SB 283 — Revises provisions relating to local improvements. (BDR 22-792)

or 8.property is located.

Enhances the surrounding environment in which the real propertySec. is located.

Sec.

“Water efficiency improvement project” means an improvement to real propertyproperty, thatfacilities isor designedequipment, toand reduceall thenecessary waterappurtenances consumptionand incidentals thereto, with a useful life of thenot realless property.than 10 years that is designed to:

1.

Reduce the water consumption of the real property;

or 2.

Conserve or remediate water, in whole or in part, on the real property.

Except as otherwise provided in this section, a qualified improvement project must be financed or refinanced only through an assessment on the real property.property that secures the direct financing or refinancing obtained from a capital provider pursuant to a financing agreement.

In addition to, but not in lieu of the direct financing fromor arefinancing capitaldescribed provider,in thesubsection governing1, bodya mayqualified issueimprovement bondsproject andmay warrantsbe tofinanced payor arefinanced portionthrough ofan aassessment qualifiedon improvementthe projectreal butproperty anyto suchsecure bonds orissued warrants:pursuant to NRS 271.475.

Any bonds issued for a qualified improvement project:

(b) Shall not be secured by a pledge of the general credit or taxing power of the municipality or by the surplus and deficiency fund established pursuant to NRS 271.428;

andrplus and deficiency (c) Shall not be used in furtherance of or in support of direct financing or refinancing from a capital provider.

InNotwithstanding any other provision of this chapter, in order to impose an assessment for a qualified improvement project, the municipality must enter into a voluntary written voluntary assessment agreement with a property owner whereby the property ownerowner: consents in writing that an assessment will be imposed on the real property to repay the capital provider for the qualified improvement project and an assessment lien will be placed on the real property.

Each(a) voluntaryConsents assessment agreement must describe the tract to be assessed and the qualified improvements included in thewriting qualifiedto: improvement project that are financed or refinanced by the capital provider.

(1) The specific amount of the assessment that will be imposed on the real property for the qualified improvement project to secure repayment of:

(I) The direct financing or refinancing provided by the capital provider for the qualified improvement project, as set forth in the financing agreement;

or - 81st Session (2021) – 5 – NRS 271.475 for the qualified improvement project;

andnt to (2) The placement of an assessment lien on the real property;

and (b) Provides a written description of the tract to be assessed and the qualified improvements included in the qualified improvement project that are to be financed or refinanced by the capital provider and, if applicable, the bonds issued pursuant to NRS 271.475.

EachNotwithstanding the execution of a voluntary assessment agreement andpursuant anyto amendment,subsection thereto,1, mustexcept befor recordedthe inimposition theand officeamount of the countyassessment recorderand and,the onceassessment recorded,lien, isin bindingno onevent is the ownermunicipality whoresponsible signedfor the form of the voluntary assessment agreement andor any otherstatement, personterm, whoprovision holdsor anyother interestmatter contained in the tract to which the voluntary assessment agreementagreement. relates.

- *SB283_R1* – 5 – 3.

AEach municipalityvoluntary assessment agreement, and any substantive amendment thereto, must assignbe recorded in the office of the county the voluntary assessment agreement and assessmentany lienother person whogned holds any interest in the tract to which the capitalvoluntary provider.assessment agreement relates regardless of whether the interest in the tract came into existence before or after the recording of the voluntary assessment agreement.

The capital provider is solely responsible for the billing, collection and the enforcement of an assessment imposed on real property pursuant to NRS 271.6312 to 271.6325, inclusive, and sections 2 to 13.5, inclusive, of this act.

DelinquentAny paymentamendment ofto ana voluntary assessment willagreement resultmust inbe theexecuted interestby andthe penaltiesproperty setowner forthand in the financingmunicipality. agreement.

If an amendment is a substantive change to the voluntary assessment agreement, the amendment must be recorded.

Any amendment is binding on the property owner and any other person who holds an interest in the tract.

EnforcementIf of a delinquentdirect paymentfinancing shallagreement beis byused judicialto foreclosurefinance ina thequalified mannerimprovement ofproject: a mortgage.

