 635)ê

(b) “Net direct premiums” means the direct premiums collected or contracted for on policies or contracts of insurance written by a captive insurer during the preceding calendar year, less the amounts paid to policyholders as return premiums, including dividends on unabsorbed premiums or premium deposits returned or credited to policyholders.

Sec. 38. 1. There is hereby created in the state general fund an account for the regulation and supervision of captive insurers. Money in the account must be used only to carry out the provisions of this chapter. Except as otherwise provided in section 37 of this act, all fees and assessments received by the commissioner or division pursuant to this chapter must be credited to the account. Not more than 2 percent of the tax collected and deposited in the account pursuant to section 37 of this act, may, upon application by the division or an agency for economic development to, and with the approval of, the interim finance committee, be transferred to an agency for economic development to be used by that agency to promote the industry of captive insurance in this state.

2. Except as otherwise provided in this section, all payments from the account for the maintenance of staff and associated expenses, including contractual services, as necessary, must be disbursed from the state treasury only upon warrants issued by the state controller, after receipt of proper documentation of the services rendered and expenses incurred.

3. At the end of each fiscal year, that portion of the balance in the account which exceeds $100,000 must be transferred to the state general fund.

4. The state controller may anticipate receipts to the account and issue warrants based thereon.

Sec. 39. 1. The terms and conditions set forth in chapter 696B of NRS pertaining to insurance reorganization, receiverships and injunctions apply to captive insurers incorporated pursuant to this chapter.

2. An agency captive insurer, a rental captive insurer and an association captive insurer are subject to those provisions of chapter 686A of NRS which are applicable to insurers.

Sec. 40. The commissioner may establish such regulations as are necessary to carry out the provisions of the chapter.

Sec. 41. NRS 679A.160 is hereby amended to read as follows:

679A.160 Except as otherwise provided by specific statute, no provision of this code applies to:

1. Fraternal benefit societies, as identified in chapter 695A of NRS, except as stated in chapter 695A of NRS.

2. Hospital, medical or dental service corporations, as identified in chapter 695B of NRS, except as stated in chapter 695B of NRS.

3. Motor clubs, as identified in chapter 696A of NRS, except as stated in chapter 696A of NRS.

4. Bail agents, as identified in chapter 697 of NRS, except as stated in NRS 680B.025 to 680B.039, inclusive, and chapter 697 of NRS.

5. Risk retention groups, as identified in chapter 695E of NRS, except as stated in chapter 695E of NRS.

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ê1999 Statutes of Nevada, Page 3218 (CHAPTER 595, AB 635)ê

6. Captive insurers, as identified in sections 2 to 40, inclusive, of this act, with respect to their activities as captive insurers, except as stated in sections 2 to 40, inclusive, of this act.

7. Health and welfare plans arising out of collective bargaining under chapter 288 of NRS, except that the commissioner may review the plan to ensure that the benefits are reasonable in relation to the premiums and that the fund is financially sound.

Sec. 42. The amendatory provisions of this act do not apply to offenses committed before October 1, 1999.

Sec. 43. This act becomes effective upon passage and approval for the purpose of adopting regulations to carry out the provisions of this act, and on October 1, 1999, for all other purposes.

________

CHAPTER 596, AB 597

Assembly Bill No. 597–Committee on Ways and Means

CHAPTER 596

AN ACT relating to governmental administration; providing for the revision of provisions governing the construction and financing of school facilities; creating a fund to assist school districts in financing capital improvements in certain circumstances; revising the provisions relating to the period in which the board of trustees of a school district may issue bonds without an election; imposing an additional sales tax to pay the cost of extraordinary maintenance, extraordinary repair and extraordinary improvement of school facilities in certain circumstances; extending the duration and changing the duties of the state planning commission for the new construction, design, maintenance and repair of school facilities; authorizing the issuance of general obligation bonds to assist school districts in financing certain capital improvements; and providing other matters properly relating thereto.

[Approved June 9, 1999]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY,

DO ENACT AS FOLLOWS:

Section 1. Chapter 387 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 and 3 of this act.

Sec. 2. 1. The fund to assist school districts in financing capital improvements is hereby created in the state treasury, to be administered by the director of the department of administration. All money received and held by the state treasurer for the purpose of the fund must be deposited in the fund.

2. The director of the department of administration may accept gifts and grants from any source for deposit in the fund.

3. The money in the fund must be invested as the money in other state funds is invested. All interest and income earned on the money in the fund must be credited to the fund.

4. Claims against the fund must be paid as other claims against the state are paid.

Sec. 3. 1. The board of trustees of a school district may apply to the director of the department of administration for a grant of money from the fund created pursuant to section 2 of this act on a form provided by the director of the department of administration. The application must be

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ê1999 Statutes of Nevada, Page 3219 (CHAPTER 596, AB 597)ê

accompanied by proof that the following emergency conditions exist within the school district:

(a) The assessed valuation of the taxable property in the county in which the school district is located is declining and all other resources available to the school district for financing capital improvements are diminishing;

(b) The combined ad valorem tax rate of the county is at the limit imposed by NRS 361.453; and

(1) One building that is located on the grounds of a school within the school district has been condemned;

(2) One of the facilities that is located on the grounds of a school within the school district is unsuitable for use as a result of:

(I) Structural defects;

(II) Barriers to accessibility; or

(III) Hazards to life, health or safety, including, without limitation, environmental hazards and the operation of the facility in an unsafe manner; or

(3) One of the facilities that is located on the grounds of a school within the school district is in such a condition that the cost of renovating the facility would exceed 40 percent of the cost of constructing a new facility.

2. Upon receipt of an application submitted pursuant to subsection 1, the director of the department of administration shall forward the application to the:

(a) Department of taxation to determine whether or not:

(1) The application satisfies the showing of proof required pursuant to paragraphs (a) and (b) of subsection 1; and

(2) The board of county commissioners in the county in which the school district is located has imposed a tax of more than one-eighth of 1 percent pursuant to NRS 377B.100; and

(b) State public works board to determine whether the application satisfies the showing of proof required pursuant to paragraph (c) of subsection 1; and

3. The department of taxation and the state public works board shall submit written statements of their determinations pursuant to subsection 2 regarding an application to the director of the department of administration. Upon receipt of such statements, the director shall submit the application accompanied by the written statements from the department of taxation and state public works board to the state board of examiners for approval.

4. The director of the department of administration shall make grants from the fund created pursuant to section 2 of this act based upon the need of each school district whose application is approved by the state board of examiners.

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ê1999 Statutes of Nevada, Page 3220 (CHAPTER 596, AB 597)ê

5. The director of the department of administration shall adopt regulations that prescribe the annual deadline for submission of an application to the director of the department of administration by a school district that desires to receive a grant of money from the fund.

Sec. 4. NRS 350.020 is hereby amended to read as follows:

350.020 1. Except as otherwise provided by subsections 3 and 4, if a municipality proposes to issue or incur general obligations, the proposal must be submitted to the electors of the municipality at a special election called for that purpose or the next general municipal election or general state election.

2. Such a special election may be held:

(a) At any time if the governing body of the municipality determines, by a unanimous vote, that an emergency exists; or

(b) On the first Tuesday after the first Monday in June of an odd-numbered year.

The determination made by the governing body is conclusive unless it is shown that the governing body acted with fraud or a gross abuse of discretion. An action to challenge the determination made by the governing body must be commenced within 15 days after the governing body’s determination is final. As used in this subsection, “emergency” means any occurrence or combination of occurrences which requires immediate action by the governing body of the municipality to prevent or mitigate a substantial financial loss to the municipality or to enable the governing body to provide an essential service to the residents of the municipality.

3. If payment of a general obligation of the municipality is additionally secured by a pledge of gross or net revenue of a project to be financed by its issue, and the governing body determines, by an affirmative vote of two-thirds of the members elected to the governing body, that the pledged revenue will at least equal the amount required in each year for the payment of interest and principal, without regard to any option reserved by the municipality for early redemption, the municipality may, after a public hearing, incur this general obligation without an election unless, within 60 days after publication of a resolution of intent to issue the bonds, a petition is presented to the governing body signed by not less than 5 percent of the registered voters of the municipality who together with any corporate petitioners own not less than 2 percent in assessed value of the taxable property of the municipality. Any member elected to the governing body whose authority to vote is limited by charter, statute or otherwise may vote on the determination required to be made by the governing body pursuant to this subsection. The determination by the governing body becomes conclusive on the last day for filing the petition. For the purpose of this subsection, the number of registered voters must be determined as of the close of registration for the last preceding general election and assessed values must be determined from the next preceding final assessment roll. An authorized corporate officer may sign such a petition whether or not he is a registered voter. The resolution of intent need not be published in full, but the publication must include the amount of the obligation and the purpose for which it is to be incurred. Notice of the public hearing must be published at least 10 days before the day of the hearing. The publications must be made once in a newspaper of general circulation in the municipality. When published, the notice of the public hearing must be at least as large as 5 inches high by 4 inches wide.

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ê1999 Statutes of Nevada, Page 3221 (CHAPTER 596, AB 597)ê

published, the notice of the public hearing must be at least as large as 5 inches high by 4 inches wide.

4. [Until June 30, 2008, the] The board of trustees of a school district may issue general obligation bonds which are not expected to result in an increase in the existing property tax levy for the payment of bonds of the school district without holding an election for each issuance of the bonds if the qualified electors approve a question submitted by the board of trustees that authorizes issuance of bonds [in such a manner.] for a period of 10 years after the date of approval by the voters. If the question is approved, the board of trustees of the school district may issue the bonds [,] for a period of 10 years after the date of approval by the voters, after obtaining the approval of the debt management commission in the county in which the school district is located and, in a county whose population is 100,000 or more, the approval of the oversight panel for school facilities established pursuant to NRS 393.092 in that county, if the board of trustees of the school district finds that the existing tax for debt service will at least equal the amount required to pay the principal and interest on the outstanding general obligations of the school district and the general obligations proposed to be issued. The finding made by the board of trustees is conclusive in the absence of fraud or gross abuse of discretion. As used in this subsection, “general obligations” does not include medium-term obligations issued pursuant to NRS 350.085 to 350.095, inclusive.

5. At the time of issuance of bonds authorized pursuant to subsection 4, the board of trustees shall establish a reserve account in its debt service fund for payment of the outstanding bonds of the school district. The reserve account must be established and maintained in an amount at least equal to the lesser of the amount of principal and interest payments due on all of the outstanding bonds of the school district in the next fiscal year or 10 percent of the outstanding principal amount of the outstanding bonds of the school district. If the amount in the reserve account falls below the amount required by this subsection:

(a) The board of trustees shall not issue additional bonds pursuant to subsection 4 until the reserve account is restored to the level required by this subsection; and

(b) The board of trustees shall apply all of the taxes levied by the school district for payment of bonds of the school district that are not needed for payment of the principal and interest on bonds of the school district in the current fiscal year to restore the reserve account to the level required pursuant to this subsection.

6. A municipality may issue special or medium-term obligations without an election.

Sec. 5. Title 32 of NRS is hereby amended by adding thereto a new chapter to consist of the provisions set forth as sections 6 and 7 of this act.

Sec. 6. 1. A tax is hereby imposed on all retailers within a county in which:

(a) The board of county commissioners of the county has not imposed the maximum rate of tax that it is authorized to impose pursuant to NRS 377B.100;

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ê1999 Statutes of Nevada, Page 3222 (CHAPTER 596, AB 597)ê

(b) The board of trustees of a county school district has applied for a grant from the fund to assist school districts in financing capital improvements pursuant to section 3 of this act; and

2. The rate of the tax imposed by subsection 1 is the difference between:

(a) The rate of tax that the board of county commissioners of the county has imposed pursuant to NRS 377B.100; and

(b) The maximum rate of tax that the board of county commissioners of the county is authorized to impose pursuant to NRS 377B.100,

but in no event may the rate imposed by subsection 1 exceed one-eighth of 1 percent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail, or stored, used or otherwise consumed, in the county.

Sec. 7. 1. The collection of the tax imposed by section 6 of this act must be commenced on the first day of the first calendar quarter that begins at least 30 days after the last condition in subsection 1 of section 6 of this act is met.

2. The tax must be administered, collected and distributed in the manner set forth in chapter 374 of NRS.

3. The board of trustees of the school district shall transfer the proceeds of the tax imposed by section 6 of this act from the county school district fund to the fund described in NRS 354.611 which has been established by the board of trustees. The money deposited in the fund described in NRS 354.611 pursuant to this subsection must be accounted for separately in that fund and must only be expended by the board of trustees for the cost of the extraordinary maintenance, extraordinary repair and extraordinary improvement of school facilities within the county.

Sec. 8. Sections 23, 24, 25, 29 and 31 of chapter 516, Statutes of Nevada 1997, at pages 2467, 2468, 2469 and 2470, respectively, are hereby amended to read as follows:

Sec. 23. 1. There is hereby created the state planning commission for the new construction, design, maintenance and repair of school facilities. The membership of the commission consists of [nine] 10 members selected as follows:

(a) [One member] Two members of the [senate standing committee on finance,] legislature appointed by the majority leader of the senate [;

(b) One member] , one of whom must represent a rural area of this state;

(b) Two members of the [senate standing committee on human resources and facilities,] legislature appointed by the [majority leader of the senate;

(c) One member of the assembly standing committee on ways and means, appointed by the] speaker of the assembly [;] , one of whom must represent a rural area of this state;

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ê1999 Statutes of Nevada, Page 3223 (CHAPTER 596, AB 597)ê

(d) One member [of the assembly standing committee on education, appointed by the speaker of the assembly;

(e) The superintendent of public instruction; and

(f) Four members appointed by the governor, one of whom must be a representative of the construction industry.] who is employed by a city and has substantial experience in financial matters with respect to cities, appointed by the Nevada League of Cities;

(e) One member who is employed by a county and has substantial experience in financial matters with respect to counties, appointed by the Nevada Association of Counties;

(f) One member who is employed by a school district and has substantial experience in financial matters with respect to school districts, appointed by the Nevada Association of School Boards;

(g) The director of the department of administration in his capacity as chairman of the state public works board or his designee; and

(h) The executive director of the department of taxation or his designee.

2. The members of the commission shall elect a chairman from among their members.

3. Except during a regular or special session of the legislature, for each day or portion of a day during which a member of the commission who is a legislator attends a meeting of the commission or is otherwise engaged in the work of the commission, he is entitled to receive the:

(a) Compensation provided for a majority of the members of the legislature during the first 60 days of the preceding regular session;

(b) Per diem allowance provided for state officers and employees generally; and

The compensation, per diem allowances and travel expenses of the members of the commission who are legislators must be paid from the legislative fund.

4. For each day or portion of a day during which a member of the commission who is not a legislator attends a meeting of the commission or is otherwise engaged in the work of the commission, he is entitled to receive the per diem allowance and travel expenses provided for state officers and employees generally, if the legislature has made an appropriation or otherwise made available money for this purpose.

Sec. 24. 1. The commission shall hold at least four meetings annually and may hold additional meetings at the call of the chairman.

