California Legislature—2013–14 Regular Session

Assembly Bill No. 1070

Introduced by Assembly Member Frazier

February 22, 2013

An act to amend Sections 64102, 64107, 64109, 64110, 64111, 64115, 64116, 64117, 64118, 64119, 64120, 64121, 64124, 64125, 64126, 64127, and 64132 of, and to add Section 64107.5 to, the Government Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

AB 1070, as introduced, Frazier. California Transportation Financing Authority.

The California Transportation Financing Authority Act creates the California Transportation Financing Authority, with specified powers and duties relative to issuance of bonds to fund transportation projects to be backed, in whole or in part, by various revenue streams of transportation funds, and toll revenues under certain conditions, in order to increase the construction of new capacity or improvements for the state transportation system consistent with specified goals. Existing law, subject to certain conditions, authorizes the authority to grant a request that a project sponsor, rather than the authority, be the issuer of the bonds.

This bill would revise the act to further define the roles of the authority and an issuer of bonds under the act if the project sponsor, rather than the authority, is the issuer of bonds, and would define “issuer” in that regard. The bill would make other related changes.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 64102 of the Government Code is
amended to read:

64102.  

As used in this division, the following terms shall have
the following meanings, unless the context clearly indicates or
requires another or different meaning or intent:

(a) “Authority” shall mean the California Transportation
Financing Authority.

(b) “Bonds” shall mean bonds, notes, debentures, commercial
paper, or any other evidence of indebtedness, lease, installment,
sale, or certificate of participation thereon, issued by the authority
or a project sponsor pursuant to this division.

(c) “Commission” shall mean the California Transportation
Commission.

(d) “Cost,” as applied to a project or portion of a project financed
under this division, shall mean and include all or any part of the
cost of construction and acquisition of all lands, structures, real or
personal property rights, rights-of-way, franchises, easements, and
interests acquired or used for a project, the cost of demolishing or
removing any buildings or structures on land so acquired, including
the cost of acquiring any lands to which those buildings or
structures may be moved, the cost of all machinery and equipment,
financing charges, interest prior to, during, and for a period not to
exceed the later of one year or one year following completion of
construction, as determined by the authority, the cost of insurance
during construction, the cost of funding or financing noncapital
expenses, reserves for principal and interest and for extensions,
enlargements, additions, replacements, renovations, and
improvements, the cost of engineering, architectural, financial,
legal, and other necessary services, plans, specifications, studies,
surveys, estimates, administrative expenses, and other expenses
of funding or financing, that are necessary or incident to
determining the feasibility of any project, or that are incident to
the construction, rehabilitation, acquisition, or financing of any
project.

(e) “Department” shall mean the Department of Transportation.

begin insert

(f) “Issuer” shall mean the authority when the authority is the
issuer of the bonds, and shall mean the project sponsor when the
authority has authorized the project sponsor to be the issuer of
the bonds.

end insert begin delete

(f)

end delete

begin insert (g) end insert  “Project” shall mean and include all or a portion of the
planning, design, development, finance, construction,
reconstruction, rehabilitation, improvement, acquisition, lease,
operation, or maintenance of highway, public street, rail, bus, or
related facilities supplemental to or improvements upon existing
facilities currently owned or operated by the department or other
project sponsor. A rail project may consist of, or include, rolling
stock.

begin delete

(g)

end delete

begin insert (h) end insert  “Project sponsor” shall mean either the department, a
regional transportation planning agency designated pursuant to
Section 29532 or 29532.1, a county transportation commission as
defined in Section 130050, 130050.1, or 130050.2 of the Public
Utilities Code, any other local or regional transportation entity that
is designated by statute as a regional transportation agency, or a
joint exercise of powers authority as defined in Chapter 5
(commencing with Section 6500) of Division 7 of Title 1 or an
agency designated pursuant to Section 66531 to submit the county
transportation plan, with the consent of a transportation planning
agency or a county transportation commission for the jurisdiction
in which the transportation project will be developed.

begin delete

(h)

end delete

begin insert (i) end insert  “Working capital” means moneys to be used by, or on behalf
of, a project sponsor to pay or prepay maintenance or operation
expenses or any other costs that would be treated as an expense
item, under generally accepted accounting principles, in connection
with the ownership or operation of a project, including, but not
limited to, reserves for maintenance or operation expenses, interest
for not to exceed one year on any loan for working capital made
pursuant to this division, and reserves for debt service with respect
to, and any costs necessary or incidental to, that financing.

