Nevada § 271.485 - Bonds: Sale; rate of interest; proceeds; validity; contract to sell special assessment bonds

§ 271.485. Bonds: Sale; rate of interest; proceeds; validity; contract to sell special assessment bonds

1. Any bonds issued pursuant to this chapter may be sold in such a manner as may be

approved by the governing body to defray the cost of the project, including all proper

incidental expenses. The governing body may issue a single issue of bonds to defray the costs of projects

in two or more improvement districts if the principal amount of those bonds does not

exceed the total uncollected assessments levied in each improvement district. 2. Bonds must be sold in the manner prescribed in NRS 350.105 to 350.195 , inclusive: (a) For not less than the principal amount thereof and accrued interest thereon;

or (b) At the option of the governing body, below par at a discount not exceeding 9 percent

of the principal amount and except as otherwise provided in this paragraph and in NRS 99.067 , 271.487 and 271.730 , at a price which will not result in an effective interest rate which exceeds by

more than 3 percent the Index of Twenty Bonds which was most recently published before

the bids are received or a negotiated offer is accepted if the maximum or any lesser

amount of discount permitted by the governing body has been capitalized as a cost

of the project. If the bonds bear an amount of interest that is included in gross income for the

purposes of calculating federal income tax pursuant to the provisions of Title 26

of the United States Code, the net effective interest rate must not exceed twice the

maximum interest rate as provided in this paragraph. 3. Except as otherwise provided in subsection 4 and NRS 271.487 and 271.730 , the rate of interest of the bonds must not at any time exceed the rate of interest,

or lower or lowest rate if more than one, borne by the special assessments, but any

rate of interest of the bonds may be the same as or less than any rate of interest

of the assessment, subject to the limitation provided in subsection 2, as the governing

body may determine. 4. Except as otherwise provided in NRS 271.730 , if a governing body creates a district pursuant to the provisions of NRS 271.710 , the governing body or chief financial officer of the municipality shall, in consultation

with a financial advisor or the underwriter of the bonds, fix the rate of interest

of the bonds at a rate of interest such that the principal and interest due on the

bonds in each year, net of any interest capitalized from the proceeds of the bonds,

will not exceed the amount of principal and interest to be collected on the special

assessments during that year. 5. The governing body may employ legal, fiscal, engineering and other expert services

in connection with any project authorized by this chapter and the authorization, issuance

and sale of bonds. 6. Any accrued interest must be applied to the payment of the interest on or the principal

of the bonds, or both interest and principal. 7. Any unexpended balance of the proceeds of the bond remaining after the completion

of the project for which the bonds were issued must be paid immediately into the fund

created for the payment of the principal of the bonds and must be used therefor, subject

to the provisions as to the times and methods for their payment as stated in the bonds

and the proceedings authorizing their issuance. 8. The validity of the bonds must not be dependent on nor affected by the validity

or regularity of any proceedings relating to the acquisition or improvement of the

project for which the bonds are issued. 9. A purchaser of the bonds is not responsible for the application of the proceeds

of the bonds by the municipality or any of its officers, agents and employees. 10. The governing body may enter into a contract to sell special assessment bonds

at any time but, if the governing body so contracts before it awards a construction

contract or otherwise contracts for acquiring or improving the project, the governing

body may terminate the contract to sell the bonds, if: (a) Before awarding the construction contract or otherwise contracting for the acquisition

or improvement of the project, it determines not to acquire or improve the project;

and (b) It has not elected to proceed pursuant to subsection 2 or 3 of NRS 271.330 , but has elected to proceed pursuant to subsection 1 of that section. 11. If the governing body ceases to have jurisdiction to proceed, because the requisite

proportion of owners of the frontage to be assessed, or of the area, zone or other

basis of assessment, file written complaints, protests and objections to the project,

as provided in NRS 271.306 , or for any other reason, any contract to sell special assessment bonds is terminated

and becomes inoperative.