BILL NUMBER: ABX4 15 CHAPTERED
BILL TEXT
CHAPTER 14
FILED WITH SECRETARY OF STATE JULY 28, 2009
APPROVED BY GOVERNOR JULY 28, 2009
PASSED THE SENATE JULY 24, 2009
PASSED THE ASSEMBLY JULY 24, 2009
AMENDED IN SENATE JULY 23, 2009
INTRODUCED BY Assembly Members Gaines, Caballero, Conway, Garrick,
and Torres
JULY 2, 2009
An act to amend Section 41204.1 of the Education Code, to amend
Sections 6585, 6588, 6590, 6591, 6592, and 6599.3 of, and to add
Section 6588.6 to, the Government Code, to amend Section 33681.12 of
the Health and Safety Code, and to add Section 100.06 to the Revenue
and Taxation Code, relating to local government finance, making an
appropriation therefor, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 15, Gaines. Property tax revenue allocations.
Existing property tax law requires the county auditor, in each
fiscal year, to allocate property tax revenue among local
jurisdictions in accordance with specified formulas and procedures,
and generally requires that each jurisdiction be allocated an amount
equal to the total amount of revenue allocated to that jurisdiction
in the prior fiscal year, subject to certain modifications, and that
jurisdiction's portion of the annual tax increment, as defined.
The California Constitution prohibits the Legislature from
enacting a statute that modifies the manner of apportioning ad
valorem property tax revenues so as to reduce the percentage of the
total amount of ad valorem property tax revenues that are collected
countywide and allocated among all local agencies, as defined, in a
county below the percentage that these agencies would receive under
the law in effect on the operative date of that prohibition. The
California Constitution authorizes the suspension of that prohibition
for a fiscal year, if certain conditions are met, including the
condition that a full repayment is made to local agencies in an
amount equal to the total amount of revenue losses, including
interest, resulting from modifications of ad valorem property tax
allocation to local agencies.
This bill would generally require the auditor of each county to
reduce the amount of ad valorem property tax revenue apportionments
to each local agency for the 2009-10 fiscal year by 8% of the total
amount of ad valorem property tax revenue apportioned to that local
agency in the 2008-09 fiscal year, and would require each county
auditor to transfer those revenues to a Supplemental Revenue
Augmentation Fund, to be transferred therefrom by the county office
of education to the Controller in amounts as directed by the
Department of Finance to reimburse the state for costs of providing
various services in that county. This bill would require full
repayment to local agencies of the reduction amounts, including
interest, as determined by the Controller, and would make an
appropriation therefor. This bill would authorize the issuer of bonds
issued pursuant to provisions of this bill, or any local agency that
did not participate in the sale of its right of repayment as
provided in this bill, to seek a writ of mandamus exclusively in the
California Supreme Court, if full repayment to local agencies has not
occurred as of a specified date.
The Marks-Roos Local Bond Pooling Act of 1985 authorizes joint
powers authorities to, among other things, issue bonds and loan the
proceeds to local agencies to finance specified types of projects and
programs. In addition, a joint powers authority may purchase, with
the proceeds of its bonds or its revenue, a local agency's 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 specified provisions of law, also known as a "VLF
receivable," and may pledge, assign, resell, or otherwise transfer
any of these receivables for the purpose of securing bonds issued to
finance the purchase price of the receivables, subject to specified
criteria.
This bill would additionally authorize a joint powers authority to
purchase, with the proceeds of bonds or its revenue and subject to
the same criteria, a local agency's right to receive moneys in
repayment of its revenue losses, with interest as provided by law,
resulting from the modification of ad valorem property tax revenue
allocations described above. This bill would also require the
authority to purchase all of these receivables offered for sale by
local agencies to the extent that it can sell bonds therefor, and
would authorize the authority to impose an administrative fee for the
costs of administering the purchase.
By modifying the manner in which county auditors apportion ad
valorem property tax revenues, this bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
The California Constitution authorizes the Governor to declare a
fiscal emergency and to call the Legislature into special session for
that purpose. The Governor issued a proclamation declaring a fiscal
emergency, and calling a special session for this purpose, on July 1,
2009.
This bill would state that it addresses the fiscal emergency
declared by the Governor by proclamation issued on July 1, 2009,
pursuant to the California Constitution.
This bill would declare that it is to take effect immediately as
an urgency statute.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 41204.1 of the Education Code is amended to
read:
41204.1. (a) (1) Pursuant to paragraph (2) of subdivision (b) of
Section 41204, the Director of Finance shall annually adjust "the
percentage of General Fund revenues appropriated for school districts
and community college districts, respectively, in fiscal year
1986-87" for purposes of applying paragraph (1) of subdivision (b) of
Section 8 of Article XVI of the California Constitution, to reflect
those property tax revenue allocation modifications required by the
qualifying provisions in a manner that ensures that those
modifications will have no net fiscal impact upon the amounts that
are otherwise required to be applied by the state for the support of
school districts and community college districts pursuant to Section
8 of Article XVI of the California Constitution.
