AUTHORITY TO BORROW MONEY IN EMERGENCY; SECURITY.

(a) The board may borrow money at a rate not to exceed the maximum annual percentage rate allowed by law for district obligations at the time the loan is made if the board determines that:

(1) money is not available to meet a lawful obligation 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 bond indebtedness;

(2) tax revenue to be collected by the district during the 12-month period following the date of the pledge that has not been 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 tax revenue or bonds are pledged must mature not later than the third anniversary of the date the loan is made. A loan for which other district revenue is pledged must mature not later than the fifth anniversary of the date the loan is made.

(d) The board may not spend loan proceeds obtained under this section for a purpose other than:

(1) the purpose for which the board determined the emergency existed; and

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