California Code, Government Code - GOV § 53837

(a) A special district may borrow money pursuant to this article, the indebtedness to be represented by a securitized limited obligation note or notes issued to the lender pursuant to this article.

(b) The money borrowed may be used and expended by the special district solely for the acquisition or improvement of land, facilities, or equipment.

(c) Any note issued pursuant to this article shall be exempt from all taxation within the state.