Current loans authorized under certain conditions.

Except as provided in subsection (2), for any fiscal year in which school funds are estimated to be insufficient at any time during that fiscal year to pay obligations created by the district school board in accordance with the official budget of the district, or a budget approved by the district school board which is prepared preliminarily to the tentative budget required by this chapter, the school board is authorized to negotiate a current loan to pay these obligations, providing for the repayment of that loan from the proceeds of revenues reasonably to be anticipated during the fiscal year in which the loan is made as prescribed below. However, the district school board shall, whenever possible, so arrange its expenditures as to make the incurring of current loans unnecessary. When it is deemed necessary for the benefit of the schools of the district for a current loan to be negotiated, the school board shall arrange for a loan in an amount not violative of federal arbitrage regulations and for the repayment of the loan, in accord with the other provisions of this section.

(1) CURRENT LOANS AGAINST DISTRICT FUND, DISTRICT CAPITAL PROJECTS FUNDS, AND DISTRICT INTEREST AND SINKING FUNDS.—

(a) District school boards are authorized and empowered to borrow money, to be retired from the district tax receipts anticipated in the operating budget, the district capital projects budget, and the debt service budget, at a rate of interest not to exceed the rate authorized under the provisions of s. 215.84, for the purpose of paying all outstanding obligations and for the further purpose of paying any and all lawful expenses incurred in operating the schools of the district. However, it is unlawful for any district school board to borrow any sum of money in any one year in excess of 80 percent of the amount as estimated by it in the official budget for the current fiscal year for the district to be available from the district tax. The sum so borrowed shall be paid in full before the school board is authorized to borrow money in any succeeding year.

(b) Nothing in paragraph (a) shall be construed to invalidate any outstanding debt of any district as now existing and now due, or to become due, or as requiring any school board to pay the same in full before being permitted to borrow 80 percent on the estimate for the next ensuing year.

(c) In the event that the county tax roll is subjected to litigation and the tax collector is prevented from collecting taxes on that roll, the following provisions shall apply:

1. The restriction of 80 percent in paragraph (b) shall not apply if the collection of taxes is delayed beyond May 1.

2. District school boards are authorized and empowered to borrow money, to be repaid from the district school fund for operating purposes, the district capital projects funds, and the district interest and sinking funds, at a rate not to exceed the rate authorized under the provisions of s. 215.84, for the purposes of paying any and all lawful operating expense, capital expense, and required debt service necessary for the outstanding bond issues of such districts at the times that the funds are needed to prevent the bonds or interest payments from being in default. However, the amount of money so borrowed shall be limited to the amount of the district school fund and district interest and sinking fund tax receipts included in the official school budget for that year or the amount necessary to be borrowed to meet such obligations, whichever amount is the lesser. Any funds borrowed pursuant to the authority of this subsection shall, insofar as possible, be repaid during the fiscal year in which the loan was made. However, any such loan unpaid at the end of the fiscal year shall be repaid from the first available revenue in the next succeeding year.

(2) CURRENT LOANS PAYABLE FROM REVENUE PROCEEDS.—

(a) A district school board is also authorized to negotiate a current loan before the end of the fiscal year, the note or notes from which loan shall be issued no earlier than 60 days before the beginning of the subsequent fiscal year, to be repaid during the subsequent fiscal year from the proceeds of revenue reasonably anticipated to be received during that year. The proceeds of any loan obtained pursuant to this subsection shall be limited, and the district school board shall take any and all action necessary, to assure that the Internal Revenue Code and the regulations promulgated thereunder are not violated.

(b) Loans arranged pursuant to this subsection shall be negotiated in accordance with a budget approved by the district school board which is prepared preliminarily to the tentative budget required by this chapter. Such loans shall be at a rate of interest not to exceed the rate of interest authorized under the provisions of s. 215.84 and shall not be in excess of amounts authorized under the Internal Revenue Code for arbitrage.

(c) The proceeds of any loan obtained pursuant to this subsection, or any interest earnings thereon, shall not be used to pay any expenses incurred in the fiscal year in which the loan is made; nor shall the proceeds of the loan or interest earnings thereon be in any way encumbered to pay expenses incurred in the fiscal year in which the loan is made, but shall be held in escrow until the subsequent fiscal year. Any outstanding loan issued pursuant to subsection (1) must be defeased not less than 5 business days prior to the issuance of any obligation pursuant to this subsection. All proceeds of any loan obtained pursuant to this subsection, and any interest earnings thereon, shall be placed at closing in an irrevocable escrow account and held until the beginning of the subsequent fiscal year. The district school board shall maintain the integrity of such loan proceeds and related interest in its accounting records so as to be able to validate compliance with the provisions of this paragraph.