citation: GOV § 6557

text: Said indenture may include covenants or other provisions relating to the bonds issued thereunder requiring the entity to fix, prescribe and collect rates, tolls, fees, rentals or other charges in connection with the services and facilities furnished from the project acquired or constructed from the proceeds of bonds, and it may require such rates, tolls, fees, rentals or other charges to be sufficient to pay principal of and interest on the bonds as they become due, together with all expenses of operation, maintenance and repair of the project and such additional sums as may be required for any sinking fund, reserve fund or other special fund provided for the further security of such bonds, or as a depreciation charge or other charge in connection with such project; provided, however, that all rates, tolls, fees, rentals or other charges in connection with the services and facilities furnished by the project shall be subject to such provisions, if any, relative thereto as may be contained in the contract or agreement between the public agencies creating such entity.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


kind: section

code: GOV

citation: GOV § 6558

text: The indenture may include covenants or other provisions, other than or in lieu of the provisions required by Article 1 (commencing with Section 6500) of this chapter, relating to the collection, deposit and safekeeping of the revenues, the permissible uses thereof, the special fund or funds to be kept for the payment of principal and interest of the bonds, including reserve, sinking, bond service, redemption and trust funds, and any bond payable from the revenue fund may be paid from any such special fund set up therefor; the appointment of a trustee; the permissible investments for moneys in said funds, or any thereof, the accounts and records to be kept, audits thereof and examination thereof by bondholders and others, and reports to be made by the entity. Any indenture providing for the appointment of a trustee shall limit such trustee’s power of investment to only such investments as are authorized by Section 53601.

history: (History: Amended by Stats. 1974, Ch. 544.)

division: 7. MISCELLANEOUS

title: 1. GENERAL

chapter: 5. Joint Exercise of Powers

article: 2. Power to Issue Revenue Bonds

path: 1. GENERAL > 7. MISCELLANEOUS > 5. Joint Exercise of Powers > 2. Power to Issue Revenue Bonds


citation: GOV § 6559

text: The indenture may include a covenant or other provision relating to the insurance upon such project, or any part thereof, against any or all risks, and in case of loss the application of the insurance proceeds.

history: (History: Added by Stats. 1955, Ch. 329.)

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6560

text: The indenture may include a covenant or other provision containing prohibitions against or limitations upon the sale, lease or other disposition of such project or any part thereof.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6561

text: The indenture may contain covenants or other provisions providing for prohibitions against or limitations upon the issuance of any additional bonds or the incurring of additional indebtedness payable from the revenues of the project.

history: (History: Amended by Stats. 1957, Ch. 943.)

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6562

text: The indenture may contain covenants or other provisions whereby the consent or agreement of a stated percentage or number of the holders of the bonds may bind all bondholders to modifications of or changes in all or part of the provisions of the indenture authorizing or providing for the issuance of such bonds, and the provisions subject to modification or change shall be specified or stated in such indenture.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6563

text: The indenture may provide for the issuance of a duplicate in the manner and upon such terms and conditions as the governing body of the entity may determine, in the event any bond, temporary bond, coupon or interim certificate of any issue is lost, destroyed or mutilated.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6564

text: The indenture may include a covenant or provision against the entering into of any agreement which impairs the operation of the project or any part of it necessary to secure adequate revenues to pay the principal and interest of the bonds, or which otherwise would impair the rights of the bondholders with respect to the revenues or the operation of the project.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6565

text: The indenture may provide for events of default and the terms upon which the bonds may be declared due before maturity and the terms upon which that declaration and its consequences may be waived.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6566

text: The indenture may provide for the rights, liabilities, powers and duties arising upon the entity’s breach of any covenants, conditions or obligations of the indenture.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6567

text: The indenture may provide for a fiscal agent and the deposit of funds therewith.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6568

text: The indenture may contain any other provision or covenant valid under the Constitutions of the State of California and the United States of America which the governing body of the entity deems necessary or desirable to facilitate the issuance and sale of the bonds or for the protection or security of holders thereof.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6569

text: The indenture authorizing the issuance of said bonds and all resolutions or orders in the proceeding for the issuance of said bonds shall constitute a contract with the holders of the bonds, and such contract may be enforced by any holder by mandamus, injunction or any applicable legal action, suit, proceeding or other remedy.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6570

text: Any bonds issued under this act shall be payable within not more than forty (40) years from the date of issue thereof. No bond may be made payable at a time later than the end of the term of the agency, board or commission as provided in the joint powers agreement in effect at the time the bonds are issued.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6571

text:
The bonds shall be issued and sold as the governing body may determine and for not less than par and accrued interest to date of delivery, except that, in the case of a project for the generation or transmission of electric energy, a project for the disposal, treatment, or conversion of energy and reusable materials of solid waste, a project for a purpose specified in Section 6546.6, a project for the construction of bridges and major thoroughfares pursuant to Section 66484.3, a project for an intermodal container transfer facility specified in Section 6546.6, a project for a consolidated transportation corridor pursuant to Section 6546.13, a project funded by a joint powers authority formed to provide port or harbor infrastructure pursuant to Part 1 (commencing with Section 1690) of Division 6 of the Harbors and Navigation Code, or in the case of bonds of a fair and exhibition authority, the bonds may be sold at less than par if the governing body determines that the sale will result in more favorable terms for the bonds. The sale shall be conducted in compliance with Chapter 10 (commencing with Section 5800) of Division 6 of Title 1, unless, in the case of a project for the generation or transmission of electric energy, a project for the disposal, treatment, or conversion of energy and reusable materials of solid waste, a project for the development and construction of an intermodal container transfer facility specified in Section 6546.6, a project for a consolidated transportation corridor pursuant to Section 6546.13, a project for the construction of bridges and major thoroughfares pursuant to Section 66484.3, a project funded by a joint powers authority formed to provide port or harbor infrastructure pursuant to Part 1 (commencing with Section 1690) of Division 6 of the Harbors and Navigation Code, or in the case of bonds of a fair and exhibition authority, the governing body shall determine that a negotiated sale of the bonds is necessary, in which case the bonds shall be sold on the terms approved by the governing body.

The proceeds from the sale (except premium and accrued interest, which shall be paid into the bond service or other fund designated or established for the payment of the principal and interest of the bonds) shall be paid into the construction fund or other fund designated by the indenture authorizing the issuance of the bonds and shall be applied exclusively to the objects and purposes set forth in the indenture, including all expenses incidental thereto or in connection therewith, and also including the payment of interest on the bonds during the period of study and construction of the project and for a period not to exceed 12 months after completion of the construction.

history: (History: Amended by Stats. 1992, Ch. 1235, Sec. 2. Effective January 1, 1993.)

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


text:
Any joint powers agency which, prior to January 1, 1972, has issued revenue bonds pursuant to Section 6571.1 of this article for the purpose of acquiring and constructing sanitary sewer facilities, may, in addition to the powers authorized by Article 1 (commencing with Section 6500) and this article issue revenue bonds for the following purposes:

(a) To refund all or any part of the principal amount of any revenue bonds previously issued for the acquisition and construction of sanitary sewer facilities.

(b) To acquire directly by acquisition of title or by acquisition of capacity rights, and construct, sanitary sewer facilities, including but not limited to collection, treatment, and disposal works and facilities or the refunding of such bonds; provided, that this subdivision shall have no force or effect after December 31, 1977.

history: (History: Added by Stats. 1973, Ch. 256.)

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6572

text: The bonds shall be secured by a pledge of and lien upon the revenues of the project described in the indenture authorizing the issuance of the bonds, and such revenues may be used only as provided in said indenture. The revenues of the project include revenues from improvements to or additions to or extensions thereof later constructed or made. The bonds shall also be secured by additional revenues, including existing funds, if any, of the entity from other sources, to the extent set forth in the indenture.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6573

text: So long as any bonds or interest coupons thereof are outstanding and unpaid, the revenues and interest thereon shall not be used for any purpose not authorized by the indenture, unless the authority to make such use of revenues shall be authorized by the bondholders pursuant to the provisions of the indenture, and during such period the joint powers agreement shall be irrevocable and may not be amended or modified in any manner to the detriment of the bondholders. Any bond for the payment and discharge of which, upon maturity or upon redemption prior to maturity, provision has been made through the setting apart in a reserve fund or special trust account created pursuant to this article to insure the payment thereof, of moneys sufficient for that purpose or through the irrevocable segregation for that purpose in some sinking fund or other fund or trust account of moneys sufficient therefor, shall be deemed to be no longer outstanding and unpaid within the meaning of any provision of this article.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6574

text: The entity shall operate, maintain and preserve the project in good repair and working order, and shall operate the project in an efficient and economical manner; provided, however, that the entity may lease or rent concessions, or lease or rent the project or any part thereof, or otherwise provide for the operation of the project or any part thereof.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6575

text: All bonds and the interest thereon or income therefrom are exempt from all taxation in this State other than gift, inheritance and estate taxes.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6576

text: The entity may provide for the issuance, sale or exchange of refunding bonds for the purpose of redeeming or retiring any revenue bonds issued by the entity and any other indebtedness incurred by the entity. All provisions of this article applicable to the issuance of revenue bonds are applicable to the funding or refunding bonds and to the issuance, sale or exchange thereof.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6577

text:
Funding or refunding bonds may be issued in a principal amount sufficient to provide funds for the payment of all of the following:

(a) All bonds to be funded or refunded by them.

