Senate Bill No. 1462

Introduced by Committee on Governance and Finance (Senators Wolk (Chair), Beall, DeSaulnier, Hernandez, Knight, Liu, and Vidak)

March 10, 2014

An act to amend Sections 5903 and 53395.10 of the Government Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

SB 1462, as introduced, Committee on Governance and Finance. Local government: omnibus bill.

(1) Existing law authorizes a legislative body, as defined, that determines prior to issuing any bonds that the interest payable on the bonds will be subject to federal income taxation under the law in effect on the date of issuance, to require in the ordinance, resolution, indenture, agreement, or other instrument providing for the issuance of the bonds, that the bonds be denominated, payable, and redeemable in accordance with certain standards.

This bill would also authorize the legislative body to include the maturity or maturities of the bonds in the ordinance, resolution, indenture, agreement, or other instrument providing for issuance.

(2) Existing law authorizes the legislative body of a city or county to establish an infrastructure financing district, and requires proceedings for the establishment of a district to be instituted by the adoption of a resolution of intention to establish the proposed district that, among other things, describes the boundaries of the proposed district as referenced in a map on file in the office of the clerk of the city.

This bill would specify that the description of the boundaries of the proposed district may be accomplished by reference to a map on file in the office of the clerk of either the city or county that is proposing to establish the district.

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

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

SECTION 1.  

(a) This act shall be known, and may be cited,
as the Local Government Omnibus Act of 2014.

(b) The Legislature finds and declares that Californians want
their governments to be run efficiently and economically and that
public officials should avoid waste and duplication whenever
possible. The Legislature further finds and declares that it desires
to control its own costs by reducing the number of separate bills.
Therefore, it is the intent of the Legislature in enacting this act to
combine several minor, noncontroversial statutory changes relating
to the common theme, purpose, and subject of local government
into a single measure.

SEC. 2.  

Section 5903 of the Government Code is amended to
read:

5903.  

If, prior to issuing any bonds, the legislative body
determines that the interest payable on the bonds to be issued by
the state or local government will be subject to federal income
taxation under the law in existence on the date of issuance or
pending on the date of issuance with an effective date preceding
the date of issuance, then notwithstanding any other provision of
law, the ordinance, resolution, indenture, agreement, or other
instrument providing for the issuance of the bonds may provide
for any of the following:

(a) The bonds shall be in begin delete such end delete begin insert the end insert denominations, in begin delete such end delete begin insert the end insert
form, either bearer or registered, and payable at begin delete such end delete begin insert the end insert place or
places, either within or without the United States, at begin delete such end delete begin insert the end insert time
or times, in lawful money of the United States of America, begin insert with
the maturity or maturities, end insert with begin delete such end delete begin insert the end insert terms of redemption, and
at begin delete such end delete begin insert the end insert interest rate or rates, either fixed or variable, including
methods of determining begin delete such end delete begin insert the end insert rate or rates if variable, as the
legislative body shall determine.

(b) The bonds shall be sold at public or private sale, in such
manner and place or places, either within or without the United
States, and at begin delete such end delete begin insert the end insert price or prices, above or below par, as the
legislative body shall determine.

(c) In connection with, or incidental to, the sale and issuance
of the bonds, the state or local government may offer, sell, and
issue warrants for additional bonds, as well as issue additional
bonds pursuant to these warrants on terms consistent with this
chapter, and may enter into any contracts which the legislative
body determines to be necessary or appropriate to place the
obligation of the state or local government, as represented by the
bonds and the contract or contracts, in whole or in part on the
interest rate, cash flow, or other basis desired by the legislative
body, including, without limitation, contracts commonly known
as interest rate swap agreements, forward payment conversion
agreements, futures, or contracts providing for payments based on
levels of or changes in interest rates, or contracts to exchange cash
flows or a series of payments, or contracts, including, without
limitation, options, puts or calls to hedge payment, rate, spread,
or similar exposure. These contracts or arrangements may also be
entered into by state or local governments in connection with, or
incidental to, entering into any agreement which secures bonds,
including bonds issued by private entities. These contracts and
arrangements shall be made upon the terms and conditions
established by the legislative body, after giving due consideration
for the creditworthiness of the counterparties, where applicable,
including any rating by a nationally recognized rating agency or
any other criteria as may be appropriate. In addition, these contracts
and arrangements may be made only if the bonds are rated in one
of the three highest rating categories by two nationally recognized
rating agencies, and if there has been receipt, from any rating
agency rating the bonds, of written evidence that the contract or
agreement will not adversely affect the rating.

(d) In connection with, or incidental to, the sale and issuance
of the bonds, or entering into any of the contracts or arrangements
referred to in subdivision (c), the state or local government may
enter into begin delete such end delete credit enhancement or liquidity agreements, with
begin delete such end delete payment, interest rate, security, default, remedy, and other
terms and conditions as the legislative body shall determine.

(e) Proceeds of the bonds and any moneys set aside or pledged
to secure payment of the bonds, or any of the contracts entered
into pursuant to subdivision (c), may be invested in securities or
obligations described in the ordinance, resolution, indenture,
agreement, or other instrument providing for the issuance of the
bonds and may be pledged to and used to service any of the
contracts or agreements entered into pursuant to this section.

SEC. 3.  

Section 53395.10 of the Government Code is amended
to read:

53395.10.  

A legislative body of a city or county may designate
one or more proposed infrastructure financing districts pursuant
to this chapter. Proceedings for the establishment of a district shall
be instituted by the adoption of a resolution of intention to establish
the proposed district and shall do all of the following:

(a) State that an infrastructure financing district is proposed to
be established under the terms of this chapter and describe the
boundaries of the proposed district, which may be accomplished
by reference to a map on file in the office of the clerk of the city
begin insert or end insert begin insert county that is proposing to establish the district end insert .

(b) State the type of public facilities proposed to be financed
by the district. The district may only finance public facilities
authorized by Section 53395.3.

(c) State that incremental property tax revenue from the city or
county and some or all affected taxing entities within the district
may be used to finance these public facilities.

(d) Fix a time and place for a public hearing on the proposal.