THE SHORT ANSWER
Nevada issuers investing bond proceeds start from NRS 350.658, which lets a governing body invest bond proceeds, tax proceeds and pledged revenues in federal securities and qualifying AAA money market funds, subject to the bond ordinance and indenture, and from NRS 355.170, which lists the securities a local government may buy 'and no others.' What a specific issue may hold is set by its bond documents, and bond counsel makes that determination.
Nevada issuers investing bond proceeds start from two statutes: NRS 350.658, which lets a governing body invest bond proceeds, tax proceeds and pledged revenues in federal securities and qualifying AAA money market funds, and NRS 355.170, which lists the securities a Nevada local government may purchase "and no others."
State law is one of three layers around the money: the bond contract defines the issue's permitted investments, the Nevada statutes bound what a local government may buy, and the federal arbitrage rules generally cap yield and shape bidding on top.
This page is the Nevada entry in mGIC's guide to permitted investments by state, and it covers the two statutes, the eligible list, the repurchase agreement rules, rating and collateral terms, the state pool, the bidding rules and what mGIC's published record says about Nevada.
Which Nevada statutes govern bond-proceeds investments?
The governing statutes are NRS 350.658 and NRS 355.170: NRS 350.658(1), in Nevada's Local Government Securities Law, lets a governing body invest bond proceeds, tax proceeds and pledged revenues in federal securities and qualifying AAA money market funds, and NRS 355.170(1) lists the securities a local government may purchase "and no others."
NRS 350.658(1) makes that authority subject to "any contractual limitations from time to time imposed upon the municipality by any ordinance authorizing the issuance of the municipality's outstanding securities or by any trust indenture."
The bond-contract layer has a definition of its own: the MSRB glossary defines permitted investments as the instruments in which bond proceeds or other funds may be invested pursuant to the provisions of the bond contract.
That contract may take the form of an indenture, which the same glossary defines as a contract between the issuer and a trustee for the bondholders' benefit, while noting that many governmental issues, especially general obligation bonds, may not use one; the guide to the bond indenture takes up what one says about investing proceeds.
The third layer is federal tax law: IRS Publication 5005 notes that conduit issuer fees can raise the effective yield on a conduit loan, which is a purpose investment, and that Section 148 generally limits purpose-investment yield to the bond yield plus a spread; the guide to yield restriction takes up those rules.
What is on Nevada's permitted investment list?
NRS 350.658(1) admits federal securities and qualifying AAA money market funds for bond proceeds, tax proceeds and pledged revenues, and it also allows deposits in trust banks, while NRS 355.170(1) sets out the general list a Nevada local government may buy "and no others."
| Category | Where the statute says it | Statutory terms |
|---|---|---|
| Federal securities, including Treasuries and agencies | NRS 350.658(1); NRS 355.170(1) | Maturities within 10 years under the NRS 355.170(1) list |
| Money market funds | NRS 350.658(1); NRS 355.170(1) | For bond proceeds: SEC-registered, rated AAA, holding only United States and agency securities or fully collateralized repurchase agreements; on the general list: AAA government and commercial paper funds |
| Deposits in trust banks | NRS 350.658(1) | Also allowed by the same subsection |
| Negotiable certificates of deposit | NRS 355.170(1) | 5 years or less |
| Bankers' acceptances | NRS 355.170(1) | 180 days, with a 25 percent cap |
| Commercial paper | NRS 355.170(1) | 270 days, rated A-1/P-1, with a 25 percent cap |
| State and local government obligations | NRS 355.170(1) | Rated A or higher |
| Corporate notes, CMOs and asset-backed securities | NRS 355.171 | Larger governments only, on the conditions NRS 355.171 sets |
| Securities another NRS provision expressly authorizes | NRS 355.170(1)(h) | Admitted when another Nevada statute authorizes them |
Repurchase agreements are governed by NRS 355.170(2) and (8), whose conditions are detailed enough that the next two sections take them up.
Two limits sit outside the list: NRS 355.170(7) does not authorize investments that the terms of a contract or grant prohibit, and NRS 355.177 bars a local government from investing in its own securities.
The categories above summarize the statutes rather than replace them, so the statutory text is the controlling statement for any specific purchase.
What rules apply to investment agreements, GICs and repurchase agreements?
Neither statute this page draws on names guaranteed investment contracts: NRS 350.658 does not mention GICs, and the NRS 355.170(1) list, which allows the listed securities "and no others," does not name them either.
A category missing from both lists is not, for that reason, a category the statutes forbid, and whether an investment agreement is available for a particular Nevada issue is a determination for bond counsel under the bond documents.
The bond documents have an explicit statutory role: NRS 350.660(6) lets ordinances and indentures cover "the temporary investment and any reinvestment of proceeds of bonds" in federal securities.
Where an issue's documents do provide for an investment agreement, the guaranteed investment contract guide covers the instrument, and its solicitation raises the federal bidding rules described below.
Repurchase agreements are the instrument Nevada law regulates in detail: NRS 355.170(2) and (8) require advance designation of qualified counterparties, a written master repurchase agreement and custodian controls.
The same provisions cap the agreement's term at 90 days and limit who can be a counterparty: United States banks, or broker-dealers that are registered, are Federal Reserve primary dealers and are capital-compliant.
A 90-day maximum means a fund drawing over several years would hold a series of short agreements rather than a single multi-year one; the guide to full-flex repurchase agreements covers how repo terms are built for bond proceeds.
What rating and collateral requirements apply?