2. The commission [, in consultation with the state public works board or its designee shall:

(a) Analyze the projections for the enrollment of pupils in each school district for the succeeding 10 years;

(b) Enter into a contract with a qualified, independent consultant to conduct an evaluation of existing school facilities in each school district in this state and to provide additional assistance as requested by the commission;

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ê1999 Statutes of Nevada, Page 3224 (CHAPTER 596, AB 597)ê

district in this state and to provide additional assistance as requested by the commission;

(1) The maintenance and repair of existing school facilties in each school district, including, without limitation, the costs of such maintenance or repair; and

(2) New school facilities in each school district, including, without limitation, the cost of such new facilities;

(d) Determine whether the current system of financing the costs of new construction, design, maintenance and repair of school facilities is sufficient to:

(1) Pay the interest and redemption of outstanding bonds of each school district; and

(2) Meet the needs for new school facilities and the maintenance and repair of existing school facilities in each school district;

(e) Analyze the efforts being made by each school district relating to the financing of the costs of the construction, design, maintenance and repair of school facilities;

(f) Consider the manner in which the boards of trustees of school districts in this state may enter into agreements with the University and Community College System of Nevada to share resources and facilities;

(g) Determine the feasibility of adopting uniform plans for the construction of new school facilities throughout this state; and

(h) Identify any improvements that are necessary to ensure that existing school facilities comply with all applicable requirements of the Americans with Disabilities Act of 1990 (42 U.S.C. §§ 12101 to 12213, inclusive).

3. On or before December 1, 1998, the commission shall, based upon the evaluation of existing school facilities conducted by the consultant pursuant to this section and the written recommendations and other information submitted by each oversight panel for school facilities and each board of trustees in a county whose population is less than 100,000 pursuant to section 25 of this act, develop a plan by which each school district in this state may adequately finance the costs of new construction, design, maintenance and repair of school facilities in the school district. The plan must provide for the efficient use of resources in the new construction, design, maintenance and repair of school facilities.

4. On or before December 31, 1998, the commission shall submit to the director of the legislative counsel bureau for transmission to the 70th session of the Nevada legislature:

(a) A written report of its findings pursuant to subsection 2;

(b) The plan developed by the commission pursuant to subsection 3; and

5.] shall:

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ê1999 Statutes of Nevada, Page 3225 (CHAPTER 596, AB 597)ê

(a) Develop a plan pursuant to which each school district in this state may adequately finance the costs of designing and constructing new school facilities and maintaining and repairing existing school facilities in the school district. The plan must provide for the efficient use of resources in the design, construction, maintenance and repair of school facilities.

(b) Review the number of hours required to transport pupils by bus to and from school and the costs associated with that transportation, and compare those costs to the costs that would be incurred to build new school facilities or change the boundaries of the zones within which pupils are transported to certain schools.

3. The board of trustees of each school district shall:

(a) Comply with all requests by the commission for information, including, without limitation, the projections for the enrollment of pupils in a school district for the succeeding 10 years; and

(b) Otherwise cooperate with the commission in carrying out its duties pursuant to this section.

Sec. 25. 1. [On or before July 1, 1998, each oversight panel for school facilities established in a county whose population is 100,000 or more pursuant to section 6 of this act and each board of trustees of a school district in a county whose population is less than 100,000 shall:

(a) Submit to the commission written recommendations for financing the costs of new construction, design, maintenance and repair of school facilities;

(b) Provide any other information relating to the new construction, design, maintenance and repair of school facilities requested by the commission; and

(c) Otherwise work cooperatively with the commission in the development and revision of a plan for financing the costs of new construction, design, maintenance and repair of school facilities.

2. In a county whose population is 100,000 or more, the oversight panel for school facilities shall review and approve or disapprove a request by the board of trustees of the school district for the issuance of general obligation bonds pursuant to subsection 4 of NRS 350.020.] The department of education shall provide administrative support to the commission.

2. In carrying out its duties pursuant to subsection 1, the department of education shall ensure that notice of the meetings of the commission is provided to the director of the legislative counsel bureau for publication with the agendas of scheduled meetings of the legislative committees that are published by the legislative counsel bureau.

Sec. 29. 1. There is hereby appropriated from the state general fund to the state planning commission for the new construction, design, maintenance and repair of school facilities created pursuant to section 23 of this act the sum of [$300,000] $75,000 for use by the state planning commission for:

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ê1999 Statutes of Nevada, Page 3226 (CHAPTER 596, AB 597)ê

(a) The [evaluation of existing school facilities to be conducted by a consultant pursuant to] carrying out of the duties set forth in section 24 of this act; and

(b) Expenses relating to the operation of the state planning commission.

2. Any remaining balance of the appropriation made by subsection 1 must not be committed for expenditure after June 30, [1999,] 2001, and reverts to the state general fund as soon as all payments of money committed have been made.

Sec. 31. 1. This section and sections 1 to 7, inclusive, 9, 10, 22 to 25, inclusive, and 27 to 30, inclusive, of this act, become effective upon passage and approval. Sections 22 to 25, inclusive, of this act, expire by limitation on June 30, [1999,] 2001.

2. Sections 11, 11.5, 13, 14, 14.5, 16, 20 and 21 of this act become effective on August 1, 1997.

3. Sections 8, 12 and 15 of this act become effective on July 1, 1999.

4. Sections 17, 18 and 19 of this act become effective on October 1, 1997. [The amendatory provisions of sections 17, 18 and 19 of this act expire by limitation on June 30, 2008.

5. Section 26 of this act becomes effective on July 1, 2008.]

Sec. 9. Section 2 of Senate Bill No. 501 of this session is hereby amended to read as follows:

Sec. 2. NRS 350.020 is hereby amended to read as follows:

2. Such a special election may be held:

(a) At any time, including, without limitation, on the date of a primary municipal election or a primary state election, if the governing body of the municipality determines, by a unanimous vote, that an emergency exists; or

(b) On the first Tuesday after the first Monday in June of an odd-numbered year.

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ê1999 Statutes of Nevada, Page 3227 (CHAPTER 596, AB 597)ê

affirmative vote of two-thirds of the members elected to the governing body, that the pledged revenue will at least equal the amount required in each year for the payment of interest and principal, without regard to any option reserved by the municipality for early redemption, the municipality may, after a public hearing, incur this general obligation without an election unless, within 60 days after publication of a resolution of intent to issue the bonds, a petition is presented to the governing body signed by not less than 5 percent of the registered voters of the municipality who together with any corporate petitioners own not less than 2 percent in assessed value of the taxable property of the municipality. Any member elected to the governing body whose authority to vote is limited by charter, statute or otherwise may vote on the determination required to be made by the governing body pursuant to this subsection. The determination by the governing body becomes conclusive on the last day for filing the petition. For the purpose of this subsection, the number of registered voters must be determined as of the close of registration for the last preceding general election and assessed values must be determined from the next preceding final assessment roll. An authorized corporate officer may sign such a petition whether or not he is a registered voter. The resolution of intent need not be published in full, but the publication must include the amount of the obligation and the purpose for which it is to be incurred. Notice of the public hearing must be published at least 10 days before the day of the hearing. The publications must be made once in a newspaper of general circulation in the municipality. When published, the notice of the public hearing must be at least as large as 5 inches high by 4 inches wide.

4. The board of trustees of a school district may issue general obligation bonds which are not expected to result in an increase in the existing property tax levy for the payment of bonds of the school district without holding an election for each issuance of the bonds if the qualified electors approve a question submitted by the board of trustees that authorizes issuance of bonds for a period of 10 years after the date of approval by the voters. If the question is approved, the board of trustees of the school district may issue the bonds for a period of 10 years after the date of approval by the voters, after obtaining the approval of the debt management commission in the county in which the school district is located and, in a county whose population is 100,000 or more, the approval of the oversight panel for school facilities established pursuant to NRS 393.092 in that county, if the board of trustees of the school district finds that the existing tax for debt service will at least equal the amount required to pay the principal and interest on the outstanding general obligations of the school district and the general obligations proposed to be issued. The finding made by the board of trustees is conclusive in the absence of fraud or gross abuse of discretion. As used in this subsection, “general obligations” does not include medium-term obligations issued pursuant to NRS 350.085 to 350.095, inclusive.

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ê1999 Statutes of Nevada, Page 3228 (CHAPTER 596, AB 597)ê

(a) The board of trustees shall not issue additional bonds pursuant to subsection 4 until the reserve account is restored to the level required by this subsection; and

6. A municipality may issue special or medium-term obligations without an election.

Sec. 10. Section 26 of chapter 516, Statutes of Nevada 1997, at page 2469, and sections 3 and 15 of Senate Bill No. 501 of this session are hereby repealed.

Sec. 11. At the request of the director of the department of administration, the state board of finance shall issue general obligation bonds of the State of Nevada in a face amount not exceeding $16,000,000 pursuant to the State Securities Law. The proceeds of the bonds remaining after the payment of the costs of issuance of the bonds must be deposited in the fund to assist school districts in financing capital improvements, created pursuant to section 2 of this act, and used by the director of the department of administration pursuant to section 3 of this act to make grants to school districts for capital improvements.

Sec. 12. 1. The state controller may advance temporarily from the state general fund, upon the approval of the chief of the budget division of the department of administration, to the fund to assist school districts in financing capital improvements created pursuant to section 2 of this act, until the date on which bonds authorized by section 11 of this act are sold, amounts necessary to facilitate the making of grants to school districts pursuant to section 3 of this act. The state controller shall not advance more than the face amount of the bonds authorized to be issued. The advanced amounts must be repaid immediately to the state general fund upon the sale of the bonds.

2. The chief of the budget division of the department of administration shall notify the state controller and the fiscal analysis division of the legislative counsel bureau of the approval of an advance from the state general fund to the fund to assist school districts in financing capital improvements pursuant to subsection 1.

Sec. 13. This act becomes effective on July 1, 1999.

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ê1999 Statutes of Nevada, Page 3229ê

CHAPTER 597, AB 280

Assembly Bill No. 280–Assemblymen Buckley, Carpenter, Ohrenschall, Leslie, Thomas, Segerblom, Perkins, Giunchigliani, Lee, Arberry, Parks, Williams, Manendo, Anderson, Price, Freeman, Goldwater, Gibbons, McClain, Koivisto, Collins, Bache, Tiffany, Neighbors, Nolan, Hettrick and Evans

CHAPTER 597

AN ACT relating to persons with disabilities; prohibiting the use of aversive intervention on persons with disabilities under certain circumstances; providing penalties; and providing other matters properly relating thereto.

[Approved June 9, 1999]

Whereas, Providing appropriate health and educational services to persons with disabilities is essential to fulfilling this state’s important goal of ensuring equality of opportunity, full participation, independent living and economic self-sufficiency for persons with disabilities; and

Whereas, A person with a disability who is receiving health or educational services in this state deserves to receive those services in an environment that is the least restrictive, as determined by his disability, and deserves to be treated with dignity and respect by the staff of the facility or school where he is receiving services; and

Whereas, A person with a disability who is receiving health or educational services in this state deserves a comprehensive treatment or educational program that does not authorize disciplinary measures when convenient for the members of the staff of the facility or school; now, therefore,

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY,

DO ENACT AS FOLLOWS:

Section 1. Chapter 433 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 19, inclusive, of this act.

Sec. 2. As used in sections 2 to 19, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections 3 to 11, inclusive, of this act have the meanings ascribed to them in those sections.

Sec. 3. “Aversive intervention” means any of the following actions if the action is used to punish a person with a disability or to eliminate, reduce or discourage maladaptive behavior of a person with a disability:

1. The use of noxious odors and tastes;

2. The use of water and other mists or sprays;

3. The use of blasts of air;

4. The use of corporal punishment;

5. The use of verbal and mental abuse;

6. The use of electric shock;

7. Requiring a person to perform exercise under forced conditions if the:

(a) Person is required to perform the exercise because he exhibited a behavior that is related to his disability;

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ê1999 Statutes of Nevada, Page 3230 (CHAPTER 597, AB 280)ê

(b) Exercise is harmful to the health of the person because of his disability; or

8. Any intervention, technique or procedure that deprives a person of the use of one or more of his senses, regardless of the length of the deprivation, including, without limitation, the use of sensory screens; or

9. The deprivation of necessities needed to sustain the health of a person, regardless of the length of the deprivation, including, without limitation, the denial or unreasonable delay in the provision of:

(a) Food or liquid at a time when it is customarily served; or

(b) Medication.

Sec. 4. “Chemical restraint” means the administration of drugs for the specific and exclusive purpose of controlling an acute or episodic aggressive behavior when alternative intervention techniques have failed to limit or control the behavior. The term does not include the administration of drugs on a regular basis, as prescribed by a physician, to treat the symptoms of mental, physical, emotional or behavioral disorders and for assisting a person in gaining self-control over his impulses.

Sec. 5. “Corporal punishment” means the intentional infliction of physical pain, including, without limitation, hitting, pinching or striking.

Sec. 6. “Electric shock” means the application of electric current to a person’s skin or body. The term does not include electroconvulsive therapy.

Sec. 7. “Emergency” means a situation in which immediate intervention is necessary to protect the physical safety of a person or others from an immediate threat of physical injury or to protect against an immediate threat of severe property damage.

Sec. 8. “Mechanical restraint” means the use of devices, including, without limitation, mittens, straps and restraint chairs to limit a person’s movement or hold a person immobile.

Sec. 9. “Person with a disability” means a person who:

1. Has a physical or mental impairment that substantially limits one or more of the major life activities of the person;

2. Has a record of such an impairment; or

3. Is regarded as having such an impairment.

Sec. 10. “Physical restraint” means the use of physical contact to limit a person’s movement or hold a person immobile.

Sec. 11. “Verbal and mental abuse” means verbal intimidation or coercion of a person without a redeeming purpose.

Sec. 12. A person employed by a facility or any other person shall not use any aversive intervention on a person with a disability who is a client.

Sec. 13. Notwithstanding the provisions of sections 14 to 17, inclusive, of this act to the contrary, a facility may use or authorize the use of physical restraint, mechanical restraint or chemical restraint on a person with a disability who is a client if the facility is:

1. Accredited by a nationally recognized accreditation association or agency; or

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2. Certified for participation in the Medicaid or Medicare program,

only to the extent that the accreditation or certification allows the use of such restraint.

Sec. 14. A person employed by a facility or any other person shall not:

1. Except as otherwise provided in section 15 of this act, use physical restraint on a person with a disability who is a client.

2. Except as otherwise provided in section 16 of this act, use mechanical restraint on a person with a disability who is a client.

3. Except as otherwise provided in section 17 of this act, use chemical restraint on a person with a disability who is client.

Sec. 15. 1. Except as otherwise provided in subsection 2, physical restraint may be used on a person with a disability who is a client only if:

(a) An emergency exists that necessitates the use of physical restraint;

(b) The physical restraint is used only for the period that is necessary to contain the behavior of the client so that the client is no longer an immediate threat of causing physical injury to himself or others or causing severe property damage; and

(c) The use of force in the application of physical restraint does not exceed the force that is reasonable and necessary under the circumstances precipitating the use of physical restraint.

2. Physical restraint may be used on a person with a disability who is a client and the provisions of subsection 1 do not apply if the physical restraint is used to:

(a) Assist the client in completing a task or response if the client does not resist the application of physical restraint or if his resistance is minimal in intensity and duration;

(b) Escort or carry a client to safety if the client is in danger in his present location; or

3. If physical restraint is used on a person with a disability who is a client in an emergency, the use of the procedure must be reported as a denial of rights pursuant to NRS 433.534, regardless of whether the use of the procedure is authorized by statute. The report must be made not later than 1 working day after the procedure is used.

