2007 California Government Code Article 6. Local Agency Emergency Loan Fund

CA Codes (gov:16492-16495.5)

16492.  The Legislature finds and declares that local agencies may
be unable to sell short-term notes to financial institutions at the
end of the 1977-78 fiscal year and the beginning of the 1978-79
fiscal year due to the lack of certainty in their ability to raise
revenue to repay such short-term notes.  Therefore, another source of
short-term financing is necessary to ensure the orderly delivery of
basic programs and services during the beginning of the fiscal year.
In order to meet this need, the state, in this article, hereby
establishes a Local Agency Emergency Loan Fund to serve as the lender
of last resort.


16492.5.  It is the purpose of the Local Agency Emergency Loan Fund
to provide short-term loans to local agencies for operational
purposes so that vital services are not interrupted.



16493.  As used in this article:
   (a) "Board" means the Pooled Money Investment Board.
   (b) "Local agency" means a city, county, city and county, special
district, school district, county board of education, or community
college district which levied a property tax during the 1977-78
fiscal year or for which a property tax was levied.  "Local agency"
also means any city, special district, or school district formed
during the 1977-78 fiscal year which was authorized to levy a
property tax but did not actually levy such a tax for that year.



16493.5.  There is hereby created in the State Treasury a Local
Agency Emergency Loan Fund.  Short-term loans shall be available to
local agencies for the purpose of meeting operating costs at the end
of the 1977-78 fiscal year and during the 1978-79 fiscal year.  Such
funds shall not be used for capital outlay projects.




16494.  The amount of any loan shall not exceed 50 percent of the
local agency's property tax revenues for the 1977-78 fiscal year,
including state property tax relief subventions.  The maximum amount
of a loan to a local agency which was formed during the 1977-78
fiscal year and authorized to levy a property tax, but did not do so,
shall be no more than 50 percent of the amount such agency could
have levied if it had levied such a tax.



16494.7.  Notwithstanding any other provision of law, any local
agency may apply to the board, by no later than August 21, 1978, for
a loan pursuant to this article after the adoption by the local
agency's governing body of a resolution containing all of the
following:
   (a) A statement that the local agency is authorized to issue
revenue or tax anticipation notes;
   (b) A statement indicating the local agency's property tax
revenues for the 1977-78 fiscal year, including state property tax
subvention.  With respect to a local agency formed during the 1977-78
fiscal year and authorized to levy a property tax, but did not do
so, a statement estimating the amount such agency could have levied
if it had levied such a tax;
   (c) A finding based on substantial evidence that the agency's cash
flow is not sufficient to meet current obligations for the operation
of vital services and that all unrestricted reserves except for a
prudent surplus have been exhausted or will be exhausted at the time
the loan is made;
   (d) A statement that taxes, revenues, and other income not
obligated by law for a specific purpose and anticipated to be
received during the 1978-79 fiscal year, will be available to repay
the principal and interest on such loan before May 31, 1979;
   (e) A statement that revenue and tax anticipation notes are not
currently being purchased from the local agency by private lenders;
and
   (f) Evidence that the local agency is unable to use interfund
transfers to meet its short-term cash obligations.



16495.  (a) The board may approve, reduce, or deny any loan
application.  Such action shall be taken within 10 days of the
receipt of an application.  No loan shall be made by the board after
August 31, 1978.  The board shall establish the form and content of
loan applications, and procedures for periodic disbursements of
approved loans to local agencies.
   (b) For the purposes of this article, each member of the board may
appoint a representative to act on his behalf.  The board shall have
the authority to appoint sufficient staff to process loan
applications received by the board.



16495.5.  (a) All loans shall bear an interest rate comparable to
the prevailing market interest rate statewide for tax anticipation
notes purchased by major California banks, as determined by the
board.  The interest on such loans shall accrue until final payment.

   (b) Any such loan constitutes a lien and charge against the taxes,
revenues, and other income not obligated by law collected during the
fiscal year in which it was borrowed.  The loan shall be repaid into
the General Fund from the money received by the local agency from
the taxes, revenues, and income as it becomes available.  At a
minimum, 50 percent of the principal and interest shall be repaid by
December 31, 1978, and the remaining principal and interest shall be
repaid by May 31, 1979.  If such loan is not repaid, the board shall
request the State Controller to offset the amount not repaid against
any payments required by law to be made by the state to the
defaulting local agency.  If the total of such payments is less than
the amount owed to the state, the state may exercise its lien rights
pursuant to this section.
   (c) The State Controller may audit all loan recipients.