AB 427 — Revises provisions relating to public financial administration. (BDR 31-739)

(Reprinted with amendments adopted on April 16, 2025) FIRST REPRINT A.B.

427–A427–ASSEMBLYMEMBERS SSEMBLYMEMBER Y EAGER ;AND D ELONG M ARCH 13, 2025 ____________ Referred to Committee on Government Affairs SUMMARY—Revises provisions relating to public financial administration.

revising provisions relating to certain financing information that is required to be provided to certain small businesses by the Office of Economic Development;

Under existing law, the State of Nevada is prohibited from donating or loaning state money or credit, or subscribing to or being interested in the stock of any company, association or corporation, except a corporation that is formed for any educational or charitable purposes.

8, § 9) Existing law requires the State Treasurer to form an independent corporation for public benefit, the purpose of which is to act as a limited partner of limited partnerships or ahea shareholder or member of limited-liability companies that provide private equity funding to businesses that are located in this State or seeking to locate to this State andState engageTreasurer primarilyis inprohibited from making certain industries.investments of money in the State Permanent School Fund unless the State Treasurer obtains a judicial determination that such an investment does not violate the prohibition in the Nevada Constitution against the State of Nevada donating or loaning state money or credit, or subscribing to or being interested in the stock of any company, association or corporation, except a corporation that is formed for educational or charitable determination that an investment does not violate the Nevada Constitution, existing law authorizes the State Treasurer to transfer up to $75,000,000 from the State - *AB427_R1* – 2 – corporation by agreement to provide more than 50 percent of all private equity funding to businesses engaged in specified industries that are located or seeking to locate in Nevada.

(NRS 355.270)355.280) UnderExisting existinglaw law,authorizes the Statemoney Treasurertransferred is prohibited from making certain investments of money in the State Permanent School Fund unlessto the Statecorporation Treasurerfor obtainspublic abenefit judicialto determinationbe thatused such an investment does not violate the prohibition in the Nevada Constitution subscribing to ormake beingventure interestedcapital ininvestments. the stock of any company, association or corporation, except a corporation that is formed for educational or charitable purposes.

(Nev.(NRS 355.275) Sections 2 and 4 of this bill eliminate the restriction that the businesses in which the corporation for public benefit is authorized to invest engage primarily in certain industries.

Const.Section 1 of this bill instead requires that the business be Development, which the Executive Director of the Office of Economicconomic Development within the Office of the Governor is required to develop under existing law.

Art.

8, § 9;

NRS 355.060) Upon obtaining a judicial determination that an investment does not violate the Nevada Constitution, existing law authorizes the State Treasurer to transfer up to $75,000,000 from the State Permanent School Fund to the corporation for public benefit and requires the corporation by agreement to provide more than 50 percent of all private equity locate in Nevada.

(NRS 355.280) Existing law authorizes the money transferredking to - *AB427* – 2 – used to make venture capital investments.

(NRS 355.275) for public benefit to be Sections 2 and 4 of this bill eliminate the restriction that the businesses in which the corporation for public benefit is authorized to invest engage primarily in certain industries.

Section 1 of this bill instead requires that the business be engaged in an industry that is consistent with the State Plan for Economic Development, which the Executive Director of the Office of Economic Development within the Office of the Governor is required to develop under existing law.

(1) clarifies the circumstances in businesseswhich bea seekingbusiness early-stageis located or middle-stageseeking investments to commencelocate orin thatNevada; the expand operations.

and (2) requires that the businesses be seeking early-stage or middle-stage investments to commence or expand operations.

Section 2 also provides that, in addition to the money transferred from the State Permanent School Fund, any other money received by the corporation for public benefit is authorized to be used for venture capitalcapExisting investments.law establishes the board of directors of the corporation for public benefit and requires the board to consist of the Chancellor of the Nevada System of Higher Education, the State Treasurer, five members from the private sector who have at least 10 years of experience in certain fields appointed by the Governor and legislative leadership and certain additional members who are required to be approved by a majority of certain board members.