(2) For purposes of this section, "qualifying provisions," means
all of the following:
(A) The amendments made to Chapter 6 (commencing with Section 95)
of Part 0.5 of Division 1 of the Revenue and Taxation Code and
Article 7 (commencing with Section 33680) of Chapter 6 of Part 1 of
Division 24 of the Health and Safety Code during the 1991-92 Regular
Session to the 2003-04 Regular Session, inclusive, and during any
Extraordinary Session concurrently held during those session years,
inclusive.
(B) Section 97.80 of the Revenue and Taxation Code.
(C) Section 100.06 of the Revenue and Taxation Code.
(b) Notwithstanding any other provision of law, for the 2004-05
fiscal year and each fiscal year thereafter, "the percentage of
General Fund revenues appropriated for school districts and community
colleges districts, respectively, in fiscal year 1986-87," for
purposes of paragraph (1) of subdivision (b) of Section 8 of Article
XVI of the California Constitution, shall be deemed to be the
percentage of General Fund revenues that would have been appropriated
for those entities if the qualifying provisions had been operative
for the 1986-87 fiscal year.
(c) It is the intent of the Legislature in enacting the act adding
this section to ensure both of the following:
(1) That the changes required by the qualifying provisions in the
allocations of ad valorem property tax revenues do not have a net
fiscal impact upon school districts, as defined in Section 41302.5,
or community college districts.
(2) That the changes required by the qualifying provisions in the
allocations of ad valorem property tax revenues do not have a net
fiscal impact upon the amounts of revenue otherwise required to be
applied by the state for the support of school districts and
community college districts pursuant to Section 8 of Article XVI of
the California Constitution.
SEC. 2. Section 6585 of the Government Code is amended to read:
6585. The definitions in this section shall govern the
construction and interpretation of this article.
(a) "Authority" means an entity created pursuant to Article 1
(commencing with Section 6500). In the case of an authority issuing
bonds pursuant to this chapter in which VLF receivables, as defined
in subdivision (j), or Proposition 1A receivables, as defined in
subdivision (g), are pledged to the payment of the bonds, other than
VLF receivables or Proposition 1A receivables so pledged for a county
of the first class, an authority shall consist of not less than 100
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 bonds (including, but not limited to, assessment
bonds, redevelopment agency bonds, government issued mortgage bonds,
and industrial development bonds), notes (including bond, revenue,
tax, or grant anticipation notes), commercial paper, floating rate,
and variable maturity securities, and any other evidences of
indebtedness and also includes certificates of participation or
lease-purchase agreements.
(d) "Cost," as applied to a public capital improvement or portion
thereof financed under this part, means 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 acquired or used for a public
capital improvement; 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; the cost of all machinery and equipment; finance charges;
interest prior to, during, and for a period after, completion of that
construction, as determined by the authority; provisions for working
capital, reserves for principal and interest and for extensions,
enlargements, additions, replacements, renovations, and improvements;
the cost of architectural, engineering, financial and legal
services, plans, specifications, estimates, administrative expenses,
and other expenses necessary or incident to determining the
feasibility of constructing any project or incident to the
construction or acquisition or financing of any public capital
improvement.
(e) "Legislative body" means the governing body of a local agency.
(f) "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 any city, county, city and
county, authority, district, or public corporation of this state.
(g) "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.
(h) "Public capital improvements" means one or more projects
specified in Section 6546.
(i) "Revenue" means all income and receipts of the authority from
a bond purchase agreement, bonds acquired by the authority, loans,
installment sale agreements, and other revenue-producing agreements
entered into by the authority, projects financed by the authority,
grants and other sources of income, VLF receivables purchased
pursuant to Section 6588.5, Proposition 1A receivables purchased
pursuant to Section 6588.6, and all 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.
(j) "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.
(k) "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.
SEC. 3. Section 6588 of the Government Code is amended to read:
6588. 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, and sell by installment sale or otherwise,
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) 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. If these entities
offer Proposition 1A receivables to the authority for purchase, 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.
The authority may establish a deadline, no earlier than 90 days after
the operative date of this section, 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 Preposition 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 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 deposited in a trust
account that is pledged to bondholders and shall be used solely for
the payment of interest on, or for repayment of, the bonds.
(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.
SEC. 4. Section 6588.6 is added to the Government Code, to read:
6588.6. (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, 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.
