Article 10. Retail Transaction And Use Tax of California Public Utilities Code >> Division 10. >> Part 15. >> Chapter 5. >> Article 10.
A retail transactions and use tax ordinance may be adopted
by the board in accordance with the provisions of Part 1.6
(commencing with Section 7251) of Division 2 of the Revenue and
Any transactions and use tax ordinance adopted shall be
operative on the first day of the first calendar quarter commencing
not less than 180 days after adoption of the ordinance.
The district may contract with the State Board of
Equalization for its services in the preparation necessary to
administer a transaction and use tax ordinance. The costs to be
covered by the contract are to be for services of the types described
in Section 7272 of the Revenue and Taxation Code for preparatory
work up to the date of the adoption of the ordinance. Any disputes as
to the amount of the costs shall be resolved in the same manner as
provided in that section.
Prior to the operative date of the transaction and use tax
ordinance, the district shall contract with the State Board of
Equalization to perform all functions incident to the administration
and operation of the ordinance.
If the district shall not have contracted with the State
Board of Equalization prior to the operative date of its transaction
and use tax ordinance, it shall nevertheless so contract, and, in
such case, the operative date shall be the first day of the first
calendar quarter following the execution of the contract.
Repeal of the transactions and use tax ordinance shall not
be operative earlier than the first day of the first calendar quarter
following the adoption of the ordinance of repeal.
Whenever a bond election is held to authorize a bonded
indebtedness pursuant to Section 103500, the ordinance calling the
election may include a statement that the transaction and use taxes,
or a stated portion thereof, shall be levied, or continued to be
levied, and used to the extent required to pay the principal of, and
interest on, the bonds as they become due, to provide any sinking
fund payments required therefor, and to create or maintain any
reserve fund required therefor.
A vote in favor of the issuance of the bonds shall authorize the
use of such taxes for such purposes. The transactions and use tax
ordinance shall not be repealed until all bonds payable from the
revenues derived from such taxes have been fully paid or provision
has been made for their payment in full.
(a) The district may issue bonds payable from the proceeds
of the retail transactions and use tax.
(b) The maximum bonded indebtedness which may be outstanding at
any one time shall be an amount equal to the sum of the principal of,
and interest on, the bonds, but not to exceed the estimated proceeds
of the transactions and use tax , as determined by the district. The
amount of bonds outstanding at any one time does not include the
amount of any bonds or refunding bonds for which moneys or securities
necessary to provide for the payment thereof have been set aside for
that purpose in a trust or escrow account.
(a) The bonds may be issued by the district at any time,
and from time to time, payable from the proceeds of the tax. The
bonds shall be referred to as "limited tax bonds." The bonds may be
secured by a pledge of revenues from the proceeds of the retail
transactions and use tax or any other funds or assets of the district
as may be specified by the district.
(b) The pledge of retail transactions and use taxes to the limited
tax bonds authorized under this article shall have priority over the
use of any of the taxes for "pay-as-you-go" financing, except to the
extent that the priority is expressly restricted in the resolution
authorizing the issuance of the bonds.
(c) A pledge by or to the district of tax receipts, revenues,
moneys, accounts, accounts receivable, contract rights, and other
rights to payment of whatever kind made by or to the district shall
be valid and binding from the time the pledge is made for the benefit
of pledgees and successors thereto. The tax receipts, revenues,
moneys, accounts, accounts receivable, contract rights, and other
rights to payment of whatever kind pledged by or to the district or
the assignees shall immediately be subject to the lien of the pledge
without physical delivery or further act. The lien of the pledge
shall be valid and binding against all parties, regardless of whether
the parties have notice of the claim. The indenture, trust
agreement, resolution, or another instrument by which the pledge is
created need not be recorded.
The district may provide for the bonds to bear a variable
interest rate, for the manner and intervals in which the rate shall
vary, and for the dates on which the interest shall be payable. In
connection with the issuance of bonds, the district may enter into
any agreement for liquidity or credit enhancement that may be
necessary or desirable, as determined by the district.
(a) Limited tax bonds shall be issued pursuant to a
resolution adopted at any time, and from time to time, by the
district by a two-thirds vote of all members of the board of the
(b) The district may, from time to time, issue bonds in accordance
with the Revenue Bond Law of 1941 (Chapter 6 (commencing with
Section 54300) of Part 1 of Division 2 of Title 5 of the Government
Code), for the purposes set forth in Section 103282, which shall
constitute an "enterprise" within the meaning of Section 54309 of the
Government Code, and the proceeds of the retail transactions and use
tax shall constitute "revenues" within the meaning of Section 54315
of the Government Code. Article 3 (commencing with Section 54380) of
Chapter 6 of Part 1 of Division 2 of Title 5 of the Government Code
and the limitations set forth in subdivision (b) of Section 54402 and
in Sections 54403 and 54418 of the Government Code do not apply to
the issuance and sale of bonds pursuant to this article. Instead, the
district shall authorize the issuance of bonds by resolution, which
resolution shall specify all of the following:
(1) The purposes for which the bonds are to be issued, which may
(2) The maximum principal amount of the bonds.
(3) The maximum term for the bonds.
(4) The maximum rate of interest to be payable upon the bonds,
which shall not exceed the maximum rate permitted for bonds of the
district by Section 53531 of the Government Code or any other
applicable provisions of law. In the case of bonds bearing a variable
interest rate, the variable rate shall on no day exceed the maximum
rate permitted for bonds of the district on that day by Section 53531
of the Government Code or any other applicable provisions of law.