(b) All expenses incident to the calling, retiring, or paying of the outstanding bonds and the issuance of the funding or refunding bonds, including the costs of issuing the refunding bonds, as defined in Section 53550.

(c) Interest upon the funding or refunding bonds from the date of sale to the date of payment of the bonds to be funded or refunded out of the proceeds of the sale or the date upon which the bonds to be funded or refunded will be paid pursuant to the call or agreement with the holders of such bonds.

(d) Any premium necessary in the calling or retiring of the outstanding bonds and the interest accruing on them to the date of the call or retirement.

history: (History: Amended by Stats. 2006, Ch. 538, Sec. 234. Effective January 1, 2007.)

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6578

text: This article shall be liberally construed to effectuate its purposes.

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6579

text: In addition to the revenue bonds authorized by this article, an agency or entity established pursuant to the provisions of this chapter may also issue revenue bonds pursuant to the provisions of the Revenue Bond Law of 1941, as contained in Chapter 6 (commencing with Section 54300) of Part 1 of Division 2 of Title 5, for the purposes specified in Section 54307.1.

history: (History: Added by Stats. 1975, Ch. 21.)

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


text:
In addition to the revenue bonds authorized by this article and in addition to other powers, any agency, commission, or board provided for by a joint powers agreement entered into pursuant to Article 1 (commencing with Section 6500) of this chapter, if such entity has the power to acquire, construct, maintain, or operate systems, plants, buildings, works, or other facilities or property for the purposes of disposal, treatment, or conversion to energy and reusable materials of solid waste, may issue revenue bonds pursuant to the Revenue Bond Law of 1941, Chapter 6 (commencing with Section 54300) of Part 1 of Division 2 of Title 5, to pay the cost and expenses of acquiring, constructing, improving, and financing a project for any and all such purposes.

Upon adopting the resolution referred to in Article 3 (commencing with Section 54380) of Chapter 6 of Part 1 of Division 2 of Title 5, the entity shall implement the resolution by conducting an election in its own territory as provided in Section 54307.3. The proposition authorizing the bonds shall be deemed adopted if it receives the affirmative vote of a majority of all the voters voting on the proposition within the entity.

history: (History: Amended by Stats. 1980, Ch. 435.)

title: 1. GENERAL

article: 2. Power to Issue Revenue Bonds


citation: GOV § 6580

text:
As used in this article, the following words shall have the following meanings:

(a) “Joint county park board” means a board, commission, or other public entity organized pursuant to an agreement made in accordance with Article 1 (commencing with Section 6500) of this chapter for the purpose of improving, operating, and maintaining a single park or other recreation facility located within more than one county, if none of the territory within the park or other recreation facility is contained within an incorporated city, and further, if all of the counties within which the park or other recreation facility is located are parties to the agreement creating the board, commission, or other public entity.

(b) “Counties” means all of the counties within which a portion of the park or other recreation facility, operated and maintained by a joint county park board, is located.

(c) “Park” means a park or other recreation facility operated and maintained by a joint county park board.

history: (History: Added by Stats. 1965, Ch. 582.)

title: 1. GENERAL

article: 3. Joint County Park Boards

path: 1. GENERAL > 7. MISCELLANEOUS > 5. Joint Exercise of Powers > 3. Joint County Park Boards


citation: GOV § 6581

text: A joint county park board may designate the sheriff of any one of the counties as the park sheriff. The park sheriff shall be designated by a contract made by and between the board of supervisors of the county of the park sheriff and the joint county park board. The contract shall provide for the amount to be paid the county of the park sheriff for the services to be rendered by the park sheriff at the park, and the method and time of termination of the contract. The contract shall further provide that an amount equal to the funds received by the county of the park sheriff from the joint county park board during the term of the contract shall be expended during the term of the contract for the purposes of providing services at the park through the park sheriff. The contract shall not take effect until it has been executed by the parties to it and, in addition, has been approved in writing by the park sheriff and by duly adopted resolutions of each of the boards of supervisors of the counties.

title: 1. GENERAL

article: 3. Joint County Park Boards


citation: GOV § 6582

text: Upon the designation of a park sheriff in the manner provided in Section 6581, and until such time as the designation is revoked by the termination of the contract designating the park sheriff, the park sheriff shall have and shall exercise throughout the park all of the functions, duties, obligations, and responsibilities of the office of sheriff, and shall have and may exercise within the park, all of the privileges in connection with the office of sheriff, all as though the entire park were a part of the county of the park sheriff, except as to those duties constituting the civil functions of the sheriff.

title: 1. GENERAL

article: 3. Joint County Park Boards


citation: GOV § 6583

text: The provisions of this article applicable to a park sheriff, if one has been designated, shall apply to all deputies and subordinates of the park sheriff in their capacities as such deputies or subordinates.

title: 1. GENERAL

article: 3. Joint County Park Boards


citation: GOV § 6584

text: This article shall be known and may be cited as the Marks-Roos Local Bond Pooling Act of 1985.

history: (History: Added by Stats. 1985, Ch. 868, Sec. 6. Effective September 23, 1985.)

title: 1. GENERAL

article: 4. Local Bond Pooling

path: 1. GENERAL > 7. MISCELLANEOUS > 5. Joint Exercise of Powers > 4. Local Bond Pooling


text:
The Legislature finds and declares all of the following:

(a) That there is a critical need within the state to expand, upgrade, and otherwise improve the public capital facilities of local government necessary to support the rehabilitation and construction of residential and economic development. The needs of local government for financing these facilities greatly exceed the amount of funds available from existing state, local, and federal sources.

(b) That it is the intent of the Legislature to assist in the reduction of local borrowing costs, help accelerate the construction, repair, and maintenance of public capital improvements, and promote greater use of existing and new financial instruments and mechanisms, such as bond pooling by local agencies.

(c) That it is not lawful under this article for an authority or any of its member agencies to charge fees to local agencies or receive payments from the proceeds of the sale of bonds issued or acquired by the authority, except for fees charged pursuant to subdivision (o) of Section 6588 to recover the authority’s costs of issuance and administration.

history: (History: Amended by Stats. 1996, Ch. 833, Sec. 1. Effective January 1, 1997.)

title: 1. GENERAL

article: 4. Local Bond Pooling


citation: GOV § 6585

text:
All of the following definitions govern the construction and interpretation of this article:

(a) (1) Except as provided in paragraphs (2) and (3), “authority” means an entity created pursuant to Article 1 (commencing with Section 6500) and includes any successor to the powers and functions of that entity.

(2) In the case of an authority issuing bonds pursuant to this chapter in which VLF receivables are pledged to the payment of the bonds, other than VLF receivables so pledged for a county of the first class, an authority shall consist of not fewer than 100 local agencies.

(3) In the case of an authority issuing bonds pursuant to this chapter in which Proposition 1A receivables are pledged to the payment of the bonds, an authority shall consist of not fewer than 250 local agencies.

(b) “Bond purchase agreement” means a contractual agreement executed between the authority and the local agency whereby the authority agrees to purchase bonds of the local agency.

(c) “Bonds” means all of the following:

(1) Bonds, including, but not limited to, assessment bonds, redevelopment agency bonds, government-issued mortgage bonds, and industrial development bonds.

(2) Notes, including bond, revenue, tax, or grant anticipation notes.

(3) Commercial paper, floating rate and variable maturity securities, and any other evidences of indebtedness.

(4) Certificates of participation or lease-purchase agreements.

(d) “Conservation or reclamation purposes” mean a utility project designed to reduce the amount of potable water to be supplied by a publicly owned utility, reduce the amount of water imported by the publicly owned utility, or facilitate the use of wastewater by a publicly owned utility for conservation purposes, including, without limitation, stormwater capture and treatment, water and wastewater recycling, development of local groundwater resources, groundwater recharging, and water reclamation.

