2007 California Public Utilities Code Article 7. Limited Obligation Bonds

CA Codes (puc:99320-99383)

99320.  This article is not applicable in a county where the transit
district has been provided bonding authority by statute.



99320.5.  If the transportation planning agency determines that the
cost of an approved claim for capital expenditures for public
transportation purposes, excluding highways, within a county is,
together with all other approved claims to be paid from the local
transportation fund of such county, in excess of the money in such
fund for the fiscal year, the board of supervisors of such county
shall be notified to call an election in conformity with the
provisions of this article.



99321.  For purposes of this article, "limited obligation bonds" are
bonds payable solely from the local transportation fund of the
county.  The money, or portion thereof, designated by the
transportation planning agency in such fund to pay interest and
redemption charges shall hereafter be referred to as "revenues."



99322.  In determining the amount of bonds to be issued, the
transportation planning agency may include:
   (a) All costs and estimated costs incidental to or connected with
the acquisition, construction, improving or financing of the
improvements.
   (b) All engineering, inspection, legal and fiscal agent's fees,
costs of the bond election and of the issuance of such limited
obligation bonds, bond reserve funds and working capital and bond
interest estimated to accrue during the construction period and for a
period of not to exceed 12 months after completion of construction.

   (c) All costs for equipment.



99323.  The bonds and the resolution providing for their issuance
shall state that they are limited obligation bonds payable solely
from the revenues.


99324.  The term of bonds issued shall not exceed 31 years.



99325.  The bonds shall be sold as the transportation planning
agency shall determine but for not less than a price which will
produce a net interest cost that will not exceed an average of 7
percent a year as determined by standard tables of bond values.




99326.  The bonds are special obligations of the county and shall be
a charge against and are secured by a lien upon and shall be
payable, as to the principal thereof and interest thereon, and any
premiums upon the redemption thereof, solely from the revenues and
such funds as are described in the resolution authorizing the
issuance of the bonds.



99327.  By resolution, the board of supervisors shall pledge, place
a charge upon, and assign all or any part of the revenues for the
security of the bonds.


99328.  The payment of interest on and principal of the bonds and
any premiums upon the redemption of any thereof are secured by an
exclusive pledge, charge, and lien upon all or the designated portion
of the revenues.


99329.  The revenues and any interest earned on the revenues
constitute a trust fund for the security and payment of the interest
on and principal of the bonds.



99330.  So long as any bonds or interest thereon are unpaid
following their maturity, the revenues or the designated portion and
interest thereon shall not be used for any other purpose.



99331.  If the interest and principal of the bonds and all charges
to protect or secure them are paid when due, an amount or amounts for
other purposes may be apportioned from the revenues or the
designated portion thereof.


99332.  Bonds of the same issue shall be equally secured by a
pledge, charge, and lien upon the revenues specified in the
resolution authorizing the issuance of the bonds, without priority
for number, or date of bonds, of sale, of execution, or of delivery
pursuant to this chapter and the resolution authorizing the issuance
of the bonds; except that any county, with the consent of the
transportation planning agency, may authorize the issuance of bonds
of different series and may provide that the bonds in any series
shall, to the extent and in the manner prescribed in the resolution,
be subordinated and be junior in standing, with respect to the
payment of principal and interest and the security thereof, to such
other bonds as may be specified in the resolution.



99333.  The general fund or any other fund of the county shall not
be liable for the payment of the bonds or their interest.



99334.  The general credit or taxing power of the county, other than
the sales and use tax as herein provided, shall not be liable for
the payment of the bonds or their interest.



99335.  The holder of the bonds or coupons shall not compel the
exercise of the taxing power by the county, other than the sales and
use tax as herein provided, or the forfeiture of its property.



99336.  The principal of and interest on the bonds and any premiums
upon the redemption of any thereof are not a debt of the county, nor
a legal or equitable pledge, charge, lien, or encumbrance upon any of
its property, or upon any of its income, receipts, or revenues,
except the revenues that may be legally applied, pledged, or
otherwise made available to their payment.



99337.  Every bond shall recite in substance that the principal of
and interest on the bond are payable solely from the revenues pledged
to its payment and that the county is not obligated to pay it,
except from the revenues.


99338.  The bonds and interest or income from the bonds are exempt
from taxation in this state, except from gift, inheritance, and
estate taxes.


99339.  In the resolution authorizing the bonds, the board of
supervisors may, with the consent of the transportation planning
agency, insert any of the provisions authorized by this article,
which shall become a part of the contract with the bondholders.




99340.  The transportation planning agency may provide for
limitations on:
   (a) The purpose to which the proceeds of sale of any issue of
bonds may be applied.
   (b) The issuance of additional bonds for the same purpose and the
lien of additional bonds.



99341.  The transportation planning agency may provide for events of
default and terms upon which the bonds may be declared due before
maturity and the terms upon which the declaration and its
consequences may be waived.


99342.  The transportation planning agency may provide for the
rights, liabilities, powers, and duties arising upon the county's
breach of any covenants, conditions, or obligations.



