The governing body of a local government in a county whose population is 20,000 or more, subject to any contractual limitations from time to time imposed upon the local government by any ordinance authorizing the issuance of outstanding securities of the local government or by any trust indenture or other proceedings appertaining thereto, may cause to be invested and reinvested, except as otherwise provided in NRS 350.698, any proceeds of taxes, any pledged revenues and any proceeds of bonds or other local government securities issued hereunder for which the amount of the principal of the original issuance was $5,000,000 or more in an investment contract that is collateralized with securities issued by the Federal Government or agencies of the Federal Government if:

1. The collateral has a market value of at least 102 percent of the amount invested and any accrued unpaid interest thereon;

2. In a county whose population is 20,000 or more but less than 55,000:

(a) The local government employs a full-time finance director; and

(b) The terms of the investment contract have been reviewed by independent bond counsel, who has determined that the contract complies with this section;

3. The local government receives a security interest in the collateral that is fully perfected and the collateral is held in custody for the local government or its trustee by a third-party agent of the local government which is a commercial bank authorized to exercise trust powers;

4. The market value of the collateral is determined not less frequently than weekly and, if the ratio required by subsection 1 is not met, sufficient additional collateral is deposited with the agent of the local government to meet that ratio within 2 business days after the determination; and

5. The party with whom the investment contract is executed is a commercial bank, or that party or a guarantor of the performance of that party is:

(a) An insurance company which has a rating on its ability to pay claims of not less than “Aa2” by Moody’s Investors Service, Inc., or “AA” by Standard and Poor’s Ratings Services, or their equivalent; or

(b) An entity which has a credit rating on its outstanding long-term debt of not less than “A2” by Moody’s Investors Service, Inc., or “A” by Standard and Poor’s Ratings Services, or their equivalent.

(Added to NRS by 1997, 2868; A 2003, 824; 2007, 2522; 2011, 1218)