SEC. 2.  

Section 64107 of the Government Code is amended
to read:

64107.  

The authority may do any of the following:

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

(b) Adopt an official seal.

(c) Sue and be sued in its own name.

(d) Receive and accept from any agency of the United States,
any agency of the state, or any municipality, county, or other
political subdivision thereof, or from any individual, association,
or corporation gifts, grants, or donations of moneys for achieving
any of the purposes of this division.

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

(f) Receive and accept from any source loans, contributions, or
grants for, or in aid of, the construction, financing, or refinancing
of a project or any portion of a project in money, property, labor,
or other things of value.

(g) Make secured or unsecured loans to, or purchase secured or
unsecured loans of, any project sponsor in connection with the
financing of a project or working capital in accordance with an
agreement between the authority and the project sponsor. However,
no loan to finance a project shall exceed the total cost of the project,
as determined by the project sponsor and approved by the authority.

(h) Make secured or unsecured loans to, or purchase secured or
unsecured loans of, any project sponsor in accordance with an
agreement between the authority and the project sponsor to
refinance indebtedness incurred by that project sponsor for the
costs of projects undertaken or for projects acquired or for working
capital.

(i) Mortgage all or any portion of the interest of the authority
in a project and the property on which that project is located,
whether owned or thereafter acquired, including the granting of a
security interest in any property, tangible or intangible, and to
assign or pledge all or any portion of the interests of the authority
in mortgages, deeds of trust, indentures of mortgage or trust, or
similar instruments, notes, and security interests in property,
tangible or intangible, of projects for which the authority has made
loans, and the revenues therefrom, including payments or income
from any thereof owned or held by the authority, for the benefit
of the holders of bonds issued to finance or refinance a project or
issued to refund or refinance outstanding indebtedness of project
sponsors as permitted by this division.

(j) Charge and equitably apportion among project sponsors, the
administrative costs and expenses incurred by the authority in the
exercise of its powers and duties conferred by this division.

begin delete

(k) Obtain, or aid in obtaining, from any department or agency
of the United States or of the state, any private company, any
insurance or guarantee as to, of, or for the payment or repayment
of, interest or principal, or both, or any part thereof, on any bond,
loan, lease, or obligation, or any instrument evidencing or securing
the loan, lease, or obligation, made or entered into pursuant to this
division; and notwithstanding any other provisions of this division,
to enter into any agreement, contract, or any other instrument
whatsoever with respect to that insurance or guarantee, to accept
payment in the manner and form as provided therein in the event
of default by a project sponsor, and to assign that insurance or
guarantee as security for the authority’s bonds.

(l) Enter into any and all agreements or contracts, including
agreements for liquidity and credit enhancement and interest rate
swaps or hedges, execute any and all instruments, and do and
perform any and all acts or things necessary, convenient, or
desirable for the purposes of the authority or to carry out any power
expressly granted by this division.

(m) Invest any moneys held in reserve or sinking funds or any
moneys not required for immediate use or disbursement, at the
discretion of the authority, in any obligations authorized by the
resolution authorizing the issuance of the bonds secured thereof
or authorized by law for the investment of trust funds in the custody
of the Treasurer.

(n) Employ and fix the compensation of bond counsel, financial
consultants, and advisers as may be necessary in its judgment in
connection with the issuance and administration of any bonds and
contract for engineering, architectural, accounting, or other services
as may be necessary in the judgment of the authority for the
successful development of any project.

(o)

end delete

begin insert (k) end insert  Participate in all things necessary and convenient to carry
out its purposes and exercise its powers.