SEC. 5. Section 6590 of the Government Code is amended to read:
6590. The authority may, from time to time, issue its bonds in
the principal amount as the authority determines necessary to provide
sufficient funds for its purposes, which may include, but shall not
be limited to, providing funds for bond purchase agreements, payment
of the purchase price of VLF receivables, payment of the purchase
price of Proposition 1A receivables, payment of interest on bonds of
the authority, establishment of reserves to secure the bonds, and
other expenditures of the authority incident to issuance of the
bonds. The authority may also issue bonds for the purpose of making
loans to local agencies, to the extent those local agencies are
authorized by law to borrow moneys, or to purchase VLF receivables
from local agencies as provided in Section 6588.5, or to purchase
Proposition 1A receivables as provided in Section 6588.6, and the
loan or sale proceeds shall be used by the local agencies to pay for
public capital improvements, working capital, or insurance programs.
The aggregate principal amount of all bonds issued pursuant to this
section that are backed by Proposition 1A receivables shall not
exceed two billion two hundred fifty million dollars
($2,250,000,000), and that issuance shall be approved by the
Department of Finance and the Treasurer.
In the case of any authority in existence on January 1, 1988, no
loans shall be made to local agencies for working capital or
insurance, unless that purpose is first approved by resolution of the
governing body of the authority by unanimous vote of all members of
the governing body.
SEC. 6. Section 6591 of the Government Code is amended to read:
6591. (a) The authority is authorized from time to time to issue
bonds to provide funds to achieve its purposes.
(b) Bonds may be authorized to finance a single public capital
improvement, working capital, purchase of VLF receivables, purchase
of Proposition 1A receivables, or insurance program for a single
local agency; a series of public capital improvements, working
capital, purchases of VLF receivables, purchase of Proposition 1A
receivables, or insurance program for a single local agency; a single
public capital improvement, working capital, purchases of
Proposition 1A receivables, or purchases of VLF receivables,
insurance program for two or more local agencies; or a series of
public capital improvements, working capital, purchases of VLF
receivables, purchases of Proposition 1A receivables, insurance
programs for two or more local agencies.
(c) Bonds issued for the purpose of financing working capital
shall be used to make loans to local agencies for any of the purposes
for which a local agency may borrow money pursuant to Section 53852.
The loans shall be repaid in accordance with the terms of Section
53854.
(d) Except as otherwise expressly provided by the authority, every
issue of its bonds shall be general obligations of the authority
payable from any revenues or moneys of the authority available
therefor and not otherwise pledged. These revenues or moneys may
include the proceeds of additional bonds, subject only to any
agreements with the holders of particular bonds pledging any
particular revenues or moneys. Notwithstanding that the bonds may be
payable from a special fund, these bonds shall be deemed to be
negotiable instruments for all purposes, subject only to the bond
registration provisions.
(e) (1) The bonds may be issued as serial bonds or as term bonds,
or the authority may issue bonds of both types. The bonds shall be
authorized by resolution of the authority and shall, as provided by
the resolution or indenture pursuant to which the bonds are issued,
bear the date of issuance; the time of maturity, not exceeding 50
years from their date of issuance; bear the rate of interest, either
fixed or variable, and, if variable, not in excess of the maximum
rate of interest specified therein; be payable as to principal and
interest at the time or times provided; be in the denominations
provided; be in the form provided; carry the registration privileges
provided; be executed in the manner provided; be payable in lawful
money of the United States at the place or places provided within or
without the state; and be subject to the terms of redemption
provided.
(2) The authority shall provide for at least two but no more than
three callable dates, as approved by the Department of Finance, for
bonds backed by Proposition 1A receivables, with one callable date in
the 2010-11 fiscal year and one callable date in the 2011-12 fiscal
year.
(3) Notwithstanding paragraph (1), the bonds shall have a maturity
date no later than 40 months from the date of issuance.
(4) The option to call shall be exercised upon receipt by the
authority of a timely written notification from the Director of
Finance, but no earlier than 30 days after delivery by the director
of a written notice of the intent to do so to the Joint Legislative
Budget Committee.
(f) The bonds shall be sold by the authority at the time and in
the manner set out in the authority's resolution. The sale may be a
public or private sale, and for price or prices, and on terms and
conditions as the authority determines proper, after giving due
consideration to the recommendations of any local agency to be
assisted from the proceeds of the bonds. Pending preparation of the
definitive bonds, the authority may issue interim receipts,
certificates, or temporary bonds which shall be exchanged for
definitive bonds. For bonds backed by Proposition 1A receivables, the
authority shall use its best efforts to obtain the lowest overall
cost of the bonds, and shall certify that it so used its best
efforts. The authority shall, in consultation with the Treasurer and
Department of Finance, structure the sale of the bonds backed by
Proposition 1A receivables and shall include those terms and
conditions approved by the Treasurer and the Department of Finance.
(g) In the case of bonds issued by an authority, on or after
January 1, 1995, for the purpose of purchasing bonds of a local
agency, all of the bonds of the local agency shall be purchased by
the authority from the proceeds of the authority bonds within 90 days
of the date of issuance of the authority bonds. Nothing in this
subdivision shall be construed to preclude an authority from issuing
parity bonds at any time.
