2009 California Health and Safety Code - Section 37930-37940 :: Chapter 3. Bonds And Notes

37930.  (a) A local agency may, from time to time, issue its
negotiable bonds or notes for the purpose of financing residential
rehabilitation, including the rehabilitation, construction, or
acquisition of (1) single residences for single participating
parties, (2) a series of residences for a single participating party,
(3) single residences for several participating parties, or (4)
several residences for several participating parties. In anticipation
of the sale of such bonds, the local agency may issue negotiable
bond anticipation notes and may renew such notes from time to time.
Bond anticipation notes may be paid from the proceeds of sale of the
bonds of the local agency in anticipation of which they were issued.
Bond anticipation notes and agreements relating thereto and the
resolution or resolutions authorizing such notes and agreements may
contain any provisions, conditions, or limitations which a bond,
agreement relating thereto, or bond resolution of the local agency
may contain except that any such note or renewal thereof shall mature
at a time not later than two years from the date of the issuance of
the original note.
   (b) Every issue of its bonds shall be a special obligation of the
local agency payable from all or any part of the revenues specified
in this part. The bonds shall be negotiable instruments for all
purposes, subject only to the provisions of such bonds for
registration.

37930.5.  In determining the amount of bonds to be issued, the local
agency may include all costs of the issuance of such revenue bonds,
bond reserve funds, and bond interest estimated to accrue for a
period not exceeding 12 months from the date of the bonds.

37931.  The bonds may be issued as serial bonds or as term bonds, or
the local agency, in its discretion, may issue bonds of both types.
The bonds shall be authorized by resolution of the local agency and
shall bear such date or dates, mature at such time or times, not
exceeding 50 years from their respective dates of issuance, bear
interest at such fixed or variable rate or rates, be payable at such
time or times, be in such denominations, be in such form, either
coupon or registered, carry such registration privileges, be executed
in such manner, be payable in lawful money of the United States of
America, at such place or places, and be subject to such terms of
redemption as the resolution or resolutions of the local agency may
provide. The bonds may be sold at either a public or private sale and
for such prices as the local agency shall determine. Pending
preparation of the definitive bonds, the local agency may issue
interim receipts, certificates, or temporary bonds, which shall be
exchanged for such definitive bonds. The local agency may sell any
bonds, notes, or other evidence of indebtedness at a price below the
par value thereof, but the discount on any bond so sold shall not
exceed 6 percent of the par value thereof.

37932.  Any resolution or resolutions authorizing any bonds or any
issue of bonds may contain provisions respecting any of the following
terms and conditions, which shall be a part of the contract with the
holders of the bonds:
   (a) The pledge of all or any part of the revenues, as defined in
this part, subject to such agreements with bondholders as may then
exist.
   (b) The interest and principal to be received and other charges to
be charged and the amounts to be raised each year thereby, and the
use and disposition of the revenues.
   (c) The setting aside of reserves or sinking funds and the
regulation and disposition thereof.
   (d) Limitations on the purposes to which the proceeds of a sale of
any issue of bonds, then or thereafter issued, may be applied, and
pledging such proceeds to secure the payment of the bonds or any
issue of bonds.
   (e) Limitations on the issuance of additional bonds, the terms
upon which additional bonds may be issued and secured, and the
refunding of outstanding bonds.
   (f) The procedure, if any, by which the terms of any contract with
bondholders may be amended or abrogated, the amount of bonds the
holders of which must consent thereto, and the manner in which such
consent may be given.
   (g) Limitation on expenditures for operating, administration, or
other expenses of the local agency.
   (h) Specification of the acts or omissions to act which shall
constitute a default in the duties of the local agency to holders of
its obligations, and providing the rights and remedies of such
holders in the event of default.
   (i) The mortgaging of any residence and the site thereof for the
purpose of securing the bondholders.
   (j) The mortgaging of land, improvements, or other assets owned by
a participating party for the purpose of securing the bondholders.

37933.  Neither the members of the governing board of the local
agency nor any person executing the bonds or notes shall be liable
personally on the bonds or notes or be subject to any personal
liability or accountability by reason of the issuance thereof.

37934.  The local agency shall have the power out of any funds
available therefor to purchase its bonds or notes. The local agency
may hold, pledge, cancel, or resell such bonds, subject to and in
accordance with agreements with the bondholders.

37935.  In the discretion of the local agency, any bonds issued
under the provisions of this part may be secured by a trust agreement
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 this state. Such trust agreement or the
resolution providing for the issuance of such bonds may pledge or
assign the revenues to be received or proceeds of any contract or
contracts pledged, and may convey or mortgage any residence the
rehabilitation, construction, or acquisition of which is to be
financed out of the proceeds of such bonds. Such trust agreement or
the resolution providing for the issuance of the bonds may provide
for the assignment to such corporate trustee or trustees of loans,
deeds of trust, or mortgages, to be held by such trustee or trustees
on behalf of the local agency for the benefit of the bondholders.
Such trust agreement or resolution providing for the issuance of
bonds may contain such 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 such provisions as may
be included in any resolution or resolutions of the local agency
authorizing the issuance of bonds pursuant to Section 37932. Any bank
or trust company doing business under the laws of this state which
may act as depositary of the proceeds of bonds or of revenues or
other moneys may furnish such indemnity bonds or pledge such
securities as may be required by the local agency. Any such trust
agreement may set forth the rights and remedies of the bondholders
and of the trustee or trustees, and may restrict the individual right
of action by bondholders. In addition to the foregoing, any such
trust agreement or resolution may contain such other provisions as
the local agency may deem reasonable and proper for the security of
the bondholders. All expenses incurred in carrying out the provisions
of such trust agreement or resolution may be treated as a part of
the cost of residential rehabilitation.