(e) “Cost,” as applied to a public capital improvement, a utility project, or portion of the improvement or utility project financed under this part, means all of the following:

(1) All or any part of the cost of construction, renovation, and acquisition of all lands, structures, real or personal property, rights, rights-of-way, franchises, easements, and interests, including the cost of related tangible and intangible property, acquired or used for a public capital improvement or a utility project.

(2) The cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which the buildings or structures may be moved, and the cost of all machinery and equipment.

(3) Finance charges.

(4) Interest prior to, during, and for a period after, completion of that construction, as determined by the authority.

(5) Provisions for working capital, reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements.

(6) The cost of architectural, engineering, financial and legal services, plans, specifications, estimates, and administrative expenses.

(7) Other expenses necessary or incidental to determining the feasibility of constructing any project or incidental to the construction or acquisition or financing of any public capital improvement or utility project.

(f) “Customer” means a person or entity receiving water or electricity or discharging wastewater through facilities of a publicly owned utility.

(g) “Financing costs” mean any of the following:

(1) Interest and redemption premiums that are payable on rate reduction bonds or water, wastewater, or electric revenue bonds or loans of a publicly owned utility that were issued to finance a utility project.

(2) The cost of retiring the principal of rate reduction bonds or water, wastewater, or electric revenue bonds or loans of a publicly owned utility that were issued to finance a utility project, whether at maturity, including acceleration of maturity upon an event of default, or upon redemption, including sinking fund redemption.

(3) A cost related to issuing or servicing rate reduction bonds, including, but not limited to, servicing fees, trustee fees, legal fees, administrative fees, bond counsel fees, bond placement or underwriting fees, remarketing fees, broker dealer fees, independent manager fees, payment under an interest rate swap agreement, financial adviser fees, accounting report fees, engineering report fees, and rating agency fees.

(4) A payment or expense associated with a bond insurance policy, financial guaranty or a contract, agreement, or other credit enhancement for rate reduction bonds or a contract, agreement, or other financial agreement entered into in connection with rate reduction bonds.

(5) The funding of one or more reserve accounts related to rate reduction bonds.

(h) (1) “Financing resolution” means a resolution adopted by the governing body of an authority financing a utility project with rate reduction bonds that establishes and imposes a utility project charge in connection with the rate reduction bonds in accordance with Section 6588.7.

(2) A financing resolution may be separate from a resolution authorizing the issuance of the rate reduction bonds.

(i) “Legislative body” means the governing body of a local agency.

(j) “Local agency” means a party to the agreement creating the authority, or an agency or subdivision of that party, sponsoring a project of public capital improvements or other utility project, or any city, county, city and county, authority, district, or public corporation of this state.

(k) “Mandate” means a requirement, imposed by a mandating entity by any means, including without limitation, a statute, rule, regulation, an administrative or judicial order, a building, operating, or licensing requirement or condition, or an agreement with, or license or permit from, the mandating entity, on a facility of a publicly owned utility or a facility operated in whole or in part for the benefit of a publicly owned utility, on the operations of the publicly owned utility, on the electricity transmitted, generated, or distributed by the publicly owned utility, or on the water or wastewater pumped, acquired, supplied, or treated by the publicly owned utility.

(l) (1) “Mandating entity” means the United States; a state of the United States; an agency, department, commission, or other subdivision of the United States or a state of the United States; a court of the United States or a state of the United States; or any other body or organization, that has jurisdiction over the operations of a publicly owned utility; the facility of a publicly owned utility, or a facility operated in whole or in part for the benefit of a publicly owned utility; or the water or wastewater pumped, acquired, treated, or sold by a publicly owned utility.

(2) “Mandating entity” does not include a local agency that owns the publicly owned utility.

(m) “Proposition 1A receivable” means the right to payment of moneys due or to become due to a local agency, pursuant to clause (iii) of subparagraph (B) of paragraph (1) of subdivision (a) of Section 25.5 of Article XIII of the California Constitution and Section 100.06 of the Revenue and Taxation Code.

(n) “Public capital improvements” means one or more projects specified in Section 6546.

(o) “Publicly owned utility” means a local publicly owned electric utility, as defined in Section 224.3 of the Public Utilities Code, or a utility furnishing water or wastewater service to not less than 25,000 retail customers that is owned and operated by a local agency or a department or other subdivision of a local agency and includes any successor to the powers and functions of the department or other subdivision.

(p) “Rate reduction bonds” mean bonds that are issued by an authority, the proceeds of which are used directly or indirectly to pay or reimburse a local agency or its publicly owned utility for the payment of the costs of a utility project, to refund rate reduction bonds, or to refinance water, wastewater, or electric revenue bonds of a local agency or publicly owned utility issued to finance a utility project, and that are secured by a pledge of, and are payable from, utility project property as provided in Section 6588.7.

(q) “Revenue” means income and receipts of the authority from any of the following:

(1) A bond purchase agreement.

(2) Bonds acquired by the authority.

(3) Loans installment sale agreements, and other revenue-producing agreements entered into by the authority.

(4) Projects financed by the authority.

(5) Grants and other sources of income.

(6) VLF receivables purchased pursuant to Section 6588.5.

(7) Proposition 1A receivables purchased pursuant to Section 6588.6.

(8) Interest or other income from any investment of any money in any fund or account established for the payment of principal or interest or premiums on bonds.

(r) “Utility project” means the acquisition, construction, installation, retrofitting, rebuilding, or other addition to, or improvement of, any equipment, device, structure, improvement, process, facility, technology, rights or property, located either within, or outside of, the State of California, and that is used, or to be used, in connection with the existing or future operations of a publicly owned utility for any of the following purposes:

(1) Conservation or reclamation purposes.

(2) For the provision of generation, transmission, or distribution of electrical service.

(3) In response to a mandate.

(4) For any other utility purpose designated a “utility project” by a publicly owned utility.

(s) “Utility project charge” means a charge paid or to be paid by customers of a publicly owned utility to pay financing costs of rate reduction bonds issued to finance or refinance a utility project for a publicly owned utility that is imposed pursuant to Section 6588.7, including any adjustment of the charge pursuant to Section 6588.7.

(t) “Utility project property” means the property right created pursuant to Section 6588.7, including without limitation, the right, title, and interest of an authority for any of the following:

(1) In and to the financing resolution and the utility charge established with respect to the rate reduction bonds, as adjusted from time to time in accordance with Section 6588.7.

(2) To be paid the financing costs of the rate reduction bonds and to all revenues, collections, claims, payments, moneys, or proceeds for, or arising from, the utility project charge relating to the rate reduction bonds.

(3) In and to all rights to obtain adjustments to the utility project charge relating to the rate reduction bonds pursuant to Section 6588.7.

(u) “VLF receivable” means the right to payment of moneys due or to become due to a local agency out of funds payable in connection with vehicle license fees to a local agency pursuant to Section 10754.11 of the Revenue and Taxation Code.

(v) “Working capital” means money to be used by, or on behalf of, a local agency for any purpose for which a local agency may borrow money pursuant to Section 53852, or for any purpose for which a VLF receivable or a Proposition 1A receivable sold to an authority could have been used by the local agency.

history: (History: Amended by Stats. 2021, Ch. 233, Sec. 2. (AB 758) Effective January 1, 2022.)

title: 1. GENERAL

article: 4. Local Bond Pooling


citation: GOV § 6586

text:
It is the Legislature’s intent that this article be used to assist local agencies in financing public capital improvements, working capital, liability and other insurance needs, or projects whenever there are significant public benefits for taking that action. For the purposes of this article, “significant public benefits” means any of the following benefits to the citizens of the local agency:

(a) Demonstrable savings in effective interest rate, bond preparation, bond underwriting, or bond issuance costs.

(b) Significant reductions in effective user charges levied by a local agency.

(c) Employment benefits from undertaking the project in a timely fashion.

(d) More efficient delivery of local agency services to residential and commercial development.

history: (History: Amended by Stats. 1998, Ch. 35, Sec. 1. Effective January 1, 1999.)

title: 1. GENERAL

article: 4. Local Bond Pooling


text:
(a) Notwithstanding Section 6587, an authority, or any entity acting on behalf of or for the benefit of an authority, may not authorize bonds to construct, acquire, or finance a public capital improvement except pursuant to Article 1 (commencing with Section 6500), unless all of the following conditions are satisfied with respect to each capital improvement to be constructed, acquired, or financed:

(1) The authority reasonably expects that the public capital improvement is to be located within the geographic boundaries of one or more local agencies of the authority that is not itself an authority.

(2) A local agency that is not itself an authority, within whose boundaries the public capital improvement is to be located, has approved the financing of the public capital improvement and made a finding of significant public benefit in accordance with the criteria specified in Section 6586 after a public hearing held by that local agency within each county or city and county where the public capital improvement is to be located after notice of the hearing is published once at least five days prior to the hearing in a newspaper of general circulation in each affected county or city and county. If the public capital improvement to be financed will provide infrastructure, services, or a golf course to support, or in conjunction with, any development project, the local agency for purposes of this subdivision shall be the city, county, or city and county with land use jurisdiction over the development project.