6.(a) A municipality must assign the assessment and assessment lien, including, without limitation, the right to receive payment in capital provider.he terms of the financing agreement, to the (b) The capital provider is solely responsible for the billing, collection and the enforcement of an assessment imposed on real property pursuant to NRS 271.6312 to 271.6325, inclusive, and sections 2 to 13.5, inclusive, of this act.

Assessments(c) notDelinquent yetpayment dueof mustan notassessment bewill acceleratedresult orin eliminatedthe byinterest foreclosure.and penalties set forth in the financing agreement.

In(d) theEnforcement event of foreclosure,a any outstanding or delinquent assessmentspayment mustshall be satisfiedby alongjudicial withforeclosure in the paymentmanner of anya delinquentmortgage. ad valorem taxes.

- 81st Session (2021) – 6 – eliminated by foreclosure.

In the event of foreclosure, any liens securing the payment of general taxes must be satisfied before the payment of outstanding or delinquent assessments.

7.

An assessment lien placed on real property pursuant to NRS 271.6312 to 271.6325, inclusive, and sections 2 to 13.5, inclusive, of this act:

(a) Is created by the voluntary assessment agreement between the municipality and the property owner;

and (b) Is not created by ordinance or resolution of the municipality.

The municipality may delegate to the capital provider responsibility for recording the notice of assessment and ass2.smThe notice of assessment and assessment lien must include, without limitation:

(c) The date on which the lien was created;created, which is the date on which the notice of assessment is recorded;

(d) The principal amount of the assessment lien;

(e) The termsterm and length of the assessment lien;

2.3.

(a) IsRun coequal with the latestland lienand thereonis not subject to secureacceleration or extinguishment by the paymentsale of any property on account of the non(b) Are prior and superior to all liens, claims, encumbrances and titles other than the liens of assessments and general taxes.taxes attached to the tract pursuant to the provisions of NRS 361.450.

(b) Runs with the land and is not subject to acceleration or extinguishment by the sale of any property on account of the nonpayment of general taxes.

(c) Is prior and superior to all liens, claims, encumbrances and titles other than the liens of assessments and general taxes attached to the tract pursuant to the provisions of NRS 361.450.

A person that is leasing real property within a district created pursuant to NRS 271.6312 to 271.6325, inclusive, and sections 2 to 13.5, inclusive, of this act may enter into a financing agreement with a capital provider for a qualified improvement project if the owner of the real property enters into a - 81st Session (2021) – 7 – voluntary written assessment agreement with the municipality pursuant to section 11 of this act.

- *SB283_R1* – 6 – Sec.

A municipality, its governing body, its officers and its employees shall not be liable for actions taken pursuant to NRS 271.6312 to 271.6325, inclusive, and sections 2 to 13.5, inclusive, of this act, except in cases of gross negligence, recklessness or willful misconduct.

A municipality shall not use any public funds to pay an assessment imposed to repay bonds or direct financing betweenor arefinancing capitalof provider and a propertyqualified owner,improvement project nor pledge the full faith and credit of the municipality for such purposes.

AThe municipalityamount thatnecessary establishes a district pursuant to NRSrepay 271.6312bonds toor 271.6325,the inclusive,direct andfinancing sectionsor 2refinancing to 13.5, inclusive, of this act, may impose a feequalified toimprovement aproject propertyis ownersecured thatsolely entersby intothe a voluntary assessment agreement pursuant to section 11 of this act to recover the reasonable and actuala costsmunicipality ofshall administrationnot anduse theor performancepledge ofany itsmoney dutiesderived pursuantfrom toany NRSother 271.6312source tofor 271.6325,such inclusive,purposes. and sections 2 to 13.5, inclusive, of this act.

4.

A municipality is not liable for any amount due related to a qualified improvement project, including, without limitation, the costs for construction of the qualified improvement project.

5.

A municipality that establishes a district pursuant to NRS 271.6312 to 271.6325, inclusive, and sections 2 to 13.5, inclusive, of this act, may impose a fee on a property owner that enters into a voluntary assessment agreement pursuant to section 11 of this act to recover the reasonable costs of administration and the performance of its duties pursuant to NRS 271.6312 to 271.6325, inclusive, and sections 2 to 13.5, inclusive, of this act.

