The district, or the district on behalf of an improvement district thereof, may issue negotiable promissory notes which shall be payable from general taxes, revenues, and other available funds of the district or the improvement district, as the case may be, other than taxes levied for the payment of principal and interest on any bonded indebtedness of the district or an improvement distict therein. The notes shall bear interest at a rate not exceeding 8 percent per annum and shall mature and be payable not later than five years from the date of issue. The balance of such notes unpaid shall not at any one time exceed 2 percent of the assessed valuation of the taxable property in the district or the improvement district, as the case may be, or, if said assessed valuation is not obtainable, 2 percent of the county auditor’s estimate of the assessed valuation of the taxable property in the district, or the improvement district, as evidenced by his certificate; provided, however, that a district which has been formed for less than 18 months may borrow an amount not exceeding twenty-five thousand dollars ($25,000), or an amount not exceeding 2 percent of the assessed valuation or estimated valuation of the taxable property in the district, whichever is greater.
No district shall borrow, pursuant to this section, for purposes other than flood control, in excess of one million dollars ($1,000,000); provided, however, that any district with an assessed valuation in excess of one hundred million dollars ($100,000,000) may borrow, pursuant to this section, for purposes other than flood control, an amount not exceeding 1 percent of the assessed valuation of all taxable property within the district.