Article 5. Agency Bonds of California Health And Safety Code >> Division 24. >> Part 1. >> Chapter 6. >> Article 5.

From time to time an agency may, subject to the approval of the legislative body, issue bonds for any of its corporate purposes. An agency may also, subject to the approval of the legislative body, issue refunding bonds for the purpose of paying or retiring bonds previously issued by it.
An agency may issue any types of bonds which it may determine, including bonds on which the principal and interest are payable:
  (a) Exclusively from the income and revenues of the redevelopment projects financed with the proceeds of the bonds, or with the proceeds together with financial assistance from the state or federal government in aid of the projects.
  (b) Exclusively from the income and revenues of certain designated redevelopment projects whether or not they were financed in whole or in part with the proceeds of the bonds.
  (c) In whole or in part from taxes allocated to, and paid into a special fund of, the agency pursuant to the provisions of Article 6 (commencing with Section 33670).
  (d) In whole or in part from taxes imposed pursuant to Section 7280.5 of the Revenue and Taxation Code which are pledged therefor.
  (e) From its revenues generally.
  (f) From any contributions or other financial assistance from the state or federal government.
  (g) By any combination of these methods.
(a) As used in this section:
  (1) "Collateral" means any revenues, moneys, accounts receivable, contracts rights, and other rights to payment of whatever kind or other property subject to the pledge provided for or created in a pledge document.
  (2) "Pledge document" means the resolution, indenture, trust agreement, loan agreement, lease, installment sale agreement, reimbursement agreement, pledge agreement, or similar agreement in which the pledge is provided for or created.
  (3) "Pledge" means a committment of, by the grant of a lien on and a security interest in, the collateral referred to in a pledge document.
  (b) A pledge of collateral by a redevelopment agency to secure, directly or indirectly, the payment of the principal or redemption price of, or interest on, any bonds, or any reimbursement agreement with any provider of credit to bonds, which is issued by or entered into by an agency shall be valid and binding in accordance with the terms of the pledge document from the time the pledge is made for the benefit of pledgees and successors thereto. The collateral shall immediately be subject to the pledge, and the pledge shall constitute a lien and security interest which immediately shall attach to the collateral and be effective, binding, and enforceable against the pledgor, its successors, purchasers of the collateral, creditors, and all others asserting the rights therein, to the extent set forth, and in accordance with, the pledge document irrespective of whether those parties have notice of the pledge and without the need for any physical delivery, recordation, filing, or further act.
Any of such bonds may be additionally secured by a pledge of any revenues or by an encumbrance by mortgage, deed of trust, or otherwise of any redevelopment project or other property of the agency or by a pledge of the taxes referred to in subdivision (c) of Section 33641, or by any combination thereof.
Neither the members of an agency nor any persons executing the bonds are liable personally on the bonds by reason of their issuance.
The bonds and other obligations of any agency are not a debt of the community, the State, or any of its political subdivisions and neither the community, the State, nor any of its political subdivisions is liable on them, nor in any event shall the bonds or obligations be payable out of any funds or properties other than those of the agency; and such bonds and other obligations shall so state on their face. The bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction.
The agency may authorize bonds by resolution. The resolution, trust indenture, or mortgage may provide for:
  (a) The issuance of the bonds in one or more series.
  (b) The date the bonds shall bear.
  (c) The maturity dates of the bonds.
  (d) The rate or maximum rate of interest on the indebtedness, which shall not exceed the maximum rate permitted by Section 53531 of the Government Code, and need not be recited if the rate does not exceed 4 1/2 percent. The interest may be fixed or variable and may be simple or compound. The interest shall be payable at the time or times determined by the agency.
  (e) The denomination of the bonds.
  (f) Their form, either coupon or registered.
  (g) The conversion or registration privileges carried by the bonds.
  (h) The rank or priority of the bonds.
  (i) The manner of their execution.
  (j) The medium of payment.
  (k) The place of payment.
  ( l) The terms of redemption with or without premium to which the bonds are subject.
  (m) The maximum amount of bonded indebtedness in compliance with, and not to exceed, the limit specified in the redevelopment plan as required in Section 33334.1. The resolution, trust indenture, or mortgage shall provide that tax-increment funds allocated to an agency pursuant to Section 33670 shall not be payable to a trustee on account of any issued bonds when sufficient funds have been placed with the trustee to redeem all outstanding bonds of the issue.
Notwithstanding Section 33645 or any other provision of law, the rate of interest on any indebtedness or obligation of an agency which is payable to the federal government or any agency or instrumentality thereof or on any such indebtedness or obligation guaranteed by the federal government or any instrumentality thereof may be at a rate higher than the limitation established in Section 33645, or any other law, if such rate is the rate established by the federal government or any instrumentality thereof. Any such indebtedness or obligation shall be in such form and denomination, have such maturity, and be subject to such conditions as may be prescribed by the federal government or agency or instrumentality thereof.