Sec. 16. 1. Except as otherwise provided in subsection 2, mechanical restraint may be used on a person with a disability who is a client only if:

(a) An emergency exists that necessitates the use of mechanical restraint;

(b) A medical order authorizing the use of mechanical restraint is obtained from the client’s treating physician before the application of the mechanical restraint or not later than 15 minutes after the application of the mechanical restraint;

(c) The physician who signed the order required pursuant to paragraph (b) or the attending physician examines the client not later than 1 working day immediately after the application of the mechanical restraint;

(d) The mechanical restraint is applied by a member of the staff of the facility who is trained and qualified to apply mechanical restraint;

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(e) The client is given the opportunity to move and exercise the parts of his body that are restrained at least 10 minutes per every 60 minutes of restraint;

(f) A member of the staff of the facility lessens or discontinues the restraint every 15 minutes to determine whether the client will stop or control his inappropriate behavior without the use of the restraint;

(g) The record of the client contains a notation that includes the time of day that the restraint was lessened or discontinued pursuant to paragraph (f), the response of the client and the response of the member of the staff of the facility who applied the mechanical restraint;

(h) A member of the staff of the facility continuously monitors the client during the time that mechanical restraint is used on the client; and

(i) The mechanical restraint is used only for the period that is necessary to contain the behavior of the client so that the client is no longer an immediate threat of causing physical injury to himself or others or causing severe property damage.

2. Mechanical restraint may be used on a person with a disability who is a client and the provisions of subsection 1 do not apply if the mechanical restraint is used to:

(a) Treat the medical needs of a client;

(b) Protect a client who is known to be at risk of injury to himself because he lacks coordination or suffers from frequent loss of consciousness;

(d) Position a client who has physical disabilities in a manner prescribed in the client’s plan of services.

3. If mechanical restraint is used on a person with a disability who is a client in an emergency, the use of the procedure must be reported as a denial of rights pursuant to NRS 433.534, regardless of whether the use of the procedure is authorized by statute. The report must be made not later than 1 working day after the procedure is used.

Sec. 17. 1. Chemical restraint may only be used on a person with a disability who is a client if:

(a) The client has been diagnosed as mentally ill, as defined in NRS 433A.115, and is receiving mental health services from a facility;

(b) The chemical restraint is administered to the client while he is under the care of the facility;

(d) A medical order authorizing the use of chemical restraint is obtained from the client’s attending physician or psychiatrist;

(e) The physician or psychiatrist who signed the order required pursuant to paragraph (d) examines the client not later than 1 working day immediately after the administration of the chemical restraint; and

(f) The chemical restraint is administered by a person licensed to administer medication.

2. If chemical restraint is used on a person with a disability who is a client, the use of the procedure must be reported as a denial of rights pursuant to NRS 433.534, regardless of whether the use of the procedure is authorized by statute.

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authorized by statute. The report must be made not later than 1 working day after the procedure is used.

Sec. 18. 1. Each facility shall develop a program of education for the members of the staff of the facility to provide instruction in positive behavioral interventions and positive behavioral supports that:

(a) Includes positive methods to modify the environment of clients to promote adaptive behavior and reduce the occurrence of inappropriate behavior;

(b) Includes methods to teach skills to clients so that clients can replace inappropriate behavior with adaptive behavior;

(d) Includes the use of the least intrusive methods to respond to and reinforce the behavior of clients; and

(e) Offers a process for designing interventions based upon the client that are focused on promoting appropriate changes in behavior as well as enhancing the overall quality of life for the client.

2. Each facility shall provide appropriate training for the members of the staff of the facility who are authorized to carry out and monitor physical restraint, mechanical restraint and chemical restraint to ensure that those members of the staff are competent and qualified to carry out the procedures in accordance with sections 2 to 19, inclusive, of this act.

Sec. 19. 1. A facility where a violation of the provisions of sections 2 to 19, inclusive, of this act occurs shall:

(a) Not later than 24 hours after a violation occurs, or as soon thereafter as the violation is discovered, report the violation to the division; and

(b) Develop, in cooperation with the division, a corrective plan to ensure that within 30 calendar days after the violation occurred, appropriate action is taken by the facility to prevent future violations.

2. The division shall forward the plan to the director of the department. The director or his designee shall review the plan to ensure that it complies with applicable federal law and the statutes and regulations of this state. The director or his designee may require appropriate revision of the plan to ensure compliance.

3. If the facility where the violation occurred does not meet the requirements of the plan to the satisfaction of the director or his designee, the department may withhold funding for the facility until the facility meets the requirements of the plan.

Sec. 20. NRS 433.484 is hereby amended to read as follows:

433.484 Each client admitted for evaluation, treatment or training to a facility has the following rights concerning care, treatment and training, a list of which must be prominently posted in all facilities providing those services and must be otherwise brought to the attention of the client by such additional means as prescribed by regulation:

1. To medical, psychosocial and rehabilitative care, treatment and training including prompt and appropriate medical treatment and care for physical and mental ailments and for the prevention of any illness or disability. All of that care, treatment and training must be consistent with standards of practice of the respective professions in the community and is subject to the following conditions:

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standards of practice of the respective professions in the community and is subject to the following conditions:

(a) Before instituting a plan of care, treatment or training or carrying out any necessary surgical procedure, express and informed consent must be obtained in writing from:

(1) The client if he is 18 years of age or over or legally emancipated and competent to give that consent, and from his legal guardian, if any;

(2) The parent or guardian of a client under 18 years of age and not legally emancipated; or

(3) The legal guardian of a client of any age who has been adjudicated mentally incompetent;

(b) An informed consent requires that the person whose consent is sought be adequately informed as to:

(1) The nature and consequences of the procedure;

(2) The reasonable risks, benefits and purposes of the procedure; and

(3) Alternative procedures available;

(c) The consent of a client as provided in paragraph (b) may be withdrawn by the client in writing at any time with or without cause;

(d) Even in the absence of express and informed consent, a licensed and qualified physician may render emergency medical care or treatment to any client who has been injured in an accident or who is suffering from an acute illness, disease or condition, if within a reasonable degree of medical certainty, delay in the initiation of emergency medical care or treatment would endanger the health of the client and if the treatment is immediately entered into the client’s record of treatment, subject to the provisions of paragraph (e); and

(e) If the proposed emergency medical care or treatment is deemed by the chief medical officer of the facility to be unusual, experimental or generally occurring infrequently in routine medical practice, the chief medical officer shall request consultation from other physicians or practitioners of healing arts who have knowledge of the proposed care or treatment.

2. To be free from [the application of any mechanical restraint, except if prescribed by a physician. If so prescribed, the restraint must be removed whenever the condition justifying its use no longer exists, and any use of a mechanical restraint, together with the reasons therefor, must be made a part of the client’s record of treatment.] abuse, neglect and aversive intervention.

3. To consent to his transfer from one facility to another, except that the administrator of the division of mental health and developmental services of the department or his designee, or the administrator of the division of child and family services of the department or his designee, may order a transfer to be made whenever conditions concerning care, treatment or training warrant it. If the client in any manner objects to the transfer, the person ordering it must enter the objection and a written justification of the transfer in the client’s record of treatment and immediately forward a notice of the objection to the administrator who ordered the transfer, and the commission shall review the transfer pursuant to subsection 3 of NRS 433.534.

4. Other rights concerning care, treatment and training as may be specified by regulation of the commission.

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Sec. 21. NRS 433.554 is hereby amended to read as follows:

433.554 1. An employee of a public or private mental health facility or any other person, except a client, who:

(a) Has reason to believe that a client of the division or of a private facility offering mental health services has been or is being abused or neglected and fails to report it;

(b) Brings intoxicating beverages or a controlled substance into any division facility occupied by clients unless specifically authorized to do so by the administrative officer or a staff physician of the facility;

(c) Is under the influence of liquor or a controlled substance while employed in contact with clients, unless in accordance with a lawfully issued prescription;

(d) Enters into any transaction with a client involving the transfer of money or property for personal use or gain at the expense of the client; or

(e) Contrives the escape, elopement or absence of a client,

is guilty of a misdemeanor, in addition to any other penalties provided by law.

2. In addition to any other penalties provided by law, an employee of a public or private mental health facility or any other person, except a client, who willfully abuses or neglects a client:

(a) [If no] For a first violation that does not result in substantial bodily harm to the client , [results,] is guilty of a gross misdemeanor.

(b) [If] For a first violation that results in substantial bodily harm to the client , [results,] is guilty of a category B felony . [and]

A person convicted of a category B felony pursuant to this section shall be punished by imprisonment in the state prison for a minimum term of not less than 1 year and a maximum term of not more than 6 years, or by a fine of not more than $5,000, or by both fine and imprisonment.

3. A person who is convicted pursuant to this section is ineligible for 5 years for appointment to or employment in a position in the state service and, if he is an officer or employee of the state, he forfeits his office or position.

4. A conviction pursuant to NRS 433.554 is, when applicable, grounds for disciplinary action against the person so convicted and the facility where the violation occurred. The division may recommend to the appropriate agency or board the suspension or revocation of the professional license, registration, certificate or permit of a person convicted pursuant to NRS 433.554.

5. For the purposes of this section:

(a) “Abuse” means any willful and unjustified infliction of pain, injury or mental anguish upon a client, including, but not limited to:

(1) The rape, sexual assault or sexual exploitation of the client;

(2) [Striking the client;

(3) Verbal intimidation or coercion of the client without a redeeming purpose;

(4) The use of excessive force when placing the client in physical restraints; and

(5)] The use of any type of aversive intervention;

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ê1999 Statutes of Nevada, Page 3236 (CHAPTER 597, AB 280)ê

(3) Except as otherwise provided in section 13 of this act, a violation of section 14 of this act; and

(4) The use of physical , [or] chemical or mechanical restraints or the use of seclusion in violation of [state or] federal law.

Any act which meets the standard of practice for care and treatment does not constitute abuse.

(b) “Client” includes any person who seeks, on his own or others’ initiative, and can benefit from care , treatment and training in a public or private institution or facility offering mental health services. The term [does not include] includes a client of the division of child and family services of the department.

(c) “Neglect” means any omission to act which causes injury to a client or which places the client at risk of injury, including, but not limited to, the failure to follow:

(1) An appropriate plan of treatment to which the client has consented; and

(2) The policies of the facility for the care and treatment of clients.

Any omission to act which meets the standard of practice for care and treatment does not constitute neglect.

(d) “Standard of practice” means the skill and care ordinarily exercised by prudent professional personnel engaged in health care.

Sec. 22. NRS 435.350 is hereby amended to read as follows:

435.350 1. Each mentally retarded person or person with a related condition admitted to a division facility is entitled to all rights enumerated in sections 2 to 19, inclusive, of this act and NRS 433.482 and 433.484.

2. The administrator shall designate a person or persons to be responsible for establishment of regulations relating to denial of rights of mentally retarded persons and persons with related conditions. The person designated shall file the regulations with the administrator.

3. Clients’ rights specified in NRS 433.482 and 433.484 may be denied only for cause. Any denial of such rights must be entered in the client’s treatment record, and notice of the denial must be forwarded to the administrator’s designee or designees as provided in subsection 2. Failure to report denial of rights by an employee may be grounds for dismissal.

4. Upon receipt of notice of a denial of rights as provided in subsection 3, the administrator’s designee or designees shall cause a full report to be prepared which sets forth in detail the factual circumstances surrounding the denial. A copy of the report must be sent to the administrator and the commission.

5. The commission has such powers and duties with respect to reports of denial of rights as are enumerated in subsection 3 of NRS 433.534.

Sec. 23. Chapter 388 of NRS is hereby amended by adding thereto the provisions set forth as sections 24 to 42, inclusive, of this act.

Sec. 24. As used in sections 24 to 42, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections 25 to 33, inclusive, of this act have the meanings ascribed to them in those sections.

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ê1999 Statutes of Nevada, Page 3237 (CHAPTER 597, AB 280)ê

Sec. 25. “Aversive intervention” means any of the following actions if the action is used to punish a pupil with a disability or to eliminate, reduce or discourage maladaptive behavior of a pupil with a disability:

1. The use of noxious odors and tastes;

2. The use of water and other mists or sprays;

3. The use of blasts of air;

4. The use of corporal punishment;

5. The use of verbal and mental abuse;

6. The use of electric shock;

7. The administration of chemical restraint to a person;

8. The placement of a person alone in a room where release from the room is prohibited by a mechanism, including, without limitation, a lock, device or object positioned to hold the door closed or otherwise prevent the person from leaving the room;

9. Requiring a person to perform exercise under forced conditions if the:

(a) Person is required to perform the exercise because he exhibited a behavior that is related to his disability;

(b) Exercise is harmful to the health of the person because of his disability; or

10. The deprivation of necessities needed to sustain the health of a person, regardless of the length of the deprivation, including, without limitation, the denial or unreasonable delay in the provision of:

(a) Food or liquid at a time when it is customarily served; or

(b) Medication.

Sec. 26. “Chemical restraint” means the administration of drugs for the specific and exclusive purpose of controlling an acute or episodic aggressive behavior when alternative intervention techniques have failed to limit or control the behavior. The term does not include the administration of drugs on a regular basis, as prescribed by a physician, to treat the symptoms of mental, physical, emotional or behavioral disorders and for assisting a person in gaining self-control over his impulses.

Sec. 27. “Corporal punishment” means the intentional infliction of physical pain, including, without limitation, hitting, pinching or striking.

Sec. 28. “Electric shock” means the application of electric current to a person’s skin or body. The term does not include electroconvulsive therapy.

Sec. 29. “Emergency” means a situation in which immediate intervention is necessary to protect the physical safety of a person or others from an immediate threat of physical injury or to protect against an immediate threat of severe property damage.

Sec. 29.5. “Individualized education program” has the meaning ascribed to it in 20 U.S.C. § 1414(d)(1)(A).

Sec. 30. “Individualized education program team” has the meaning ascribed to it in 20 U.S.C. § 1414(d)(1)(B).

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ê1999 Statutes of Nevada, Page 3238 (CHAPTER 597, AB 280)ê

Sec. 31. “Mechanical restraint” means the use of devices, including, without limitation, mittens, straps and restraint chairs to limit a person’s movement or hold a person immobile.

Sec. 32. “Physical restraint” means the use of physical contact to limit a person’s movement or hold a person immobile.

Sec. 33. “Verbal and mental abuse” means actions or utterances that are intended to cause and actually cause severe emotional distress to a person.

Sec. 34. A person employed by the board of trustees of a school district or any other person shall not use any aversive intervention on a pupil with a disability.

Sec. 35. A person employed by the board of trustees of a school district or any other person shall not:

1. Except as otherwise provided in section 36 of this act, use physical restraint on a pupil with a disability.

2. Except as otherwise provided in section 37 of this act, use mechanical restraint on a pupil with a disability.

Sec. 36. 1. Except as otherwise provided in subsection 2, physical restraint may be used on a pupil with a disability only if:

(a) An emergency exists that necessitates the use of physical restraint;

(b) The physical restraint is used only for the period that is necessary to contain the behavior of the pupil so that the pupil is no longer an immediate threat of causing physical injury to himself or others or causing severe property damage; and

(c) The use of force in the application of physical restraint does not exceed the force that is reasonable and necessary under the circumstances precipitating the use of physical restraint.