(3) A notice is sent by certified mail at least five business days prior to the hearing held pursuant to paragraph (2) to the Attorney General and to the California Debt and Investment Advisory Commission. This notice shall contain all of the following information:

(A) The date, time, and exact location of the hearing.

(B) The name and telephone number of the contact person.

(C) The name of the joint powers authority.

(D) The names of all members of the joint powers authority.

(E) The name, address, and telephone number of the bond counsel.

(F) The name, address, and telephone number of the underwriter.

(G) The name, address, and telephone number of the financial adviser, if any.

(H) The name, address, and telephone number of the legal counsel of the authority.

(I) The prospective location of the public capital improvement described by its street address, including city, county, and ZIP Code, or, if none, by a general description designed to inform readers of its specific location, including both the county and the ZIP Code that covers the specific location.

(J) A general functional description of the type and use of the public capital improvement to be financed.

(K) The maximum aggregate face amount of obligations to be issued with respect to the public capital improvement.

(b) Paragraph (3) of subdivision (a) does not apply to bonds:

(1) Issued pursuant to the Community Redevelopment Law, Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code.

(2) To finance transportation facilities and vehicles.

(3) To finance a facility that is located within the boundaries of an authority, provided that the authority that issues those bonds consists of any of the following:

(A) Local agencies with overlapping boundaries.

(B) A county and a local agency or local agencies located entirely within that county.

(C) A city and a local agency or local agencies located entirely within that city.

(4) To finance a facility for which an authority has received an allocation from the California Debt Limit Allocation Committee.

(5) Of an authority that consists of no less than 100 local agencies and the agreement that established that authority requires the governing body of the local agency that is a member of the authority in whose jurisdiction the facility will be located to approve the facility and the issuance of the bonds.

(c) This section and Section 6586.7 do not apply to bonds issued for any of the following purposes:

(1) To finance the undergrounding of utility and communication lines.

(2) To finance, consistent with the provisions of this chapter, facilities for the generation or transmission of electrical energy for public or private uses and all rights, properties, and improvements necessary therefor, including fuel and water facilities and resources.

(3) To finance facilities for the production, storage, transmission, or treatment of water, recycled water, or wastewater.

(4) To finance public school facilities.

(5) To finance public highways located within the jurisdiction of an authority that is authorized to exercise the powers specified in Chapter 5 (commencing with Section 31100) of Division 17 of the Streets and Highways Code, provided that the authority conducts the noticed public hearing and makes the finding of significant public benefit in accordance with this section.

(d) For purposes of this section, a local agency does not include a private entity.

history: (History: Amended by Stats. 2001, Ch. 56, Sec. 1. Effective January 1, 2002.)

title: 1. GENERAL

article: 4. Local Bond Pooling


text:
(a) A copy of the resolution adopted by an authority authorizing bonds or any issuance of bonds, or accepting the benefit of any bonds or proceeds of bonds, except bonds issued or authorized pursuant to Article 1 (commencing with Section 6500), or bonds issued for the purposes specified in subdivision (c) of Section 6586.5, shall be sent by certified mail to the Attorney General and the California Debt and Investment Advisory Commission not later than five days after adoption by the authority.

(b) This section does not apply to bonds:

(1) Specified in subdivision (c) of Section 6586.5.

(2) Issued pursuant to the Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code).

(3) To finance transportation facilities and vehicles.

(4) To finance a facility that is located within the boundaries of an authority, provided that the authority that issues those bonds consists of any of the following:

(A) Local agencies with overlapping boundaries.

(B) A county and a local agency or local agencies located entirely within that county.

(C) A city and a local agency or local agencies located entirely within that city.

(5) To finance a facility for which an authority has received an allocation from the California Debt Limit Allocation Committee.

(6) Of an authority that consists of no less than 100 local agencies and the agreement that established that authority requires the governing body of the local agency that is a member of the authority in whose jurisdiction the facility will be located to approve the facility and the issuance of the bonds.

(7) Issued pursuant to Section 6588.8.

history: (History: Amended (as added by Stats. 2000, Ch. 724, Sec. 1) by Stats. 2017, Ch. 430, Sec. 4. (SB 564) Effective January 1, 2018.)

title: 1. GENERAL

article: 4. Local Bond Pooling


citation: GOV § 6587

text: This article does not limit any other law authorizing, or providing for, the financing of public capital improvements. Likewise, this article does not limit any other law regarding local indebtedness, or limit the exercise of any other power of an authority created pursuant to this chapter. This article shall be deemed to provide a complete and supplemental method for exercising the powers authorized by this article, and shall be deemed as being supplemental to the powers conferred by other applicable laws. The issuance of bonds, financing, or refinancing under this article need not comply with the requirements of any other state laws applicable to the issuance of bonds, including, but not limited to, other articles of this chapter.

history: (History: Amended by Stats. 1989, Ch. 1264, Sec. 4.)

title: 1. GENERAL

article: 4. Local Bond Pooling


citation: GOV § 6588

text:
In addition to other powers specified in an agreement pursuant to Article 1 (commencing with Section 6500) and Article 2 (commencing with Section 6540), the authority may do any or all of the following:

(a) Adopt bylaws for the regulation of its affairs and the conduct of its business.

(b) Sue and be sued in its own name.

(c) Issue bonds, including, at the option of the authority, bonds bearing interest, to pay the cost of any public capital improvement, working capital, or liability or other insurance program. In addition, for any purpose for which an authority may execute and deliver or cause to be executed and delivered certificates of participation in a lease or installment sale agreement with any public or private entity, the authority, at its option, may issue or cause to be issued bonds, rather than certificates of participation, and enter into a loan agreement with the public or private entity.

(d) Engage the services of private consultants to render professional and technical assistance and advice in carrying out the purposes of this article.

(e) As provided by applicable law, employ and compensate bond counsel, financial consultants, and other advisers determined necessary by the authority in connection with the issuance and sale of any bonds.

(f) Contract for engineering, architectural, accounting, or other services determined necessary by the authority for the successful development of a public capital improvement.

(g) Pay the reasonable costs of consulting engineers, architects, accountants, and construction, land-use, recreation, and environmental experts employed by any sponsor or participant if the authority determines those services are necessary for the successful development of public capital improvements.

(h) Take title to, sell by installment sale or otherwise, or lease lands, structures, real or personal property, rights, rights-of-way, franchises, easements, and other interests in lands that are located within the state that the authority determines are necessary or convenient for the financing of public capital improvements, or any portion thereof.

(i) Receive and accept from any source, loans, contributions, or grants, in either money, property, labor, or other things of value, for, or in aid of, the construction financing, or refinancing of public capital improvement, or any portion thereof or for the financing of working capital or insurance programs, or for the payment of the principal of and interest on bonds if the proceeds of those bonds are used for one or more of the purposes specified in this section.

(j) Make secured or unsecured loans to any local agency in connection with the financing of capital improvement projects, working capital or insurance programs in accordance with an agreement between the authority and the local agency. However, no loan shall exceed the total cost of the public capital improvements, working capital or insurance needs of the local agency as determined by the local agency and by the authority.

(k) Make secured or unsecured loans to any local agency in accordance with an agreement between the authority and the local agency to refinance indebtedness incurred by the local agency in connection with public capital improvements undertaken and completed.

(l) Mortgage all or any portion of its interest in public capital improvements and the property on which any project is located, whether owned or thereafter acquired, including the granting of a security interest in any property, tangible or intangible.

(m) Assign or pledge all or any portion of its interests in mortgages, deeds of trust, indentures of mortgage or trust, or similar instruments, notes, and security interests in property, tangible or intangible, of a local agency to which the authority has made loans, and the revenues therefrom, including payment or income from any interest owned or held by the authority, for the benefit of the holders of bonds issued to finance public capital improvements. The pledge of moneys, revenues, accounts, contract rights, or rights to payment of any kind made by or to the authority pursuant to the authority granted in this part shall be valid and binding from the time the pledge is made for the benefit of the pledgees and successors thereto, against all parties irrespective of whether the parties have notice of the claim.

(n) Lease the public capital improvements being financed to a local agency, upon terms and conditions that the authority deems proper; charge and collect rents therefor; terminate any lease upon the failure of the lessee to comply with any of the obligations of the lease; include in any lease provisions that the lessee shall have options to renew the lease for a period or periods, and at rents as determined by the authority; purchase or sell by an installment agreement or otherwise any or all of the public capital improvements; or, upon payment of all the indebtedness incurred by the authority for the financing or refinancing of the public capital improvements, the authority may convey any or all of the project to the lessee or lessees.