Existing law establishes the board of directors of the corporation for public benefit and requires the board to consist of the Chancellor of the Nevada System of Higher Education, the State Treasurer, five members from the private sector who legislative leadership and certain additional members who are required to bernor and approved by a majority of certain board members.

and (2) changes the experience required for the five appointed members from at least 10 yearsyeaExisting oflaw experienceauthorizes inthe certaincorporation fieldsfor public benefit to demonstratedplace experienceinvestments inthrough thosethe fields.use or assistance of external asset managers or private equity investment firms.

(NRS 355.275) Existing law authorizesalso thereferences corporation for public benefit to place investments through the useboard orcontracting assistancewith ofventure externalcapital asset managers and private equity investment firms.

(NRS 355.275)355.270) ExistingSection law3 alsoof referencesthis thebill: board contracting authorizes a corporation for public benefit to invest directly in eligible businesses;

(1) authorizes a corporation for public benefit to invest directly in eligible businesses;

Section 3 also requires the corporation for public benefit to ensure that private equity money and venture capital investments made directly by the corporation or by external asset managers and private equity or venture capital investment firms are provided in a manner that:

and (4) supports new, emerging and expanding businesses in this StaExistingState. law authorizes the State Treasurer to adopt regulations which include criteria for determining eligibility for and use of private equity funding, subject to certain limitations.

Existing law authorizes the State Treasurer to adopt regulations which include criteria for determining eligibility for and use of private equity funding, subject to certain limitations.

Sections 6-9 of this bill revise obsolete references to the provisions governing the program administered by the corporation for public benefit to provide private equity funding and venture capital investments to specified businesses.businesses.de private Existing law:

-(1) *AB427*provides –for 3the –certification THEof PEOPLEeligible OFbusinesses THEas STATElocal OFemerging NEVADA,small REPRESENTEDbusinesses INby SENATEthe ANDOffice ASSEMBLY,of DOEconomic ENACTDevelopment; AS FOLLOWS:

and (2) requires the Office to provide to such businesses certain information concerning public and private programs to provide financing to small businesses and the - *AB427_R1* – 3 – criteria for obtaining financing through such programs.

(NRS 231.14055) Section 8 of this bill revises the scope of the financing programs concerning which the Office private programs that are active or funded, or both, at the time the application for certification of a business is received by the Office.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

this355.270 State1. an independent corporation for public benefit, the general purpose of which is to act as a limited partner of limited partnerships or a shareholder or member of limited-liability companies that provide private equity funding or venture capital investments, or both, to businesses [:

The State Treasurer shall cause to be formed in this State an independent corporation for public benefit, the general purpose of which is to act as a limited partner of limited partnerships or a shareholder or member of limited-liability companies that provide private equity funding or venture capital investments, or both, to businesses [:

and - *AB427_R1* – 4 – (b) Engaged primarily in one or more of the following industries:

- *AB427* – 4 – (6) Information technology.

The members of the board of directors of the corporation for public benefit must serve without compensation but are entitled to be reimbursed for actual and necessary expenses incurred in the - *AB427_R1* – 5 – performance of their duties, including, without limitation, travel expenses.

- *AB427* – 5 – (a) External asset manager or venture capital or private equity investment firm contracting with the board pursuant to NRS 355.275;

[Money received pursuant to NRS 355.280 by the] The corporation for public benefit [may be used to make] shall ensure - *AB427_R1* – 6 – that private equity funding and venture capital investments [.] are provided pursuant to subsection 1 in a manner that:

- *AB427* – 6 – (1) Employ residents of this State;

(7) Any other industry that the board of directors of the corporation for public benefit determines will likely meet the targets for investment returns established by the corporation for public - *AB427_R1* – 7 – benefit for investments authorized by NRS 355.250 to 355.285, inclusive, and comply with sound fiduciary principles.] that meet the eligibility requirements set forth in section 1 of this act.

- *AB427* – 7 – 1.