1. A transaction whereby a municipality acquires real or personal property and another person acquires or retains a security interest in that or other property creates a general obligation of the municipality which must be counted against any limit upon its debt unless:

(a) The obligation by its terms is extinguished by failure of the governing body to appropriate money for the ensuing fiscal year for payment of the amounts then due; or

(b) The budget of the municipality for the fiscal year in which the transaction occurs includes a provision for the discharge of the obligation in full.

2. Any member of the governing body may vote upon such a transaction whether or not the obligation incurred is expected to extend beyond his or her term of office, without any special notice or other formality.

3. Any such transaction is subject to the requirements of this chapter for an election if it must be counted against a debt limit, but, except as otherwise provided in NRS 350.011 to 350.0165, inclusive, and 350.087 to 350.095, inclusive, is not subject to any other requirement of this chapter.

4. In addition to or as a substitute for granting a security interest in the property being acquired in a transaction described in subsection 1, the municipality may grant a security interest in other property if the governing body finds that:

(a) Granting the security interest in the other property will result in lower financing costs to the municipality; and

(b) The value of all property in which a security interest is granted does not, at the time the security interest is granted, exceed an amount equal to one and one-half times the value of the property being acquired.

The finding and determination of values by the governing body are conclusive in the absence of fraud or gross abuse of discretion.

(Added to NRS by 1981, 942; A 1989, 166; 2001, 2314)