(o) Charge and apportion to local agencies that benefit from its services the administrative costs and expenses incurred in the exercise of the powers authorized by this article. These fees shall be set at a rate sufficient to recover, but not exceed, the authority’s costs of issuance and administration. The fee charged to each local obligation acquired by the pool shall not exceed that obligation’s proportionate share of those costs. The level of these fees shall be disclosed to the California Debt and Investment Advisory Commission pursuant to Section 6599.1.

(p) Issue, obtain, or aid in obtaining, from any department or agency of the United States or of the state, or any private company, any insurance or guarantee to, or for, the payment or repayment of interest or principal, or both, or any part thereof, on any loan, lease, or obligation or any instrument evidencing or securing the same, made or entered into pursuant to this article.

(q) Notwithstanding any other provision of this article, enter into any agreement, contract, or any other instrument with respect to any insurance or guarantee; accept payment in the manner and form as provided therein in the event of default by a local agency; and assign any insurance or guarantee that acts as security for the authority’s bonds.

(r) Enter into any agreement or contract, execute any instrument, and perform any act or thing necessary, convenient, or desirable to carry out any power authorized by this article.

(s) Invest any moneys held in reserve or sinking funds, or any moneys not required for immediate use or disbursement, in obligations that are authorized by law for the investment of trust funds.

(t) At the request of affected local agencies, combine and pledge revenues to public capital improvements for repayment of one or more series of bonds issued pursuant to this article.

(u) Delegate to any of its individual parties or other responsible individuals the power to act on its behalf subject to its general direction, guidelines, and oversight.

(v) Purchase, with the proceeds of its bonds or its revenue, bonds issued by any local agency at public or negotiated sale. Bonds purchased pursuant to this subdivision may be held by the authority or sold to public or private purchasers at public or negotiated sale, in whole or in part, separately or together with other bonds issued by the authority.

(w) Purchase, with the proceeds of its bonds or its revenue, VLF receivables sold to the authority pursuant to Section 6588.5. VLF receivables so purchased may be pledged to the payment of bonds issued by the authority or may be resold to public or private purchasers at public or negotiated sale, in whole or in part, separately or together with other VLF receivables purchased by the authority.

(x) (1) Purchase, with the proceeds of its bonds or its revenue, Proposition 1A receivables pursuant to Section 6588.6. Proposition 1A receivables so purchased may be pledged to the payment of bonds issued by the authority or may be resold to public or private purchasers at public or negotiated sales, in whole or in part, separately or together with other Proposition 1A receivables purchased by the authority.

(2) (A) All entities subject to a reduction of ad valorem property tax revenues required under Section 100.06 of the Revenue and Taxation Code pursuant to the suspension set forth in Section 100.05 of the Revenue and Taxation Code shall be afforded the opportunity to sell their Proposition 1A receivables to the authority.

(B) If these entities offer Proposition 1A receivables to the authority for purchase and duly authorize the sale of the Proposition 1A receivable pursuant to documentation approved by the authority, the authority shall purchase all Proposition 1A receivables so offered to the extent it can sell bonds therefor. If the authority does not purchase all Proposition 1A receivables offered, it shall purchase a pro rata share of each entity’s offered Proposition 1A receivables.

(C) The authority may establish a deadline, no earlier than November 3, 2009, by which these entities shall offer their Proposition 1A receivables for sale to the authority and complete the application required by the authority.

(3) For purposes of meeting costs incurred in performing its duties relative to the purchase and sale of Proposition 1A receivables, the authority shall be authorized to charge a fee to each entity from which it purchases a Proposition 1A receivable. The fee shall be computed based on the percentage value of the Proposition 1A receivable purchased from each entity, in relation to the value of all Proposition 1A receivables purchased by the authority. The amount of the fee shall be paid from the proceeds of the bonds and shall be included in the principal amount of the bonds.

(4) Terms and conditions of any and all fees and expenses charged by the authority, or those it contracts with, and the terms and conditions of sales of Proposition 1A receivables and bonds issued pursuant to this subdivision, including the terms of optional early redemption provisions, if any, shall be approved by the Treasurer and the Director of Finance, who shall not unreasonably withhold their approval. The aggregate principal amount of all bonds issued pursuant to this subdivision shall not exceed two billion two hundred fifty million dollars ($2,250,000,000), and the rate of interest paid on those bonds shall not exceed 8 percent per annum. The authority shall exercise its best efforts to obtain the lowest cost financing possible. Any and all premium obtained shall be used for either of the following:

(A) Applied to pay the costs of issuance of the bonds.

(B) Deposited in a trust account that is pledged to bondholders and used solely for the payment of interest on, or for repayment of, the bonds.

(5) (A) In connection with any financing backed by Proposition 1A receivables, the Treasurer may retain financial advisors, legal counsel, and other consultants to assist in performing the duties required by this chapter and related to that financing.

(B) Notwithstanding any other law, none of the following shall apply to any agreements entered into by the Treasurer pursuant to subparagraph (A) in connection with any Proposition 1A financing:

(i) Section 11040 of the Government Code.

(ii) Section 10295 of the Public Contract Code.

(iii) Article 3 (commencing with Section 10300) and Article 4 (commencing with Section 10335) of, Chapter 2 of Part 2 of Division 2 of the Public Contract Code, except for the authority of the Department of Finance under Section 10336 of the Public Contract Code to direct a state agency to transmit to it a contract for review, and except for Section 10348.5 of the Public Contract Code.

(C) Any costs incurred by the Treasurer in connection with any Proposition 1A financing shall be reimbursed out of the proceeds of the financing.

(y) Set any other terms and conditions on any purchase or sale pursuant to this section as it deems by resolution to be necessary, appropriate, and in the public interest, in furtherance of the purposes of this article.

history: (History: Amended by Stats. 2013, Ch. 219, Sec. 1. (SB 692) Effective January 1, 2014.)

title: 1. GENERAL

article: 4. Local Bond Pooling


text:
(a) An authority that was in existence at the time of the enactment of this section may purchase, with the proceeds of its bonds or its revenue, VLF receivables from one or more local agencies. The authority may pledge, assign, resell or otherwise transfer or hypothecate any VLF receivables for the purpose of securing bonds issued to finance the purchase price of the VLF receivables.

(b) Notwithstanding any other provision of law, local agencies may sell VLF receivables to the authority, at one time or from time to time, and to enter into one or more sales agreements with an authority as and on the terms the local agency deems appropriate. The sales agreement may include covenants of, and binding on, the local agency necessary to establish and maintain the security of bonds issued by the authority for the purpose of purchasing the VLF receivables and, if applicable, the exclusion from gross income of interest on the bonds for federal income tax purposes. Any transfer of some or all of a VLF receivable by a local agency to the authority under this article that the governing documents state is a sale shall be treated as an absolute sale and transfer of the property so transferred to the authority and not as a pledge or grant of a security interest by the local agency to secure a borrowing. The characterization of the transfer of any VLF receivable as an absolute sale by the local agency shall not be negated or adversely affected by any of the following:

(1) The fact that only a portion of the VLF receivable is transferred.

(2) By the local agency’s acquisition of an ownership interest in any residual interest or a subordinate interest in the VLF receivable.

(3) By any characterization of the authority or its bonds for purposes of accounting, taxation, or securities regulation.

(4) By any other factor.

(c) On and after the effective date of each transfer of a VLF receivable under this article that the governing documents state is a sale, the local agency shall have no right, title, or interest in or to the VLF receivable transferred, and the VLF receivable so transferred shall be the property of the authority and not of the local agency, and shall be owned, received, held, and disbursed only by the authority or any trustee or agent of the authority appointed by the authority. Any sale of some or all of any VLF receivable shall automatically be perfected without the need for physical delivery, recordation, filing, or further act, and the provisions of Division 9 (commencing with Section 9101) of the Commercial Code and Sections 954.5 to 955.1, inclusive, of the Civil Code shall not apply to the sale. None of the VLF receivables sold by the local agency pursuant to this article shall be subject to garnishment, levy, execution, attachment, or other process, writ, including, but not limited to, a writ of mandate, or remedy in connection with the assertion or enforcement of any debt, claim, settlement, or judgment against the local agency. On or before the effective date of any sale of a VLF receivable, the local agency shall notify the Controller that the VLF receivable has been sold to the authority and irrevocably instruct the payor that, as of the effective date, payments on the VLF receivable so sold are to be made directly to the authority or any trustee or agent appointed by the authority.