SEC. 7. Section 6592 of the Government Code is amended to read:
6592. Any resolution authorizing any bonds or any issue of bonds
may contain the following provisions, which shall be a part of the
contract with the holders of the bonds to be authorized:
(a) Provisions pledging the full faith and credit of the
authority, or pledging all or any part of the revenues of any public
capital improvements, or any revenue-producing contract or contracts
made by the authority with any local agency, any VLF receivables
purchased pursuant to Section 6588.5, any Proposition 1A receivables
purchased pursuant to Section 6588.6, or any other moneys of the
authority, to secure the payment of the bonds, and of any special
account, subject to those agreements with bondholders as may then
exist.
(b) Provisions setting out the rentals, fees, purchase payments,
loan repayments, and other charges, and the amounts to be raised in
each year thereby, and the use and disposition of the revenues.
(c) Provisions setting aside reserves or sinking funds, and the
regulation and disposition thereof.
(d) Limitations on the right of the authority or its agent to
restrict and regulate the use of the public capital improvements to
be financed out of the proceeds of the bonds or any particular issue
of bonds.
(e) Limitations on the purpose to which the proceeds of sale of
any issue of bonds may be applied, and pledging the proceeds to
secure the payment of the bonds or any issue of the bonds.
(f) Limitations on the issuance of additional bonds, the terms
upon which additional bonds may be issued and secured, and the
refunding of outstanding bonds.
(g) The procedure, if any, by which the terms of any contract with
bondholders may be amended or abrogated, the amount of bonds and the
holders thereof that are required to give consent thereto, and the
manner in which the consent may be given.
(h) Limitations on expenditures for operating, administrative, or
other expenses of the authority.
(i) Definitions of acts or omissions to act which constitute a
default in the duties of the authority to holders of its obligations,
and providing the rights and remedies of the holders in the event of
a default.
(j) The mortgaging of any public capital improvements and the site
thereof for the purpose of securing the bondholders.
(k) The mortgaging of land, improvements, or other assets owned by
a local agency for the purpose of securing the bondholders.
(l) Procedures for the selection of public capital improvements to
be financed with the proceeds of the bonds authorized by the
resolution, if the bonds are to be sold in advance of designating the
public capital improvements and the local agency to receive the
financing.
SEC. 8. Section 6599.3 of the Government Code is amended to read:
6599.3. Notwithstanding any other provision of law, an action may
be brought under Chapter 9 (commencing with Section 860) of Title 10
of Part 2 of the Code of Civil Procedure, to determine the validity
of any bonds issued under this article to finance the purchase of
bonds for local agencies, the financing of public capital
improvements, or the purchase of VLF receivables pursuant to Section
6588.5 or Proposition 1A receivables pursuant to Section 6588.6 and
any contracts of sale of VLF receivables or Proposition 1A
receivables entered into by any local agency, and any related
documents. If an action is commenced, the action shall be brought in
the jurisdiction in which the authority maintains its principal
office and is not required to be brought in the jurisdiction or
jurisdictions of any of the local agencies. However, publication of
summons, as provided in Section 861 of the Code of Civil Procedure,
shall be made in the county in which the authority maintains its
principal office and in each county in which any local agency that
has sold bonds to the authority, for which a public capital
improvement is being financed or that has entered into a sales
agreement for a VLF receivable or a Proposition 1A receivable where
the authority is located.
SEC. 9. Section 33681.12 of the Health and Safety Code is amended
to read:
33681.12. (a) (1) During the 2004-05 fiscal year, a redevelopment
agency shall, prior to May 10, remit an amount equal to the amount
determined for that agency pursuant to subparagraph (I) of paragraph
(2) to the county auditor for deposit in the county's Educational
Revenue Augmentation Fund created pursuant to Article 3 (commencing
with Section 97) of Chapter 6 of Part 0.5 of Division 1 of the
Revenue and Taxation Code. During the 2005-06 fiscal year, a
redevelopment agency shall, prior to May 10, remit an amount equal to
the amount determined for that agency pursuant to subparagraph (I)
of paragraph (2) to the county auditor for deposit in the county's
Educational Revenue Augmentation Fund created pursuant to Article 3
(commencing with Section 97) of Chapter 6 of Part 0.5 of Division 1
of the Revenue and Taxation Code.
(2) For the 2004-05 and 2005-06 fiscal years, on or before
November 15, the Director of Finance shall do all of the following:
(A) Determine the net tax increment apportioned to each agency
pursuant to Section 33670, excluding any amounts apportioned to
affected taxing agencies pursuant to Section 33401, 33607.5, or
33676.
(B) Determine the net tax increment apportioned to all agencies
pursuant to Section 33670, excluding any amounts apportioned to
affected taxing agencies pursuant to Section 33401, 33607.5, or
33676.
(C) Determine a percentage factor by dividing one hundred
twenty-five million dollars ($125,000,000) by the amount determined
pursuant to subparagraph (B).
(D) Determine an amount for each agency by multiplying the amount
determined pursuant to subparagraph (A) by the percentage factor
determined pursuant to subparagraph (C).
(E) Determine the total amount of property tax revenue apportioned
to each agency pursuant to Section 33670, including any amounts
apportioned to affected taxing agencies pursuant to Section 33401,
33607.5, or 33676.
(F) Determine the total amount of property tax revenue apportioned
to all agencies pursuant to Section 33670, including any amounts
apportioned to affected taxing agencies pursuant to Section 33401,
33607.5, or 33676.
(G) Determine a percentage factor by dividing one hundred
twenty-five million dollars ($125,000,000) by the amount determined
pursuant to subparagraph (F).
(H) Determine an amount for each agency by multiplying the amount
determined pursuant to subparagraph (E) by the percentage factor
determined pursuant to subparagraph (G).
(I) Add the amount determined pursuant to subparagraph (D) to the
amount determined pursuant to subparagraph (H).
(J) Notify each agency and each legislative body of the amount
determined pursuant to subparagraph (I).
(K) Notify each county auditor of the amounts determined pursuant
to subparagraph (I) for each agency in his or her county.
(3) The obligation of any agency to make the payments required
pursuant to this subdivision shall be subordinate to the lien of any
pledge of collateral securing, directly or indirectly, the payment of
the principal, or interest on any bonds of the agency including,
without limitation, bonds secured by a pledge of taxes allocated to
the agency pursuant to Section 33670.
(b) (1) Notwithstanding Sections 33334.2, 33334.3, and 33334.6,
and any other provision of law, in order to make the full allocation
required by this section, an agency may borrow up to 50 percent of
the amount required to be allocated to the Low and Moderate Income
Housing Fund pursuant to Sections 33334.2, 33334.3, and 33334.6
during the 2004-05 fiscal year and, if applicable, the 2005-06 fiscal
year, unless executed contracts exist that would be impaired if the
agency reduced the amount allocated to the Low and Moderate Income
Housing Fund pursuant to the authority of this subdivision.
(2) As a condition of borrowing pursuant to this subdivision, an
agency shall make a finding that there are insufficient other moneys
to meet the requirements of subdivision (a). Funds borrowed pursuant
to this subdivision shall be repaid in full within 10 years following
the date on which moneys are remitted to the county auditor for
deposit in the county's Educational Revenue Augmentation Fund
pursuant to subdivision (a).
(c) In order to make the allocation required by this section, an
agency may use any funds that are legally available and not legally
obligated for other uses, including, but not limited to, reserve
funds, proceeds of land sales, proceeds of bonds or other
indebtedness, lease revenues, interest, and other earned income. No
moneys held in a low- and moderate-income fund as of July 1 of the
applicable fiscal year may be used for this purpose.
(d) The legislative body shall by March 1 report to the county
auditor as to how the agency intends to fund the allocation required
by this section, or that the legislative body intends to remit the
amount in lieu of the agency pursuant to Section 33681.14.
(e) The allocation obligations imposed by this section, including
amounts owed, if any, created under this section, are hereby declared
to be an indebtedness of the redevelopment project to which they
relate, payable from taxes allocated to the agency pursuant to
Section 33670, and shall constitute an indebtedness of the agency
with respect to the redevelopment project until paid in full.
(f) It is the intent of the Legislature, in enacting this section,
that these allocations directly or indirectly assist in the
financing or refinancing, in whole or in part, of the community's
redevelopment project pursuant to Section 16 of Article XVI of the
California Constitution.
(g) In making the determinations required by subdivision (a), the
Director of Finance shall use those amounts reported as the "Tax
Increment Retained by Agency" for all agencies and for each agency in
the most recent published edition of the Controller's Community
Redevelopment Agencies Annual Report made pursuant to Section 12463.3
of the Government Code.
(h) If revised reports have been accepted by the Controller on or
before September 1, 2005, the Director of Finance shall use
appropriate data that has been certified by the Controller for the
purpose of making the determinations required by subdivision (a).
(i) (1) Notwithstanding any other provision of law, a county
redevelopment agency may enter into a loan agreement with the
legislative body to have the agency remit to the county's Educational
Revenue Augmentation Fund for each of the 2004-05 and 2005-06 fiscal
years an amount greater than that determined pursuant to
subparagraph (I) of paragraph (2) of subdivision (a) or, for the
2009-10 fiscal year, to have the agency remit to the county auditor
on the county's behalf all or a portion of the reduction amount
determined for the county under Section 100.06 of the Revenue and
Taxation Code, if, in either instance, all of the following
conditions are met:
(A) The agency does not exercise its authority under subdivision
(b) to borrow from its Low and Moderate Income Housing Fund to
finance its payments to the county's Educational Revenue Augmentation
Fund or to the county auditor.
(B) The agency does not have any outstanding loans from its Low
and Moderate Income Housing Fund that were made under subdivision (b)
of Section 33981.5, subdivision (b) of Section 33681.7, or
subdivision (b) of Section 33681.9.
(C) The loan agreement requires the county to repay any excess
remitted amounts or amounts paid to the county auditor on the county'
s behalf in the 2009-10 fiscal year, including interest, to the
agency within three fiscal years subsequent to the fiscal year in
which the loan is made.
(D) The agency making the loan does not participate in pooled
borrowing under Section 33681.15.
(2) A loan agreement described in paragraph (1) shall be
transmitted to the county auditor not later than December 1 of the
fiscal year in which the loan is made. Any amount remitted by the
agency to the county Educational Revenue Augmentation Fund for the
2004-05 or 2005-06 fiscal year in excess of the amount determined
pursuant to paragraph (1) of subdivision (a) shall be credited to the
amount that would otherwise be subtracted by the county auditor
pursuant to subdivision (a) of Section 97.71 of the Revenue and
Taxation Code for, as applicable, the 2004-05 and 2005-06 fiscal
years.
(3) Notwithstanding subparagraph (C) of paragraph (1), a county
redevelopment agency and a legislative body that have entered into a
loan agreement for the 2004-05 or 2005-06 fiscal year under paragraph
(1) may, by mutual consent, adopt either or both of the following
modifications to that agreement:
(A) The repayment period may be extended, but the full repayment
shall be completed no later than June 30, 2021.
(B) The repayment obligation may be offset by the amount of any
expenditures by the county for capital improvements or deferred
maintenance that substantially benefit any or all of the
redevelopment project areas of the redevelopment agency if the agency
approves the expenditure and the agency adopts a finding that the
expenditure furthers the goals and objectives of the agency's
redevelopment plan or plans.
SEC. 10. Section 100.06 is added to the Revenue and Taxation Code,
to read:
100.06. (a) In accordance with the suspension under Section
100.05 of the Revenue and Taxation Code of subparagraph (A) of
paragraph (1) of subdivision (a) of Section 25.5 of Article XIII of
the California Constitution, the county auditor shall, for the
2009-10 fiscal year, do both of the following:
(1) (A) Except as otherwise provided in subparagraph (B) and
subdivision (b), reduce the total amount of ad valorem property tax
revenue otherwise required to be apportioned to a city, county, city
and county, or a special district by 8 percent of the total amount of
ad valorem property tax revenue apportioned to that local agency for
the 2008-09 fiscal year.
(B) For purposes of calculating the amount of an 8-percent
reduction required by subparagraph (A), any amount required to be
paid or allocated to a city, county, or city and county under Section
97.68 or 97.70 for the 2008-09 fiscal year is included in
determining the total amount of property tax revenue apportioned to
that local agency for that fiscal year. A reduction made pursuant to
this paragraph shall not, however, be made from any amount that is to
be apportioned to a city, county, or city and county as a result of
Section 97.68.
(2) Transfer to the Supplemental Revenue Augmentation Fund, hereby
established in the county treasury for administration by the county
office of education as provided in subdivision (c), an amount equal
in the aggregate to that portion of the total amount of reductions
required by paragraph (1). The aggregate amount of transfers required
by this paragraph shall be made in two equal shares, with the first
share being transferred no later than January 15, 2010, and the
second share being transferred after that date but no later than May
1, 2010.
(b) (1) Upon written request by a local agency that is received no
later than October 15, 2009, the Director of Finance may, on the
basis of extreme hardship, decrease the reduction amount that would
otherwise be applied to that local agency under subdivision (a). In
evaluating a written request for a decrease, the Director of Finance
may consider factors including, but not limited to, all of the
following:
(A) Whether the requesting local agency is the subject of a
current bankruptcy proceeding, or whether incurring the full
reduction amount otherwise required by subdivision (a) would likely
cause the local agency to seek bankruptcy protection.
(B) Whether the requesting local agency has any financial
reserves, and whether incurring the full reduction amount otherwise
required by subdivision (a) would impair the ability of the local
agency to provide a basic level of core public services.
(2) (A) If the Director of Finance approves a request made
pursuant to paragraph (1), he or she shall, by November 15, 2009,
certify to the auditor of the county in which the requesting local
agency is located, the amount of a decrease in the reduction
otherwise to be incurred by the requesting local agency pursuant to
subdivision (a). The amount of that decrease shall be applied in
proportionate shares to increase the reduction amounts under
subdivision (a) of all other local agencies in the county, so that
there is no reduction in the aggregate amount of reductions to be
incurred by local agencies located in the county. The Director of
Finance may determine that the reduction amount that would otherwise
be incurred by the requesting local agency under subdivision (a)
should be decreased to zero. The amount of any certified decrease, in
whole or in part, of a reduction amount shall be based upon the
director's evaluation of the factors considered with respect to the
requesting local agency under paragraph (1) and the extent to which
those factors indicate that the requesting local agency should be
given relief.