SEC. 3.  

Section 64107.5 is added to the Government Code, to
read:

64107.5.  

The authority or issuer may do any of the following:

(a) Obtain, or aid in obtaining, from any department or agency
of the United States or of the state, any private company, any
insurance or guarantee as to, of, or for the payment or repayment
of, interest or principal, or both, or any part thereof, on any bond,
loan, lease, or obligation, or any instrument evidencing or securing
the loan, lease, or obligation, made or entered into pursuant to this
division; and notwithstanding any other provisions of this division,
to enter into any agreement, contract, or any other instrument
whatsoever with respect to that insurance or guarantee, to accept
payment in the manner and form as provided therein in the event
of default by a project sponsor, and to assign that insurance or
guarantee as security for the issuer’s bonds.

(b) Enter into any and all agreements or contracts, including
agreements for liquidity and credit enhancement and interest rate
swaps or hedges, execute any and all instruments, and do and
perform any and all acts or things necessary, convenient, or
desirable for the purposes of the issuer or to carry out any power
expressly granted by this division.

(c) Invest any moneys held in reserve or sinking funds or any
moneys not required for immediate use or disbursement, at the
discretion of the issuer, in any obligations authorized by the
resolution authorizing the issuance of the bonds secured thereof
or authorized by law for the investment of trust funds in the custody
of the Treasurer.

(d) Employ and fix the compensation of bond counsel, financial
consultants, and advisers as may be necessary in its judgment in
connection with the issuance and administration of any bonds and
contract for engineering, architectural, accounting, or other services
as may be necessary in the judgment of the issuer for the successful
development of any project.

SEC. 4.  

Section 64109 of the Government Code is amended
to read:

64109.  

(a) To the extent permitted by law, in connection with
any project financed or refinanced pursuant to this division, the
project sponsor may pledge the following revenue sources as
security for revenue bonds issued begin delete by the authority end delete begin insert under this
division end insert :

(1) Local transportation funds, including, but not limited to,
fuel taxes, Article XIX B fuel sales taxes, local transportation sales
taxes, other state revenues approved for this purpose by the
Legislature or by initiative, and developer fees. To the extent that
these revenue sources are within the control of a local agency, the
revenue sources may only be pledged with approval of the
governing board of the local agency. To the extent that these
revenues are within the control of a state agency, the revenue
sources may only be pledged with approval by the department and
the commission.

(2) Tolls, on facilities where not otherwise prohibited by statute,
collected by a project sponsor with the approval of the authority.

(b) Where the authority is issuing bonds to finance or refinance
a project, the authority shall accept a project sponsor’s pledge
made pursuant to subdivision (a) and pledge those revenues to the
repayment of bonds issued to finance or refinance the applicable
project.

SEC. 5.  

Section 64110 of the Government Code is amended
to read:

64110.  

(a) A project sponsor may apply to the authority for
bond begin delete financing or refinancing of end delete begin insert issuance by the authority or
project sponsor for end insert a transportation project that has been approved
by the department and the commission for construction.

(b) The authority shall also ensure that the following
requirements are met for a project to be financed or refinanced begin delete by
the authority end delete begin insert under this division end insert to the extent these criteria have
not already been met through approval of the project by the
commission:

(1) The project complies with all relevant statutes applicable to
planning, programming, and construction of transportation
improvement projects, and is contained in the constrained portion
of a conforming regional transportation plan prepared pursuant to
Section 65080 and identified as a project proposed to be funded
under the authority provided by this division. For purposes of this
subdivision, a regional transportation plan must be consistent with
greenhouse gas reduction targets assigned by the State Air
Resources Board, pursuant to Division 25.5 (commencing with
Section 35800) of the Health and Safety Code.

(2) For projects on the state highway system, the project sponsor
has cooperated with the department to secure its support for the
project and to ensure that the project is consistent with the needs
and requirements of the state highway system.

(3) The project is technically feasible in that it conforms to
federal standards and meets or exceeds environmental
requirements.

(4) The project is financially feasible, as determined pursuant
to Section 64111.

(5) Performance measures have been developed for the project
to enable the commission to track and report on the project’s
performance to the Legislature in the commission’s annual report
prepared pursuant to Section 14535.

(6) The project has support in the communities adjacent to or
affected by the project. To ensure that such support can be
demonstrated, the project sponsor shall, at a minimum, make
available for public review and comment the proposed project,
including any proposed toll schedule, no less than 30 days prior
to approval by the governing body with jurisdiction over the
project.

(7) In the case of highway projects, the project sponsor submits
to the commission and to the authority a plan that demonstrates
how transit service or alternative modes of transportation will be
enhanced in the corridor concurrent with the operation of a toll
facility for the purpose of ensuring that the corridor provides for
multiple modes of transport that accommodate all users. Nothing
in this section may be construed to require that toll revenues be
used to finance the enhancement of transit or alternative means of
transportation in the project corridor.

(c) The authority shall have no power to plan projects, or to
approve projects other than provided in this division. The authority
shall have no power to assume any of the planning, programming,
or allocation authority of the department or the commission.

(d) Beginning June 30, 2011, and annually thereafter, the
authority shall provide to the commission a summary of actions
taken in the previous calendar year, including the number of project
sponsors who sought financing through the authority, a description
of each project, a summary of the sources of funding used to
finance or refinance the project, and any recommendations the
authority may have to improve the financing of transportation
infrastructure, to be included in the commission’s annual report
to the Legislature as required by Section 14535.

SEC. 6.  

Section 64111 of the Government Code is amended
to read:

64111.  

(a) Prior to issuing or approving the issuance of bonds
for a project, the authority shall determine that the revenues and
other moneys available for a project will be sufficient to pay debt
service on the bonds and to operate and maintain the project over
the life of the bonds consistent with the objective set forth in
Section 64105. The authority may hire outside consultants to assist
in making these determinations.

(b) The authority may issue or approve the issuance of bonds
to achieve any of its purposes under this division and bonds may
be issued without investment grade ratings, as long as the bonds
are sold only to qualified institutional buyers or accredited investors
who attest upon purchase that they understand the nature of the
risks of their investment. The bonds may be taxable or tax exempt
and may be sold at public or private negotiated sale. The Treasurer
shall serve as the agent for sale for all authority bond issues, and
shall be reimbursed from bond proceeds to cover the Treasurer’s
costs related to the issuance of these bonds. As used in this
subdivision, “accredited investor” shall have the meaning as
defined in subdivision (a) of Section 5950, and “qualified
institutional buyer” shall have the meaning as defined in
subdivision (h) of Section 5950.

(c)  begin delete The project sponsor may request that it be the issuer of the
bonds. The authority may grant the request if it determines that
the revenues and other moneys available for the project will be
sufficient to pay debt service on the bonds and to operate and
maintain the project over the life of the bonds. end delete A project sponsor
for which the authority has granted a request that the project
sponsor issue the bonds, in addition to any other powers it may
have under any other law, shall have all of the powers of the
authority under this division necessary or convenient for the
purpose of issuing, securing, and repaying the bonds and financing
or refinancing the project. begin delete This provision is a complete, additional,
and alternative method of accomplishing the matters authorized,
and the project sponsor need not comply with any other law relating
to the issuance of bonds, financing of projects and, if applicable,
the imposition and collection of tolls. end delete

(d) The begin delete authority end delete begin insert issuer end insert may arrange additional credit support
for the bond issues. However, the authority may not compel project
sponsors to make use of that credit enhancement, nor compel them
to contribute to it by becoming part of a common credit or by
providing funding for a common reserve or other enhancement
mechanism.

SEC. 7.  

Section 64115 of the Government Code is amended
to read:

64115.  

(a) The begin delete authority is authorized end delete begin insert issuer may end insert , from time
to time, begin delete to end delete issue its negotiable bonds in order to provide funds for
achieving any of its purposes under this division.

(b) Except as may otherwise be expressly provided by the
begin delete authority end delete begin insert issuer end insert , each of its bonds shall be payable from any
revenues or moneys of the begin delete authority end delete begin insert issuer end insert available therefor and
not otherwise pledged, subject only to any agreements with the
holders of particular bonds or notes pledging any particular
revenues or moneys. Notwithstanding that those bonds may be
payable from a special fund, they shall be and be deemed to be for
all purposes negotiable instruments, subject only to the provisions
of those bonds for registration.

(c) The begin delete authority’s end delete bonds may be issued as serial bonds or as
term bonds, or the begin delete authority end delete begin insert issuer end insert , in its discretion, may issue
bonds of both types. The issuance of all bonds shall be authorized
by resolution begin delete of the authority end delete and shall bear the date or dates,
mature at the time or times not exceeding 40 years from their
respective dates, bear interest at the rate or rates, fixed or variable,
be payable at the time or times, be in the denominations, be in the
form, either coupon or registered, carry the registration privileges,
be executed in the manner, be payable in lawful money of the
United States of America at the place or places, and be subject to
the terms of redemption, as the indenture, trust agreement, or other
document authorized by the resolution, or resolution itself may
provide. The begin delete authority’s end delete bonds or notes may be sold by the
Treasurer at public or private negotiated sale, after giving due
consideration to the recommendation of the project sponsor, for
such price or prices and upon such terms and conditions as the
begin delete authority end delete begin insert issuer end insert shall determine. The Treasurer may sell those
bonds at a price below the par value thereof. However, the discount
on any bonds so sold shall not exceed 6 percent of the par value
thereof, except in the case of any bonds payable in whole or in
part from moneys held under one or more outstanding resolutions
or indentures. Pending preparation of the definitive bonds, the
begin delete authority end delete begin insert issuer end insert may issue interim receipts or certificates or
temporary bonds that shall be exchanged for those definitive bonds.

(d) Any resolution or resolutions authorizing the issuance of
any bonds or any issue of bonds may contain provisions, which
shall be a part of the contract with the holders of the bonds to be
authorized, as to pledging all or any part of the revenues of a
project or any revenue-producing contract or contracts made by
the begin delete authority end delete begin insert issuer end insert with any individual, partnership, corporation,
or association or other body, public or private, to secure the
payment of the bonds or of any particular issue of bonds.

(e) Neither the members of the authority nor any person
executing the bonds shall be liable personally on the bonds or be
subject to any personal liability or accountability by reason of the
issuance thereof.

(f) The authority shall have power out of any funds available
therefor to purchase its bonds or bonds issued by a project sponsor
under this division. The authority may hold, pledge, cancel, or
resell the bonds, subject to and in accordance with agreements
with bondholders.

SEC. 8.  

Section 64116 of the Government Code is amended
to read:

64116.  

In the discretion of the authority, any bonds issued
under this division may be secured by a trust agreement or
indenture by and between the begin delete authority end delete begin insert issuer end insert and a corporate
trustee or trustees, which may be the Treasurer or any trust
company or bank having the powers of a trust company within or
without the state. The trust agreement, indenture, or the resolution
providing for the issuance of those bonds may pledge or assign
the revenues to be received from a project sponsor or pursuant to
any revenue-producing contract or as pledged by the begin delete authority end delete
begin insert issuer end insert pursuant to Section 64109. The indenture, trust agreement,
or resolution providing for the issuance of those bonds may contain
provisions for protecting and enforcing the rights and remedies of
the bondholders as may be reasonable and proper and not in
violation of law, including, particularly, provisions as have been
specifically authorized to be included in any resolution or
resolutions begin delete of the authority end delete authorizing bonds thereof. The trust
agreement or indenture may set forth the rights and remedies of
the bondholders and of the trustee or trustees, and may restrict the
individual right of action of bondholders. In addition to the
foregoing, the indenture, trust agreement, or resolution may contain
other provisions as the authority begin insert or issuer end insert may deem reasonable
and proper for the security of the bondholders.

