Sec. 1118.156. AUTHORITY TO BORROW MONEY; SECURITY

(a) The board may borrow money at a rate of not more than 10 percent a year on district notes to pay the obligations if the board declares that money is not available to meet authorized district obligations, which creates an emergency.

(b) To secure a loan, the board may pledge:

(1) district revenue that is not pledged to pay the district's bonded indebtedness;

(2) a district tax to be imposed by the district in the next 12-month period that is not pledged to pay the principal of or interest on district bonds; or

(3) district bonds that have been authorized but not sold.

(c) A loan for which taxes or bonds are pledged must mature not later than the first anniversary of the date the loan is made. A loan for which district revenue is pledged must mature not later than the fifth anniversary of the date the loan is made.

(d) Money obtained from a loan under this section may be spent only for:

(1) a purpose for which the board declared an emergency; and

(2) if district taxes or bonds are pledged to pay the loan, the purposes for which the taxes were imposed or the bonds were authorized.

Added by Acts 2009, 81st Leg., R.S., Ch. 1139 , Sec. 1.01, eff. April 1, 2011. Redesignated from Special District Local Laws Code, Section 1072.156 by Acts 2011, 82nd Leg., R.S., Ch. 91 , Sec. 27.001(53), eff. September 1, 2011.