37936.  Any holder of bonds issued under the provisions of this part
or any of the coupons appertaining thereto, and the trustee or
trustees appointed pursuant to any resolution authorizing the
issuance of such bonds, except to the extent the rights thereof may
be restricted by the resolution authorizing the issuance of the
bonds, may, either at law or in equity, by suit, action, mandamus, or
other proceedings, protect or enforce any and all rights specified
in the laws of the state or in such resolution, and may enforce and
compel the performance of all duties required by this part or by such
resolution to be performed by the local agency or by any officer,
employee, or agent thereof, including the fixing, charging, and
collecting of rates, fees, interest, and charges authorized and
required by the provisions of such resolution to be fixed,
established, and collected.

37937.  Bonds issued under the provisions of this part shall not be
deemed to constitute a debt or liability of the local agency or a
pledge of the faith and credit of the local agency, but shall be
payable solely from the funds specified in this part. All such bonds
shall contain on the face thereof a statement to the following
effect:

   Neither the faith and credit nor the taxing power of the [local
agency] is pledged to the payment of the principal of or interest on
this bond.

   The issuance of bonds under the provisions of this part shall not
directly, indirectly, or contingently obligate the local agency to
levy or to pledge any form of taxation whatever therefor or to make
any appropriation for their payment.

37938.  (a) The local agency may provide for the issuance of the
bonds of the local agency for the purpose of refunding any bonds of
the local agency then outstanding including the payment of any
redemption premiums thereof and any interest accrued or to accrue to
the earliest or subsequent date of redemption, purchase, or maturity
of such bonds, and, if deemed advisable by the local agency, for the
additonal purpose of paying all or any part of the cost of additional
residential rehabilitation.
   (b) The proceeds of bonds issued for the purpose of refunding any
outstanding bonds may, in the discretion of the local agency, be
applied to the purchase or retirement at maturity or redemption of
such outstanding bonds, either at their earliest or, notwithstanding
the provisions of Section 53583 of the Government Code or any other
law, any subsequent redemption date or upon the purchase or
retirement at the maturity thereof and may, pending such application,
be placed in escrow, to be applied to such purchase or retirement at
maturity or redemption on such date as may be determined by the
local agency.
   (c) Pending use for purchase, retirement at maturity, or
redemption of outstanding bonds, any proceeds held in escrow pursuant
to subdivision (b) may be invested and reinvested as provided in the
resolution authorizing the issuance of the bonds. Any interest or
other increment earned or realized on any such investment may also be
applied to the payment of the outstanding bonds to be refunded.
After the terms of the escrow have been fully satisfied and carried
out, any balance of such proceeds and any interest or increment
earned or realized from the investment thereof may be returned to the
local agency to be used by it for any lawful purpose.
   (d) That portion of the proceeds of any such bonds designated for
the purpose of paying all or any part of the cost of additonal
residential rehabilitation pursuant to subdivision (a) may be
invested and reinvested in obligations of, or guaranteed by, the
United States of America or in certificates of deposit or time
deposits secured by obligations of, or guaranteed by, the United
States of America, maturing not later than the time or times when
such proceeds will be needed for the purpose of paying all or any
part of such cost.
   (e) All bonds issued pursuant to this section shall be subject to
the provisions of this part in the same manner and to the same extent
as other bonds issued pursuant to this part.

37938.5.  When not immediately required to provide financing under
this chapter, revenues and the proceeds of bonds may be invested in
any securities or obligations authorized by the resolution providing
for issuance of the bonds or by the trust agreement securing the
bonds. Such investments may include mortgage obligations on
single-family dwellings purchased from a state or federally chartered
bank or savings and loan association pursuant to a repurchase
agreement under which the bank or savings and loan association will
repurchase the mortgage obligation on or before a specified date and
for a specified amount, provided that the mortgage or the repurchase
agreement shall be insured by a mortgage insurance company licensed
to insure mortgages in the State of California and qualified to
provided insurance on mortgages purchased by the Federal Home Loan
Mortgage Corporation or the Federal National Mortgage Association.
   The authority provided in this section is additional and
alternative to any other authorization for investment contained in
this part, including subdivision (d) of Section 37938, or in other
provisions of law.

37939.  Notwithstanding any other provisions of law, bonds issued
pursuant to this part shall be legal investments for all trust funds,
the funds of insurance companies, savings and loan associations,
investment companies and banks, both savings and commercial, and
shall be legal investments for executors, administrators, guardians,
conservators, trustees, and all other fiduciaries. Such bonds shall
be legal investments for state school funds and for any funds which
may be invested in county, municipal, or school district bonds, and
such bonds shall be deemed to be securities which may properly and
legally be deposited with, and received by, any state or municipal
officer or by any agency or political subdivision of the state for
any purpose for which the deposit of funds or obligations of the
state is now, or may hereafter be, authorized by law, including
deposits to secure public funds.

37940.  The exercise of the powers granted by this part shall be in
all respects for the benefit of the people of this state and for
their health and welfare. Any bonds or notes issued under the
provisions of this chapter, their transfer and the income therefrom,
shall at all times be free from taxation of every kind by the state
and by the municipalities and other political subdivisions of the
state.