SEC. 9.  

Section 64117 of the Government Code is amended
to read:

64117.  

Bonds issued under this division shall not be deemed
to constitute a debt or liability of the state or of any political
subdivision thereof or a pledge of the faith and credit of the state
or of the political subdivision, other than the begin delete authority end delete begin insert issuer end insert , but
shall be payable solely from the funds herein provided. The bonds
shall contain on the face thereof a statement to the effect that
neither the State of California nor the begin delete authority end delete begin insert issuer end insert shall be
obligated to pay the principal of, or the interest thereon, except
from revenues pledged therefor by the begin delete authority end delete begin insert issuer end insert , and that
neither the faith and credit nor the taxing power of the State of
California or of any political subdivision thereof is pledged to the
payment of the principal of or the interest on those bonds. The
issuance of bonds under the provisions of this division shall not
directly or indirectly or contingently obligate the state or any
political subdivision thereof to levy or to pledge any form of
taxation therefor or to make any appropriation for their payment.

SEC. 10.  

Section 64118 of the Government Code is amended
to read:

64118.  

Any holder of bonds issued under this division or any
of the coupons appertaining thereto, and the trustee or trustees
under any indenture or trust agreement, except to the extent the
rights herein given may be restricted by any resolution authorizing
the issuance of, or any indenture or trust agreement securing, the
bonds, may, either at law or in equity, by suit, action, mandamus,
or other proceedings, protect and enforce any and all rights under
the laws of the state or granted hereunder or under the resolution
or indenture or trust agreement, and may enforce and compel the
performance of all duties required by this division or by the
resolution, indenture, or trust agreement to be performed by the
begin delete authority end delete begin insert issuer end insert or by any officer, employee, or agent thereof.

SEC. 11.  

Section 64119 of the Government Code is amended
to read:

64119.  

All moneys received pursuant to this division, whether
as proceeds from the sale of bonds or as revenues, shall be deemed
to be trust funds to be held and applied solely as provided in this
division. Until the funds are applied as provided in this division,
and notwithstanding any other provision of law, the moneys may
be invested in any obligations or securities authorized by resolution
begin delete of the authority end delete authorizing the issuance of the bonds or indenture
or trust agreement securing the bonds. Any officer with whom, or
any bank or trust company with which, the moneys are deposited
shall act as trustee of the moneys and shall hold and apply the
moneys for the purposes hereof, subject to any regulations adopted
pursuant to this division, and the resolution authorizing the issuance
of the bonds or the indenture or trust agreement securing the bonds.

SEC. 12.  

Section 64120 of the Government Code is amended
to read:

64120.  

(a) The begin delete authority end delete begin insert issuer end insert may provide for the issuance
of bonds begin delete of the authority end delete for the purpose of refunding any bonds
or any series or issue of bonds of the begin delete authority end delete begin insert issuer end insert then
outstanding, including the payment of any redemption premium
thereon and any interest accrued or to accrue to the date of
redemption, purchase, or maturity of the bonds.

(b) The proceeds of any bonds issued for the purpose of
refunding of outstanding bonds may, in the discretion of the
begin delete authority end delete begin insert issuer end insert , be applied to the purchase, redemption prior to
maturity, or retirement at maturity of any outstanding bonds on
their earliest redemption date or dates, upon their purchase or
maturity, or paid to a third person to assume the begin delete authority’s end delete begin insert issuer’s end insert
obligation to make the payments, and may, pending that
application, be placed in escrow to be applied to the purchase,
retirement at maturity, or redemption on the date or dates
determined by the begin delete authority end delete begin insert issuer end insert .

(c) Any proceeds placed in escrow may, pending their use, be
invested and reinvested in obligations or securities authorized by
resolutions of the begin delete authority end delete begin insert issuer end insert , payable or maturing at the time
or times as are appropriate to ensure the prompt payment of the
principal, interest, and redemption premium, if any, of the
outstanding bonds to be refunded at maturity or redemption of the
bonds to be refunded either at their earliest redemption date or
dates or any subsequent redemption date or dates or for payment
of interest on the refunding bonds on or prior to the final date of
redemption or payment of the bonds to be refunded. After the terms
of the escrow have been fully satisfied and carried out, any balance
of the proceeds and interest, income, and profits, if any, earned or
realized on the investments thereof may be returned to the begin delete authority end delete
begin insert issuer end insert for use by the begin delete authority end delete begin insert issuer end insert .

(d) All of the refunding bonds are subject to this division in the
same manner and to the same extent as other bonds issued pursuant
to this division.

SEC. 13.  

Section 64121 of the Government Code is amended
to read:

64121.  

Bonds issued begin delete by the authority end delete under this division are
hereby made securities in which all banks, bankers, savings banks,
trust companies and other persons carrying on a banking business,
all insurance companies, insurance associations and other persons
carrying on an insurance business, and all administrators, executors,
guardians, trustees and other fiduciaries, and all other persons
whatsoever who now are or may hereafter be authorized to invest
in bonds or other obligations of the state, may properly and legally
invest any funds, including capital belonging to them or within
their control; and the bonds, notes, or other securities or obligations
are hereby made securities that may properly and legally be
deposited with and received by any state or municipal officers or
agency of the state for any purpose for which the deposit of bonds
or other obligations of the state is now or may hereafter be
authorized by law.

SEC. 14.  

Section 64124 of the Government Code is amended
to read:

64124.  

A pledge by or to the begin delete authority end delete begin insert issuer end insert of revenues,
moneys, accounts, accounts receivable, contract rights, and other
rights to payment of whatever kind made by or to the begin delete authority end delete
begin insert issuer end insert pursuant to the authority granted in this division shall be
valid and binding from the time the pledge is made for the benefit
of pledges and successors thereto. The revenues, moneys, accounts,
accounts receivable, contract rights, and other rights to payment
of whatever kind pledged by or to the begin delete authority end delete begin insert issuer end insert or its
assignees shall immediately be subject to the lien of the pledge
without physical delivery or further act. The lien of the pledge
shall be valid and binding against all parties, irrespective of
whether the parties have notice of the claim. The indenture, trust
agreement, resolution, or another instrument by which the pledge
is created need not be recorded.

SEC. 15.  

Section 64125 of the Government Code is amended
to read:

64125.  

Each lease begin delete entered into by the authority with a project
sponsor and each end delete agreement, note, mortgage, or other instrument
evidencing the obligations of a project sponsor begin delete to the authority end delete
shall provide that the rents or principal, interest, and other charges
payable by the project sponsor shall be sufficient at all times, (a)
to pay the principal of, sinking fund payments, if any, the premium,
if any, and the interest on outstanding bonds begin delete of the authority end delete issued
in respect of such project as the same shall become due and
payable, (b) to create and maintain reserves which may, but need
not, be required or provided for in the resolution relating to the
bonds begin delete of the authority end delete , and (c) to pay its share of the administrative
costs and expenses of the authority. The begin delete authority end delete begin insert issuer end insert shall
pledge the revenues derived, and to be derived, from a project or
from a project sponsor for the purposes specified in (a), (b), and
(c) of the preceding sentence and additional bonds may be issued
which may rank on a parity with other bonds relating to the project
to the extent and on the terms and conditions provided in the bond
resolution.

SEC. 16.  

Section 64126 of the Government Code is amended
to read:

64126.  

When the principal of and interest on bonds issued by
the authority to finance the cost of a project or working capital or
to refinance outstanding indebtedness of one or more project
sponsors, including any refunding bonds issued to refund and
refinance those bonds, have been fully paid and retired or when
adequate provision has been made to fully pay and retire those
bonds, and all other conditions of the resolution, the lease, the trust
indenture and any mortgage or deed of trust, security interest, or
any other instrument or instruments authorizing and securing the
bonds have been satisfied and the lien of the mortgage, deed of
trust, or security interest has been released in accordance with the
provisions thereof, the authority shall promptly do all things and
execute those releases, release deeds, reassignments, deeds, and
conveyances necessary and required to convey or release any
rights, title, and interest of the authority in the project so financed
begin insert or refinanced end insert , or securities or instruments pledged or transferred
to secure the bonds, to the project sponsor or sponsors.