2. Physical restraint may be used on a pupil with a disability and the provisions of subsection 1 do not apply if the physical restraint is used to:

(a) Assist the pupil in completing a task or response if the pupil does not resist the application of physical restraint or if his resistance is minimal in intensity and duration;

(b) Escort or carry a pupil to safety if the pupil is in danger in his present location; or

3. If physical restraint is used on a pupil with a disability in an emergency, the use of the procedure must be reported in the pupil’s cumulative record and a confidential file maintained for the pupil not later than 1 working day after the procedure is used. A copy of the report must be provided to the board of trustees of the school district, the pupil’s individualized education program team and the parent or guardian of the pupil. If the board of trustees determines that a denial of the pupil’s rights has occurred, the board of trustees may submit a report to the department in accordance with section 42 of this act.

Sec. 37. 1. Except as otherwise provided in subsection 2, mechanical restraint may be used on a pupil with a disability only if:

(a) An emergency exists that necessitates the use of mechanical restraint;

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ê1999 Statutes of Nevada, Page 3239 (CHAPTER 597, AB 280)ê

(b) A medical order authorizing the use of mechanical restraint is obtained from the pupil’s treating physician before the application of the mechanical restraint or not later than 15 minutes after the application of the mechanical restraint;

(c) The physician who signed the order required pursuant to paragraph (b) or the attending physician examines the pupil as soon as practicable;

(d) The mechanical restraint is applied by a member of the staff of the school who is trained and qualified to apply mechanical restraint;

(e) The pupil is given the opportunity to move and exercise the parts of his body that are restrained at least 10 minutes per every 60 minutes of restraint, unless otherwise prescribed by the physician who signed the order;

(f) A member of the staff of the school lessens or discontinues the restraint every 15 minutes to determine whether the pupil will stop or control his inappropriate behavior without the use of the restraint;

(g) The record of the pupil contains a notation that includes the time of day that the restraint was lessened or discontinued pursuant to paragraph (f), the response of the pupil and the response of the member of the staff of the school who applied the mechanical restraint;

(h) A member of the staff of the school continuously monitors the pupil during the time that mechanical restraint is used on the pupil; and

(i) The mechanical restraint is used only for the period that is necessary to contain the behavior of the pupil so that the pupil is no longer an immediate threat of causing physical injury to himself or others or causing severe property damage.

2. Mechanical restraint may be used on a pupil with a disability and the provisions of subsection 1 do not apply if the mechanical restraint is used to:

(a) Treat the medical needs of the pupil;

(b) Protect a pupil who is known to be at risk of injury to himself because he lacks coordination or suffers from frequent loss of consciousness;

(d) Position a pupil who has physical disabilities in a manner prescribed in the pupil’s individualized education program.

3. If mechanical restraint is used on a pupil with a disability in an emergency, the use of the procedure must be reported in the pupil’s cumulative record and a confidential file maintained for the pupil not later than 1 working day after the procedure is used. A copy of the report must be provided to the board of trustees of the school district, the pupil’s individualized education program team and the parent or guardian of the pupil. If the board of trustees determines that a denial of the pupil’s rights has occurred, the board of trustees may submit a report to the department in accordance with section 42 of this act.

Sec. 38. 1. The department shall develop a model program of education for use by the school districts to train the members of the staff of the schools within the school districts who are identified in the individualized education programs of pupils with disabilities to provide services to those pupils. The model program of education must provide instruction in positive behavioral interventions and positive behavioral supports that:

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ê1999 Statutes of Nevada, Page 3240 (CHAPTER 597, AB 280)ê

instruction in positive behavioral interventions and positive behavioral supports that:

(a) Includes positive methods to modify the environment of pupils with disabilities to promote adaptive behavior and reduce the occurrence of inappropriate behavior;

(b) Includes methods to teach skills to pupils with disabilities so that the pupils can replace inappropriate behavior with adaptive behavior;

(d) Includes the use of the least intrusive methods to respond to and reinforce the behavior of pupils with disabilities; and

(e) Offers a process for designing interventions based upon the pupil that are focused on promoting appropriate changes in behavior as well as enhancing the overall quality of life for the pupil.

2. The board of trustees of each school district shall provide for appropriate training for the members of the staff of the schools within the school district who are authorized to carry out and monitor physical restraint and mechanical restraint to ensure that those members of the staff are qualified to carry out the procedures in accordance with sections 24 to 42, inclusive, of this act.

Sec. 39. In addition to any penalty prescribed by specific statute, a person who intentionally uses aversive intervention on a pupil with a disability or intentionally violates section 35 of this act, is subject to disciplinary action pursuant to NRS 391.312 or 391.330, or both.

Sec. 40. 1. A school where a violation of sections 24 to 42, inclusive, of this act occurs shall report the violation to the board of trustees of the school district not later than 24 hours after the violation occurred, or as soon thereafter as the violation is discovered.

2. The board of trustees of the school district where the violation occurred shall develop, in cooperation with the superintendent of schools of the school district, a corrective plan to ensure that within 30 calendar days after the violation occurred, appropriate action is taken by the school and the board of trustees to prevent future violations.

3. The superintendent of schools of the school district shall submit the plan to the department. The department shall review the plan to ensure that it complies with applicable federal law and the statutes and regulations of this state. The department may require appropriate revision of the plan to ensure compliance.

4. If the school where the violation occurred does not meet the requirements of the plan to the satisfaction of the department, the department may appoint a licensed administrator to oversee the school to ensure that the school meets the requirements of the plan. An administrator serves at the pleasure of the superintendent of public instruction and is entitled to receive such compensation as may be set by the superintendent. A school district that contains a school for which an administrator is appointed pursuant to this subsection shall reimburse the department for any expenses incurred by the department pursuant to this subsection.

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ê1999 Statutes of Nevada, Page 3241 (CHAPTER 597, AB 280)ê

Sec. 41. An officer, administrator or employee of a public school shall not retaliate against any person for having:

1. Reported a violation of sections 24 to 42, inclusive, of this act; or

2. Provided information regarding a violation of sections 24 to 42, inclusive, of this act,

by a public school or a member of the staff of the public school.

Sec. 42. 1. A denial of rights of a pupil with a disability pursuant to sections 24 to 42, inclusive, of this act must be entered in the pupil’s cumulative record and a confidential file maintained for that pupil. Notice of the denial must be provided to the board of trustees of the school district.

2. If the board of trustees of a school district receives notice of a denial of rights pursuant to subsection 1, it shall cause a full report to be prepared which must set forth in detail the factual circumstances surrounding the denial. A copy of the report must be provided to the department.

3. The department:

(a) Shall receive reports made pursuant to subsection 2;

(b) May investigate apparent violations of the rights of pupils with disabilities; and

Sec. 43. NRS 388.440 is hereby amended to read as follows:

388.440 As used in NRS 388.440 to 388.520, inclusive [:] , and sections 24 to 42, inclusive, of this act:

1. “Gifted and talented pupil” means a person under the age of 18 years who demonstrates such outstanding academic skills or aptitudes that he cannot progress effectively in a regular school program and therefore needs special instruction or special services.

2. “Pupil with a disability” means a person under the age of 22 years who deviates either educationally, physically, socially or emotionally so markedly from normal patterns that he cannot progress effectively in a regular school program and therefore needs special instruction or special services.

Sec. 44. NRS 391.312 is hereby amended to read as follows:

391.312 1. A teacher may be suspended, dismissed or not reemployed and an administrator may be demoted, suspended, dismissed or not reemployed for the following reasons:

(a) Inefficiency;

(b) Immorality;

(d) Insubordination;

(e) Neglect of duty;

(f) Physical or mental incapacity;

(g) A justifiable decrease in the number of positions due to decreased enrollment or district reorganization;

(h) Conviction of a felony or of a crime involving moral turpitude;

(i) Inadequate performance;

(j) Evident unfitness for service;

(k) Failure to comply with such reasonable requirements as a board may prescribe;

(l) Failure to show normal improvement and evidence of professional training and growth;

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ê1999 Statutes of Nevada, Page 3242 (CHAPTER 597, AB 280)ê

(m) Advocating overthrow of the Government of the United States or of the State of Nevada by force, violence or other unlawful means, or the advocating or teaching of communism with the intent to indoctrinate pupils to subscribe to communistic philosophy;

(n) Any cause which constitutes grounds for the revocation of a teacher’s license;

(o) Willful neglect or failure to observe and carry out the requirements of this Title;

(p) Dishonesty; [or]

(q) Breaches in the security or confidentiality of the questions and answers of the achievement and proficiency examinations that are administered pursuant to NRS 389.015 [.] ; or

(r) An intentional violation of section 34 or 35 of this act.

2. In determining whether the professional performance of a licensed employee is inadequate, consideration must be given to the regular and special evaluation reports prepared in accordance with the policy of the employing school district and to any written standards of performance which may have been adopted by the board.

Sec. 45. NRS 391.330 is hereby amended to read as follows:

391.330 The state board may suspend or revoke the license of any teacher, administrator or other licensed employee, after notice and an opportunity for hearing have been provided pursuant to NRS 391.322 and 391.323, for:

1. Immoral or unprofessional conduct.

2. Evident unfitness for service.

3. Physical or mental incapacity which renders the teacher, administrator or other licensed employee unfit for service.

4. Conviction of a felony or crime involving moral turpitude.

5. Conviction of a sex offense under NRS 200.366, 200.368, 201.190, 201.220, 201.230 or 207.260 in which a pupil enrolled in a school of a county school district was the victim.

6. Knowingly advocating the overthrow of the Federal Government or of the State of Nevada by force, violence or unlawful means.

7. Persistent defiance of or refusal to obey the regulations of the state board, the commission or the superintendent of public instruction, defining and governing the duties of teachers, administrators and other licensed employees.

8. Breaches in the security or confidentiality of the questions and answers of the achievement and proficiency examinations that are administered pursuant to NRS 389.015.

9. An intentional violation of section 34 or 35 of this act.

Sec. 46. Chapter 394 of NRS is hereby amended by adding thereto the provisions set forth as sections 47 to 66, inclusive, of this act.

Sec. 47. As used in sections 47 to 66, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections 48 to 57, inclusive, of this act have the meanings ascribed to them in those sections.

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ê1999 Statutes of Nevada, Page 3243 (CHAPTER 597, AB 280)ê

Sec. 48. “Aversive intervention” means any of the following actions if the action is used to punish a pupil with a disability or to eliminate, reduce or discourage maladaptive behavior of a pupil with a disability:

1. The use of noxious odors and tastes;

2. The use of water and other mists or sprays;

3. The use of blasts of air;

4. The use of corporal punishment;

5. The use of verbal and mental abuse;

6. The use of electric shock;

7. The administration of chemical restraint to a person;

9. Requiring a person to perform exercise under forced conditions if the:

(a) Person is required to perform the exercise because he exhibited a behavior that is related to his disability;

(b) Exercise is harmful to the health of the person because of his disability; or

(a) Food or liquid at a time when it is customarily served; or

(b) Medication.

Sec. 49. “Chemical restraint” means the administration of drugs for the specific and exclusive purpose of controlling an acute or episodic aggressive behavior when alternative intervention techniques have failed to limit or control the behavior. The term does not include the administration of drugs on a regular basis, as prescribed by a physician, to treat the symptoms of mental, physical, emotional or behavioral disorders and for assisting a person in gaining self-control over his impulses.

Sec. 50. “Corporal punishment” means the intentional infliction of physical pain, including, without limitation, hitting, pinching or striking.

Sec. 51. “Electric shock” means the application of electric current to a person’s skin or body. The term does not include electroconvulsive therapy.

Sec. 52. “Emergency” means a situation in which immediate intervention is necessary to protect the physical safety of a person or others from an immediate threat of physical injury or to protect against an immediate threat of severe property damage.

Sec. 53. “Individualized education program team” has the meaning ascribed to it in 20 U.S.C. § 1414(d)(1)(B).

Sec. 54. “Mechanical restraint” means the use of devices, including, without limitation, mittens, straps and restraint chairs to limit a person’s movement or hold a person immobile.

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ê1999 Statutes of Nevada, Page 3244 (CHAPTER 597, AB 280)ê

Sec. 55. “Physical restraint” means the use of physical contact to limit a person’s movement or hold a person immobile.

Sec. 56. “Pupil with a disability” has the meaning ascribed to it in NRS 388.440.

Sec. 57. “Verbal and mental abuse” means actions or utterances that are intended to cause and actually cause severe emotional distress to a person.

Sec. 58. A person employed by a private school or any other person shall not use any aversive intervention on a pupil with a disability.

Sec. 59. A person employed by a private school or any other person shall not:

1. Except as otherwise provided in section 60 of this act, use physical restraint on a pupil with a disability.

2. Except as otherwise provided in section 61 of this act, use mechanical restraint on a pupil with a disability.

Sec. 60. 1. Except as otherwise provided in subsection 2, physical restraint may be used on a pupil with a disability only if:

(a) An emergency exists that necessitates the use of physical restraint;

(c) The use of force in the application of physical restraint does not exceed the force that is reasonable and necessary under the circumstances precipitating the use of physical restraint.

2. Physical restraint may be used on a pupil with a disability and the provisions of subsection 1 do not apply if the physical restraint is used to:

(a) Assist the pupil in completing a task or response if the pupil does not resist the application of physical restraint or if his resistance is minimal in intensity and duration;

(b) Escort or carry a pupil to safety if the pupil is in danger in his present location; or

3. If physical restraint is used on a pupil with a disability in an emergency, the use of the procedure must be reported in the pupil’s cumulative record not later than 1 working day after the procedure is used. A copy of the report must be provided to the superintendent, the administrator of the private school, the pupil’s individualized education program team, if applicable, and the parent or guardian of the pupil. If the administrator of the private school determines that a denial of the pupil’s rights has occurred, the administrator shall submit a report to the superintendent in accordance with section 66 of this act.

Sec. 61. 1. Except as otherwise provided in subsection 2, mechanical restraint may be used on a pupil with a disability only if:

(a) An emergency exists that necessitates the use of mechanical restraint;

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ê1999 Statutes of Nevada, Page 3245 (CHAPTER 597, AB 280)ê

(c) The physician who signed the order required pursuant to paragraph (b) or the attending physician examines the pupil as soon as practicable after the application of the mechanical restraint;

(d) The mechanical restraint is applied by a member of the staff of the private school who is trained and qualified to apply mechanical restraint;

(f) A member of the staff of the private school lessens or discontinues the restraint every 15 minutes to determine whether the pupil will stop or control his inappropriate behavior without the use of the restraint;

(h) A member of the staff of the private school continuously monitors the pupil during the time that mechanical restraint is used on the pupil; and

2. Mechanical restraint may be used on a pupil with a disability and the provisions of subsection 1 do not apply if the mechanical restraint is used to:

(a) Treat the medical needs of the pupil;

(b) Protect a pupil who is known to be at risk of injury to himself because he lacks coordination or suffers from frequent loss of consciousness;

(d) Position a pupil who has physical disabilities in a manner prescribed in the pupil’s service plan developed pursuant to 34 C.F.R. § 300.455 or the pupil’s individualized education program, whichever is appropriate.

3. If mechanical restraint is used on a pupil with a disability in an emergency, the use of the procedure must be reported in the pupil’s cumulative record not later than 1 working day after the procedure is used. A copy of the report must be provided to the superintendent, the administrator of the private school, the pupil’s individualized education program team, if applicable, and the parent or guardian of the pupil. If the administrator of the private school determines that a denial of the pupil’s rights has occurred, the administrator shall submit a report to the superintendent in accordance with section 66 of this act.

4. As used in this section, “individualized education program” has the meaning ascribed to it in 20 U.S.C. § 1414(d)(1)(A).

