Article 1. Authorization And Issuance Of General Obligation Bonds of California Public Utilities Code >> Division 10. >> Part 12. >> Chapter 7. >> Article 1.
Whenever the board deems it necessary for the district to
incur a bonded indebtedness for the acquisition, construction, or
repair of any or all improvements, works, property, or facilities,
authorized by this part or necessary or convenient for the carrying
out of the powers of the district, or for any other purpose
authorized by this part, the board shall, by ordinance, adopted by a
vote of two-thirds of all members of the board, so declare and call
an election to be held in the district for the purpose of submitting
to the qualified voters thereof the proposition of incurring
indebtedness by the issuance of bonds of the district, provided the
total amount of bonds issued and outstanding pursuant to this article
shall not exceed 15 percent of the assessed value of the taxable
property of the district as shown by the last equalized assessment
roll of the County of Santa Clara. The ordinance shall state:
(a) The purposes for which the proposed debt is to be incurred,
which may include all costs and estimated costs incidental to or
connected with the accomplishment of those purposes, including,
without limitation, engineering, inspection, legal, fiscal agents,
financial consultant, and other fees; bond and other reserve funds;
working capital; bond interest estimated to accrue during the
construction period and for a period not to exceed three years
thereafter; and expenses of all proceedings for the authorization,
issuance, and sale of the bonds.
(b) The estimated cost of accomplishing those purposes.
(c) The amount of the principal of the indebtedness.
(d) The maximum term the bonds proposed to be issued shall run
before maturity, which shall not exceed 50 years from the date
thereof or the date of each series thereof.
(e) The maximum rate of interest to be paid, which shall not
exceed 7 percent per annum.
(f) The proposition to be submitted to the voters, which may
include one or more purposes.
(g) The date of the election.
(h) The manner of holding the election and the procedure for
voting for or against the measure.
(i) The ordinance may also contain a statement that the retail
transaction and use tax mentioned in Article 9 (commencing with
Section 100250) of Chapter 5 of this part, or a stated portion
thereof, shall be levied, or continued to be levied, and used to the
extent required to pay principal of and interest on the bonds as they
become due, to provide for any sinking fund payments required
therefor, or to create or maintain any reserve fund required
(j) The ordinance may also contain any other matters authorized by
this part or any other law.
Notice of holding of the election shall be given by
publishing, pursuant to Section 6066 of the Government Code, the
ordinance calling the election in at least one newspaper published in
the district. No other notice of the election need be given. Except
as otherwise provided in the ordinance, the election shall be
conducted as other district elections.
If any proposition is defeated by the electors, the board
shall not call another election on a substantially similar
proposition to be held within six months after the prior election. If
a petition requesting submission of such a proposition, signed by 15
percent of the district electors, as shown by the votes cast for all
candidates for governor within the district at the last
gubernatorial election, is filed with the board, it may call an
election before the expiration of six months.
If a majority of the electors voting on the proposition
vote for it, then the board may, by resolution, at such time or times
as it deems proper, issue bonds of the district for the whole or any
part of the amount of the indebtedness so authorized and may from
time to time, by resolution, provide for the issuance of such amounts
as the necessity thereof may appear, until the full amount of such
bonds authorized shall have been issued. The full amount of bonds may
be divided into two or more series and different dates and different
dates of payment fixed for the bonds of each series. A bond need not
mature on an anniversary of its date. The maximum term the bonds of
any series shall run before maturity shall not exceed 50 years from
the date of each series respectively. In such resolution or
resolutions, the board shall prescribe the form of the bonds
(including, without limitation, registered bonds and coupon bonds)
and the form of any coupons to be attached thereto, the registration,
conversion, and exchange privileges, if any, pertaining thereto, and
fix the time when the whole or any part of the principal shall
become due and payable.