(d) The state hereby covenants, for the benefit of the holders of any bonds issued by the authority pursuant to this article payable from VLF receivables purchased by the authority, that it will not take any action that would materially adversely affect the interest of the holders of these bonds or otherwise impair the security of these bonds, so long as any of these bonds remain outstanding.

history: (History: Added by Stats. 2004, Ch. 211, Sec. 4. Effective August 5, 2004.)

title: 1. GENERAL

article: 4. Local Bond Pooling


text:
(a) An authority that was in existence on July 28, 2009, may purchase, with the proceeds of its bonds or its revenue, Proposition 1A receivables from one or more local agencies. The authority may pledge, assign, resell, or otherwise transfer or hypothecate any Proposition 1A receivables for the purpose of securing bonds issued to finance the purchase price of the Proposition 1A receivables.

(b) Notwithstanding any other law, local agencies may sell Proposition 1A receivables to the authority and enter into one or more sales agreements with an authority as, and on the terms, the local agency deems appropriate. The sales agreement may include covenants of, and binding on, the local agency as necessary to establish and maintain the security of bonds issued by the authority for the purpose of purchasing the Proposition 1A receivables and, if applicable, the exclusion from gross income of interest on the bonds for federal income tax purposes. Any transfer of some or all of a Proposition 1A receivable by a local agency to the authority under this article that the governing documents state is a sale shall be treated as an absolute sale and transfer of the property so transferred to the authority and not as a pledge or grant of a security interest by the local agency to secure a borrowing. The characterization of the transfer of any Proposition 1A receivable as an absolute sale by the local agency shall not be negated or adversely affected by any of the following:

(1) The fact that only a portion of the Proposition 1A receivable is transferred.

(2) By the local agency’s acquisition of an ownership interest in any residual interest or a subordinate interest in the Proposition 1A receivable.

(3) By any characterization of the authority or its bonds for purposes of accounting, taxation, or securities regulation.

(4) By any other factor.

(c) On and after the effective date of each transfer of a Proposition 1A receivable under this article that the governing documents state is a sale, the local agency shall have no right, title, or interest in or to the Proposition 1A receivable transferred, and the Proposition 1A receivable so transferred shall be the property of the authority and not of the local agency, and shall be owned, received, held, and disbursed only by the authority or any trustee or agent of the authority appointed by the authority. Any sale of some or all of any Proposition 1A receivable shall automatically be perfected without the need for physical delivery, recordation, filing, or further act, and the provisions of Division 9 (commencing with Section 9101) of the Commercial Code and Sections 954.5 to 955.1, inclusive, of the Civil Code shall not apply to the sale. None of the Proposition 1A receivables sold by the local agency pursuant to this article shall be subject to garnishment, levy, execution, attachment, or other process, writ, including, but not limited to, a writ of mandate, or remedy in connection with the assertion or enforcement of any debt, claim, settlement, or judgment against the local agency. On or before the effective date of any sale of a Proposition 1A receivable, the local agency shall notify the Controller that the Proposition 1A receivable has been sold to the authority and irrevocably instruct the payer that, as of the effective date, payments on the Proposition 1A receivable so sold are to be made directly to the authority or any trustee or agent appointed by the authority.

(d) The state hereby covenants, for the benefit of the holders of any bonds issued by the authority pursuant to this article payable from Proposition 1A receivables purchased by the authority, that it will not take any action that would materially adversely affect the interest of the holders of these bonds or otherwise impair the security of these bonds, so long as any of these bonds remain outstanding.

(e) (1) On or before September 15, 2009, each county auditor shall prepare a list of each taxing agency within the county containing the name of the taxing agency and the estimated amount of the Proposition 1A receivable for each taxing agency.

(2) On or before October 30, 2009, each county auditor shall prepare a list of each taxing agency within the county containing the name of the taxing agency and the final certified amount of the Proposition 1A receivable for each taxing agency.

(3) A list prepared pursuant to paragraph (1) or (2) shall be made available to the authority, the Department of Finance, or any taxing agency upon request.

(4) The authority and the holders of the authority’s bonds issued to finance Proposition 1A receivables shall be entitled to rely on the certified list prepared pursuant to paragraph (2).

history: (History: Amended by Stats. 2009, Ch. 634, Sec. 3. (SB 67) Effective October 19, 2009.)

title: 1. GENERAL

article: 4. Local Bond Pooling


text:
(a) An authority whose financing activities are limited to financing utility projects and projects for the use or benefit of public agencies providing water, wastewater, or electrical service may finance utility projects as provided in this section, including the issuance of rate reduction bonds and the imposition and adjustment of utility project charges.

(b) (1) A local agency that owns and operates a publicly owned utility may apply to an authority specified in subdivision (a) to finance costs of a utility project for the publicly owned utility with the proceeds of rate reduction bonds if at the time of application, bonds payable from revenues of the publicly owned utility are, or upon issuance would be, rated investment grade by a nationally recognized rating agency. In its application to an authority for the financing or refinancing, the local agency shall specify the utility project to be financed by the rate reduction bonds, the maximum principal amount, the maximum interest rate, and the maximum stated terms of the rate reduction bonds.

(2) (A) In order to allow the state to review the issuance of rate reduction bonds, collect data, ensure transparency, and conduct an independent analysis of the effectiveness of the use of rate reduction bonds pursuant to this section, the Capital Programs and Climate Financing Authority, as defined in Section 44504 of the Health and Safety Code, shall review each issue of bonds and shall determine whether the issue is qualified for issuance under the provisions of this section. The Capital Programs and Climate Financing Authority shall determine that an issue of rate reduction bonds is qualified for issuance under this section, if the issuance satisfies all of the following:

(i) The issuance meets the criteria specified in paragraphs (1) to (3), inclusive, of subdivision (c), or, if the local agency elects to make a determination under paragraph (4) of subdivision (c), meets the criteria specified in paragraphs (1), (2), and (4) of subdivision (c).

(ii) The projected financing costs fall within the normal range of financing costs for comparable types of debt issuance.

(B) The Capital Programs and Climate Financing Authority shall determine that an issue of rate reduction bonds is qualified for issuance pursuant to subparagraph (A) solely on the basis of the submitted documentation referred to in subparagraph (A), and the determination shall not be conditional in any respect, including conditional on the submission or review of additional material after the determination.

(3) The Capital Programs and Climate Financing Authority shall establish procedures for the expeditious review of a proposed issuance pursuant to this section, including, but not limited to, the establishment of reasonable application fees to reimburse the Capital Programs and Climate Financing Authority for costs incurred in administering this section. The Capital Programs and Climate Financing Authority may charge additional fees in an amount equal to the amount of any additional expenses incurred by the authority in retaining an independent financial advisor to review the application under circumstances involving the verification of all requirements of this section. Any fees for review and processing of the application shall be nonrefundable.

(4) The Capital Programs and Climate Financing Authority shall provide an explanation in writing for any refusal to qualify a proposed issuance but may not alter or modify any term or condition related to the utility project property.

(5) The Capital Programs and Climate Financing Authority shall take action on any completed application submitted to it pursuant to this section no later than the next meeting of the Capital Programs and Climate Financing Authority that occurs after at least 60 days following receipt of the application.

(6) The review and qualification pursuant to this section may be concurrent with an authority’s processing of an application for financing or refinancing so as to allow for the issuance of rate reduction bonds as quickly as feasible.

(7) Notwithstanding any other law, the Capital Programs and Climate Financing Authority may adopt regulations relating to this section as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3. For purposes of that chapter, including Section 11349.6, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare.

(8) (A) Annually, no later than March 31, the Capital Programs and Climate Financing Authority shall submit to the Legislature, including to the relevant legislative policy committees having jurisdiction over energy and public utilities issues, a report of its activities pursuant to this section for the preceding calendar year ending December 31. The Capital Programs and Climate Financing Authority shall require information from applicants to ensure that the necessary data is available to complete this report. The report may be submitted as a part of the report required pursuant to Section 44538 of the Health and Safety Code. The report shall include all of the following:

(i) A listing of applications received.

(ii) A listing of proposed issuances qualified under the provisions of this section.

(iii) A report of bonds sold, the interest rates on the bonds, whether the bond sales were pursuant to public bid or were negotiated, and any rating given the bonds by a nationally recognized securities rating organization.

(iv) A specification of proposed issuances qualified but not yet issued.

(v) A comparison of the interest rates and transactional costs on issuances qualified under this section with interest rates on comparable types of debt issuance occurring at or near the same time as the issuances.

(B) A report to be submitted pursuant to this paragraph shall be submitted in compliance with Section 9795.

(9) The provisions of paragraphs (2) to (8), inclusive, shall not apply to the issuance of rate reduction bonds for a publicly owned utility if the determinations of the local agency pursuant to subdivision (c) are subject to review by a ratepayer advocate or similar entity whose function is to provide public independent analysis of a public utility’s actions as they relate to water, wastewater, or electric rates.

