Amended in Assembly April 3, 2013

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, begin insert 64112, end insert 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 amended, 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.

(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.

(g) “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.

(h) “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.

(i) “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 begin insert a period end insert 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.

(k) 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 under this division:

(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 issuance by the authority or project sponsor for 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
under this division 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) 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.

(d) The issuer 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.

begin insert

begin insert SEC. end insert begin insert 7 end insert begin insert . end insert   

end insert

begin insert Section 64112 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

64112.  

Notwithstanding any other begin delete provision of end delete law, the
authority may authorize a project sponsor, or the department, to
impose and collect tolls as one source of begin delete financing end delete begin insert revenue end insert to pay
debt service and to operate and maintain a project under the
following conditions:

(a) The governing body of the project sponsor, by a majority
vote of the body, or, for projects sponsored by the department, the
commission, has approved the imposition of tolls on users of the
project, or a majority of the voters within the jurisdiction of the
project sponsor has approved a ballot measure imposing the tolls.

(b) Each highway project for which tolls are imposed shall have
nontolled alternative lanes available for public use in the same
corridor as the proposed toll project. Nothing in this division shall
allow the conversion of any existing nontolled or non-user-fee
lanes into tolled or user-fee lanes, except for the conversion of
high-occupancy vehicle lanes into high-occupancy toll lanes,
consistent with the authorizations in Sections 149.1, 149.4, 149.5,
149.6, and 149.7 of the Streets and Highways Code.

(c) For highway projects, the road segment is on the state
highway system. Nothing in this division shall allow the imposition
of a toll on any local street or road.

(d) The approval of the tolls pursuant to subdivision (a) shall
require that the tolls be set and maintained at a level expected to
be sufficient to pay debt service, operations, and maintenance of
the project over the life of the bonds consistent with the objective
set forth in Section 64105.

(e) The project’s financial pro forma shall incorporate life-cycle
costs for the project, including revenues to pay for maintenance,
operation, and rehabilitation.

(f) Subject to any constraints in the bond documents necessary
to make the bonds marketable, excess revenues from operation of
the project, including toll revenues, shall be used exclusively in
the corridor from which the revenue was generated to fund
acquisition, construction, improvement, maintenance, or operation
of high-occupancy vehicle facilities, other transportation purposes,
or transit service, including, but not limited to, support for transit
operations pursuant to an expenditure plan. The project sponsor,
in consultation with the department, shall issue an expenditure
plan that describes transportation improvements for the corridor begin delete ,
which end delete begin insert . This expenditure plan end insert shall include projected costs, the use
of toll revenues, and a proposed completion schedule. The
expenditure plan shall be updated annually. The plan and each
annual update shall be made available for public review and
comment for begin delete no end delete begin insert not end insert less than 30 days prior to adoption by the
governing board of the project sponsor.

(g) Except for purposes of implementing congestion
management mechanisms pursuant to Section 64113, tolls begin delete may end delete
begin insert shall end insert not be set to generate more revenue than the expected cost
of paying debt service on the bonds, contracts entered into by the
authority or the project sponsor in connection with the bonds,
funding reserves, operating and maintaining the project, repair and
rehabilitation of the project, and providing transportation
improvements to the corridor pursuant to subdivision (f).

begin delete SEC. 7. end delete
begin insert SEC. 8. end insert   

Section 64115 of the Government Code is amended
to read:

64115.  

(a) The issuer may, from time to time, 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 issuer,
each of its bonds shall be payable from any revenues or moneys
of the issuer 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 bonds may be issued as serial bonds or as term bonds,
or the issuer, in its discretion, may issue bonds of both types. The
issuance of all bonds shall be authorized by resolution 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 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
issuer 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 issuer
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 issuer 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.

begin delete SEC. 8. end delete
begin insert SEC. 9. end insert   

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 issuer 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 issuer 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
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 or issuer may deem reasonable and proper for the security
of the bondholders.

begin delete SEC. 9. end delete
begin insert SEC. 10. end insert   

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 issuer, 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 issuer shall be obligated to pay the
principal of, or the interest thereon, except from revenues pledged
therefor by the issuer, 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.

begin delete SEC. 10. end delete
begin insert SEC. 11. end insert   

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
issuer or by any officer, employee, or agent thereof.

begin delete SEC. 11. end delete
begin insert SEC. 12. end insert   

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
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.

begin delete SEC. 12. end delete
begin insert SEC. 13. end insert   

Section 64120 of the Government Code is amended
to read:

64120.  

(a) The issuer may provide for the issuance of bonds
for the purpose of refunding any bonds or any series or issue of
bonds of the issuer 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 issuer,
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 issuer’s 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 issuer.

(c) Any proceeds placed in escrow may, pending their use, be
invested and reinvested in obligations or securities authorized by
resolutions of the issuer, 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 issuer for use
by the issuer.

(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.

begin delete SEC. 13. end delete
begin insert SEC. 14. end insert   

Section 64121 of the Government Code is amended
to read:

64121.  

Bonds issued 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.

begin delete SEC. 14. end delete
begin insert SEC. 15. end insert   

Section 64124 of the Government Code is amended
to read:

64124.  

A pledge by or to the issuer of revenues, moneys,
accounts, accounts receivable, contract rights, and other rights to
payment of whatever kind made by or to the issuer 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 issuer 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.

begin delete SEC. 15. end delete
begin insert SEC. 16. end insert   

Section 64125 of the Government Code is amended
to read:

64125.  

Each lease agreement, note, mortgage, or other
instrument evidencing the obligations of a project sponsor 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 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, and (c) to
pay its share of the administrative costs and expenses of the
authority. The issuer 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.

begin delete SEC. 16. end delete
begin insert SEC. 17. end insert   

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
or refinanced, or securities or instruments pledged or transferred
to secure the bonds, to the project sponsor or sponsors.

begin delete SEC. 17. end delete
begin insert SEC. 18. end insert   

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 division 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.

begin delete SEC. 18. end delete
begin insert SEC. 19. end insert   

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 bonds issued by the
authority, 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 bonds issued by 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 issued by 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.