1. The severe financial emergency fund is hereby created in the state

treasury as a revolving fund. The executive director shall administer the

fund.

2. The money in the fund must be invested as other state funds are

invested. Any interest and income earned on the money in the fund must,

after deducting any applicable charges, be credited to the fund.

3. The executive director may distribute the money in the severe

financial emergency fund as a loan to a local government for the

purpose of paying the operating expenses of the local government until

the local government receives revenues if:

(a) The department takes over the management of a local government

pursuant to NRS 354.685 to 354.725, inclusive;

(b) The executive director determines that a loan from the severe

financial emergency fund is necessary to pay the operating expenses of

the local government; and

(c) The local government adopts a resolution in which the local

government agrees to:

(1) Use the money only for the purpose of paying the operating

expenses of the local government until the local government receives

revenues; and

(2) Repay the entire amount of the loan, without any interest, to the

severe financial emergency fund as soon as practicable, but not later

than 12 months after the date on which the resolution is adopted.

4. A loan approved by the executive director must be repaid as soon

as practicable by the local government, but the duration of the loan must

not exceed 12 months after the date on which the loan was made. The

executive director shall not charge interest on a loan made pursuant to

this section.

5. The executive director shall report to the committee on local

government finance and to the Nevada tax commission as soon as

practicable after the date that the loan is approved concerning: