BILL NUMBER: AB 2080 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 18, 2010
INTRODUCED BY Assembly Member Hernandez
FEBRUARY 18, 2010
An act to amend Section 53508.9 of the Government Code,
relating to bonds. An act to amend Sections 6585,
6588, 6588.7, 6590, 6591, 6592, and 6599.3 of the Government Code,
relating to joint powers authorities.
LEGISLATIVE COUNSEL'S DIGEST
AB 2080, as amended, Hernandez. Bonds: local agencies.
Joint powers authorities: government receivables.
Existing law 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. Existing law also
authorizes a joint powers authority to 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 in connection with
specified provisions of law, which rights of payment are defined as
VLF receivables and Proposition 1A receivables. Existing law permits
a joint powers authority to pledge, assign, resell, or otherwise
transfer these receivables for the purpose of securing bonds issued
to finance the purchase price of the receivables, subject to
specified criteria. Existing law limits the aggregate amount of all
bonds issued in connection with Proposition 1A receivables and
permits a joint powers authority to charge a fee to a local agency
from which it purchases a Proposition 1A receivable.
This bill would authorize a joint powers authority to 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 from the
federal government in connection with direct subsidy payments
related to Buy America Bonds, which would be defined as government
receivables. The bill would authorize local agencies to make these
sales. The bill would permit the authority to pledge the government
receivables to the payment of bonds issued by the authority or to
resell them to public or private purchasers at public or negotiated
sale, in whole or in part, separately or together with other
government receivables. The bill would also make various conforming
changes.
Existing law regulates the sale of securities by local agencies.
Existing law permits specified local agencies to sell bonds at a
negotiated sale for a price at, above, or below par value, as
authorized by the legislative body, without further approval, if the
legislative body adopts a resolution before the sale, as an agenda
item at a public meeting, that includes specified items.
This bill would make a nonsubstantive, technical change to these
provisions.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. 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) (1) Except as provided in paragraphs (2) and (3), "authority"
means an entity created pursuant to Article 1 (commencing with
Section 6500).
(2) In the case of an authority issuing bonds pursuant to this
chapter in which VLF receivables, as defined in subdivision (j), 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 less than 100 local agencies.
(3) In the case of an authority issuing bonds pursuant to this
chapter in which Proposition 1A receivables, as defined in
subdivision (g), are pledged to the payment of the bonds, an
authority shall consist of not less 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) "Cost," as applied to a public capital improvement or portion
thereof 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 acquired
or used for a public capital improvement.
(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; 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 incident to determining the
feasibility of constructing any project or incident to the
construction or acquisition or financing of any public capital
improvement.
(e) "Government receivable" means any payment or right to payment
for moneys due, or to become due, to a local agency from the federal
government in the form of direct subsidy payments under Section 6431
of Title 26 of the United States Code, with respect to Build America
Bonds. "Government receivable" also means any residual interests
retained or received by the local agency in connection with the sale
of governmental receivables.
(e)
(f) "Legislative body" means the governing body of a
local agency.
(f)
(g) "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)
(h) "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)
(i) "Public capital improvements" means one or more
projects specified in Section 6546.
(i)
(j) "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) Government receivables purchased pursuant to Section 6588.7.
(8)
(9) 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)
(k) "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)
(l) "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 , or a government receivable
sold to an authority could have been used by the local agency.
SEC. 2. 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) (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 provision of 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) Purchase, with the proceeds of its bonds or its revenue, any
government receivables sold to the authority pursuant to Section
6588.7. Government 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 government receivables
purchased by the authority.
(y)
(z) 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. 3. Section 6588.7 is added to the
Government Code , to read:
6588.7. (a) An authority may purchase, with the proceeds of its
bonds or its revenue, government receivables from one or more local
agencies. The authority may pledge, assign, resell or otherwise
transfer or hypothecate any government receivables for the purpose of
securing bonds issued to finance the purchase price of the
government receivables.
(b) Notwithstanding any other provision of law, local agencies may
sell government receivables to an authority, at one time or from
time to time, 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 necessary to establish and maintain the security of
bonds issued by the authority for the purpose of purchasing the
government 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 government receivable by a local agency
to an 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 government receivable as
an absolute sale and transfer 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 government receivable is
transferred.