At the time and place designated pursuant to NRS 271.380, the governing body shall hear and determine any written complaint, protest or objection filed as provided in that section and any verbal views expressed in respect to the proposed assessments, assessment roll or assessment procedure.

or (d) The regularity, validity and correctness of any other proceedings occurring after the date of the hearing described in NRS 271.310 and before the date of the hearing governed by this section, - 81st Session (2021) – 8 –  shall be deemed waived unless filed in writing within the time and in the manner provided by NRS 271.380.

If any owner of a tract which is assessed for the purpose of creating a district pursuant to NRS 271.6312 objects in writing within the time and in the manner provided by NRS 271.380, the tract must be removed from the assessment roll, and the80, the municipality shall not finance the project located on the tract unless the objecting owner withdraws his or her objection in writing within the time specified by the governing body.] Sec.

The governing body of a municipality, on behalf of the municipality and in its name, without an election, may createby -resolution *SB283_R1*create – 7 – a district to finance or refinance one or more [energy efficiency improvement projects or renewable energy] qualified improvement projects:

(1) For an energy efficiency improvement project, the project must be determined to meet the definition of an energy efficiency improvementapplicable projectrequirements set forth in sectionthe 4program ofguide this act and bebey with [appropriate through] supported by an energy audit conducted by a qualified service company [.

and (II) The expected energy savings from the project exceeds the investment costs of the project.] that includes,includes without limitation, a written energy analysis of the project.

(2)- For81st aSession renewable(2021) energy– project,9 the– project must [be determined to be feasible through a written feasibility studystudye conducted] meet the definition of a renewable energy project set forth in section 7 of this act, as determined by a qualified service company.company [.] , and comply with applicable requirements set forth in the program guide.

(3)Except Foras aotherwise resiliencyprovided project, the project must be determined to meet the definition of a resiliency project set forth in section 8 of this actsubparagraph, by a licensedrenewable professionalenergy inproject themust fieldnot ofbe theused resiliencyto projectsell thator isdistribute approvedrenewable byenergy thebetween municipalitytracts. pursuant to NRS 271.6325.

(4)If Forthe astructure waterthat efficiencyis project,benefitting from the qualified improvement project mustis belocated determinedon tomore meetthan theone definitioncontiguous oftract, athe waterrenewable efficiencyenergy project setmay forthbe inused sectionto 9serve ofthe thisentire actstructure. by a qualified service company.

The(3) determinationFor ofa theresiliency qualifiedproject, servicethe companyproject must be baseddetermined onto meet the definition of a writtenresiliency analysisproject set forth in section 8 of this act by a licensed professional in the project.field of the resiliency project that is approved by the municipality pursuant to in the program guide.

-The *SB283_R1*determination –of 8the –licensedt 2.forth professional must be contained in a written analysis of the project.

[A(4) bondFor or interim warrant issued for a districtwater createdefficiency pursuantimprovement toproject, thisthe sectionproject must not be secureddetermined byto ameet pledge of the generaldefinition credit or taxing power of thea municipalitywater orefficiency byimprovement theproject surplusset andforth deficiencyin fundsection established9 pursuant to NRS 271.428.] Subject to the provisions of subsectionthis 2act ofby NRS 271.6315, a districtqualified createdservice pursuantcompany toand subsectioncomply 1with mayapplicable compriserequirements theset entireforth jurisdictionalin boundaries of the municipalityprogram orguide. any portion or individual tract, thereof.

3.The determination of the qualified service company must be contained in a written analysis of the project.

2.

[A bond or interim warrant issued for a district created pursuant to this section must not be secured by a pledge of the general credit or taxing power of the municipality or by the surplus and deficiency fund established pursuant to NRS 271.428.] Subject to the provisions of subsection 2 of NRS 271.6315, a district created pursuant to subsection 1 may comprise the entire individual tract, thereof.of the municipality or any portion or 3.

(b)- NRS81st 271.495Session and(2021) 271.500– do10 not– apply to any bonds or interim warrants issued to financefinancenot [anappl[an energy efficiency improvement project or renewable energy] a qualified improvement project within a district created pursuant to this section.

