2005 California Government Code Sections 53595-53595.55 Article 13. Collateralized Borrowing

53595.  As used in this article:
   (a) "Debt instruments" means bonds, notes, certificates of
participation, or other evidences of indebtedness issued by a local
agency pursuant to this article.
   (b) "Indenture" means the instrument providing the terms and
conditions for the issuance of the debt instruments, and may be a
resolution, order, agreement, or other instrument.
   (c) "Legislative body" means the city council, board of
supervisors, or other legislative or governing body of a local
agency.
   (d) "Local agency" means any city, county, city and county,
district, including, but not limited to, a school district or other
public entity authorized to enter into a tax increment agreement.
   (e) "Redevelopment agency" means a redevelopment agency
established pursuant to Part 1 (commencing with Section 33000) of
Division 24 of the Health and Safety Code and includes a community
development commission exercising the powers granted to a
redevelopment agency pursuant to Section 34141 of the Health and
Safety Code.
   (f) "Tax increment" means that portion of tax revenues allocated
to a redevelopment agency pursuant to subdivision (b) of Section
33670 of the Health and Safety Code.
   (g) "Tax increment agreement" means any agreement between a local
agency and a redevelopment agency which allocates tax increment to
the local agency pursuant to Section 33401 of the Health and Safety
Code.
   (h) "Tax increment revenues" means tax increment received or
receivable by a local agency pursuant to a tax increment agreement.
53595.5.  This article shall apply only to local agencies located
within a county with a population of over 4,000,000 persons.
53595.10.  A local agency may pledge, sell, transfer, assign, or
otherwise dispose of tax increment revenues for any purpose for which
the general funds of the local agency may be expended.
53595.15.  (a) A pledge by a local agency of tax increment revenues
received pursuant to a tax increment agreement shall be valid and
binding upon the local agency from the time the pledge is made for
the benefit of pledgees and successors in interest thereof.  The tax
increment revenues pledged by the local agency or its assignees shall
immediately, upon receipt by the local agency from the redevelopment
agency, be subject to the lien of the pledge without physical
delivery or further act.
   (b) Except as otherwise specified in this section, 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 by
which the pledge is created need not be recorded.  The pledge shall
remain a valid and binding pledge until the debt instruments secured
by the pledge are no longer outstanding.
   (c) Nothing in this article affects the rights, duties, or
obligations of a redevelopment agency with regard to the allocation
of tax increment by a redevelopment agency to a local agency pursuant
to a tax increment agreement, the terms of which shall exclusively
govern the rights, duties, and obligations of the redevelopment
agency.  This article does not vest in any pledgee, holder of debt
instruments, successor in interest thereof, or any person, other than
the local agency, any lien, right, claim, interest, or cause of
action against a redevelopment agency for tax increment revenues held
by, or to be received by, the redevelopment agency.
53595.20.  (a) A local agency may, from time to time, issue its
negotiable debt instruments payable from, secured by, collateralized
by, or representing interests in, tax increment revenues.  The debt
instruments may be issued to provide funds for capital expenditures,
payment of rent or debt service, purchases of fixed assets, deposits
into reserves created to improve the financial condition of the local
agency, or other similar expenditures.  The debt instrument proceeds
may also be used to pay operating costs of the local agency if that
use has been approved by a four-fifths vote of all the members of the
governing body of the local agency.  In no case, however, shall the
proceeds of any debt instrument be used to pay for increased salary
or benefit for officers or employees of a local agency.
   (b) (1) The debt instruments may be issued as serial debt
instruments, term debt instruments, or both, and may be issued in
those series or classes as the legislative body of the local agency
may determine.  The debt instruments shall bear the date or dates,
mature at the time or times, 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 terms of redemption, as the indenture relating to
the debt instruments may provide.
   (2) The debt instruments may be sold at public or private sale,
for the price or prices and upon these terms and conditions as the
legislative body of the local agency shall determine.  The local
agency may sell the debt instruments at a price below the par value
thereof.  Pending preparation of the definitive debt instruments, the
local agency may issue interim receipts or certificates or temporary
debt instruments which shall be exchanged for the definitive debt
instruments.  The recitals of regularity of proceedings in any debt
instrument issued or sold under this article shall be conclusive
evidence of compliance with this article and of the validity of the
debt instrument.
   (c) The debt instruments shall be signed by the chairperson of the
legislative body and by any authorized officer of the local agency
by manual or facsimile signature.  Neither the members of the
legislative body of a local agency nor any person executing the debt
instruments shall be personally liable on the debt instruments or be
subject to any personal liability or accountability by reason of the
issuance or execution thereof.
   (d) The local agency shall have the power to purchase its debt
instruments out of any funds available therefor.  The local agency
may hold, pledge, cancel, or resell the debt instruments, subject to,
and in accordance with, agreements with holders of debt instruments.
53595.25.  (a) A local agency may provide for the issuance of debt
instruments for the purpose of refunding any debt instruments or any
class, series, or issue of debt instruments of the local agency 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 debt instruments.
