Section 6084.2 Of Article 3. Powers From California Harbors And Navigation Code >> Division 8. >> Part 3. >> Chapter 2. >> Article 3.
6084.2
. (a) A district may issue limited obligation notes after the
adoption, by a four-fifths vote of all the commissioners of the
board, of a resolution reciting each of the following:
(1) That the resolution is being adopted pursuant to this
subdivision.
(2) The purposes of incurring the indebtedness.
(3) The estimated amount of the indebtedness.
(4) The maximum amount of notes to be issued, and the source of
revenue or revenues to be used to secure the limited obligation
notes.
(5) The maturity date of the limited obligation notes.
(6) The form of the limited obligation notes.
(7) The manner of execution of the limited obligation notes.
(b) The resolution may also provide for one or more of the
following matters:
(1) Insurance for the limited obligation notes.
(2) Procedures in the event of default, terms upon which the
limited obligation notes may be declared due before maturity, and the
terms upon which that declaration may be waived.
(3) The rights, liabilities, powers, and duties arising upon the
district's breach of an agreement with regard to the limited
obligation notes.
(4) The terms upon which the holders of the limited obligation
notes may enforce agreements authorized by this section.
(5) A procedure for amending or abrogating the terms of the
resolution with the consent of the holders of a specified percentage
of the limited obligation notes. If the resolution contains this
procedure, the resolution shall specifically state the effect of
amendment upon the rights of the holders of all of the limited
obligation notes.
(6) The manner in which the holders of the limited obligation
notes may take action.
(7) Other actions necessary or desirable to secure the limited
obligation notes or tending to make the notes more marketable.
(c) The limited obligation notes shall bear interest at a rate not
exceeding the rate permitted under Article 7 (commencing with
Section 53530) of Chapter 3 of Part 1 of Division 2 of Title 5 of the
Government Code.
(d) The limited obligation notes may not mature later than 10
years after the date of the issuance of the notes, and the total
amount of the limited obligation notes outstanding at any one time
for the district may not exceed the sum of ten million dollars
($10,000,000).
(e) The agreement between the district and the purchasers of the
limited obligation notes shall state that the notes are limited
obligation notes payable solely from specified revenue of the
district. The pledged revenue shall be sufficient to pay the
following amounts annually, as they become due and payable:
(1) The interest and principal on the notes.
(2) Payments required for compliance with the resolution
authorizing issuance of the notes or agreements with the purchasers
of the notes.
(3) Payments to meet any other obligations of the district that
are charges, liens, or encumbrances on the pledged revenue.
(f) The limited obligation notes are special obligations of the
district, and shall be a charge against, and secured by a lien upon,
and payable, as to the principal thereof and interest thereon, from
the pledged revenue. If the revenue described in the authorizing
resolution is insufficient for the payment of interest and principal
on the notes, the district may make payments from any other funds or
revenues that may be applied to their payment. The revenue and any
interest earned on the revenue constitute a trust fund for the
security and payment of the interest on and principal of the notes.
(g) So long as any limited obligation notes or interest thereon
are unpaid following their maturity, the pledged revenue and interest
thereon may not be used for any other new purpose.
(h) If the interest and principal on the limited obligation notes
and all charges to protect them are paid when due, the district may
expend the pledged revenue for other purposes.
(i) Limited obligation notes of the same issue shall be equally
secured.
(j) The general fund of the district is not liable for the payment
of the principal or the interest on the limited obligation notes.
(k) The holders of the limited obligation notes may not compel the
exercise of the taxing power by the district, other than the revenue
pledged, or the forfeiture of the district's property.
(l) Every agreement shall recite in substance that the principal
of, and interest on, the limited obligation notes are payable solely
from the revenue pledged to the payment of the principal and interest
and that the district is not obligated to pay the principal or
interest except from the pledged revenue.