(a) The governing body makes a finding that the creation of the district serves the public purposes of resource conservation, reducing emissions or increasing the resiliency of the community.

The governing body shall not includeapprove a tract within the boundaries of the district for financing or refinancing a qualified improvement project unless:

- *SB283_R1* – 9 – (a) The owner of [each] the tract on which [an energy efficiency improvement project or renewable energy] a qualified improvement project will be located [consents in writing to the location of the project on the tract and]and enters into a voluntary assessment agreement pursuant to section 11 of this act agreeing to the levy of an assessment against the tract to pay [all or a portion of the cost thereof in an amount up to the estimated maximum benefit to the tract from the installation or improvement.

(c)](c) theEach amountconsent ofprovided financing or refinancing set forth in the financing agreement and the placement of an assessment lien on the property pursuant to theparagraph provisions(b): of section 12 of this act.

[Each consent provided pursuant to paragraph (b):

and (3)- Is81st accompaniedSession by:(2021) – 11 – (3)(I) A signed copy of each contract between an owner of the tract and each contractor described in NRS 271.6321 pursuant to which the contractor agrees to construct, acquire and install the installation or improvement identified in the consent at a total price which does not exceed the limitation set forth in NRS 271.6321 and which contains any terms, including, without limitation, application fees and costs, the total amount financed, annual percentage rate, total amount paid over the life of any assessment, any appraisal fees, bond-related costs, annual administrative fees, closing costs, credit reporting fees and recording fees, and such other terms not inconsistent with the provisions of NRS 271.6312 to 271.6325, inclusive, or with the resolution adopted pursuant to NRS 271.6325, as may be agreed upon by the owner of the tract and the contractor and is acceptable to the governing body;

(I) A signed copy of each contract between an owner of the tract and each(II) contractorA describeddeposit in NRSan 271.6321amount pursuantdetermined to which the contractor agrees to construct, acquire and install the installation or improvement identified in the consentmanner atspecified a total price which does not exceed the limitation set forth in NRS 271.6321 and which contains any terms, including, without limitation, application fees and costs, the total amount financed, annual percentage rate, total amount paid over the life of any assessment, any appraisal fees, bond-related costs, annual administrative fees, closing costs, credit reporting fees and recording fees, and such other terms not inconsistent with the provisions of NRS 271.6312 to 271.6325, inclusive, or with the resolution adopted pursuant to NRS 271.6325, ascompleted mayand beis agreedfinanced uponwith byassessments thelevied ownerpursuant ofto thethisis tractchapter andwithin the contractorperiod andspecified isin acceptable to the governingresolution. body;

and(d)] (II)enters Ainto deposita involuntary anassessment amountagreement determined in the manner specified in the resolution adopted pursuant to NRSsection 271.6325,11 whichof may be refunded if the project to which the consent relates is completed and is financed with assessments levied pursuant to this chapteract. within the period specified in the resolution.

(d)] (b) The amount of the assessment lien that will be placed on the tract for a qualified improvement project, if used for improving or retrofitting an existing structure, does not exceed 25 percent of the fair market value of the property assessed, as determined by a certified appraiser pursuant to guidelines adopted pursuant to NRS 271.6325.

- *SB283_R1* – 10 – (c) The amount of the assessment lien that will be placed on the tract for a qualified improvement project, if used for new construction or a gut rehabilitation, does not exceed 35 percent of the fair market value of the property assessed, as determined by a certified appraiser pursuant to guidelines adopted pursuant to NRS(d) The outstanding amount owed on all recorded instruments which are liens against [any] the tract [included in the district, does] including the assessment lien for the qualified improvement project, will not exceed 90 percent of the estimated fair market value of the property assessed [, as defined by the governing body, taking into account the imposition of the liens for assessments pursuant to NRS 271.6325.271.6312 to 271.6325, inclusive, and the additional value added to the tract by a project financed pursuant to NRS 271.6312 to 271.6325, inclusive.

