NRS277A.370. Agreements for exchange of cash flow based on price of fuel.

      1.  A commission that budgets $1,000,000 or more in any fiscal year for the purchase of fuel may enter into an agreement for an exchange of cash flow based on the price of fuel as provided in this section if it finds that such an agreement would be in the best interest of the commission.

      2.  A commission may only enter into an agreement to exchange cash flow payments based on the price of fuel only if:

      (a) The long-term unsecured debt obligations of the person with whom the commission enters the agreement are rated “A” or better by a nationally recognized rating agency; or

      (b) The obligations pursuant to the agreement of the person with whom the commission enters the agreement are guaranteed by a person whose long-term debt obligations are rated “A” or better by a nationally recognized rating agency.

      3.  A commission may agree, with respect to a fuel that the commission has budgeted to purchase in a fiscal year:

      (a) To pay sums based on a fixed price or prices for that fuel, on an amount of the fuel that does not exceed the amount of the fuel that the commission expects to acquire over a period that is not more than 63 months from the date of the agreement, in exchange for an agreement by the other party to pay sums equal to a variable price for that fuel determined pursuant to a formula or price reference set forth in the agreement on the same amount of the fuel as the amount used in determining the sums payable by the commission;

      (b) To pay sums based on a variable price or prices for that fuel determined pursuant to a formula or price reference set forth in the agreement, on an amount of fuel that does not exceed the amount of the fuel the commission expects it will acquire over the period that is not more than 63 months from the date of the agreement, in exchange for an agreement by the other party to pay sums equal to a fixed price or prices for that fuel on the same amount of fuel as the amount used in determining the sums payable by the commission; or

      (c) To pay sums based on a variable price or prices for the fuel determined pursuant to a formula or price reference set forth in the agreement, on an amount of the fuel that does not exceed the amount of the fuel that the commission expects it will acquire over the period that is not more than 63 months from the date of the agreement, in exchange for an agreement by the other party to pay sums equal to a different variable price for that fuel determined pursuant to a formula or price reference set forth in the agreement on the same amount of the fuel as the amount used in determining the amount payable by the commission.

      4.  The payments to be made for any fiscal year must be based on the amounts of the fuel that the commission expects to buy or sell during that fiscal year and must be scheduled to be paid within an 18-month period that begins 3 months before and ends 3 months after the fiscal year.

      5.  A certification by the commission or its chief financial officer as to any determination made under this section or as to the amount of fuel that a commission expects to buy or sell during the term of an agreement entered into pursuant to this section, or during all or any part of any fiscal year that is wholly or partially included in the term of an agreement entered into pursuant to this section, is conclusive, absent fraud, for the purpose of determining whether the commission is authorized to enter into an agreement under this section.

      6.  The term of an agreement entered into pursuant to this section may not exceed 63 months.

      7.  An agreement entered into pursuant to this section is not:

      (a) A debt or indebtedness of the commission for the purposes of any limitation upon the indebtedness of the commission or any requirement for an election with regard to the issuance of securities that is applicable to the commission.

      (b) Subject to the limitations of subsection 1 of NRS 354.626.

      8.  A commission which has entered into an agreement pursuant to this section may use the price it pays or expects to pay for fuel after giving effect to the agreement for the purpose of calculating:

      (a) Rates and charges of a revenue-producing enterprise whose revenues are pledged to or used to pay municipal securities;

      (b) Statutory requirements concerning revenue coverage that are applicable to municipal securities; and

      (c) Any other amounts which are based upon the amounts to be paid for fuel.

      9.  Subject to covenants applicable to municipal securities to which any revenues of the commission or county are pledged, any payments required to be made by the commission under an agreement may be made from money that could be used to pay for the fuel or from any other legally available source.

      10.  The powers granted by this section are in addition to all other powers of any commission, and nothing herein limits the exercise of a power a commission otherwise has.

      (Added to NRS by 2009, 849)