SEC. 17.  

Section 64127 of the Government Code is amended
to read:

64127.  

(a) This division shall be deemed to provide a complete,
additional, and alternative method for doing the things authorized
by this code, and shall be regarded as supplemental and additional
to powers conferred by other laws. The issuance of bonds and
refunding bonds and the financing or refinancing of projects or
the imposition and collection of tolls under this begin delete chapter end delete begin insert division end insert
need not comply with any other law applicable to the issuance of
bonds or the collection of tolls, including, but not limited to,
Division 13 (commencing with Section 21000) of the Public
Resources Code.

(b) Except as provided in subdivision (a), the financing of a
project pursuant to this division shall not exempt a project from
any requirement of law that is otherwise applicable to the project,
and the project sponsor shall provide documentation, before the
authority approves the issuance of bonds for the project, that the
project has complied with Division 13 (commencing with Section
21000) of the Public Resources Code, or is not a project under that
division.

SEC. 18.  

Section 64132 of the Government Code is amended
to read:

64132.  

(a) The California Transportation Financing Authority
Fund is hereby created and continued in existence in the State
Treasury, to be administered by the authority. Notwithstanding
Section 13340 of the Government Code, all moneys in the funds
shall be continuously appropriated without regard to fiscal year
for the purposes of this division. The authority may pledge any or
all of the moneys in the fund as security for payment of the
principal of, and interest on, any particular begin delete issuance end delete begin insert bonds issued end insert
by the authority begin delete of bonds issued pursuant to this division end delete , or any
particular secured or unsecured loan made pursuant to subdivision
(g) or (h) of Section 64107, and, for that purpose or as necessary
or convenient to the accomplishment of any other purpose of the
authority, may divide the fund into separate accounts. All moneys
accruing to the authority pursuant to this part from whatever source
shall be deposited in the fund.

(b) Subject to the priorities that may be created by the pledge
of particular moneys in the fund to secure any begin delete issuance of end delete bonds
begin delete of end delete begin insert issued by end insert the authority, and subject further to the costs of loans
provided by the authority pursuant to subdivisions (g) and (h) of
Section 64107, and subject further to any reasonable costs that
may be incurred by the authority in administering the program
authorized by this division, all moneys in the fund derived from
any source shall be held in trust for the security and payment of
bonds begin delete of end delete begin insert issued by end insert the authority and shall not be used or pledged
for any other purpose so long as the bonds are outstanding and
unpaid. However, nothing in this section shall limit the power of
the authority to make loans with the proceeds of bonds in
accordance with the terms of the resolution authorizing the same.

(c) Pursuant to any agreements with the holders of particular
bonds pledging any particular assets, revenues, or moneys, the
authority may create separate accounts in the fund to manage
assets, revenues, or moneys in the manner set forth in the
agreements.

(d) The authority may, from time to time, direct the Treasurer
to invest moneys in the fund that are not required for its current
needs, including proceeds from the sale of any bonds, in the eligible
securities specified in Section 16430 as the agency shall designate.
The authority may direct the Treasurer to deposit moneys in
interest-bearing accounts in state or national banks or other
financial institutions having principal offices in this state. The
authority may alternatively require the transfer of moneys in the
fund to the Surplus Money Investment Fund for investment
pursuant to Article 4 (commencing with Section 16470) of Chapter
3 of Part 2 of Division 4 of Title 2. All interest or other increment
resulting from an investment or deposit shall be deposited in the
fund, notwithstanding Section 16305.7. Moneys in the fund shall
not be subject to transfer to any other fund pursuant to any
provision of Part 2 (commencing with Section 16300) of Division
4 of Title 2, excepting the Surplus Money Investment Fund.