(2) By the local agency's acquisition of an ownership interest in
any residual interest or a subordinate interest in the government
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
government 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 government receivable transferred, and the
government receivable so transferred shall be 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 government receivable shall automatically be perfected without
the need for physical delivery, recordation, filing, or further act,
and the provisions of Division 9 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 government 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 government receivable, the local agency shall notify the payor
of the government receivable that the government receivable has been
sold to the authority and irrevocably instruct the payor that, as of
the effective date, payments on the government receivable so sold are
to be made directly to the authority or any trustee or agent
appointed by the authority. Any government receivable sold by a local
agency but received by that local agency shall be held by it in
trust solely for the benefit of the authority to which the government
receivable was sold and transferred to the authority or any trustee
or agent appointed by the authority as soon as possible.
SEC. 4. 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 the purchase
price of government 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, or to purchase government receivables from local
agencies as provided in Section 6588.7, 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. 5. 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 any of the following:
(1) A single public capital improvement, working capital, purchase
of VLF receivables, purchase of Proposition 1A receivables,
purchase of government receivables, or insurance program for a
single local agency.
(2) A series of public capital improvements, working capital,
purchases of VLF receivables, purchase of Proposition 1A receivables,
purchase of government receivables, or insurance program
for a single local agency.
(3) A single public capital improvement, working capital,
purchases of Proposition 1A receivables, or purchases of VLF
receivables , purchase of government receivables, or
insurance program for two or more local agencies.
(4) A series of public capital improvements, working capital,
purchases of VLF receivables or ,
purchases of Proposition 1A receivables , purchase of government
receivables, or 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, meet all of the following
conditions:
(A) Bear the date of issuance.
(B) Bear the time of maturity, not exceeding 50 years from their
date of issuance.
(C) Bear the rate of interest, either fixed or variable, and, if
variable, not in excess of the maximum rate of interest specified
therein.
(D) Be payable as to principal and interest at the time or times
provided.
(E) Be in the denominations and in the form provided.
(F) Carry the registration privileges provided.
(G) Be executed in the manner provided.
(H) Be payable in lawful money of the United States at the place
or places provided within or without the state.
(I) Be subject to the terms of redemption provided.
(2) Notwithstanding paragraph (1), the bonds backed by Proposition
1A receivables shall have a maturity date no later than August 1,
2013.
(3) For bonds backed by Proposition 1A receivables, both of the
following shall apply:
(A) 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.
(B) The bonds may bear interest payable on periodic interest
payment dates or may accrue interest to their maturity date or any
combination thereof, subject to the approval of the Department of
Finance and the State Treasurer pursuant to subdivision (x) of
Section 6588.
(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. 6. 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, any government receivables
purchased pursuant to Section 6588.7, 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. 7. 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 , or
government receivables pursuant to Section 6588.7,
and any contracts of sale of VLF receivables or
, Proposition 1A receivables , or government
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 or
government receivable where the authority is located.
SECTION 1. Section 53508.9 of the Government
Code is amended to read:
53508.9. (a) Notwithstanding Section 53508.7, a local agency may
sell bonds at a negotiated sale for a price at, above, or below par
value, as authorized by the legislative body, without further
approval, if the legislative body adopts a resolution before the
negotiated sale, as an agenda item at a public meeting, that includes
all of the following:
(1) Express approval of the negotiated method of sale.
(2) Statement of the reasons for selecting the negotiated method
of sale.
(3) Disclosure of the identity of the bond counsel.
(4) Disclosure of the identity of the bond underwriter and the
financial adviser, if used for the negotiated bond sale. If a bond
underwriter or financial adviser has not been selected at the time
the legislative body adopts the resolution, the legislative body
shall disclose the identity at the public meeting first occurring
after the bond underwriter or financial adviser has been selected.
(5) Estimate of the costs associated with the bond issuance.
(b) For purposes of this section, the following definitions shall
apply:
(1) "Legislative body" means the governing body of a local agency.
(2) "Local agency" means a city, county, city and county, and
special district. "Special district" means an agency of the state
formed for the performance of governmental or proprietary functions
within limited geographic boundaries, and does not include a school
district or community college district.