However, the variable interest rate so permitted may on any day
exceed that maximum rate if the interest paid on the bonds from their
date of original issuance on that day does not exceed the total
interest which would have been permitted to have been paid on the
bonds if the bonds had borne interest at all times from the date of
issuance to that day at the maximum rate permitted from time to time
by Section 53531 of the Government Code or any other applicable
provisions of law.
(5) The maximum discount or premium on the sale of bonds. The
bonds may be sold at less or more than the principal amount thereof
in the manner and to the extent determined by the district.
(c) For purposes of the issuance and sale of bonds pursuant to
this article, the following definitions are applicable to the Revenue
Bond Law of 1941:
(1) "Resolution" means, unless the context otherwise requires, the
instrument providing the terms and conditions for the issuance of
the limited tax bonds, and may be an indenture, resolution,
ordinance, order, agreement, or other instrument in writing.
(2) "Fiscal agent" means any fiscal agent, trustee, paying agent,
depository, or other fiduciary provided for in the resolution
authorizing the issuance of the bonds, which fiscal agent may be
located within or without the state.
(d) Each resolution shall provide for the issuance of bonds in the
amounts as may be necessary, until the full amount of the bonds
authorized has been issued. The full amount of bonds may be divided
into two or more series with different dates of payment fixed for the
bonds of each series. A bond need not mature on its anniversary
(a) The district may issue 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.
(b) Refunding bonds may be issued in a principal amount sufficient
to pay all, or any part of, the principal of the outstanding bonds,
the premiums, if any, due upon call and redemption thereof prior to
maturity, all expenses of the refunding, and either of the following:
(1) The interest upon the refunding bonds from the date of sale
thereof to the date of payment of the bonds to be refunded out of the
proceeds of the sale of the refunding bonds or to the date upon
which the bonds to be refunded will be paid pursuant to call or
agreement with the holders of the bonds.
(2) The interest upon the bonds to be refunded from the date of
sale of the refunding bonds to the date of payment of the bonds to be
refunded or to the date upon which the bonds to be refunded will be
paid pursuant to call or agreement with the holders of the bonds.
(c) The provisions of this article for the issuance and sale of
bonds apply to the issuance and sale of refunding bonds.
(a) The district may borrow money in anticipation of the
sale of bonds which have been authorized pursuant to this article but
which have not been sold or delivered, and may issue negotiable bond
anticipation notes therefor and may renew the bond anticipation
notes from time to time. However, the maximum maturity of any bond
anticipation notes, including the renewals thereof, shall not exceed
five years from the date of delivery of the original bond
(b) The bond anticipation notes, and the interest thereon, may be
paid from any money of the district available therefor, including the
revenues from the retail transactions and use tax. If not previously
otherwise paid, the bond anticipation notes, or any portion
thererof, or the interest thereon, shall be paid from the proceeds of
the next sale of the bonds of the district in anticipation of which
the notes were issued.
(c) The bond anticipation notes shall not be issued in any amount
in excess of the aggregate amount of the bonds which the district has
been authorized to issue, less the amount of any bonds of the
authorized issue previously sold, and also less the amount of other
bond anticipation notes therefor issued and then outstanding. The
bond anticipation notes shall be issued and sold in the same manner
as the bonds.
(d) The bond anticipation notes and the resolutions authorizing
them may contain any provisions, conditions, or limitations which a
resolution of the district may contain.
Any bonds issued pursuant to this article are legal
instruments for all trust funds; for the funds of insurance
companies, commercial and savings banks, 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, counties,
school districts, or other districts within the state, those funds
may be invested in the bonds issued pursuant to this article, and
whenever bonds of cities, 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 money, the bonds issued pursuant to this
article may be so used. The provisions of this article are in
addition to all other laws relating to legal investment and shall be
controlling as the latest expression of the Legislature with respect
This article provides a complete, additional, and
alternative method for doing what is authorized by this article and
shall be regarded as supplemental and additional to the powers
conferred by any other laws. The issuance of bonds and the entering
into any credit reimbursement or other agreement under this article
need not comply with the requirements of any other law applicable to
the district or the issuance of bonds or the incurring of
indebtedness. Bonds issued by the district prior to the effective
date of the act which enacted this section which were subject to
investigation, reports, and approval or certification by the
Treasurer pursuant to the District Securities Investigation Law of
1965 (Chapter 2.5 (commencing with Section 58750) of Division 2 of
Title 6 of the Government Code), and the Districts Securities Law
(Chapter 1 (commencing with Section 20000) of Division 10 of the
Water Code) prior to the adoption of this article shall continue to
be subject to those investigations, reports, and approvals or
(a) Any action or proceedings wherein the validity of the
levy or collection of the retail transactions and use tax, or any
proceedings in relation thereto, is contested, questioned, or denied
shall be commenced not later than July 1, 1990; otherwise the retail
transactions and use tax and all proceedings in relation thereto
shall be held to be valid and in every respect legal, enforceable,
(b) Any action or proceedings wherein the validity of the issuance
of any bonds, or any proceedings in relation thereto is contested,
questioned, or denied shall be commenced not later than July 1, 1990,
or, in the case of bonds authorized to be issued after that date,
within six months from the date the bonds are authorized to be issued
by the district; otherwise, in each case, the bonds and all
proceedings in relation thereto shall be held to be valid and in
every respect legal, enforceable, and incontestable.
(c) Nothing in this section precludes the validity of the retail
transactions and use tax or of any bonds or any related proceedings
from being established by an action brought under Chapter 9
(commencing with Section 860) of Title 10 of Part 2 of the Code of
Civil Procedure or pursuant to any other procedure established by
law, before the end of any period of time specified in subdivision
(a) or (b).