AUTHORITY TO BORROW MONEY; SECURITY

(a) The board may borrow money at a rate not to exceed the maximum annual percentage rate allowed by law for authorized district obligations at the time the loan is made if the board declares that: (1) money is not available to meet authorized obligations of the district; and (2) an emergency exists. (b) To secure a loan, the board may pledge: (1) district revenue that is not pledged to pay the district's bonded indebtedness; (2) district taxes to be imposed by the district in the 12-month period following the date of the pledge that are 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 pledged taxes were imposed or the bonds were authorized.