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ê1999 Statutes of Nevada, Page 3246 (CHAPTER 597, AB 280)ê

Sec. 62. 1. If a private school provides instruction to pupils with disabilities, the school shall develop a program of education for the members of the staff of the school who provide services to pupils with disabilities. The program of education must provide instruction in positive behavioral interventions and positive behavioral supports that:

(a) Includes positive methods to modify the environment of pupils with disabilities to promote adaptive behavior and reduce the occurrence of inappropriate behavior;

(b) Includes methods to teach skills to pupils with disabilities so that the pupils can replace inappropriate behavior with adaptive behavior;

(d) Includes the use of the least intrusive methods to respond to and reinforce the behavior of pupils with disabilities; and

(e) Offers a process for deigning interventions based upon the pupil that are focused on promoting appropriate changes in behavior as well as enhancing the overall quality of life for the pupil.

2. If a private school provides instruction to pupils with disabilities, the school shall provide appropriate training for the members of the staff of the school who are authorized to carry out and monitor physical restraint and mechanical restraint to ensure that those members of the staff are qualified to carry out the procedures in accordance with sections 47 to 66, inclusive, of this act.

Sec. 63. In addition to any penalty prescribed by specific statute, a person who intentionally uses aversive intervention on a pupil with a disability or intentionally violates section 59 of this act, is subject to appropriate disciplinary action by the private school that employs him.

Sec. 64. 1. A private school where a violation of sections 47 to 66, inclusive, of this act occurs shall report the violation to the superintendent not later than 24 hours after the violation occurred, or as soon thereafter as the violation is discovered.

2. The private school where a violation occurred shall develop, in cooperation with the superintendent, a corrective plan to ensure that within 30 calendar days after the violation occurred, appropriate action is taken by the private school to prevent future violations.

3. The superintendent shall submit the plan to the department. The department shall review the plan to ensure that it complies with applicable federal law and the statutes and regulations of this state. The department may require appropriate revision of the plan to ensure compliance.

Sec. 65. An officer, administrator or employee of a private school shall not retaliate against any person for having:

1. Reported a violation of sections 47 to 66, inclusive, of this act; or

2. Provided information regarding a violation of sections 47 to 66, inclusive, of this act,

by a private school or a member of the staff of the private school.

Sec. 66. 1. A denial of rights of a pupil with a disability pursuant to sections 47 to 66, inclusive, of this act must be entered in the pupil’s cumulative record. Notice of the denial must be provided to the administrator of the private school.

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ê1999 Statutes of Nevada, Page 3247 (CHAPTER 597, AB 280)ê

2. If the administrator of a private school receives notice of a denial of rights pursuant to subsection 1, he shall cause a full report to be prepared which must set forth in detail the factual circumstances surrounding the denial. A copy of the report must be provided to the superintendent.

3. The superintendent:

(a) Shall receive reports made pursuant to subsection 2;

(b) May investigate apparent violations of the rights of pupils with disabilities; and

Sec. 67. Chapter 449 of NRS is hereby amended by adding thereto the provisions set forth as sections 68 to 86, inclusive, of this act.

Sec. 68. As used in sections 68 to 86, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections 69 to 77, inclusive, of this act have the meanings ascribed to them in those sections.

Sec. 69. “Aversive intervention” means any of the following actions if the action is used to punish a person with a disability or to eliminate, reduce or discourage maladaptive behavior of a person with a disability:

1. The use of noxious odors and tastes;

2. The use of water and other mists or sprays;

3. The use of blasts of air;

4. The use of corporal punishment;

5. The use of verbal and mental abuse;

6. The use of electric shock;

7. Requiring a person to perform exercise under forced conditions if the:

(a) Person is required to perform the exercise because he exhibited a behavior that is related to his disability;

(b) Exercise is harmful to the health of the person because of his disability; or

(a) Food or liquid at a time when it is customarily served; or

(b) Medication.

The term does not include the withholding or withdrawal of life-sustaining treatment in accordance with NRS 449.626.

Sec. 69.5. “Chemical restraint” means the administration of drugs for the specific and exclusive purpose of controlling an acute or episodic aggressive behavior when alternative intervention techniques have failed to limit or control the behavior. The term does not include the administration of drugs on a regular basis, as prescribed by a physician, to treat the symptoms of mental, physical, emotional or behavioral disorders and for assisting a person in gaining self-control over his impulses.

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ê1999 Statutes of Nevada, Page 3248 (CHAPTER 597, AB 280)ê

Sec. 70. “Corporal punishment” means the intentional infliction of physical pain, including, without limitation, hitting, pinching or striking.

Sec. 71. “Electric shock” means the application of electric current to a person’s skin or body. The term does not include electroconvulsive therapy.

Sec. 72. “Emergency” means a situation in which immediate intervention is necessary to protect the physical safety of a person or others from an immediate threat of physical injury or to protect against an immediate threat of severe property damage.

Sec. 73. “Facility” means a facility licensed pursuant to this chapter that is a psychiatric hospital or a unit of a hospital that is specifically designated to provide care and services to persons with psychiatric or developmental disabilities.

Sec. 74. “Mechanical restraint” means the use of devices, including, without limitation, mittens, straps and restraint chairs to limit a person’s movement or hold a person immobile.

Sec. 75. “Person with a disability” means a person who:

1. Has a physical or mental impairment that substantially limits one or more of the major life activities of the person;

2. Has a record of such an impairment; or

3. Is regarded as having such an impairment.

Sec. 76. “Physical restraint” means the use of physical contact to limit a person’s movement or hold a person immobile.

Sec. 77. “Verbal and mental abuse” means actions or utterances that are intended to cause and actually cause severe emotional distress to a person.

Sec. 78. A person employed by a facility licensed pursuant to this chapter or any other person shall not use any aversive intervention on a person with a disability who is a patient at the facility.

Sec. 78.5. Notwithstanding the provisions of sections 79 to 81.5, inclusive, of this act to the contrary, a facility may use or authorize the use of physical restraint, mechanical restraint or chemical restraint on a person with a disability who is a patient if the facility is:

1. Accredited by a nationally recognized accreditation association or agency; or

2. Certified for participation in the Medicaid or Medicare program,

only to the extent that the accreditation or certification allows the use of such restraint.

Sec. 79. A person employed by a facility licensed pursuant to this chapter or any other person shall not:

1. Except as otherwise provided in section 80 of this act, use physical restraint on a person with a disability who is a patient at the facility.

2. Except as otherwise provided in section 81 of this act, use mechanical restraint on a person with a disability who is a patient at the facility.

3. Except as otherwise provided in section 81.5 of this act, use chemical restraint on a person with a disability who is a patient at the facility.

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ê1999 Statutes of Nevada, Page 3249 (CHAPTER 597, AB 280)ê

Sec. 80. 1. Except as otherwise provided in subsection 2, physical restraint may be used on a person with a disability who is a patient at a facility only if:

(a) An emergency exists that necessitates the use of physical restraint;

(b) The physical restraint is used only for the period that is necessary to contain the behavior of the patient so that the patient is no longer an immediate threat of causing physical injury to himself or others or causing severe property damage; and

(c) The use of force in the application of physical restraint does not exceed the force that is reasonable and necessary under the circumstances precipitating the use of physical restraint.

2. Physical restraint may be used on a person with a disability who is a patient at a facility and the provisions of subsection 1 do not apply if the physical restraint is used to:

(a) Assist the patient in completing a task or response if the patient does not resist the application of physical restraint or if his resistance is minimal in intensity and duration;

(b) Escort or carry a patient to safety if the patient is in danger in his present location; or

3. If physical restraint is used on a person with a disability who is a patient at a facility in an emergency, the use of the procedure must be reported as a denial of rights pursuant to section 86 of this act, regardless of whether the use of the procedure is authorized by statute. The report must be made not later than 1 working day after the procedure is used.

Sec. 81. 1. Except as otherwise provided in subsection 2, mechanical restraint may be used on a person with a disability who is a patient at a facility only if:

(a) An emergency exists that necessitates the use of mechanical restraint;

(b) A medical order authorizing the use of mechanical restraint is obtained from the patient’s treating physician before the application of the mechanical restraint or not later than 15 minutes after the application of the mechanical restraint;

(c) The physician who signed the order required pursuant to paragraph (b) or the attending physician examines the patient not later than 1 working day immediately after the application of the mechanical restraint;

(d) The mechanical restraint is applied by a member of the staff of the facility who is trained and qualified to apply mechanical restraint;

(e) The patient is given the opportunity to move and exercise the parts of his body that are restrained at least 10 minutes per every 60 minutes of restraint;

(f) A member of the staff of the facility lessens or discontinues the restraint every 15 minutes to determine whether the patient will stop or control his inappropriate behavior without the use of the restraint;

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ê1999 Statutes of Nevada, Page 3250 (CHAPTER 597, AB 280)ê

(g) The record of the patient contains a notation that includes the time of day that the restraint was lessened or discontinued pursuant to paragraph (f), the response of the patient and the response of the member of the staff of the facility who applied the mechanical restraint;

(h) A member of the staff of the facility continuously monitors the patient during the time that mechanical restraint is used on the patient; and

(i) The patient is released from the mechanical restraint as soon as his behavior no longer presents an immediate threat to himself or others.

2. Mechanical restraint may be used on a person with a disability who is a patient at a facility and the provisions of subsection 1 do not apply if the mechanical restraint is used to:

(a) Treat the medical needs of a patient;

(b) Protect a patient who is known to be at risk of injury to himself because he lacks coordination or suffers from frequent loss of consciousness;

(d) Position a patient who has physical disabilities in a manner prescribed in the patient’s plan of treatment.

3. If mechanical restraint is used on a person with a disability who is a patient at a facility in an emergency, the use of the procedure must be reported as a denial of rights pursuant to section 86 of this act, regardless of whether the use of the procedure is authorized by statute. The report must be made not later than 1 working day after the procedure is used.

Sec. 81.5. 1. Chemical restraint may only be used on a person with a disability who is a patient at a facility if:

(a) The patient has been diagnosed as mentally ill, as defined in NRS 433A.115, and is receiving mental health services from a facility;

(b) The chemical restraint is administered to the patient while he is under the care of the facility;

(d) A medical order authorizing the use of chemical restraint is obtained from the patient’s attending physician or psychiatrist;

(e) The physician or psychiatrist who signed the order required pursuant to paragraph (d) examines the patient not later than 1 working day immediately after the administration of the chemical restraint; and

(f) The chemical restraint is administered by a person licensed to administer medication.

2. If chemical restraint is used on a person with a disability who is a patient, the use of the procedure must be reported as a denial of rights pursuant to section 86 of this act, regardless of whether the use of the procedure is authorized by statute. The report must be made not later than 1 working day after the procedure is used.

Sec. 82. 1. Each facility shall develop a program of education for the members of the staff of the facility to provide instruction in positive behavioral interventions and positive behavioral supports that:

(a) Includes positive methods to modify the environment of patients to promote adaptive behavior and reduce the occurrence of inappropriate behavior;

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ê1999 Statutes of Nevada, Page 3251 (CHAPTER 597, AB 280)ê

(b) Includes methods to teach skills to patients so that patients can replace inappropriate behavior with adaptive behavior;

(d) Includes the use of the least intrusive methods to respond to and reinforce the behavior of patients; and

(e) Offers a process for designing interventions based upon the patient that are focused on promoting appropriate changes in behavior as well as enhancing the overall quality of life for the patient.

2. Each facility shall provide appropriate training for the members of the staff of the facility who are authorized to carry out and monitor physical restraint and mechanical restraint to ensure that those members of the staff are competent and qualified to carry out the procedures in accordance with sections 68 to 86, inclusive, of this act.

Sec. 83. 1. Unless a more severe penalty is prescribed by specific statute, a person who willfully uses aversive intervention on a person with a disability who is a patient at a facility or, except as otherwise provided in section 78.5 of this act, violates section 79 of this act:

(a) For a first violation that does not result in substantial bodily harm to the person with a disability, is guilty of a gross misdemeanor.

(b) For a first violation that results in substantial bodily harm to the person with a disability, is guilty of a category B felony.

A person who is convicted of a category B felony pursuant to this section shall be punished by imprisonment in the state prison for a minimum term of not less than 1 year and a maximum term of not more than 6 years, or by a fine of not more than $5,000, or by both fine and imprisonment.

2. A person who is convicted pursuant to this section is ineligible for 5 years for employment with a facility.

3. A conviction pursuant to this section is, when applicable, grounds for disciplinary action against the person so convicted and the facility where the violation occurred. The health division may recommend to the appropriate agency or board the suspension or revocation of the professional license, registration, certificate or permit of a person convicted.

Sec. 84. 1. A facility where a violation of the provisions of sections 68 to 86, inclusive, of this act occurs shall report the violation to the health division not later than 24 hours after the violation occurred, or as soon thereafter as the violation is discovered.

2. A facility where a violation occurred shall develop, in cooperation with the health division, a corrective plan to ensure that within 30 calendar days after the violation occurred, appropriate action is taken by the facility to prevent future violations.

3. The health division shall forward the plan to the board. The board shall review the plan to ensure that it complies with applicable federal law and the statutes and regulations of this state. The board may require appropriate revision of the plan to ensure compliance.

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ê1999 Statutes of Nevada, Page 3252 (CHAPTER 597, AB 280)ê

4. If the facility where the violation occurred does not meet the requirements of the plan to the satisfaction of the board, the board may direct the agency that administers funding for the facility to withhold state funding for the facility until the facility meets the requirements of the plan.

Sec. 85. An officer, administrator or employee of a facility licensed pursuant to this chapter shall not retaliate against any person for having:

1. Reported a violation of sections 68 to 86, inclusive, of this act; or

2. Provided information regarding a violation of sections 68 to 86, inclusive, of this act,

by a facility or a member of the staff of the facility.

Sec. 86. 1. A denial of rights of a person with a disability who is a patient of a facility pursuant to sections 68 to 86, inclusive, of this act must be entered in the patient’s record. Notice of the denial must be provided to the administrator of the facility.

2. If the administrator of a facility receives notice of a denial of rights pursuant to subsection 1, he shall cause a full report to be prepared which must set forth in detail the factual circumstances surrounding the denial. A copy of the report must be provided to the health division.

3. The health division:

(a) Shall receive reports made pursuant to subsection 2;

(b) May investigate apparent violations of the rights of persons with disabilities who are patients at facilities; and

Sec. 87. NRS 449.730 is hereby amended to read as follows:

449.730 1. Every medical facility, facility for the dependent and home for individual residential care shall inform each patient or his legal representative, upon his admission to the facility or home, of the patient’s rights as listed in NRS 449.700, 449.710 and 449.720.

2. In addition to the requirements of subsection 1, if a person with a disability is a patient at a facility, as that term is defined in section 73 of this act, the facility shall inform the patient of his rights pursuant to sections 68 to 86, inclusive, of this act.

Sec. 88. NRS 449.850 is hereby amended to read as follows:

449.850 1. The attorney in fact may not consent to:

(a) Commitment or placement of the principal in a facility for treatment of mental illness;

(b) Convulsive treatment;

(d) Sterilization;

(e) Abortion; [or]

(f) Aversive intervention, as that term is defined in section 69 of this act; or

(g) Any other treatment to which the principal, in the power of attorney, states that the attorney in fact may not consent.