(B) The Director of Finance may not grant decreases to local
agencies within a single county that, in the aggregate, total more
than 10 percent of the combined total of the reduction amounts under
subdivision (a) for all local agencies in that county.
(3) (A) Two or more local agencies in a county may agree to
reallocate exclusively among themselves all or part of their
reduction amounts otherwise required by subdivision (a). Any local
agencies entering into an agreement to so reallocate their reduction
amounts shall, no later than November 15, 2009, notify the county
auditor of that agreement and the reallocations specified in that
agreement. The auditor shall thereafter implement subdivision (a)
with respect to those local agencies in accordance with that
agreement.
(B) A county redevelopment agency that will, on behalf of the
county under Section 33681.12 of the Health and Safety Code, pay all
or a portion of a reduction amount under subdivision (a) shall so
notify the county auditor by December 1, 2009. The auditor shall
thereafter decrease the county's reduction amount by the amount of
the payment from the county redevelopment agency to the extent that
the payment is received prior to a date by which a transfer is
required by paragraph (2) of subdivision (a).
(c) (1) Except for those moneys subject to paragraph (3), the
moneys in the Supplemental Revenue Augmentation Fund shall be
transferred by the county office of education to the Controller, in
amounts and for those purposes as directed by the Director of
Finance, exclusively to reimburse the state for the costs of
providing health care, trial court, correctional, or other
state-funded services and costs, until those moneys are exhausted.
Moneys in a Supplemental Revenue Augmentation Fund shall be
transferred to reimburse only those costs incurred, and the costs of
services provided, in the county in which those moneys are collected.
(2) (A) Entities of state government, including the Administrative
Office of the Courts, that are responsible for the functions funded
with moneys transferred pursuant to paragraph (1) shall keep records,
as required by the Department of Finance, of expenditures made in
the county pursuant to that paragraph, and shall provide to the
Department of Finance any information required by the department with
respect to those expenditures.
(B) Moneys transferred pursuant to paragraph (1) for the funding
of trial courts shall reimburse transfers from the state General Fund
to the Trial Court Trust Fund.
(C) The county office of education shall make a transfer under
paragraph (1) within five days of that transfer being directed by the
Department of Finance, and shall provide to the Controller, with
that transfer, information specifying the purpose of that transfer.
(D) Moneys in the Supplemental Revenue Augmentation Fund that are
not transferred in a fiscal year and are not subject to paragraph (3)
shall be retained in the fund for transfer pursuant to paragraph (1)
in a subsequent fiscal year.
(3) Any moneys in the Supplemental Revenue Augmentation Fund that
are determined by the Director of Finance not to be necessary to fund
the provision of state-funded services and costs shall be
transferred to the county's Educational Revenue Augmentation Fund, no
later than June 1, 2010. Funds transferred to the county's
Educational Revenue Augmentation Fund pursuant to this paragraph
shall not be apportioned to community college districts. This
paragraph shall not be construed to increase any allocations of
excess, additional, or remaining funds that would otherwise have been
allocated to cities, counties, cities and counties, or special
districts pursuant to clause (i) of subparagraph (B) of paragraph (4)
of subdivision (d) of Section 97.2 of, clause (i) of subparagraph
(B) of paragraph (4) of subdivision (d) of Section 97.3 of, or
Article 4 (commencing with Section 98) of Chapter 6 of Part 0.5 of
Division 1 of, the Revenue and Taxation Code had this section not
been enacted.
(4) (A) Each county auditor shall report to the Department of
Finance the amount of property tax revenue that was transferred from
each local agency located in the county to the county's Supplemental
Revenue Augmentation Fund. The county auditor first shall report this
information on or before January 15, 2010, and then on or before May
15, 2010, and shall provide a copy of each report to each local
agency located in the county.
(B) When transferring the amounts required by paragraph (1), each
county auditor shall also provide the Department of Finance, the
Legislative Analyst's Office, and each local agency located in the
county with information detailing how each local agency's reduction
amount under subdivision (a) was calculated. This information shall
first be reported on or before January 15, 2010, and then on or
before May 15, 2010.
(d) For the 2010-11 fiscal year and each fiscal year thereafter,
the county auditor shall apply paragraph (1) of subdivision (a) of
Section 96.1, or any successor to that provision, without regard to
the changes in property tax revenue apportionments required by this
section.
(e) (1) In accordance with Section 25.5 of Article XIII of the
California Constitution, the state shall, no later than June 30,
2013, fully reimburse the revenue reductions incurred pursuant to
subdivision (a) in the following amounts determined by the
Controller:
(A) (i) The amount due to the authority that issued bonds pursuant
to Section 6590 of the Government Code to purchase Proposition 1A
receivables pursuant to Section 6588.6 of the Government Code shall
be paid as follows:
(I) The principal amount of the bonds on the date of the maturity
or upon call.
(II) Periodic interest as applicable.