Of the rules this page covers, the most specific rating and collateral terms attach to repurchase agreements and money market funds: NRS 355.170(2) and (8) require the market value of the purchased securities to exceed 102 percent of the repurchase price and to be marked to the market weekly, with collateral maturing in 10 years or less.
The statute puts it directly: "The market value of the purchased securities must exceed 102 percent of the repurchase price to be paid by the counterparty and the value of the purchased securities must be marked to the market weekly."
Money market funds carry their own conditions: the funds NRS 350.658(1) admits for bond proceeds must be SEC-registered, rated AAA, and hold only United States and agency securities or fully collateralized repurchase agreements.
The NRS 355.170(1) list adds its own ratings: commercial paper must be rated A-1/P-1, state and local government obligations must be rated A or higher, and the money market funds on the general list are AAA government and commercial paper funds.
How collateral and margin are handled over the life of a bond-proceeds repo is covered in the guide to repo collateral.
Rating terms for a specific issue's investments also sit where its bond documents and bid specifications put them, which the general treatment of permitted investments covers in depth.
Does Nevada have a state investment pool option?
Yes: NRS 355.167 is the Local Government Pooled Investment Fund, which the State Treasurer administers and into which any local government, as defined in NRS 354.474, may deposit its money, and NRS 355.165 adds a Local Government Pooled Long-Term Investment Account.
Participation carries written terms: a local government must state in writing how long its money will be available, an early withdrawal requires a written request, and losses from early liquidation are charged to that deposit.
The MSRB glossary describes a local government investment pool as an investment pool established by a state or local governmental entity or instrumentality that serves as a vehicle for investing public funds of participating governmental units, with participants buying shares or units, often in a trust.
Pool yields change daily, so this page states none of them and leaves current figures to the State Treasurer; the guide to local government investment pools takes up when a pool fits bond proceeds, as does the state pool versus bid GIC comparison.
What procurement rules apply to Nevada bond-proceeds investments?
The procurement rules this page draws on are federal: Treasury Regulation §1.148-5(d)(6)(iii)(A) describes a bona fide solicitation as written bid specifications timely sent to potential providers, containing all material terms and only commercially reasonable terms, with electronic form permitted.
The regulation defines a material term as one that may directly or indirectly affect the yield or the cost of the investment.
For yield-restricted defeasance escrows, the same provision requires the hold-firm period to be no longer than reasonably required.
How a particular Nevada issue's investment is solicited follows its bond documents, and the bid specifications guide takes up what those specifications contain.
Refunding escrows add the division of labor GFOA describes: an escrow agent, typically a commercial bank, holds the escrow investments; a verification agent, typically a CPA firm, confirms the escrow is sufficient and, where yield is limited, that escrow yield does not exceed the permitted yield; and an escrow bidding agent solicits bids for open-market escrow securities, a role GFOA says a municipal advisor, if one is engaged, may be able to fill, which the Bidding Agent guide covers from the issuer's side.
Which representative transactions in Nevada does mGIC publish?
None of the representative transactions mGIC names on its site is a Nevada project; the named deals sit in other states, while mGIC itself was founded in 2002 and is based in Scottsdale, Arizona.
The record mGIC publishes covers more than $60 billion in bond proceeds invested and swap notional executed across more than 1,000 transactions for issuers in more than 40 states.
Its representative transactions pages are names only, among them Pocahontas Parkway, the Grand River Dam Authority and the DHL air cargo hub at CVG, with no deal-level detail on size, structure, provider, rate or result.
As an independent, SEC-registered municipal advisor, mGIC does not sell a proprietary investment product or act as principal in the investments it evaluates, and it provides Nevada reinvestment help through a free, no-obligation reinvestment review of a fund's objectives, permitted investments and draw schedule.
Final legal and tax conclusions on any Nevada issue belong to its bond counsel and tax counsel.
Frequently asked questions
Does Nevada's bond-proceeds statute name guaranteed investment contracts?
No. NRS 350.658 lets bond proceeds, tax proceeds and pledged revenues go into federal securities and qualifying AAA money market funds, and it does not mention GICs. The NRS 355.170(1) list, which allows the listed securities 'and no others,' does not name them either. That silence is not a prohibition the statutes state, and whether an investment agreement is available for a particular Nevada issue is a determination for bond counsel under the bond documents.
How long can a repurchase agreement run under Nevada law?
NRS 355.170(2) and (8) cap the agreement's term at 90 days and require the collateral to mature in 10 years or less. The market value of the purchased securities must exceed 102 percent of the repurchase price, and it must be marked to the market weekly.
What happens if a Nevada issuer withdraws early from the state pool?
Under NRS 355.167, the depositor first states in writing how long its money will be available. An early withdrawal takes a written request, and losses from liquidating the position early are charged to that deposit.
Which money market funds does NRS 350.658 allow for Nevada bond proceeds?
The funds NRS 350.658(1) admits must be SEC-registered, rated AAA, and hold only United States and agency securities or fully collateralized repurchase agreements. Whether a particular fund fits a particular issue is read against the bond documents, which is bond counsel's call.
Can a Nevada local government buy its own bonds as an investment?
NRS 355.177 bars a local government from investing in its own securities. That bar sits outside the NRS 355.170(1) eligible list, and it is one of the limits bond counsel checks alongside the NRS 355.170(7) rule that the list does not authorize investments a contract or grant prohibits.
Sources
This page is general educational information about municipal finance and federal and state rules as of the date shown. It is not legal, tax or investment advice, and it is not a recommendation about any particular investment. Product availability, legality and suitability depend on the issuer, jurisdiction, governing documents and transaction-specific facts. Final legal and tax determinations remain with the issuer's bond counsel, tax counsel and other advisors.