(c) A local agency shall not apply to an authority for financing or refinancing of a utility project pursuant to this section unless the legislative body of the local agency has determined all of the following:

(1) The project to be financed or refinanced is a utility project.

(2) The local agency is electing to finance or refinance costs of the utility project pursuant to this section and the financing costs associated with the financing or refinancing are to be paid from utility project property, including the utility project charge for the rate reduction bonds issued for the utility project in accordance with this section.

(3) Based on information available to, and projections used by, the legislative body, the rates of the publicly owned utility plus the utility project charge resulting from the financing or refinancing of the utility project with rate reduction bonds are expected to be lower than the rates of the publicly owned utility if the utility project was financed or refinanced with bonds payable from revenues of the publicly owned utility.

(4) A local agency with a publicly owned utility having 500,000 or more retail customers may, in lieu of making the determination in paragraph (3), determine that the use of rate reduction bonds to finance or refinance utility projects provides substantial benefits to the publicly owned utility. These benefits may include, but are not limited to, lower interest rates on rate reduction bonds and more favorable capitalization and debt service coverage ratio treatment that results in gross or present value lifetime savings for the publicly owned utility.

(d) (1) Subject to the requirements of Article XIII D of the California Constitution, to the extent applicable, an authority financing the costs of a utility project or projects for a local agency’s publicly owned utility with rate reduction bonds is authorized and directed to impose and collect a utility project charge with respect to the rate reduction bonds as provided in this section. The imposition of the utility project charge shall be made and evidenced by the adoption of a financing resolution by the governing body of the authority. Upon the issuance of rate reduction bonds, the financing resolution adopted in connection with the issuance of rate reduction bonds shall be irrevocable. The financing resolution with respect to financing or refinancing a utility project or projects with rate reduction bonds for a publicly owned utility shall include all of the following:

(A) The addition of a separate charge to the bill of each customer of the publicly owned utility in the class or classes of customers specified in the financing resolution.

(B) A description of the financial calculation, formula, or other method that the authority is to use to determine the utility project charge. The calculation, formula, or other method shall include a periodic adjustment method to the then current utility project charge, to be applied at least annually, that shall be used by the authority to correct for any overcollection or undercollection of financing costs from the utility project charge or any other adjustment necessary to ensure timely payment of the financing costs of the rate reduction bonds, including, but not limited to, the adjustment of the utility project charge to pay any debt service coverage requirement for the rate reduction bonds. The financial calculation, formula, or other method, including the periodic adjustment method, established in the financing resolution pursuant to this section, and the allocation of utility project charges to, and among, customers of the publicly owned utility shall be decided solely by the governing body of the authority and shall be final and conclusive. In no event shall the periodic adjustment method established in the financing resolution be applied less frequently than required by the financing resolution and the documents relating to the applicable rate reduction bonds. Once the financial calculation, formula, or other method for determining the utility project charge, and the periodic adjustment method, have been established in the financing resolution and have become final and conclusive as provided in this section, they shall not be changed.

(C) Notwithstanding any other provision of this section, the imposition of a utility project charge shall comply with the requirements of Article XIIID of the California Constitution, to the extent applicable, including, but not limited to, the provision of a notice containing the initial amount of the proposed utility project charge and the periodic adjustment method by which the utility project charge amount could subsequently change.

(D) A requirement that the authority enter into a servicing agreement for the collection of the utility project charge with the local agency for which the financing is undertaken or its publicly owned utility and the local agency or its publicly owned utility shall act as a servicing agent for purposes of collecting the utility project charge as long as the servicing agreement remains in effect. Moneys collected by the local agency or its publicly owned utility, acting as a servicing agent on behalf of the authority, as a utility project charge shall be held in trust for the exclusive benefit of the persons entitled to the financing costs to be paid, directly or indirectly, from the utility project charge and shall not lose their character as revenues of the authority by virtue of possession by the local agency or its publicly owned utility. The local agency or its publicly owned utility shall provide the authority with the information as to estimated sales of water, wastewater, or electrical services and any other information concerning the publicly owned utility required by the authority in connection with the initial establishment and the adjustment of the utility project charge.

(2) The determination of the legislative body of the local agency that a project to be financed with rate reduction bonds is a utility project shall be final and conclusive and the rate reduction bonds issued to finance the utility project and the utility project charge imposed relating to the rate reduction bonds shall be valid and enforceable in accordance with the terms of the financing resolution and the documents relating to the rate reduction bonds. The authority shall require, in its financing resolution with respect to a utility project charge, that as long as a customer in the class or classes of customers specified in the financing resolution receive water or electricity or discharge wastewater through the facilities of the publicly owned utility, the customer shall pay the utility project charge regardless of whether or not the customer has an agreement to purchase water or electricity or discharge wastewater from a person or entity other than the publicly owned utility. The utility project charge shall be a nonbypassable charge to all customers of the publicly owned utility in the class or classes of customers specified in the financing resolution at the time of adoption of the financing resolution and all future customers in that class or classes. If a customer of the publicly owned utility that is subject to a utility project charge enters into an agreement to purchase water or electricity or discharge wastewater from a person or entity other than the publicly owned utility, the customer shall remain liable for the payment of its share of the utility project charge as if it had not entered into the agreement. The liability may be discharged by the continued payment of its share of the utility project charge as it accrues or by a one-time payment, as determined by the authority. All provisions of a financing resolution adopted pursuant to this subdivision shall be binding on the authority.

(3) The timely and complete payment of all utility project charges by a person liable for the charges shall be a condition of receiving water, wastewater, or electrical service, as applicable, from the publicly owned utility of the local agency and each of the local agencies and their publicly owned utilities is authorized to use its established collection policies and all rights and remedies provided by law to enforce payment and collection of the utility project charge. In no event shall a person liable for a utility project charge be entitled or authorized to withhold payment, in whole or in part, of the utility project charge for any reason.

(4) The authority shall determine whether adjustments to the utility project charge relating to rate reduction bonds are required upon the issuance of the rate reduction bonds and at least annually, and at additional intervals as may be provided for in the financing resolution or the documents relating to the rate reduction bonds. Each adjustment shall be made and put into effect in accordance with the financial calculation, formula, or other method that the authority is to use to determine the utility project charge pursuant to the financing resolution expeditiously after the authority’s determination that the adjustment is required.

(5) All revenues with respect to utility project property related to rate reduction bonds, including payments of the utility project charge, shall be applied first to the payment of the financing costs of the related rate reduction bonds then due, including the funding of reserves for the rate reduction bonds, with any excess being applied as determined by the authority for the benefit of the utility for which the rate reduction bonds were issued.

(6) The authority shall be obligated to impose and collect the utility project charge relating to rate reduction bonds in amounts, based on estimates of water or electricity usage or wastewater discharge subject to the utility project charge, sufficient to pay on a timely basis the financing costs associated with the rate reduction bonds when due. The pledge of a utility project charge to secure the payment of rate reduction bonds shall be irrevocable, and the State of California, the authority, or any limited liability company acting pursuant to subdivision (j) shall not reduce, impair, or otherwise adjust the utility project charge, except that the authority shall implement the periodic adjustments to the utility project charge relating to rate reduction bonds as required by the applicable financing resolution and the documents relating to the rate reduction bonds. Revenue from a utility project charge shall be deemed special revenue of the authority and shall not constitute revenue of the local agency or its publicly owned utility for any purpose, including, without limitation, any dedication, commitment, or pledge of revenue, receipts, or other income that the local agency or its publicly owned utility has made or will make for the security of any of its obligations.

(7) A utility project charge shall constitute utility project property when, and to the extent that, a financing resolution authorizing the utility project charge has become effective in accordance with its terms, and the utility project property shall thereafter continuously exist as property for all purposes with all of the rights and privileges of this section for the period, and to the extent, provided in the financing resolution, but in any event until all financing costs with respect to the related rate reduction bonds are paid in full, including all arrearages thereon.

(8) Utility project property shall constitute a current property right notwithstanding that the value of the property right will depend on consumers using water, wastewater, or electrical services or, in those instances where consumers are customers of the publicly owned utility, the publicly owned utility performing certain services.

(9) If a local agency for which rate reduction bonds have been issued and remain outstanding ceases to operate a water, wastewater, or electric utility, either directly or through its publicly owned utility, references in this section to the local agency or to its publicly owned utility shall be to the entity providing water, wastewater, or electrical services in lieu of the local agency and the entity shall assume and perform all obligations of the local agency and its publicly owned utility required by this section and the servicing agreement with the local agency while the rate reduction bonds remain outstanding.