2. The attorney in fact must make decisions concerning the use or nonuse of life sustaining treatment which conform to the known desires of the principal. The principal may make these desires known in the power of attorney.

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ê1999 Statutes of Nevada, Page 3253 (CHAPTER 597, AB 280)ê

Sec. 89. The amendatory provisions of this act do not apply to offenses that were committed before October 1, 1999.

Sec. 90. Section 20 of this act becomes effective at 12:01 a.m. on October 1, 1999.

________

CHAPTER 598, SB 556

Senate Bill No. 556–Committee on Finance

CHAPTER 598

AN ACT relating to health care; creating a task force on the policy of the State of Nevada concerning access to public health services; making an appropriation; and providing other matters properly relating thereto.

[Approved June 9, 1999]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY,

DO ENACT AS FOLLOWS:

Section 1. 1. The task force on the policy of the State of Nevada concerning access to public health services, consisting of 15 members, is hereby created. The membership of the task force consists of:

(a) Nine members appointed by the Governor in accordance with subsection 2;

(b) Three members appointed by the Majority Leader of the Senate in accordance with subsection 3; and

2. The Governor shall appoint to the task force:

(a) One representative of the State of Nevada who has experience in the field of health care;

(b) One representative of the Nevada State Medical Association;

(d) One representative of the insurance industry of the State of Nevada;

(e) One representative of Nevadans for Affordable Health Care;

(f) One representative of the Nevada Public Health Foundation;

(g) One representative of the Nevada Women’s Lobby;

(h) One representative of the Nevada Association of Health Plans; and

(i) One member of the public.

3. The Majority Leader of the Senate and the Speaker of the Assembly shall each ensure that at least one of the members whom they appoint to the task force is a member of the minority party.

4. The Governor shall select a chairman and a vice chairman from among the membership of the task force.

5. For each day or portion of a day during which a member of the task force who is a legislator attends a meeting of the task force or is otherwise engaged in the business of the task force, except during a regular or special session of the Legislature, he is entitled to receive the:

(a) Compensation provided for a majority of the members of the Legislature during the first 60 days of the preceding session;

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ê1999 Statutes of Nevada, Page 3254 (CHAPTER 598, SB 556)ê

(b) Per diem allowance provided for state officers and employees generally; and

The compensation, per diem allowances and travel expenses of the legislative members of the task force must be paid from the legislative fund.

6. Each member of the task force who is not a legislator:

(a) Is entitled to receive a salary of $80 for each day or portion of a day during which he attends a meeting of the task force; and

(b) Is entitled to receive the per diem allowance and travel expenses provided for state officers and employees generally for each day or portion of a day during which he attends a meeting of the task force or is otherwise engaged in the business of the task force.

7. The Department of Human Resources and the Division of Insurance of the Department of Business and Industry shall provide the necessary staff to assist the task force in performing its duties.

Sec. 2. 1. The task force on the policy of the State of Nevada concerning access to public health services shall appoint a technical advisory committee that consists of persons who have experience with public health issues to assist the task force concerning technical issues.

2. The technical advisory committee must include, without limitation, persons who are employed by the University of Nevada School of Medicine and the dental school to be established in this state pursuant to Assembly Bill No. 527 of this session and who are recommended by the Board of Regents of the University of Nevada.

Sec. 3. The task force on the policy of the State of Nevada concerning access to public health services shall:

1. Establish the basic coverage that must be included in each policy of health insurance and health plan that is issued in the State of Nevada. To determine the basic coverage, the task force shall consider public policy and actuarial evidence, including, without limitation, an analysis of the cost of providing the coverage. The basic coverage must be established as the minimum coverage to be offered which may be augmented based upon the needs of insureds or employees and on economic considerations.

2. Identify, review and prioritize the basic health care services, including, without limitation, public health assessments and screenings, to which all residents of the State of Nevada should have access, regardless of whether they have health insurance. The task force shall identify the costs and benefits of providing each of these basic health care services, including, without limitation, a consideration of at-risk persons and the clinical consensus on the positive value of each preventative, screening and primary health care service. The review must include, without limitation, a review of methods to increase access to health care services for members of minority groups and other persons who are medically underserved in this state.

3. Identify and analyze current public and private resources within this state that provide health care services and coverage to persons without health insurance, including, without limitation, Medicaid, the children’s health insurance program, county indigent health programs, care provided by hospitals or charities, federally qualified health centers, clinics of county health departments and community health nurses.

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ê1999 Statutes of Nevada, Page 3255 (CHAPTER 598, SB 556)ê

health departments and community health nurses. The analysis must include, without limitation, a compilation of data concerning:

(a) Persons in this state who do not have health insurance;

(b) The cost of providing health care services to persons in this state;

(d) The public health care needs of minority groups and other persons who are medically underserved and the services available to these groups and persons; and

(e) The demographics of persons in this state who are covered by public or private health insurance and the demographics of persons in this state who are not covered by public or private health insurance.

Sec. 4. 1. The task force on the policy of the State of Nevada concerning access to public health services shall sponsor forums throughout the State of Nevada, if money for the forums is provided by the Nevada Public Health Foundation, to provide information to the public concerning the work of the task force and to obtain public comment on the work of the task force.

2. The forums must include, without limitation, participation by providers of public health care, health care advocacy groups and health care professionals.

Sec. 5. 1. The task force on the policy of the State of Nevada concerning access to public health services shall hold not less than eight meetings before the 71st session of the Nevada Legislature convenes, and more frequently if needed.

2. In carrying out its duties, the task force may contract for consulting services and other technical assistance.

3. The task force shall, on or before December 1, 2000, submit written recommendations to the Governor and to the Director of the Legislative Counsel Bureau for transmission to the 71st session of the Nevada Legislature. Such recommendations must include, without limitation, recommendations concerning:

(a) The structure of, contents of and services that must be included in a basic plan of health coverage offered to residents of this state;

(b) The establishment of minimum public health services that must be provided to each resident of this state, regardless of his ability to pay, including, without limitation, preventative care, health screenings, primary care services and immunizations;

(c) Potential plans and programs to improve the quality of health care services provided to members of minority groups and other persons who are medically underserved and to increase access to health care services for members of minority groups and other persons who are medically underserved;

(d) Methods to provide funding to public health clinics to enable them to provide health care services to residents of this state; and

(e) An estimate of the costs and benefits of coordinating insurance coverage provided by the private sector with public health care services.

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ê1999 Statutes of Nevada, Page 3256 (CHAPTER 598, SB 556)ê

Sec. 6. 1. There is hereby appropriated from the state general fund to the Department of Human Resources the sum of $50,000 for use by the task force on the policy of the State of Nevada concerning access to public health services to pay for the costs associated with carrying out the provisions of this act.

2. Any remaining balance of the appropriation made by subsection 1 must not be committed for expenditure after June 30, 2001, and reverts to the state general fund as soon as all payments of money committed have been made.

Sec. 7. This act becomes effective on July 1, 1999.

________

CHAPTER 599, SB 445

Senate Bill No. 445–Committee on Human Resources and Facilities

CHAPTER 599

AN ACT relating to education; prescribing the academic subjects for public schools; requiring the state board of education to adopt certain courses of study; repealing certain courses of study; and providing other matters properly relating thereto.

[Approved June 9, 1999]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY,

DO ENACT AS FOLLOWS:

Section 1. NRS 386.550 is hereby amended to read as follows:

386.550 A charter school shall:

1. Comply with all laws and regulations relating to discrimination and civil rights.

2. Remain nonsectarian, including, without limitation, in its educational programs, policies for admission and employment practices.

3. Refrain from charging tuition or fees, levying taxes or issuing bonds.

4. Comply with any plan for desegregation ordered by a court that is in effect in the school district in which the charter school is located.

5. Comply with the provisions of chapter 241 of NRS.

6. Schedule and provide annually at least as many days of instruction as are required of other public schools located in the same school district as the charter school is located.

7. Cooperate with the board of trustees of the school district in the administration of the achievement and proficiency examinations administered pursuant to NRS 389.015 to the pupils who are enrolled in the charter school.

8. Comply with applicable statutes and regulations governing the achievement and proficiency of pupils in this state.

9. Provide instruction in the core academic subjects set forth in subsection 1 of section 4 of this act, as applicable for the grade levels of pupils who are enrolled in the charter school, and provide at least the courses of instruction that are required of pupils by statute or regulation for promotion to the next grade or graduation from a public high school and require the pupils who are enrolled in the charter school to take those courses of study. This subsection does not preclude a charter school from offering, or requiring the pupils who are enrolled in the charter school to take, other courses of study that are required by statute or regulation.

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ê1999 Statutes of Nevada, Page 3257 (CHAPTER 599, SB 445)ê

requiring the pupils who are enrolled in the charter school to take, other courses of study that are required by statute or regulation.

10. Provide instruction on acquired immune deficiency syndrome and the human reproductive system, related to communicable diseases and sexual responsibility in accordance with NRS 389.065.

11. Adhere to the same transportation policy that is in effect in the school district in which the charter school is located.

12. Adopt a final budget in accordance with the regulations adopted by the department. A charter school is not required to adopt a final budget pursuant to NRS 354.598 or otherwise comply with the provisions of chapter 354 of NRS.

Sec. 2. NRS 388.380 is hereby amended to read as follows:

388.380 1. Except as otherwise provided in subsection 2, the board of trustees of a school district in a county whose population is 100,000 or more shall and any other board of trustees of a school district may:

(a) Establish and maintain occupational schools or classes giving instruction in the subjects approved by the state board for occupational education.

(b) Raise and expend money for the establishment and maintenance of occupational schools or classes.

2. The board of trustees of each school district shall incorporate into the curriculum:

(a) Occupational guidance and counseling [;] in accordance with NRS 389.180; and

(b) Technology . [,

in accordance with the courses of study adopted by the state board pursuant to NRS 389.170 and 389.180.]

Sec. 3. Chapter 389 of NRS is hereby amended by adding thereto the provisions set forth as sections 4 and 5 of this act.

Sec. 4. 1. The following subjects are designated as the core academic subjects that must be taught, as applicable for grade levels, in all public schools, the Caliente youth center and the Nevada youth training center:

(a) English, including reading, composition and writing;

(b) Mathematics;

(d) Social studies, which includes only the subjects of history, geography, economics and government.

2. Except as otherwise provided in this subsection, in addition to the core academic subjects, the following subjects must be taught as applicable for grade levels and to the extent practicable in all public schools, the Caliente youth center and the Nevada youth training center:

(a) The arts;

(b) Computer education and technology;

(d) Physical education.

If the state board requires the completion of course work in a subject area set forth in this subsection for graduation from high school or promotion to the next grade, a public school shall offer the required course work. Unless a subject is required for graduation from high school or promotion to the next grade, a charter school is not required to comply with this subsection.

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ê1999 Statutes of Nevada, Page 3258 (CHAPTER 599, SB 445)ê

Unless a subject is required for graduation from high school or promotion to the next grade, a charter school is not required to comply with this subsection.

Sec. 5. The state board shall adopt regulations establishing courses of study and the grade levels for which the courses of study apply for:

1. The academic subjects set forth in section 4 of this act.

2. Citizenship and physical training for pupils enrolled in high school.

3. Physiology, hygiene and cardiopulmonary resuscitation.

4. The prevention of suicide.

5. Instruction relating to child abuse.

6. The economics of the American system of free enterprise.

7. American Sign Language.

8. Environmental education.

9. Adult roles and responsibilities.

A course of study established for subsection 1 may include one or more of the subjects listed in subsections 2 to 9, inclusive.

Sec. 6. NRS 389.010 is hereby amended to read as follows:

389.010 Except as otherwise provided in NRS [389.170 and] 389.180, boards of trustees of school districts shall enforce in schools the courses of study prescribed and adopted by the state board.

Sec. 7. 1. The subjects taught in public schools pursuant to section 4 of this act must be in accordance with the standards of content and performance established for grade levels by the council to establish academic standards for public schools pursuant to section 45 of chapter 473, Statutes of Nevada 1997, at page 1780.

2. The courses of study established by the state board of education pursuant to subsection 1 of section 5 of this act must comply with and carry out the standards of content and performance that are submitted to the state board of education by the council to establish academic standards for public schools pursuant to section 45 of chapter 473, Statutes of Nevada 1997, at page 1780.

Sec. 8. NRS 389.050, 389.060, 389.063, 389.075, 389.080, 389.083, 389.085, 389.110, 389.120, 389.130, 389.140, 389.170 and 389.190 are hereby repealed.

Sec. 9. 1. This section and sections 2 to 8, inclusive, of this act become effective on July 1, 1999.

2. Section 1 of this act becomes effective at 12:01 a.m. on July 1, 1999.

________

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ê1999 Statutes of Nevada, Page 3259ê

CHAPTER 600, SB 438

Senate Bill No. 438–Committee on Commerce and Labor

CHAPTER 600

AN ACT relating to utilities; providing for the appointment of hearing officers to conduct proceedings before the public utilities commission of Nevada; revising the provisions governing recoverable costs; providing for the provision of basic electric services during the period of transition to a competitive market; providing for an auction of the right to provide such electric services; making various changes related to the provision of electricity in a competitive market; revising the provisions governing the statutory deadline by which customers may begin obtaining potentially competitive services; repealing provisions relating to deferred accounting; authorizing the use of the name or logo of a provider of a noncompetitive service by an affiliate of a provider of electric services or a provider of natural gas; and providing other matters properly relating thereto.

[Approved June 9, 1999]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY,

DO ENACT AS FOLLOWS:

Section 1. NRS 703.130 is hereby amended to read as follows:

703.130 1. The commission shall appoint a deputy commissioner who shall serve in the unclassified service of the state.

2. The commission shall appoint a secretary who shall perform such administrative and other duties as are prescribed by the commission. The commission shall also appoint an assistant secretary.

3. The commission may employ such other clerks, experts or engineers as may be necessary.

4. The commission may appoint one or more hearing officers for a period specified by the commission to conduct proceedings or hearings that may be conducted by the commission pursuant to chapters 704, 704A, 705, 708 and 711 of NRS. The commission shall prescribe by regulation the procedure for appealing a decision of a hearing officer to the commission.

Sec. 2. Chapter 704 of NRS is hereby amended by adding thereto the provisions set forth as sections 3 to 6, inclusive, of this act.

Sec. 3. 1. A vertically integrated electric utility that is in existence on January 1, 1999, or its successor electric distribution utility or any assignee of the utility shall comply with the terms of any existing obligations for the purchase of power.

2. To recover any costs associated with an obligation for the purchase of power, a vertically integrated electric utility in existence on January 1, 1999, or its successor electric distribution utility or any assignee of the utility must demonstrate to the commission that it has made reasonable efforts to reduce the cost or increase the value of the obligation, including, without limitation, by:

(a) Evaluating the costs and benefits of the obligation and analyzing whether there are any reasonable options under the existing provisions of the obligation that may reduce the costs or increase the benefits of the obligation;

(b) Reporting on the good faith attempts by the utility or its assignee to seek an increase in value or reduction in cost from the provider of the purchased power under the existing provisions of the obligation;

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ê1999 Statutes of Nevada, Page 3260 (CHAPTER 600, SB 438)ê

(c) Showing that the utility or its assignee has exercised to the extent practicable the terms of the existing obligation to mitigate the cost of the obligation or has assessed the value of retaining the obligation;

(d) Providing a citation to an order of the commission approving the obligation, or if such an order does not exist or is not available, providing all information, including, without limitation, any actions or statements by the commission or any state or federal agency, that demonstrates the commitment of the utility or its assignee to the obligation; and

(e) Providing all information indicating the extent to which the rates previously established by the commission have compensated shareholders for the risk of not recovering the costs of the obligation.