99343.  The transportation planning agency may provide for the
vesting in a trustee of the right to enforce covenants to secure
payment of or in relation to the bonds, and the trustee's powers and
duties and the limitation of his liabilities.




99344.  The transportation planning agency may provide for the terms
upon which the bondholders or any percentage of them may enforce
covenants or duties imposed by this article.



99345.  The transportation planning agency may require the board of
supervisors to provide in the resolution for a procedure for amending
or abrogating the terms of the resolution with the consent of the
holders of a specified number of the bonds.



99346.  Any resolution containing such a procedure may also provide
for meetings of bondholders or for their written assent without a
meeting and the manner of consenting, with or without a meeting.



99347.  The resolution shall specifically state the effect of
amendment upon the rights of the holders of all of the bonds and
attached or detached interest coupons and shall be binding upon the
holders of all of the bonds and coupons issued pursuant to the
resolution.



99348.  The transportation planning agency may provide for any other
acts and things necessary, convenient or desirable to secure the
bonds or tending to make them more marketable.



99349.  The county shall pay or cause to be paid the principal and
interest of the bonds on the date, at the place, and in the manner
mentioned in the bonds and coupons and in accordance with the
resolution authorizing their issuance.


99350.  During the period that any of the bonds and the interest
thereon are unpaid, the county shall prescribe, revise and collect
taxes in the manner provided by Part 1.5 (commencing with Section
7200) of Division 2 of the Revenue and Taxation Code.




99351.  After making allowances for contingencies and error in the
estimates, the taxes, for the respective purposes hereinafter set
forth, shall be at least sufficient to pay the following amounts in
the order set forth:
   (a) The interest on and principal of the bonds as they become due
and payable.
   (b) All payments required for compliance with the resolution
authorizing the issuance of the bonds or any other contract with the
bondholders, including the creation of sinking and reserve funds.
   (c) All payments to meet any other obligations of the county which
are charges, liens, or encumbrances upon the revenues.



99352.  A separate, distinct and special account shall be created at
or before the issuance of the bonds, which shall be maintained
continuously in the local transportation fund during the time that
any of the bonds or the interest thereon are outstanding and unpaid.




99353.  All designated revenues shall be deposited in the special
account and payments shall be made therefrom as provided in Section
99351.


99354.  The county shall preserve and protect the security of the
bonds and the rights of the bondholders and warrant and defend their
rights against all claims and demands of all persons.



99355.  In order to fully preserve and protect the priority and
security of the bonds, the county shall pay from the special account
in the local transportation fund and discharge all lawful claims for
labor, materials and supplies, which if unpaid may become a lien or
charge upon the designated revenues prior or superior to the lien of
the bonds or impair the security of the bonds.



99356.  The county shall hold in trust the revenues pledged to the
payment of the principal of and interest on the bonds for the benefit
of the bondholders and shall apply the same pursuant to the
resolution authorizing the issuance of the bonds or to the resolution
as modified.



99357.  The county may invest funds held in reserve, or in any
sinking fund, or funds not required for immediate disbursement, in
property or securities in which counties may legally invest funds
subject to their control.  No such investment shall be made in
contravention of any covenant or agreement in any resolution
authorizing the issuance of any outstanding bonds.



99358.  The county shall keep proper books of record and accounts of
the revenues, separate from all other records and accounts, in which
complete and correct entries shall be made of all transactions
relating to the revenues.


99359.  At all times the books shall be subject to the inspection of
the holders of not less than 10 percent of the outstanding bonds or
their representatives authorized in writing.



99360.  The county shall cause to be published a summary statement
showing the amount of revenues deposited which are required as
security for payment of the principal of and interest on the bonds,
the disbursements from such revenues in reasonable detail, and a
general financial statement.



99361.  The statement shall be published annually, not more than 120
days after the close of each fiscal year.  The county shall furnish
a copy of the statement to any bondholder upon request.



99362.  In the resolution authorizing the bonds, the county may
agree that the statement shall be prepared or audited by an
independent certified public accountant and shall be in the form and
contain the detail specified in the resolution.




99363.  The duties set forth in this article do not require the
county to expend any funds other than revenues pledged to secure
payment of the principal of or interest on bonds as provided in this
article.


99364.  A fiscal or paying agent may be appointed as now or as may
hereafter be provided in Article 7 (commencing with Section 54550),
Chapter 6, Part 1, Division 2, Title 5 of the Government Code.



99365.  An action to determine the validity of bonds may be brought
pursuant to Chapter 9 (commencing with Section 860) of Title 10 of
Part 2 of the Code of Civil Procedure.



99366.  Bondholders shall have the remedies as now or as may
hereafter be provided in Article 10 (commencing with Section 54640),
Chapter 6, Part 1, Division 2, Title 5 of the Government Code.



99367.  The bonds may be refunded in the manner now or as may
hereafter be provided in Article 11 (commencing with Section 54660),
Chapter 6, Part 1, Division 2, Title 5 of the Government Code.



