1.  If a school district fails to make a timely payment on the debt service of bonds that are guaranteed pursuant to the provisions of NRS 387.513 to 387.528, inclusive, the State Treasurer shall:

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(a) Withdraw from the State Permanent School Fund the amount of money due for the payment on the debt service;

(b) Make the payment on the debt service; and

(c) Report the payment to the Executive Director.

2.  The amount of money withdrawn pursuant to subsection 1 shall be deemed a loan to the school district from the State Permanent School Fund. The State Treasurer shall determine the rate of interest on the loan, which must not exceed 1 percent above the average rate of interest yielded on investments in the State Permanent School Fund on the date that the loan is made. A loan that is made to a school district pursuant to this subsection is a special obligation of the school district and is payable only from the sources specified in NRS 387.528.

3.  A school district that receives a loan pursuant to this section shall not:

(a) Include the loan as a general obligation of the school district when determining any limit on the debt of the school district.

(b) Unless the school district obtains the written approval of the Executive Director, for the period during which the loan is unpaid, enter into any medium-term obligations or installment-purchase agreement pursuant to the provisions of NRS 350.087 to 350.095, inclusive, or otherwise borrow money.

4.  If the Executive Director receives notice that a loan has been made pursuant to this section, the Executive Director shall proceed pursuant to the provisions of NRS 354.685.