The bonds may be sold at no less than par less a discount of not to exceed 5 percent, at public sale held after notice published once at least five days prior to the sale in a newspaper of general circulation published in the community, or, if there is none, in a newspaper of general circulation published in the county. The bonds may be sold at not less than par to the federal government at private sale without any advertisement. The amendment to this section made at the 1969 Regular Session of the Legislature shall be applicable to bonds of a redevelopment agency which have been authorized by the agency prior to the effective date of the amendment but which have not been issued prior to such date.
If any agency member or officer whose signature appears on bonds or coupons ceases to be such member or officer before delivery of the bonds, his signature is as effective as if he had remained in office.
Bonds issued pursuant to this part are fully negotiable.
In any action or proceedings involving the validity or enforceability of any bonds or their security, any such bond reciting in substance that it has been issued by the agency to aid in financing a redevelopment project is conclusively deemed to have been issued for a redevelopment project and the project is conclusively deemed to have been planned, located, and constructed pursuant to this part.
In connection with the issuance of bonds, and in addition to its other powers, an agency has the powers prescribed in Sections 33651 to 33659, inclusive.
An agency may:
  (a) Pledge all or any part of its gross or net rents, fees, or revenues to which its right then exists or may thereafter come into existence.
  (b) Encumber by mortgage, deed of trust, or otherwise all or any part of its real or personal property, then owned or thereafter acquired.
An agency may covenant:
  (a) Against pledging all or any part of its rents, fees, and revenues.
  (b) Against encumbering all or any part of its real or personal property, to which its right or title then exists or may thereafter come into existence.
  (c) Against permitting any lien on such revenues or property.
  (d) With respect to limitations on its right to sell, lease, or otherwise dispose of all or part of any redevelopment project.
  (e) As to what other, or additional debts or obligations it may incur.
An agency may:
  (a) Covenant as to the bonds to be issued, as to the issuance of such bonds in escrow or otherwise, and as to the use and disposition of the bond proceeds.
  (b) Provide for the replacement of lost, destroyed, or mutilated bonds.
  (c) Covenant against extending the time for the payment of its bonds or interest.
  (d) Redeem the bonds, covenant for their redemption, and provide the redemption terms and conditions.
An agency may:
  (a) Covenant as to the consideration or rents and fees to be charged in the sale or lease of a redevelopment project, the amount to be raised each year or other period of time by rents, fees, and other revenues, and as to their use and disposition.
  (b) Create or authorize the creation of special funds for money held for redevelopment or other costs, debt service, reserves, or other purposes, and covenant as to the use and disposition of such money.
An agency may prescribe the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds whose holders are required to consent thereto, and the manner in which such consent may be given.
An agency may covenant:
  (a) As to the use of any or all of its real or personal property.
  (b) As to the maintenance of its real and personal property, its replacement, the insurance to be carried on it, and the use and disposition of insurance money.
An agency may:
  (a) Covenant as to the rights, liabilities, powers, and duties arising upon the breach by it of any covenant, condition, or obligation.
  (b) Covenant and prescribe as to events of default and terms and conditions upon which any or all of its bonds or obligations become or may be declared due before maturity, and as to the terms and conditions upon which such declaration and its consequences may be waived.
An agency may:
  (a) Vest in a trustee or the holders of bonds or any proportion of them the right to enforce the payment of the bonds or any covenants securing or relating to the bonds.
  (b) Vest in a trustee the right, in the event of a default by the agency, to take possession of all or part of any redevelopment project, to collect the rents and revenues arising from it and to dispose of such money pursuant to the agreement of the agency with the trustee.
  (c) Provide for the powers and duties of a trustee and limit his liabilities.
  (d) Provide the terms and conditions upon which the trustee or the holders of bonds or any proportion of them may enforce any covenant or rights securing or relating to the bonds.
An agency may:
  (a) Exercise all or any part or combination of the powers granted in Sections 33651 to 33658 inclusive.
  (b) Make covenants other than and in addition to the covenants expressly authorized in such sections of like or different character.
  (c) Make such covenants and to do any and all such acts and things as may be necessary, convenient, or desirable to secure its bonds, or, except as otherwise provided in this part, as will tend to make the bonds more marketable notwithstanding that such covenants, acts, or things may not be enumerated in this part.
In addition to all other rights which may be conferred on him, and subject only to any contractual restrictions binding upon him, an obligee may:
  (a) By mandamus, suit, action, or proceeding, compel the agency and its members, officers, agents, or employees to perform each and every term, provision, and covenant contained in any contract of the agency with or for the benefit of the obligee, and require the carrying out of any or all such covenants and agreements of the agency and the fulfillment of all duties imposed upon it by this part.
