Notwithstanding any other provisions of this article, the board may borrow money by the issuance of promissory notes or other evidences of indebtedness in an amount, or of a value, not exceeding, in the aggregate at any one time, the greater of 5 percent of the total of the district’s general fund and development fund budgets for the year in which the loan is made, or the sum of five hundred thousand dollars ($500,000), to be used for any revenue-producing purpose for which the district may expend funds.

A district shall not exercise the borrowing authority conferred by this section if the district, at any time during the previous two years, has not met the loan repayment requirements of this section and the repayment provisions set forth in the promissory note or other evidence of indebtedness issued for a loan entered into pursuant to this section. A district shall not expend, in any one year, any amount of money in excess of what it collects in property taxes, state and federal subventions, grants, loans, fees, gifts, bequests, or income from other sources.

Indebtedness incurred pursuant to this section shall be repaid during a period not to exceed five years from June 30th of the fiscal year in which it is incurred and shall bear interest at a rate not exceeding 10 percent per annum, or the rate allowed under Section 53531 of the Government Code, if higher, payable annually or semiannually or in part annually and in part semiannually.

Each indebtedness incurred under this section shall be authorized by a resolution of the board unanimously adopted, shall be evidenced by a promissory note or contract signed by the president of the board and attested by the secretary or treasurer, and shall be sold at not less than 95 percent of the principal amount in the manner determined by the board at a discount which equals the underwriter’s spread. The board shall determine that the discount reflects an underwriter’s spread which is both reasonable and customary under the prevailing market conditions. One of the two signatures may be by facsimile reproduction.

The indebtedness authorized to be incurred by this section shall be in addition to, and the provisions of this section shall not apply to, any bonded indebtedness authorized by vote of the electors.

Nothing in this section limits or restricts the authority of the district to issue promissory notes or deeds of trust in the acquisition of real property or the exercise of its right of eminent domain subject to the limitations in Section 5568.

Nothing in this section limits the authority of the district to borrow pursuant to Section 5544.3.

(Amended by Stats. 1985, Ch. 371, Sec. 2.)