3. The provisions of this section must not be construed to allow the commission, by direct or indirect action, to modify or terminate any obligation for the purchase of power in effect on June 1, 1999.

Sec. 4. The commission shall, for each class of customers of electric service in this state, establish a total rate for the components of electric service that are necessary to provide electric service to customers in this state pursuant to subsection 1 of NRS 704.982. The total rate for each class must be established at and must not exceed the total rate for each class of customers of electric service in this state which is in effect on July 1, 1999, except that the commission shall modify the rates to account for the effects of any decisions by the commission relating to any cases filed with the commission before October 1, 1999, which involve the use of deferred accounting. Upon approval by the commission, the provider designated pursuant to subsection 1 of NRS 704.982 may reduce the total rate for any class of customers. The total rates established pursuant to this subsection do not apply to any customer who obtains generation, aggregation or any other potentially competitive service from an alternative seller.

Sec. 5. 1. The provider of electric service designated pursuant to subsection 1 of NRS 704.982 is entitled to recover only from the gain, if any, from the sale by the provider of its generation assets any shortfall during the period commencing on March 1, 2000, or such other date that is determined to be in the public interest by the governor pursuant to NRS 704.976, and ending on March 1, 2003, that results from the netting of any difference between:

(a) The revenues generated by the total rates charged to all classes of customers pursuant to section 4 of this act; and

(b) The total cost incurred by the provider to provide that service to all classes of customers.

2. Upon approval of the amount of the net shortfall, if any, the commission shall authorize the designated provider to recover that amount from the gain if any, on the sale of its generation assets, after the deduction of any taxes.

3. As used in this section, “total cost incurred by the provider” means the total revenues generated by all classes by the rates in effect on July 1, 1999, as adjusted to account for the effects of any decision of the commission relating to any cases filed with the commission before October 1, 1999, which involve the use of deferred accounting.

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ê1999 Statutes of Nevada, Page 3261 (CHAPTER 600, SB 438)ê

Sec. 6. 1. At any time after July 1, 2001, a licensed alternative seller may submit to the commission an offer to provide electric service that is being provided by the provider designated pursuant to subsection 1 of NRS 704.982. The offer must:

(a) Request to serve at least 10 percent of the load of the provider designated pursuant to subsection 1 of NRS 704.982;

(b) Provide that the service will be provided by the alternative seller to more than one class of customers; and

2. Upon the receipt of such an offer, the commission may conduct an auction if the commission determines that it is in the public interest to conduct such an auction. If the commission determines that such an auction is in the public interest, the commission shall conduct the auction as soon as practicable. The commission shall determine the terms and conditions for continued service by the successful bidder at the auction. Any licensed alternative seller or affiliate of an electric distribution utility may submit a bid. Bidding must be done by sealed bid. Each bid must be not less than 10 percent of the load, as measured in megawatts or megawatt hours, of the load of the provider designated pursuant to subsection 1 of NRS 704.982.

3. The commission shall review the bids. If the successful bidder is an alternative seller or an affiliate of an electric distribution utility other than the electric distribution utility that provided the service before the auction, the successful bidder becomes the provider of the service for the percentage of the load as indicated in its bid. For the remainder of the load that is not awarded to a successful bidder, the electric distribution utility which provided service to the customers before the auction remains the provider of the service, and that service must continue to be provided under the same terms and conditions as existed for the provision of that service by the electric distribution utility immediately before the auction.

Sec. 7. NRS 704.110 is hereby amended to read as follows:

704.110 Except as otherwise provided in NRS 704.075 or as otherwise provided by the commission pursuant to NRS 704.095 or 704.097:

1. Whenever there is filed with the commission any schedule stating a new or revised individual or joint rate or charge, or any new or revised individual or joint regulation or practice affecting any rate or charge, or any schedule resulting in a discontinuance, modification or restriction of service, the commission may, upon complaint or upon its own motion without complaint, at once, without answer or formal pleading by the interested utility, investigate or, upon reasonable notice, conduct a hearing concerning the propriety of the rate, charge, classification, regulation, discontinuance, modification, restriction or practice.

2. Pending the investigation or hearing and the decision thereon, the commission, upon delivering to the utility affected thereby a statement in writing of its reasons for the suspension, may suspend the operation of the schedule and defer the use of the rate, charge, classification, regulation, discontinuance, modification, restriction or practice, but not for more than 150 days beyond the time when the rate, charge, classification, regulation, discontinuance, modification, restriction or practice would otherwise go into effect.

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ê1999 Statutes of Nevada, Page 3262 (CHAPTER 600, SB 438)ê

discontinuance, modification, restriction or practice would otherwise go into effect.

3. Whenever there is filed with the commission any schedule stating an increased individual or joint rate or charge for service or equipment, the public utility shall submit with its application a statement showing the recorded results of revenues, expenses, investments and costs of capital for its most recent 12 months for which data were available when the application was prepared. During any hearing concerning the increased rates or charges determined by the commission to be necessary, the commission shall consider evidence in support of the increased rates or charges based upon actual recorded results of operations for the same 12 months, adjusted for increased revenues, any increased investment in facilities, increased expenses for depreciation, certain other operating expenses as approved by the commission and changes in the costs of securities which are known and are measurable with reasonable accuracy at the time of filing and which will become effective within 6 months after the last month of those 12 months, but no new rates or charges may be placed into effect until the changes have been experienced and certified by the utility to the commission. The commission shall also consider evidence supporting expenses for depreciation, calculated on an annual basis, applicable to major components of the public utility’s plant placed into service during the recorded test period or the period for certification as set forth in the application. Adjustments to revenues, operating expenses and costs of securities must be calculated on an annual basis. Within 90 days after the filing with the commission of the certification required in this subsection, or before the expiration of any period of suspension ordered pursuant to subsection 2, whichever time is longer, the commission shall make such order in reference to those rates or charges as is required by this chapter.

4. After full investigation or hearing, whether completed before or after the date upon which the rate, charge, classification, regulation, discontinuance, modification, restriction or practice is to go into effect, the commission may make such order in reference to the rate, charge, classification, regulation, discontinuance, modification, restriction or practice as would be proper in a proceeding initiated after the rate, charge, classification, regulation, discontinuance, modification, restriction or practice has become effective.

5. [Whenever an application is filed by a public utility for an increase in any rate or charge based upon increased costs in the purchase of fuel or power, and the public utility has elected to use deferred accounting for costs of the purchase of fuel or power in accordance with the commission’s regulations, the commission, by appropriate order after a public hearing, shall allow the public utility to clear the deferred account not more often than every 6 months by refunding any credit balance or recovering any debit balance over a period not to exceed 1 year as determined by the commission. The commission shall not allow a recovery of a debit balance or any portion thereof in an amount which would result in a rate of return in excess of the rate of return most recently granted the public utility.

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ê1999 Statutes of Nevada, Page 3263 (CHAPTER 600, SB 438)ê

6.] Except as otherwise provided in subsection [7,] 6, whenever a general rate application for an increased rate or charge for, or classification, regulation, discontinuance, modification, restriction or practice involving service or equipment has been filed with the commission, a public utility shall not submit another general rate application until all pending general rate applications for increases in rates submitted by that public utility have been decided unless, after application and hearing, the commission determines that a substantial financial emergency would exist if the other application is not permitted to be submitted sooner.

[7.] 6. A public utility may not file an application to recover the increased cost of purchased fuel, purchased power, or natural gas purchased for resale more often than once every 30 days.

[8.] 7. A utility facility identified in a 3-year plan submitted pursuant to NRS 704.741 and accepted by the commission for acquisition or construction pursuant to NRS 704.751 and the regulations adopted pursuant thereto shall be deemed to be a prudent investment. The utility may recover all just and reasonable costs of planning and constructing such a facility.

Sec. 8. NRS 704.185 is hereby amended to read as follows:

704.185 1. A public utility which purchases [fuel, including] natural gas for resale [, or power] may record upon its books and records all cost increases or decreases in [fuels or purchased power] the natural gas purchased for resale in deferred accounts. Any public utility which utilizes deferred accounting to reflect changes in costs of [fuels and purchased power] natural gas purchased for resale shall include in its annual report to the commission a statement showing the allocated rate of return for each of its operating departments in Nevada which uses deferred accounting.

2. If the rate of return for any department using deferred accounting is greater than the rate of return allowed by the commission in the last rate proceeding, the commission shall order the utility which recovered any [deferred fuel and purchased power] costs of natural gas purchased for resale through rates during the reported period to transfer to the next energy adjustment period that portion of such recovered amounts which exceeds the authorized rate of return.

Sec. 9. NRS 704.965 is hereby amended to read as follows:

704.965 As used in NRS 704.965 to 704.990, inclusive, and sections 3 to 6, inclusive, of this act, unless the context otherwise requires, the words and terms defined in NRS 704.966 to 704.975, inclusive, have the meanings ascribed to them in those sections.

Sec. 10. NRS 704.970 is hereby amended to read as follows:

704.970 “Electric distribution utility” means a utility that is in the business of supplying noncompetitive electric distribution or transmission service, or both, or a noncompetitive service pursuant to NRS 704.982, on or after [July 1, 1999, or the date on which alternative sellers are authorized to provide potentially competitive services to customers in this state, as appropriate.] March 1, 2000, or such other date that is determined to be in the public interest by the governor pursuant to NRS 704.976.

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ê1999 Statutes of Nevada, Page 3264 (CHAPTER 600, SB 438)ê

Sec. 11. NRS 704.975 is hereby amended to read as follows:

704.975 1. “Vertically integrated electric utility” means any public utility in the business of supplying electricity or its successor in interest that, as of December 31, 1996:

(a) Held a certificate of public convenience and necessity issued pursuant to NRS 704.005 to 704.731, inclusive; and

(b) Had an annual operating revenue of $250,000,000 or more [.] in Nevada.

2. The term does not include a cooperative association or nonprofit corporation or association or other provider of electric service, which is declared to be a public utility pursuant to NRS 704.673 and provides service only to its members.

Sec. 12. NRS 704.976 is hereby amended to read as follows:

704.976 1. The date upon which customers may begin obtaining generation, aggregation , metering, billing and any other potentially competitive services from an alternative seller must be no later than [December 31, 1999,] March 1, 2000, unless the governor, after consultation with the commission , determines that a different date is necessary to protect the public interest. [If the commission determines that a different date is necessary, the commission shall provide a report to the director of the legislative counsel bureau for transmittal to the legislature by February 1, 1999, which:

(a) Explains the reason that the commission has not granted such an authorization; and

(b) States whether the commission will grant such an authorization by December 31, 1999.]

2. The commission may:

(a) Establish different dates for the provision of different services by alternative sellers in different geographic areas; and

(b) Authorize, in gradual phases, the right of customers to buy from alternative sellers.

3. The commission shall determine that an electric service is a potentially competitive service if provision of the service by alternative sellers:

(a) Will not harm any class of customers;

(b) Will decrease the cost of providing the service to customers in this state or increase the quality or innovation of the service to customers in this state;

(d) Will advance the competitive position of this state relative to surrounding states; and

(e) Will not otherwise jeopardize the safety and reliability of the electric service in this state.

4. If the commission determines that a market for a potentially competitive service does not have effective competition, the commission shall, by regulation, establish the method for determining prices for the service and the terms and conditions for providing the service. The regulations must ensure that the pricing method, terms and conditions are just and reasonable and not unduly discriminatory. The regulations may include pricing alternatives which authorize the seller to reduce prices below maximum pricing levels specified by the commission or any other form of alternative pricing which the commission determines to be consistent with the provisions of this subsection.

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ê1999 Statutes of Nevada, Page 3265 (CHAPTER 600, SB 438)ê

pricing alternatives which authorize the seller to reduce prices below maximum pricing levels specified by the commission or any other form of alternative pricing which the commission determines to be consistent with the provisions of this subsection. In determining whether a market for an electric service has effective competition, the commission shall:

(a) Identify the relevant market;

(b) Identify, where feasible, the alternative sellers that participate and are reasonably expected to participate in the relevant market; and

(c) Calculate, where feasible, the market share of each participant in the market and evaluate the significance of each share.

5. On [or before October 1, 2000, the commission shall submit to the director of the legislative counsel bureau for transmittal to the appropriate legislative committee a report which:

(a) Evaluates the effectiveness of competition in the market for each service which customers have the right to purchase from alternative sellers; and

(b) Recommends actions which the legislature should take to increase the effectiveness of competition in the markets for all potentially competitive services.

6. On] or before October 1, 2001, an electric service that has been found on or before that date to be potentially competitive shall be deemed to be competitive.

[7.] 6. The commission may reconsider any determination made pursuant to this section upon its own motion or upon a showing of good cause by a party requesting a reconsideration. Upon a finding by the commission that the market for a service previously found not to have effective competition has become effectively competitive, the commission shall repeal the regulations which established the pricing methods and the terms and conditions for providing that service. The commission shall conduct any proceedings for the reconsideration of any such determination as expeditiously as practicable considering the current work load of the commission and the need to protect the public interest.

[8.] 7. A vertically integrated electric utility shall not provide a potentially competitive service except through an affiliate [:

(a) On or after December 31, 1999; or

(b) The date on which the commission determines that the service is potentially competitive,

whichever is later.] on or after March 1, 2000, or such other date that is determined to be in the public interest by the governor pursuant to subsection 1.

Sec. 13. NRS 704.977 is hereby amended to read as follows:

704.977 1. It is unlawful for an alternative seller to sell any electric service to a customer for consumption within this state without having first obtained a license from the commission to do so.

2. [Not later than January 1, 1999, or any different date as determined by the commission pursuant to NRS 704.976, as appropriate, the] The commission shall by regulation set forth the procedures and conditions that alternative sellers must satisfy to obtain a license to sell any electric services to a customer in this state, including, but not limited to, procedures and conditions relating to:

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ê1999 Statutes of Nevada, Page 3266 (CHAPTER 600, SB 438)ê

to a customer in this state, including, but not limited to, procedures and conditions relating to:

(a) Safety and reliability of service;

(b) Financial and operational fitness; and

3. If, after reviewing the application of an alternative seller for a license, the commission finds that the applicant is qualified to be an alternative seller, the commission shall issue a license to the applicant.

4. The commission may deny the application of an applicant for a license to operate as an alternative seller and may limit, suspend or revoke a license issued to an alternative seller if the action is necessary to protect the interests of the public or to enforce the provisions of NRS 704.965 to 704.990, inclusive, and sections 3 to 6, inclusive, of this act, or a regulation of the commission.

5. In determining whether an applicant is qualified for a license, whether to deny an application for a license to operate as an alternative seller or whether to limit, suspend or revoke a license issued to an alternative seller, the commission may consider whether the applicant for or holder of the license, or any affiliate thereof, has engaged in any activities which are inconsistent with effective competition.

6. A city, county or other local governmental entity or a public utility, or any affiliate thereof, which is authorized to provide electric service within the State of Nevada and which has an annual operating revenue of less than $250,000,000, [is] becomes subject to the provisions of NRS 704.965 to 704.990, inclusive, and sections 3 to 6, inclusive, of this act, and any regulations adopted [by the commission that are in effect] pursuant thereto, on the date on which the city, county or other local governmental entity or a public utility, or an affiliate thereof:

(a) Applies to obtain a license as an alternative seller; or

(b) Directly or indirectly attempts to provide, or act on behalf of an alternative seller in the provision of, electric service in the territory served by another city, county or other local governmental entity or public utility, or an affiliate thereof, unless the city, county or other local governmental entity or public utility, or an affiliate thereof, is otherwise required or permitted by specific statute to provide such service.