  (b) By suit, action, or proceeding in equity, enjoin any acts or things which may be unlawful, or the violation of any of the rights of the obligee.
By its resolution, trust indenture, mortgage, lease, or other contract, an agency may confer upon any obligee holding or representing a specified amount in bonds, the following rights upon the happening of an event or default prescribed in such resolution or instrument, to be exercised by suit, action, or proceeding in any court of competent jurisdiction:
  (a) To cause possession of all or part of any redevelopment project to be surrendered to any such obligee.
  (b) To obtain the appointment of a receiver of all or part of any redevelopment project of the agency and of the rents and profits from it. If a receiver is appointed, he may enter and take possession of the redevelopment project or any part of it, operate and maintain it, collect and receive all fees, rents, revenues, or other charges thereafter arising from it, and shall keep such money in separate accounts and apply it pursuant to the obligations of the agency as the court shall direct.
  (c) To require the agency and its members and employees to account as if it and they were the trustees of an express trust.
The bonds are issued for an essential public and governmental purpose, and together with interest on them and income from them are exempt from all taxes.
Notwithstanding any restrictions on investments contained in any laws, the state and all public officers, municipal corporations, political subdivisions, and public bodies, all banks, bankers, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations, and other persons carrying on an insurance business, and all executors, administrators, guardians, conservators, trustees, and other fiduciaries may legally invest any sinking funds, money, or other funds belonging to them or within their control in any bonds or other obligations issued by an agency. Such bonds and other obligations are authorized security for all public deposits. It is one of the purposes of this part to authorize any persons, firms, corporations, associations, political subdivisions, bodies and officers, public and private, to use any funds owned or controlled by them, including, but not limited to, sinking, insurance, investment, retirement, compensation, pension, and trust funds, and funds held on deposit, for the purchase of any such bonds or other obligations. This part does not relieve any person, firm, or corporation from any duty of exercising reasonable care in selecting securities.
(a) An agency may purchase its bonds as follows:
  (1) At a price not more than the sum of their principal amount and accrued interest plus (if the bonds purchased are callable at a premium) an amount not to exceed the premium that would be applicable if the bonds were purchased on the next following call date.
  (2) At a higher price if a majority of the members of the agency determine, based upon substantial evidence, that under then prevailing conditions the purchase would be of financial advantage to the agency. Prior to purchasing bonds pursuant to this paragraph, the agency shall adopt a resolution designating paragraph (1), (2), or (3) of subdivision (b) as the financial advantage accruing to the agency from the bond purchase or specifying in detail any alternative basis for the agency's finding of financial advantage. Unless the legislative body has designated itself as the redevelopment agency, the agency shall additionally obtain the approval of the legislative body for repurchase of agency bonds under this subdivision and, if applicable, under Section 33640. A resolution of the legislative body approving repurchase of agency bonds under this subdivision shall be operative only for the period specified in the resolution of the legislative body, not to exceed five years. However, the authorization may be renewed by an appropriate resolution of the legislative body and the expiration of the legislative body's resolution shall in no way impair the obligation of bonds previously issued by the agency to refund bonds purchased under this subdivision.
  (b) "Financial advantage," as used in subdivision (a), includes, but is not limited to, each of the following:
  (1) A reduction in the aggregate debt service on the agency's outstanding bonds.
  (2) The creation of opportunities to more efficiently leverage revenues of the agency.
  (3) Cancellation of agency bonds subject to adverse provisions of, or tax consequences under, the laws of the United States.
  (c) Any bond purchases made pursuant to this section shall be (1) identified in the agency's annual fiscal year report required by Section 33080.1 for the fiscal year in which the purchase was made and (2) reflected in the agency's statement of indebtedness filed pursuant to Section 33675.
  (d) Within two weeks following a purchase of bonds pursuant to paragraph (2) of subdivision (a), the redevelopment agency shall transmit to the California Debt Advisory Commission a copy of the agency's resolution specifying the financial advantage to the agency in making the purchase, together with a covering letter that includes all of the following information respecting the bonds purchased:
  (1) The date of the agency's resolution authorizing the bonds, the date of issuance of the bonds, and any other information necessary to identify the particular issuance or series of bonds.
  (2) The terms of redemption to which the bonds were originally subject.
  (3) The denominations and interest rates of the bonds purchased.
  (4) The purchase price.
  (e) All bonds purchased pursuant to this section shall be canceled.
All of the provisions of this article are subject to the limitations of Article 3 (commencing with Section 33620) of this chapter.