(d)- The81st outstandingSession amount(2021) owed– on12 all– recorded(e)] instruments, which are liens against [any] the tract [included in the district, does] including the assessment lien for the qualified improvement project, will not exceed 90 percent of the estimated fair market value of the property assessed [, as defineddetermined by thea governingcertified body,appraiser taking into account the imposition of the liens for assessments pursuant to NRSguidelines 271.6312adopted to 271.6325, inclusive, and the additional value added to the tract by a project financed pursuant to NRS 271.6312271.6325. to 271.6325, inclusive.

(e)](e) ,Any aslender determinedwho byholds a certifiedlien appraiseron pursuant[any] tothe guidelinestract adoptedon pursuantwhich [an energy efficiency] the qualified improvement project [or renewable assessment and assessment lien against the tract to NRS[pay 271.6325.all or af an portion of the cost of the installation or improvement.] secure repayment of the financing or refinancing of the qualified improvement project.

(e) Any lender who holds a lien on [any] the tract on which [an energy efficiency] the qualified improvement project [or renewable energy project] will be located consents in writing to the levy of an assessment and assessment lien against the tract to [pay all or a portion of the cost of the installation or improvement.] secure repayment of the financing or refinancing of the qualified improvement project.

2.] Each consent provided pursuant to this paragraph [(b) of subsection 1 and each amendment thereto] must be recorded in the office of the county recorder and, once recorded, is binding on the [owner] lender who signed the consent .[and any other person who holds any interest in the tract to which the consent relates and who signed the consent.] and any successors or assigns.

[and any other person who holds any interest in the tract to which the consent relates and who signed the consent.] 3.

Real property owned by the United States Department of Defense is not eligible for any qualified improvement project authorized pursuant to NRS 271.6312 to 271.6325, inclusive, and sections 2 to 13.5, inclusive, of this act.

4.

[, but must only include tracts for which a consent has been recorded pursuant to subsectionsub[4.] 2.]5. 4.

As2As used in this section, “lender” means a mortgagee, the beneficiary of a deed of trust or other creditor who holds a mortgage, deed of trust or other recorded instrument that encumbers a tract as security for the repayment of a loan used. to purchase the tract.

-[used *SB283_R1*to –purchase 11the –tract.] Sec.

The total contract price of any improvement or installation must not exceed 80- 81st Session (2021) – 13 – percent of the estimated maximum benefit for the tract as stated in the consent, as it may be amended from time to time, unless the owner of the property to be assessed:

Agrees to pay and pays, or causes another party to pay, the difference between 80 percent of the estimated maximum benefit and the total contract price from a source other than financing provided pursuant to this chapter;

Before creating a district pursuant to NRS 271.6312, a governing body must adopt [aa resolution]resolution an ordinance which specifies the procedures for the creation and administration of such a district.

The ordinanceresolution adopted pursuant to subsection 1 must approve a program guide that,that contains, without limitation,limitation: sets forth the forms for any agreements necessary between the district, the property owner and the capital provider.

The forms must include, without limitation:

The ordinanceresolution adopted pursuant to subsection 1 or the program guide approved pursuant to subsection 2 must:

(a) Require that the property owner agree to the assessment in the amount approved by the governing body as repayment for the financingfin(b) Require that the property owner acknowledge that an assessment lien will be recorded on the real property pursuant to section 12 of this act to secure the qualifiedrepayment improvementof project.the financing set forth in the financing agreement.

(b)(c) RequireProhibit thatany thefinancing propertyagreement ownerthe acknowledgeduration thatof awhich lienexceeds willthe beexpected recordeduseful onlife of the realqualified propertyimprovement pursuantproject toor, sectionif 12the ofqualified thisimprovement actproject toincludes securemore than one qualified improvement, the repaymentweighted average expected life of theall financingqualified setimprovements forthincluded in the qualified improvement project that are financed by the financing agreement.agreement or bond issuance.

- *SB283_R1* – 12 – (c) Prohibit any financing agreement the duration of which exceeds the useful life of the qualified improvement project or, if the qualified improvement project includes more than one qualified improvement, the weighted average life of all qualified improvements included in the qualified improvement project.