(III) The accrued interest on the bonds upon call, on the date of
maturity, or a later date, if repayment does not occur prior to the
date of maturity.
(ii) In the event the state fully repays the reduction amounts in
accordance with paragraph (2) prior to the maturity date of the
bonds, the payment amount shall be equal to the amount required, as
shown in a report of an independent certified public accountant
provided by the authority, to legally defease the bonds.
(B) The amount due to each local agency that does not sell all of
its Proposition 1A receivables to an authority described in
subparagraph (A) shall be the sum of both of the following:
(i) The unpaid principal amount of the revenue reduction incurred
by each local agency pursuant to subdivision (a), less the amount of
the revenue reduction that is attributable to Proposition 1A
receivables that are sold to an authority described in subparagraph
(A).
(ii) Interest on the amount described in clause (i) at a rate, set
by the Department of Finance no later than 60 days after the
operative date of this section, that is higher than the rate of
interest earned by the Pooled Money Investment Account but no greater
than 6 percent.
(2) The state may repay the revenue reductions incurred pursuant
to subdivision (a) before June 30, 2013, upon the order of the
Director of Finance issued no earlier than 30 days after delivery of
a written notice of the intent to do so to the Joint Legislative
Budget Committee.
(3) The payment of the amounts specified in this subdivision shall
take priority over all other obligations of the state, excepting
payments to schools under Article XVI of the California Constitution
and debt service on general obligation bonds for the 2012-13 fiscal
year. The Controller shall take all prudent means within his or her
legal discretion to assure that sufficient sums are available to pay
these amounts and all other obligations of higher priority.
(4) Notwithstanding Section 13340 of the Government Code, there is
hereby continuously appropriated to the Controller from the General
Fund, without regard to fiscal year, those
amounts sufficient to pay the amounts specified
in this subdivision.
(f) (1) Notwithstanding any other law, if by June 30, 2013, the
state has not fully reimbursed each local agency for its revenue
reduction incurred pursuant subdivision (a) in the amounts as
required by subdivision (e), the issuer of any bonds issued pursuant
to subdivision (x) of Section 6588 of the Government Code, or any
local agency that did not participate in the sale of Proposition 1A
receivables pursuant to paragraph (2) of subdivision (x) of Section
6588 of the Government Code, may seek a writ of mandamus to compel
the Controller to fully pay the amounts the state is obligated to pay
under subdivision (e). A petition seeking a writ of mandamus
pursuant to this subdivision, and any appellate proceedings arising
from that action, shall have priority and preference in setting and
review in furtherance of the repayment deadline mandated by Section
25.5 of Article XIII of the California Constitution. A petition for a
writ of mandamus authorized by this subdivision may also be filed in
the California Supreme Court pursuant to that court's original
jurisdiction described in Section 10 of Article VI of the California
Constitution.
(2) In authorizing an original mandamus petition to the California
Supreme Court pursuant to this paragraph, the Legislature finds and
declares all of the following:
(A) The Legislature is expressly required by Section 25.5 of
Article XIII of the California Constitution to enact a statute
mandating the full and timely repayment, as provided by subdivision
(e), of any revenue reduction incurred by a local agency pursuant to
subdivision (a) and all accrued interest thereon.
(B) Full and timely repayment of any revenue reduction incurred by
a local agency pursuant to subdivision (a), with interest, is
critical to every local agency from which those funds were diverted.
(C) The Legislature further finds and declares that conclusively
determining, no later than the deadline mandated under Section 25.5
of Article XIII of the California Constitution, that the state's
obligation under subdivision (e) to fully repay any revenue reduction
incurred by a local agency pursuant to subdivision (a) and all
accrued interest thereon is a matter of vital and urgent public
importance.
SEC. 11. (a) Notwithstanding any other law, a city that has
established a reserve for subsidence contingencies may, for the
2009-10 fiscal year only, retain interest earned on that reserve for
the previous three calendar years in an amount not to exceed the
amount of the revenue reduction incurred by that city pursuant to
Section 100.06 of the Revenue and Taxation Code.
(b) The Legislature finds and declares that the amounts retained
by a city pursuant to subdivision (a) are in excess of trust needs
and are free from the public trust for navigation, commerce,
fisheries, and any other trust uses and restrictions.
(c) A city that has retained an amount under subdivision (a) shall
repay to the reserve for subsidence contingencies that amount so
retained at the time that city is repaid for its revenue reduction
pursuant to Section 100.06 of the Revenue and Taxation Code. Those
amounts repaid to the reserve for subsidence contingencies are
subject to the public trust and shall be used only for the purposes
prescribed by law for the reserve.
SEC. 12. If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.
SEC. 13. This act addresses the fiscal emergency declared by the
Governor by proclamation on July 1, 2009, pursuant to subdivision (f)
of Section 10 of Article IV of the California Constitution.
SEC. 14. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to address the current, severe state fiscal hardships, it
is necessary that this act go into effect immediately.