1. Except as otherwise provided in this section, the governing body of a local government or an administrative entity established pursuant to NRS 277.080 to 277.180 , inclusive, that is not a local government may purchase for investment: (a) Notes, bonds and other unconditional obligations for the payment of money issued by corporations organized and operating in the United States that: (1) Are purchased from a registered broker-dealer; (2) At the time of purchase have a remaining term to maturity of no more than 5 years; and (3) Are rated by a nationally recognized rating service as A or its equivalent, or better. (b) Collateralized mortgage obligations that are rated by a nationally recognized rating service as AAA or its equivalent. (c) Asset-backed securities that are rated by a nationally recognized rating service as AAA or its equivalent. 2. With respect to investments purchased pursuant to paragraph (a) of subsection 1: (a) Such investments must not, in aggregate value, exceed 25 percent of the total par value of the portfolio as determined at the time of purchase; (b) Not more than 5 percent of the total par value of the portfolio may be in notes, bonds and other unconditional obligations issued by any one corporation; and (c) If the rating of an obligation is reduced to a level that does not meet the requirements of that paragraph, the investment adviser must, as soon as possible, report the reduction in the rating to the governing body of the local government or administrative entity that purchased the investment. 3. Subsections 1 and 2 do not: (a) Apply to a: (1) Board of county commissioners of a county whose population is less than 100,000; (2) Board of trustees of a county school district in a county whose population is less than 100,000; (3) Governing body of an incorporated city whose population is less than 150,000; (4) Governing body of a local government not specified in subparagraph (1), (2) or (3) if the population subject to the jurisdiction of the governing body or served by the governing body is less than 100,000; or (5) Governing body of an administrative entity established pursuant to NRS 277.080 to 277.180 , inclusive, that is not a local government if the population subject to the jurisdiction of the governing body or served by the governing body is less than 150,000, unless the purchase is effected by the State Treasurer pursuant to his or her investment of a pool of money from local governments or by an investment adviser who is registered with the Securities and Exchange Commission and approved by the State Board of Finance. (b) Authorize the investment of money administered pursuant to a contract, debenture agreement or grant in a manner not authorized by the terms of the contract, agreement or grant. 4. As used in this section, local government has the meaning ascribed to it in NRS 354.474 .
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