(1)- The81st natureSession of(2021) – 14 – included in a resiliency project;cy improvements that may be included(2) inThe standards and codes that must be met for a resiliency project;project to be a qualified improvement;

(2) The standards and codes that must be met for a resiliency project to be a qualified improvement;

(I) An architect licensedregistered pursuant to chapter 623 of NRS;

(II) A landscape architect licensedregistered pursuant to chapter 623A of NRS;

(V) A land use planner certified by the American Institute of Certified Planners;

ororrtified by the American (VI) Any other licensed professional person, as set forth in the ordinance.resolution or program guide.

(g) Require each application to include the submission of the analysis or feasibility study required pursuant to NRS 27l.6312.271.6312.

The [resolution]resolution ordinanceor program guide may provide for one or more of the following:

(a) Additional notices of the proposal to create the district, notices of the opportunity to apply for inclusion in the district or any other notices;

-opportunity *SB283_R1*to –apply 13for –inclusion in the district or any (b) Any additional requirements for a qualified improvement project, including, without limitation, any requirement for insurance, security features or additional covenants and agreements that must be entered into by the municipality, capital provider, property owner and, if applicable, lessee;

(1) A reserve of money for bonds issued for the district, the method of funding the reserve and the disposition of any interest - 81st Session (2021) – 15 – earned upon or the principal of the reserve that is not needed to repay any bonds or interim warrants issued for the purposes of financing [an energy efficiency improvement project or renewable energy] a qualified improvement project within the district;

and [(c)]; (2) Any other security for those bonds or interim warrants;

[, and the method of determining the term of the bonds ininwarrants compliance with NRS 271.515;] (d) Any requirements for casualty insurance, liability insurance or other types of insurance for any project within the district;

(e) The method of determining the lien-to-value ratio of the property for the purpose of complying with the limitation prescribed by paragraph [(d)](d) (e) of subsection 1[1] 2 of NRS 271.6315;

(f) Any limitation on the lien-to-value ratio that would result in a lower lien-to-value ratio than that prescribed by paragraph [(d)](d) (e) of subsection 1[1] 2 of NRS 271.6315;

oror(3) (3) The cost of engineering work, the cost to issue any bonds or provide other financing, or the cost of other incidentals pursuant to NRS 271.6312 to 271.6325, inclusive [;] , and sections 2 to 13.5, inclusive, of this act;

[(i)] (h) Any other security features, covenants required of property owners, covenants required of other parties or any other covenants, guarantees, insurance or other matters which the governing body finds are necessary or desirable for the financing of [an energy efficiency improvement project or renewable energy] a - *SB283_R1* – 14 – qualified improvement project pursuant to NRS 271.6312 to 271.6325, inclusive [;] , and sections 2 to 13.5, inclusive, of this act;

[and (j)] (i) Any other matters, procedures or financing or program terms which the governing body, in its sole discretion, determines are necessary or desirable to carry out the purposes of - 81st Session (2021) – 16 – NRS 271.6312 to 271.6325, inclusive [.] , and sections 2 to 13.5, inclusive, of this act;act, including, without limitation, any requirement related to the estimated benefit conferred on the property by the qualified improvement project;

and (j) AThe designationamount delegatingof, or the governancebasis andfor administrationdetermining of the districtamount of, any application or administrative fees that must be paid to the municipality, itsthe governingprogram body,administrator, designatedor employeesboth, orand anthe independenttime thirdwhen partyany administrator.such fee will be due;

and (k) A designation delegating all or any part of the governance and administration of the district to:

(1) The governing body;

municipality;

orgnated official, department or employee of the (3) An independent third party administrator.

[AA resolution]resolution An ordinance adopted pursuant to this section [:

(a) Must contain or incorporate by reference an exhibit describing each tract to be assessed, the type of improvement or installation to be financed for each tract and the estimated maximum benefit as stated in the consent provided pursuant to paragraph (b) of subsection 1 of NRS 271.6315.]271.6315. may be adopted as if an emergency exists by a vote of not less than two-thirds of all the voting members of the governing body.

(b) May] must be adopted [as if an emergency exists by a vote of not less than two-thirds of all the voting members of the governing body.] by a majority vote of the governing body.

Such a resolution is effective upon adoption or on any date thereafter, as provided in the resolution.

H~~~~~ 21 - *SB283_R1*81st Session (2021)