   (b) The proceeds of any debt instruments issued for the purpose of
refunding of outstanding debt instruments may, in the discretion of
the local agency, be (1) applied to the purchase, redemption prior to
maturity, or retirement at maturity of any outstanding debt
instruments on their redemption date or dates, or (2) paid to a third
person to assume the local agency's obligation to make the payments,
and may, pending that application, be placed in escrow to be
reapplied to the purchase, retirement at maturity, or redemption on
the date or dates determined by the local agency.
   (c) Any proceeds placed in escrow may, pending their use, be
invested and reinvested in obligations or securities authorized by
resolutions of the legislative body of the local agency, 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 debt instruments to be refunded.  The interest,
income, and profits, if any, earned or realized on this investment
may also be applied to the payment of the outstanding debt
instruments to be refunded or to the payment of interest on the
refunding debt instruments.  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
investment thereof may be returned to the local agency for use by the
local agency.
   (d) All of the refunding debt instruments are subject to this
article in the same manner, and to the same extent, as other debt
instruments issued pursuant to this article.
53595.30.  (a) All moneys received pursuant to this article and
pledged to the payment of any class, series, or issue of debt
instruments, whether as tax increment revenues or from any other
source, shall be deemed to be trust funds to be held and applied
solely as provided in this article.  Until the funds are applied as
provided by this article, and notwithstanding any other provision of
law, the moneys may be invested in obligations or securities
authorized by resolutions of the legislative body of the local agency
authorizing the issuance of debt instruments.
   (b) 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 purpose of this article,
subject to any regulations of the local agency adopted pursuant to
this article and the indenture securing the bonds.
53595.35.  (a) In the discretion of the legislative body of a local
agency, any debt instruments issued under this article may be secured
by an indenture by and between the local agency and a corporate
trustee or trustees, which may be any trust company or bank having
the powers of a trust company within or without the state.  The
indenture or resolution providing for the issuance of the debt
instruments may pledge or assign the tax increment revenues or the
interest of the local agency therein.  The indenture may contain
provisions for protecting and enforcing the rights and remedies of
the holders of debt instruments as may be reasonable and proper and
not in violation of law, including particular provisions specifically
authorized by law to be included in any indenture of the local
agency authorizing debt instruments pursuant to this article.  The
indenture may set forth the rights and remedies of the holders of
debt instruments and of the trustee or trustees, and may restrict
rights of action of holders of debt instruments.  In addition to the
foregoing, the indenture may contain other provisions as the local
agency may deem necessary or desirable to facilitate the issuance and
sale of the debt instruments or for the protection and security of
the holders of debt instruments.
   (b) Any holder of debt instruments issued under this article or
any of the coupons appertaining thereto, and the trustee or trustees
under any indenture, except to the extent the rights herein given may
be restricted by any indenture securing the debt instruments, may,
either at law or in equity, by suit, action, mandamus, or other
proceeding, protect and enforce any and all rights under the laws of
the state or granted by this article or under indenture, and may
enforce and compel the performance of all duties required by this
article or by the indenture to be performed by the local agency or by
any officer, employee, or agent thereof.
53595.40.  (a) Debt instruments issued under this article shall be
payable solely from the tax increment revenues herein provided and
not from any other assets or revenues of the issuing local agency.
   (b) The local agency issuing the debt instruments shall not pledge
the faith or credit of the state or of any municipality or political
subdivision thereof to secure the debt instruments.  All debt
instruments shall contain on the face thereof a statement to the
effect that neither the State of California nor the local agency
issuing the debt instruments shall be obligated to pay the principal
of, premium, if any, or interest on the debt instruments, except from
the revenues of the local agency pledged for payment, and that
neither the faith and credit nor the taxing power of the State of
California nor of any municipality or political subdivision thereof
is pledged to the payment of the principal of, premium, if any, or
interest on the debt instruments.
   (c) The issuance of debt instruments under this article shall not
directly or indirectly or contingently obligate the state, a
municipality, or any political subdivision of the state to levy or
pledge any form of taxation whatever therefor or to make any
appropriation for the payment thereof.
53595.45.  (a) Debt instruments issued by a local agency under this
article are hereby made securities in which all (1) banks, bankers,
savings banks, trust companies, and other persons carrying on a
banking business, (2) all insurance companies, insurance
associations, and other persons carrying on an insurance business,
(3) all administrators, executors, guardians, trustees, and other
fiduciaries, and (4) all other persons whatsoever who now are or may
hereafter be authorized to invest in debt instruments or other
obligations of the state, may properly and legally invest any funds,
including capital belonging to them or within their control.
   (b) The debt instruments are hereby made securities which may
properly and legally be deposited with, and received by, any state or
municipal officers or agency of the state or municipality or
political subdivision thereof for any purpose for which the deposit
of debt instruments or other obligations of the state is now, or may
hereafter be, authorized by law.
53595.50.  Any debt instruments issued under this article, their
transfer, and in the income therefrom shall at all times be free from
taxation of every kind by the state and by all municipalities and
political subdivisions in the state.
53595.55.  This article shall be deemed to provide a complete,
additional, and alternative method for doing the things authorized
hereby and shall be regarded as supplemental and additional to powers
conferred by other laws.  This article shall be liberally construed
so as to effectuate its purposes.  To the extent that this article is
inconsistent with any other general statute or special act or parts
thereof, this article shall be deemed controlling.