The district may issue negotiable promissory notes bearing interest at a rate not exceeding the rate set by Article 7 (commencing with Section 53530) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code. The notes shall be general obligations of the district payable from revenues and assessment taxes, unless paid from other available funds of the district, in the same manner as bonds of the district. The maturity of the notes shall not be later than five years from the date thereof and the total aggregate amount of the notes outstanding at any one time shall not exceed the lesser of 2 percent of the assessed valuation of the taxable property in the district, according to the last assessment roll or five million dollars ($5,000,000), except that a district which has been formed for less than 18 months may not borrow an amount exceeding twenty-five thousand dollars ($25,000).
Financial ProvisionsNegotiable Promissory Notes
Section § 74950
This law allows the district to issue promissory notes, which are like IOUs, with interest rates according to another specific law. These notes are obligations of the district, meaning they need to be paid back through certain district funds, just like bonds. The notes can't last more than five years, and the total amount of these notes can't exceed either 2% of the district's taxable property value or $5 million, whichever is less. New districts, formed within the last 18 months, have a borrowing cap of $25,000.
negotiable promissory notes interest rate limit general obligations
Section § 74951
This law defines what "taxable property" means for certain water-related districts in California. It covers three scenarios: (a) property including land and improvements within a district that followed specific formation rules, (b) property within a district where the taxation basis has changed to include improvements, and (c) only land in other districts not covered by the first two scenarios.
“Taxable property,” as used in Section 74950, means:
(a)CA Water Code § 74951(a) All lands and improvements within a district or improvement district, as the case may be, if the provisions of Section 74056 were complied with in the formation of the district or district within which the improvement district is created.
(b)CA Water Code § 74951(b) All lands and improvements within an improvement district if the basis of taxation in the improvement district has been changed pursuant to Section 75151 from land to land and improvements.
(c)CA Water Code § 74951(c) Land only within any district or improvement district not mentioned in subdivision (a) or (b) of this section.
taxable property definition water district taxation land improvements
Section § 74952
This law states that if a district issues promissory notes under the rules of Section 74950, then the usual restrictions found in Sections 75357 and 75358 do not apply.
If a district undertakes to issue promissory notes pursuant to the limitations set forth in Section 74950, the limitations provided in Sections 75357 and 75358 shall not apply.
district promissory notes issuance limitations Section 74950