7. Notwithstanding the provisions of subsection 6, a city, county or other local governmental entity or a public utility, or any affiliate thereof, does not become subject to the provisions of NRS 704.965 to 704.990, inclusive, and sections 3 to 6, inclusive, of this act, or any regulations adopted pursuant thereto, solely because the city, county or other local governmental entity or a public utility, or any affiliate thereof, provides transmission or distribution services to an alternative seller pursuant to a contract, tariff or requirement of any state or federal law, except that the city, county or other local governmental entity or public utility, or an affiliate thereof, shall provide such transmission and distribution services on an open and nondiscriminatory basis to alternative sellers in accordance with such standards as the commission may establish by regulation for the provision of transmission and distribution services in accordance with this subsection.

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ê1999 Statutes of Nevada, Page 3267 (CHAPTER 600, SB 438)ê

8. Regulations adopted pursuant to subsection 2:

(a) Must not be unduly burdensome;

(b) Must not unnecessarily delay or inhibit the initiation and development of competition for any service in any market; and

(1) Different services; or

(2) Similar services to different classes of customers,

whenever such different requirements are appropriate to carry out the provisions of NRS 704.965 to 704.990, inclusive [.] , and sections 3 to 6, inclusive, of this act.

9. An alternative seller may combine two or more customers or any group of customers to provide aggregation service. The commission may not limit the ability of:

(a) An alternative seller to combine customers to provide aggregation service; or

(b) Customers to form groups to obtain aggregation service from alternative sellers.

Sec. 14. NRS 704.978 is hereby amended to read as follows:

704.978 1. The commission shall prohibit a provider of a noncompetitive service from providing a potentially competitive service, except through an affiliate of the provider.

2. The commission shall require each provider of a noncompetitive service that is necessary to the provision of a potentially competitive service to make its facilities or services available to all alternative sellers on equal and nondiscriminatory terms and conditions.

3. In providing a potentially competitive service, an affiliate of a provider of a noncompetitive service may use the name or logo, or both, of the provider of noncompetitive service.

Sec. 15. NRS 704.981 is hereby amended to read as follows:

704.981 1. An electric distribution utility shall provide all noncompetitive services within its territory unless the commission authorizes another entity to provide the noncompetitive service.

2. A noncompetitive service is subject to NRS 704.001 to 704.655, inclusive, 704.701 to 704.751, inclusive, and 704.800 to 704.900, inclusive.

3. The component rates for noncompetitive services established by the commission pursuant to NRS 704.986 must be used by customers who elect to receive competitive or potentially competitive services from alternative sellers or from the Colorado River Commission pursuant to NRS 704.987.

4. The commission shall adopt regulations for noncompetitive services that allow innovative pricing methods for noncompetitive services upon a finding that the innovative pricing, when compared to pricing of services provided pursuant to subsections 1 and 2, improves the performance of the service or lowers the cost of the service to the customer, or both. The regulations for innovative pricing must specify:

(a) The provisions that must be included in a plan of innovative pricing;

(b) The procedures for submitting an innovative plan for pricing to the commission for approval and implementation; and

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ê1999 Statutes of Nevada, Page 3268 (CHAPTER 600, SB 438)ê

(c) Which provisions of this chapter do not apply to pricing changes that are made during the period in which the innovative pricing plan is in effect.

[4.] 5. The commission shall adopt regulations which ensure that a person who owns a transmission or distribution facility, or both, or a facility that provides access to a competitive service shall make the facilities available on equal and nondiscriminatory terms and conditions to all alternative sellers or to the customers of the alternative sellers, or both, as the commission may determine.

Sec. 16. NRS 704.982 is hereby amended to read as follows:

704.982 1. The commission shall designate a vertically integrated electric utility or its successor electric distribution utility to provide electric service to customers who are unable to obtain electric service from an alternative seller or who fail to select an alternative seller. The provider so designated by the commission is obligated to provide electric service to the customers. Electric service provided by the utility pursuant to this section shall be deemed to be a noncompetitive service for which the utility may recover its costs pursuant to NRS 704.001 to 704.655, inclusive, 704.701 to 704.751, inclusive, and 704.800 to 704.900, inclusive.

2. The rate that the designated provider of electric service must charge a customer for the provision of electric service pursuant to subsection 1 is the total rate established for that class of customer by the commission pursuant to section 4 of this act.

3. Upon a finding by the commission that the public interest will be promoted, the commission may prescribe alternate methods for providing electric service to those customers described in subsection 1. The alternate methods may include, but are not limited to, the direct assignment of customers to alternative sellers or electric distribution utilities or a process of competitive bidding for the right to provide electric service to the designated customers [.

3.] , including, without limitation, an auction conducted pursuant to section 6 of this act. Any alternate methods prescribed by the commission pursuant to this subsection may not go into effect before July 1, 2001.

4. A customer who has obtained generation, aggregation or any other potentially competitive service for at least 30 continuous days from an alternative seller after March 1, 2000, or such other date that is determined to be in the public interest by the governor pursuant to NRS 704.976, may reacquire service from the designated provider of electric service pursuant to tariffs approved by the commission. The commission shall establish minimum terms and conditions under which electric service must be provided pursuant to this section, including a minimum period during which a customer must be obligated to pay for the electric service from the assigned provider. The price charged for electric service for a particular group of customers must reflect the incremental cost of serving the group.

[4.] 5. If the designated provider of the electric service pursuant to subsection 1 is a vertically integrated electric utility, the utility shall provide the electric service on or after July 1, 2001, only through an affiliate whose sole business activity is the provision of electric service.

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ê1999 Statutes of Nevada, Page 3269 (CHAPTER 600, SB 438)ê

[5. Except as otherwise provided in this subsection and subsection 6, the rate charged for residential service provided pursuant to subsection 1 must not exceed the rate charged for that service on July 1, 1997. The limitation set forth in this subsection is effective until 2 years after the date upon which, in accordance with NRS 704.976, the commission repeals the regulations which established the pricing method for that service and the terms and conditions for providing that service.

6. The commission may, in accordance with NRS 704.110, 704.120 and 704.130, approve an increase in the rate charged for residential service provided pursuant to subsection 1 in an amount that does not exceed the increase necessitated, if any, to ensure the recovery by the vertically integrated electric utility of its just and reasonable costs. The provisions of this section do not limit or prohibit in any manner the operation of any order issued by the commission before July 1, 1997.]

6. Except upon the application of the designated provider to reduce the total rate for any class of customers pursuant to section 4 of this act, the commission shall not initiate or conduct any proceedings to adjust the rates, earnings, rate base or rate of return of the designated provider of electric service during the period in which the provider is providing that service to customers pursuant to this section.

Sec. 17. NRS 704.982 is hereby amended to read as follows:

704.982 1. The commission shall designate [a vertically integrated electric utility or its successor] an electric distribution utility to provide electric service to customers who are unable to obtain electric service from an alternative seller or who fail to select an alternative seller. The provider so designated by the commission is obligated to provide electric service to the customers. Electric service provided by the utility pursuant to this section shall be deemed to be a noncompetitive service for which the utility may recover its costs pursuant to NRS 704.001 to 704.655, inclusive, 704.701 to 704.751, inclusive, and 704.800 to 704.900, inclusive.

2. [The rate that the designated provider of electric service must charge a customer for the provision of electric service pursuant to subsection 1 is the total rate established for that class of customer by the commission pursuant to section 4 of this act.

3.] Upon a finding by the commission that the public interest will be promoted, the commission may prescribe alternate methods for providing electric service to those customers described in subsection 1. The alternate methods may include, but are not limited to, the direct assignment of customers to alternative sellers or other electric distribution utilities or a process of competitive bidding for the right to provide electric service to the designated customers, including, without limitation, an auction conducted pursuant to section 6 of this act. [Any alternate methods prescribed by the commission pursuant to this subsection may not go into effect before July 1, 2001.

4.] 3. A customer who has obtained generation, aggregation or any other potentially competitive service for at least 30 continuous days from an alternative seller [after March 1, 2000, or such other date that is determined to be in the public interest by the governor pursuant to NRS 704.976,] may reacquire service from the designated provider of electric service pursuant to tariffs approved by the commission.

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tariffs approved by the commission. The commission shall establish minimum terms and conditions under which electric service must be provided pursuant to this section, including a minimum period during which a customer must be obligated to pay for the electric service from the assigned provider. The price charged for electric service for a particular group of customers must reflect the incremental cost of serving the group.

[5.] 4. If the designated provider of the electric service pursuant to subsection 1 is [a vertically integrated] an electric distribution utility, the utility shall provide the electric service [on or after July 1, 2001,] only through an affiliate whose sole business activity is the provision of electric service.

[6. Except upon the application of the designated provider to reduce the total rate for any class of customers pursuant to section 4 of this act, the commission shall not initiate or conduct any proceedings to adjust the rates, earnings, rate base or rate of return of the designated provider of electric service during the period in which the provider is providing that service to customers pursuant to this section.]

Sec. 18. NRS 704.983 is hereby amended to read as follows:

704.983 1. The commission shall determine the recoverable costs associated with assets and obligations that are documented in the accounting records of a vertically integrated electric utility and its successor electric distribution utility and that are properly allocable to a particular potentially competitive service as of the date on which alternative sellers of similar potentially competitive services begin providing such service to customers in this state. Shareholders of the vertically integrated electric utility must be compensated fully for all such costs determined by the commission. [In] Except as otherwise provided in section 3 of this act, in determining the recoverable costs, the commission shall take into account:

(a) The extent to which the utility was legally required to incur the costs of the assets and obligations . [;]

(b) The extent to which the market value of the assets and obligations of the utility, relating to the provision of potentially competitive services, exceeds the costs of the assets and obligations . [;]

(c) [The] Except as otherwise provided in this paragraph, the effectiveness of the efforts of the utility to increase the market value and realize the market value of any assets, and to decrease the costs of any obligations, associated with the provision of potentially competitive services . [;] If a utility purchases generation services pursuant to the approval of the appropriate governmental agencies to meet its obligations to provide electric service pursuant to NRS 704.982 from a generation unit that the utility has divested, the commission shall not impute a value to the generation unit other than the sales price of the unit.

(d) The extent to which the rates previously established by the commission have compensated shareholders for the risk of not recovering the costs of the assets and obligations . [;]

(e) The effects of the difference between the market value and the cost, including, without limitation, tax considerations, for the assets and obligations . [~~; and]~~

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(f) If the utility had the discretion to determine whether to incur or mitigate the costs, the conduct of the utility with respect to the costs of the assets and obligations when compared to other utilities with similar obligations to serve the public.

2. [For the purposes of this section,] If the commission [may impose a procedure] determines that costs are recoverable pursuant to subsection 1, the commission shall, for the purposes of this section and section 3 of this act, adopt by regulation procedures to provide for the direct and unavoidable recovery from ratepayers of the portion of the past costs which are determined by the commission to be owed by the ratepayers. The [procedure] procedures must include a determination of the period over which the recovery may occur and include the authority for the commission to assess charges on those customers on whose behalf the vertically integrated electric utility incurred costs who are no longer receiving transmission or distribution service, or both, from the vertically integrated electric utility. Such determinations and procedures must not discriminate against a participant in the market.

3. Failure by a utility to minimize, in a reasonable and prudent manner, federal taxes resulting from the offsetting of gains and losses of assets and obligations properly allocable to a potentially competitive service must be considered by the commission in determining the recoverable costs for the utility.

Sec. 19. NRS 704.984 is hereby amended to read as follows:

704.984 A vertically integrated electric utility shall take such reasonable steps as are necessary to minimize layoffs and any other adverse effects on the employees of the vertically integrated electric utility that result from the beginning of provision of potentially competitive services by alternative sellers. In determining the recoverable costs of the vertically integrated electric utility pursuant to NRS 704.983, the commission shall consider any reasonable costs incurred by the vertically integrated electric utility pursuant to this section, including, without limitation, the costs for severance pay, retraining, job placement and early retirement for employees of the vertically integrated electric utility.

Sec. 20. NRS 704.997 is hereby amended to read as follows:

704.997 1. Upon the receipt of a specific request for an exemption by a public utility that supplies natural gas, the commission may, to the extent it deems necessary, exempt any service offered by the public utility from the strict application of one or more provisions of this chapter. Such an exemption may be made only upon a determination by the commission, after notice and an opportunity for a hearing, that the service is competitive, discretionary or potentially competitive.

2. The commission shall adopt regulations necessary to establish an alternative plan of regulation of a public utility that supplies natural gas and that is otherwise subject to regulation pursuant to the provisions of this chapter. The alternative plan may include, but is not limited to, provisions that:

(a) Allow adjustment of the rates charged by the public utility during the period in which the utility elects the alternative plan of regulation.

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(b) Specify the provisions of this chapter that do not apply to a public utility which elects to be regulated under the alternative plan.

3. A public utility that elects to be regulated under the alternative plan established pursuant to this section is not subject to the remaining provisions of this chapter to the extent specified pursuant to this section.

4. In providing a potentially competitive service, an affiliate of a provider of a noncompetitive service may use the name or logo, or both, of the provider of noncompetitive service.

5. It is unlawful for an alternative seller to sell any service relating to the supply of natural gas to a customer for his consumption within this state without first having obtained a license from the commission to do so.

Sec. 21. On or before March 1, 2000, or such other date that is determined to be in the public interest by the governor pursuant to NRS 704.976, the commission shall, for the purposes of NRS 704.986, establish for each class of customers of electric service in this state the rate for each component and a total rate for electric services for customers based on the cost to provide electric service to each class of customers in this state. The total rate established for each class of customers pursuant to this section must be the same as the total rate for each class of customers that is in effect on June 1, 1999.

Sec. 22. On or before March 1, 2000, or such other date that is determined to be in the public interest by the governor pursuant to NRS 704.976, an alternative seller and a vertically integrated electric utility may negotiate and enter into a contract with a customer for the provision of electric service, but no such contract is effective before March 1, 2000, or such other date that is determined to be in the public interest by the governor pursuant to NRS 704.976.

Sec. 23. This act must not be construed to impair any existing rights under contracts with customers in effect on June 1, 1999.

Sec. 24. This act must not be construed to impair any existing rights under any labor agreement to which a vertically integrated electric utility or its successor electric distribution utility or an affiliate thereof is a party on July 1, 1999.

Sec. 25. 1. This section and sections 1 to 6, inclusive, 9 to 16, inclusive, 18 to 22, inclusive, and 26 of this act become effective on July 1, 1999.

2. Sections 23 and 24 become effective upon passage and approval.

3. Sections 7 and 8 of this act become effective on October 1, 1999.

4. Sections 4 and 16 expire by limitation on March 1, 2003.

5. Section 5 expires by limitation on September 1, 2003.

6. Section 17 becomes effective on March 1, 2003.

Sec. 26. If the pending merger between Sierra Pacific Resources and Nevada Power Company, referred to in the records of the Public Utilities Commission of Nevada as Docket No. 98-7023, is terminated for any reason before the completion of the merger, this act expires by limitation on the date on which the pending merger is terminated.

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