1.  The Severe Financial Emergency Fund is hereby created in the State Treasury as a revolving fund. The Executive Director shall administer the Fund.

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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.  Money in the Severe Financial Emergency Fund may be:

(a) Distributed by the Executive Director as a loan to a local government for the purpose of paying the operating expenses and general obligations of the local government until the local government receives revenues if:

(1) The Department takes over the management of a local government pursuant to NRS 354.685 to 354.725, inclusive;

(2) The Executive Director determines that a loan from the Severe Financial Emergency Fund is necessary to pay the operating expenses and general obligations of the local government; and

(3) The local government adopts a resolution in which the local government agrees to:

(I) Use the money only for the purpose of paying the operating expenses and general obligations of the local government until the local government receives revenues; and

(II) Repay the entire amount of the loan, without any interest, to the Severe Financial Emergency Fund as soon as practicable, but not later than 24 months after the date on which the resolution is adopted.

(b) Used for any other purpose authorized by the Legislature.

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 24 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:

(a) The status of the loan;

(b) The purposes for which the local government will use the money from the loan; and

(c) The resources that the local government will use to repay the loan.