(e) (1) Rate reduction bonds shall be within the parameters of the financing or refinancing set forth by the local agency pursuant to subdivision (b) in connection with the rate reduction bonds and the proceeds of the rate reduction bonds made available to the local agency or its publicly owned utility shall be used for the utility project identified in the application for financing or refinancing of the utility project or projects pursuant to subdivision (b).

(2) An authority shall authorize the issuance of rate reduction bonds by a resolution of its governing body. An authority issuing rate reduction bonds shall include in its preliminary notice and final report for the rate reduction bonds submitted to the California Debt and Investment Advisory Commission pursuant to Section 8855 a statement that the rate reduction bonds are being issued pursuant to this section. An authority issuing rate reduction bonds shall include in its final report for the rate reduction bonds submitted to the California Debt and Investment Advisory Commission pursuant to Section 8855 the estimated savings or local agency benefit, if applicable pursuant to paragraph (4) of subdivision (c), realized by issuing the rate reduction bonds rather than bonds payable from the revenues of the publicly owned utility for whose benefit the rate reduction bonds were issued. Rate reduction bonds shall be nonrecourse to the credit or any assets of the local agency and the publicly owned utility for which the utility project is financed and shall be payable from, and secured by a pledge of, the utility project property relating to the rate reduction bonds and any additional security or credit enhancement specified in the documents relating to the rate reduction bonds.

(3) An authority issuing rate reduction bonds shall pledge the utility project property relating to the rate reduction bonds as security for the payment of the rate reduction bonds, which pledge shall be made pursuant to, and with the effect set forth in Section 5451. All rights of an authority with respect to utility project property pledged as security for the payment of rate reduction bonds shall be for the benefit of, and enforceable by, the beneficiaries of the pledge to the extent provided in the documents relating to the rate reduction bonds.

(4) To the extent that any interest in utility project property is pledged as security for the payment of rate reduction bonds, the applicable local agency or its publicly owned utility shall contract with the authority, which contract shall be part of the utility project property, that the local agency or its publicly owned utility will continue to operate its publicly owned utility system that includes the financed utility project to provide service to its customers, will, as servicer, collect amounts in respect of the utility project charge for the benefit and account of the authority and the beneficiaries of the pledge of the utility project charge and will account for and remit these amounts to, or for the account of, the authority.

(5) Notwithstanding any other law, any requirement under this section, a financing resolution, any other resolution of the authority, or the provisions of the documents relating to rate reduction bonds to the effect that the authority shall take action with respect to the utility project property relating to the rate reduction bonds shall be binding upon the authority, as its governing body may be constituted from time to time, and the authority shall have no power or right to rescind, alter, or amend any resolution or document containing the requirement.

(6) Notwithstanding any other law, except as otherwise provided in this section with respect to adjustments to a utility project charge, the recovery of the financing costs for the rate reduction bonds from the utility project charge shall be irrevocable and the authority shall not have the power either by rescinding, altering, or amending the applicable financing resolution or otherwise, to revalue or revise for ratemaking purposes the financing costs of rate reduction bonds, determine that the financing costs for the related rate reduction bonds or the utility project charge is unjust or unreasonable, or in any way reduce or impair the value of utility project property that includes the utility project charge, either directly or indirectly; nor shall the amount of revenues arising with respect to the financing costs for the related rate reduction bonds or the utility project charge be subject to reduction, impairment, postponement, or termination for any reason until all financing costs to be paid from the utility project charge are fully met and discharged. Except as otherwise provided in this section with respect to adjustments to a utility project charge, the State of California does hereby pledge and agree with the owners of rate reduction bonds that the State of California shall neither limit nor alter the financing costs or the utility project property, including the utility project charge, relating to the rate reduction bonds, or any rights in, to, or under, the utility project property until all financing costs with respect to the rate reduction bonds are fully met and discharged. This section does not preclude limitation or alteration if and when adequate provision shall be made by law for the protection of the owners. The authority is authorized to include this pledge and undertaking by the State of California in the governing documents for rate reduction bonds. Notwithstanding any other provision of this section, the authority shall make the adjustments to the utility project charge relating to rate reduction bonds provided by this section and the documents related to those rate reduction bonds as may be necessary to ensure timely payment of all financing costs with respect to the rate reduction bonds. The adjustments shall not impose the utility project charge upon classes of customers that were not subject to the utility project charge pursuant to the financing resolution imposing the utility project charge.

(f) (1) Financing costs in connection with rate reduction bonds do not constitute a debt or liability of the State of California or of any political subdivision thereof, other than the special obligation of the authority, and do not constitute a pledge of the full faith and credit of the State of California or any of its political subdivisions, including the authority, but are payable solely from the funds provided therefor under this section and in the documents relating to the rate reduction bonds. This subdivision shall in no way preclude guarantees or credit enhancements in connection with rate reduction bonds. All the rate reduction bonds shall contain on the face thereof a statement to the following effect:

Neither the full faith and credit nor the taxing power of the State of California or any political subdivision thereof is pledged to the payment of the principal of, or interest on, this bond.

(2) The issuance of rate reduction bonds shall not directly, indirectly, or contingently obligate the State of California or any political subdivision thereof to levy or to pledge any form of taxation to pay the rate reduction bonds or to make any appropriation for their payment.

(g) (1) Utility project property shall constitute property for all purposes, including for contracts securing rate reduction bonds, whether or not the revenues and proceeds arising with respect thereto have accrued.

(2) Subject to the terms of the pledge document with respect to a pledge of utility project property, the validity and relative priority of a pledge created or authorized under this section is not defeated or adversely affected by the commingling of revenues arising with respect to the utility project property with other funds of the local agency or the publicly owned utility collecting a utility project charge on behalf of an authority.

(h) (1) There shall exist a statutory lien on the utility project property relating to rate reduction bonds. Upon the effective date of the financing resolution relating to rate reduction bonds, there shall exist a first priority statutory lien on all utility project property, then existing or, thereafter arising, to secure the payment of the rate reduction bonds. This lien shall arise pursuant to law by operation of this section automatically without any action on the part of the authority, the local agency or its publicly owned utility, or any other person. This lien shall secure the payment of all financing costs, then existing or subsequently arising, to the holders of the rate reduction bonds, the trustee or representative for the holders of the rate reduction bonds, and any other entity specified in the financing resolution or the documents relating to the rate reduction bonds. This lien shall attach to the utility project property regardless of who shall own, or shall subsequently be determined to own, the utility project property including any local agency or its publicly owned utility, the authority, or any other person. This lien shall be valid and enforceable against the owner of the utility project property and all third parties upon the effectiveness of the financing resolution without any further public notice.

(2) The statutory lien on utility project property created by this section is a continuously perfected lien on all revenues and proceeds arising with respect thereto, whether or not the revenues or proceeds have accrued. Utility project property shall constitute property for all purposes, including for contracts securing rate reduction bonds, whether or not the revenues or proceeds arising with respect thereto have accrued.

(3) In addition, the authority may require, in a financing resolution creating utility project property, that, in the event of default by the local agency or its publicly owned utility, in payment of revenues arising with respect to the utility project property, any court in the state, upon the application by the beneficiaries of the statutory lien, and without limiting any other remedies available to the beneficiaries by reason of the default, shall order the sequestration and payment to the beneficiaries of revenues arising with respect to the utility project property.

(i) Notwithstanding any other law, an authority or a limited liability company acting pursuant to subdivision (j) that has financed a utility project through the issuance of rate reduction bonds is not authorized, and no governmental officer or organization shall be empowered to authorize the authority, to become a debtor in a case under the United States Bankruptcy Code (11 U.S.C. Sec. 101 et seq.) or to become the subject of any similar case or proceeding under any other law, whether federal or State of California, as long as any payment obligation from utility project property remains with respect to the rate reduction bonds.

(j) An authority may elect to implement a financing of a utility project pursuant to this section by forming a single member limited liability company and by authorizing the company to adopt the financing resolution. The authority may issue rate reduction bonds payable from, and secured by a pledge of, amounts paid by the company to the authority from the applicable utility project property pursuant to an agreement. The provisions of subdivisions (g) and (h) shall apply to and be the exclusive method of perfecting a pledge of utility project property by the company securing the payment of financing costs under any agreement of the company in connection with the issuance of rate reduction bonds. Reference to the authority in this section and in all related defined terms shall mean or include the company as necessary to implement this subdivision.

(k) After December 31, 2036, the authority to issue rate reduction bonds under this section terminates.

history: (History: Amended by Stats. 2025, Ch. 710, Sec. 1. (AB 786) Effective January 1, 2026.)

title: 1. GENERAL

article: 4. Local Bond Pooling