1. When all outstanding bonds, principal, interest and prior redemption premiums, if any, of such a district have been paid and any surplus amounts remain in the fund established pursuant to NRS 271.490 to the credit of the district, the surplus after the payment of valid claims for refund, if any, must be transferred to a surplus and deficiency fund. The governing body may at any time, by resolution or ordinance, authorize the deposit of any money otherwise available to the surplus and deficiency fund.

2. Amounts in the surplus and deficiency fund may be used by the governing body to pay costs incurred in connection with:

(a) The issuance of refunding bonds pursuant to NRS 271.488;

(b) Collecting delinquent assessments pursuant to NRS 271.445 and 271.540 to 271.630, inclusive;

(c) Refunding, pursuant to NRS 271.429, the surplus amounts in the special fund created for the district pursuant to NRS 271.490;

(d) Legal fees or other costs that relate to an improvement district; or

(e) Modifying a project pursuant to NRS 271.640 to 271.646, inclusive.

3. Whenever there is a deficiency in any fund established pursuant to NRS 271.490 for the payment of the bonds and interest thereon for any improvement district created pursuant to former NRS 244A.193 or pursuant to NRS 271.325 or 318.070, the deficiency must first be paid out of the surplus and deficiency fund to the extent of the money available in the fund before any payment is made out of the general fund of the municipality as provided by NRS 271.495.

4. Amounts in the surplus and deficiency fund which exceed 10 percent of the principal amount of outstanding bonds of the municipality for all improvement districts created pursuant to former NRS 244A.193 or pursuant to NRS 271.325 or 318.070 at the end of each fiscal year may be used:

(a) To make up deficiencies in any assessment which proves insufficient to pay for the cost of the project or work for which the assessment has been levied.

(b) To advance amounts for the cost of any project or work in any district created pursuant to any of these sections.

(c) To provide for the payment of assessments levied against, or attributable to, property owned by the municipality or the Federal Government.

5. At the end of each fiscal year any excess amount described in subsection 4 may be transferred to the general fund of the municipality as the governing body directs by resolution.

(Added to NRS by 1981, 956; A 1991, 468; 2005, 1830; 2015, 154)