99368.  Without the issuance of bonds hereunder, a pledge or
allocation from revenues for the payment of bonds and interest issued
or to be issued under any other law, may be made upon the approval
thereof in the manner provided for the issuance of bonds hereunder.




99369.  All bonds issued in pursuance of the provisions of this
article shall by their issuance be conclusive evidence of the
regularity, validity and legal sufficiency of all proceedings, acts
and determinations in any wise pertaining thereto, had or made
hereunder; and, after the same have been issued, no sales tax levied
or collected for the purpose of paying the principal or interest on
the bonds shall be held to be invalid or illegal, or set aside by
reason of any error, informality, irregularity, omission or defect in
any of the proceedings, acts or determinations in any wise
pertaining to the issuance or payment of the bonds, and not amounting
to a want of due process of law under the Constitution.



99370.  All bonds by their issuance in pursuance of the provisions
of this article shall by their issuance be conclusive evidence of the
regularity, validity and sufficiency of all proceedings, acts and
determinations in any wise pertaining thereto, had or made hereunder.



99371.  Any action, suit or proceeding of any kind or nature in
which the validity of any of the proceedings taken under the
provisions of this article is questioned or attacked, shall be filed
within 30 days after the day of the adoption of the resolution
providing for the issuance of the bonds and in case such action is
not brought raising such issue within such period, then thereafter
all persons whatsoever shall be barred in any action, suit or
proceeding from pleading, asserting or claiming that any of the
proceedings or other actions herein specified, were defective, faulty
or invalid in any respect.



99372.  This article and all of its provisions shall be liberally
construed to the end that the purposes hereof may be effective.  If
any section, subsection, sentence, clause or phrase of this article
is for any reason held to be unconstitutional, such decision shall
not affect the validity of the remaining portion of this article.  It
is hereby declared that this article would have been passed
irrespective of the fact that any one or more sections, subsections,
sentences, clauses or phrases be declared unconstitutional.



99373.  Proceedings are initiated to issue bonds within the meaning
of this article when the board of supervisors, by majority vote,
adopts a resolution in conformity with the notification from the
director.


99374.  At its next subsequent meeting, the board of supervisors
shall pass an ordinance ordering the submission of the proposition of
incurring a bonded debt for the purposes set forth in the resolution
to the qualified voters of the county at an election held for that
purpose.


99375.  Propositions for more than one object or purpose may be
submitted at the same election.



99376.  The ordinance shall recite:
   (a) The object and purpose of incurring the indebtedness.
   (b) The estimated cost of the public improvements.
   (c) The amount of the principal of the indebtedness.
   (d) The rate or maximum rate of interest on the indebtedness,
which shall not exceed 7 percent, and need not be recited if it does
not exceed 41/2  percent.  Such interest shall be payable
semiannually, except that interest for the first year after the date
of the bonds may be made payable at the end of such year.
   (e) The date of the election.
   (f) The manner of holding the election and the procedure for
voting for or against the proposition.



99377.  The ordinance may provide that the estimated cost stated
therein of the public improvements includes any or all of the
following:
   (a) Legal or other fees incidental to or connected with the
authorization, issuance and sale of the bonds.
   (b) The costs of printing the bonds and other costs and expenses
incidental to or connected with the authorization, issuance and sale
of the bonds.
   (c) If the public improvements are revenue-producing public works,
bond interest estimated to accrue during the construction period and
for a period of not to exceed 12 months after completion of
construction.
   If such statement is made, the proceeds of the sale of the bonds
may be used to pay such of the foregoing as are stated in the
ordinance.
   This section shall not be construed to authorize a city to use the
proceeds of the sale of bonds for a purpose for which it could not
use its general fund.



99378.  The ordinance shall be published once a day for at least
seven days in a newspaper published at least six days a week in the
county, or once a week for two weeks in a newspaper published less
than six days a week in the county.
   If there are no such newspapers, it shall be posted in three
public places in the county for two succeeding weeks.
   No other notice need be given.


99379.  If an election called pursuant to this article is
consolidated with any other election, the ordinance calling the bond
election need not set forth the election precincts, polling places
and officers of election, but may provide that the precincts, polling
places and officers of election shall be the same as those set forth
in the ordinance, order, resolution or notice calling or providing
for or listing or designating the precincts, polling places and
election officers for the election with which the election called
pursuant to this article is consolidated, and shall refer to such
ordinance, order, resolution or notice by number and title or date of
adoption, or by date or proposed date of publication and the name of
the newspaper in which publication has been or will be made, or by
any other definite description.



99380.  Except as otherwise provided in the ordinance, the election
shall be conducted as other county elections.



99381.  If two-thirds of the electors voting on the proposition vote
for it, the bonds shall be issued.



99382.  When two or more propositions for incurring indebtedness are
submitted at the same election, the votes cast for and against each
proposition shall be counted separately.



99383.  If any proposition is defeated, the transportation planning
agency shall reconsider the application pertaining thereto.  Another
election on a substantially similar proposition shall not be called
within the county pursuant to this article within six months after
the prior election.