The bonds shall bear interest at a rate or rates not
exceeding 7 percent per annum, payable semiannually, except that the
first interest payable on the bonds or any series thereof may be for
any period not exceeding one year as determined by the board. In the
resolution or resolutions providing for the issuance of the bonds,
the board may also provide for call and redemption of the bonds prior
to maturity at such times and prices and upon such other terms as it
may specify, but no bond shall be subject to call or redemption
prior to maturity unless it contains a recital to that effect or
unless a statement to that effect is printed thereon. The
denomination or denominations of the bonds shall be stated in the
resolution providing for their issuance, but shall not be less than
one thousand dollars ($1,000). The principal of and interest on the
bonds shall be payable in lawful money of the United States at the
office of the treasurer of the district or at such other place or
places as may be designated, or at either place or places at the
option of the holders of the bonds. The bonds, or such series
thereof, shall be dated and numbered consecutively and shall be
signed by the chairman of the board and the treasurer, countersigned
by the secretary and the official seal of the district attached. The
interest coupons of such bonds shall be signed by the treasurer. All
such signatures, countersignatures, and seal may be printed,
lithographed, or mechanically reproduced, except that one of such
signatures or countersignatures on the bonds shall be manually
affixed. If any officer whose signature or countersignature appears
on bonds or coupons ceases to be such officer before the delivery of
the bonds, his signature is as effective as if he had remained in
The bonds may be sold as the board determines by resolution
but for not less than par. Before selling the bonds, or any part
thereof, the board shall give notice inviting sealed bids in such
manner as it may prescribe. If satisfactory bids are received, the
bonds offered for sale shall be awarded to the highest responsible
bidder. If no bids are received or if the board determines that the
bids received are not satisfactory as to price or responsibility of
the bidders, the board may reject all bids received, if any, and
either readvertise or sell the bonds at private sale.
Delivery of any bonds may be made at any place either
inside or outside the state, and the purchase price may be received
in cash or bank credits.
All accrued interest and premiums received on the sale of
bonds shall be placed in the fund to be used for the payment of
principal of and interest on the bonds and the remainder of the
proceeds of the bonds shall be placed in the treasury to the credit
of the proper improvement fund and applied exclusively to the
purposes for which the debt was incurred (which purposes shall be in
conformity with an approved general transit plan or element thereof
then in effect); provided, however, that when such purposes have been
accomplished any moneys remaining in such improvement fund (a) shall
be transferred to the fund to be used for the payment of principal
of and interest on the bonds, or (b) shall be placed in a fund to be
used for the purchase of outstanding bonds of the district from time
to time in the open market at such prices and in such manner, either
at public or private sale or otherwise, as the board may determine.
Bonds so purchased shall be canceled immediately.
After the expiration of three years after a bond election
the board may determine, by ordinance adopted by a vote of two-thirds
of all the members of the board, that any or all of the bonds
authorized at the election remaining unsold shall not be issued or
sold. When the ordinance takes effect, the authorization to issue
such bonds shall become void.
Whenever the board deems that the expenditure of money for
the purposes for which the bonds were authorized by the voters is
impractical or unwise, it may, by ordinance adopted by a vote of
two-thirds of all members of the board, so declare and call an
election to be held in the district for the purpose of submitting to
the qualified voters thereof the proposition of incurring
indebtedness by the issuance of such bonds for some other purposes
or, in the case where bonds have been sold, the proposition to use
the proceeds for some other purposes. The procedure, so far as
applicable, shall be the same as when a bond proposition is
The board may provide for the issuance, sale, or exchange
of refunding bonds to redeem or retire any bonds issued by the
district upon the terms, at the times, and in the manner which it
determines. Refunding bonds may be issued in a principal amount
sufficient to pay all or any part of the principal of such
outstanding bonds, the interest thereon, and the premiums, if any,
due upon call and redemption thereof prior to maturity and all
expenses of such refunding. The provisions of this article for
issuance and sale of bonds apply to the issuance and sale of such
refunding bonds, except that (a) no election need be called or held
for the purpose of authorizing the issuance of refunding bonds, and
(b) when refunding bonds are to be exchanged for outstanding bonds,
the method of exchange shall be as determined by the board.
The provisions of Article 4 (commencing with Section
53500), Chapter 3, Part 1, Division 2, Title 5 of the Government Code
are applicable to the district.
Any bonds which shall be issued under the provisions of
this article shall be legal investment for all trust funds; for the
funds of insurance companies, banks, both commercial and savings, and
trust companies; and for state school funds. Whenever any money or
funds may, by any law now or hereafter enacted, be invested in bonds
of cities, cities and counties, counties, school districts, or other
districts within the State of California, such money or funds may be
invested in the bonds issued under this part. Whenever bonds of
cities, cities and counties, counties, school districts, or other
districts within this state may, by any law now or hereafter enacted,
be used as security for the performance of any act or the deposit of
any public moneys, the bonds issued under this part may be so used.
The provisions of this article shall be in addition to all other laws
relating to legal investments and shall be controlling as the latest
expression of the Legislature with respect thereto.
If bonds are authorized that contain a provision for
special taxes under subdivision (i) of Section 100400, the board may
enter into such convenants as may be deemed proper to provide for
issuance of additional parity bonds and the priority and pledge of
special taxes; and such other covenants as are customary or desirable
in the issuance of any bonds payable out of special funds or as are
necessary, convenient, or desirable to secure the bonds or tending to
make them more marketable, subject to the provisions of the
ordinance calling the bond election.