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Article 2. Revenue Bonds of California Government Code >> Division 1. >> Title 5. >> Part 1. >> Chapter 3.5. >> Article 2.
The board shall issue revenue bonds in the name of the local
agency. These bonds shall constitute obligations of the project
only, and neither the payment of the principal or interest of any
such bond constitutes a debt, liability or obligation of the local
agency or of the State of California. All bonds issued by the board
shall contain a recital on their face that neither the payment of the
principal or any part thereof nor any interest thereon constitutes a
debt, liability or obligation of the local agency or of the State.
The board shall determine the time, form and manner of the
issuance of revenue bonds.
The board may enter into indentures providing for the
aggregate principal amount, date, or dates, maturities, interest
rate, denominations, form, registration transfer and interchange of
such bonds and coupons, and the terms and conditions upon which the
same shall be executed, issued, secured, sold, paid, redeemed, funded
and refunded. Reference on the face of the bonds to such indenture
by its date of adoption, or the apparent date on the face thereof, is
sufficient to incorporate all of the provisions thereof and of this
chapter into the body of the bonds and their appurtenant coupons.
Each taker and subsequent holder of the bonds or coupons, whether the
coupons are attached to or detached from the bonds, has recourse to
all of the provisions of the indenture and of this chapter, and is
bound thereby.
An indenture pursuant to which bonds are issued may include
such covenants and agreements on the part of the board as the board
deems necessary or advisible for the better security of the bonds
issued thereunder.
An indenture may include a clause relating to the bonds
issued thereunder requiring the board to pay or cause to be paid
punctually the principal of all such bonds and the interest thereon
on the date or dates, at the place or places, and in the manner
mentioned in such bonds and in the coupons appertaining thereto in
accordance with such indenture.
An indenture may include a clause relating to the bonds
issued thereunder requiring the board to continuously operate all
improvements acquired, constructed, or completed, in whole or in
part, from the proceeds of the bonds in an efficient and economical
manner.
An indenture may include a clause relating to the bonds
issued thereunder requiring the board to make all needful and
necessary repairs, renewals and replacements to any improvements and
to keep them at all times in good repair, working order and
condition.
An indenture may include a clause relating to the bonds
issued thereunder requiring the board to preserve and protect the
security of the bonds and the rights of the holders thereof and to
warrant and defend such rights.
An indenture may include a clause relating to the bonds
issued thereunder requiring the board to pay and discharge or cause
to be paid and discharged from the funds available for that purpose
all lawful claims for labor, materials and supplies or other charges
which, if unpaid, might become a lien or charge upon the revenues, or
any part thereof, of any improvements acquired, constructed or
completed from the proceeds of the sale of the bonds, or upon any of
the physical properties thereof which might impair the security of
the bonds.
An indenture may include a clause relating to the bonds
issued thereunder which limits, restricts, or prohibits any right,
power or privilege of the board to mortgage or otherwise encumber,
sell, lease or dispose of any improvements constructed from the
proceeds of the bonds, or to enter into any lease or agreement which
impairs or impedes the operation of such improvement, or any part
thereof, necessary to secure adequate revenues or which otherwise
impairs or impedes the rights of the holders of the bonds with
respect to such revenues.
An indenture may include a clause relating to the bonds
issued thereunder requiring the board to fix, prescribe and collect
fees, rates, tolls, rentals or other charges in connection with the
services and facilities furnished from the improvements acquired,
constructed or purchased from part or all of the proceeds of the
bonds, sufficient to pay the principal of and interest on the bonds
as they become due and payable, together with all expenses of
operation, maintenance and repair of the improvements, and with such
additional sums as may be required for any sinking fund, reserve fund
or other special fund provided for the further security of such
bonds or as a depreciation charge or other charge in connection with
such improvement.
An indenture may include a clause relating to the bonds
issued thereunder requiring the board to hold in trust the revenues
pledged to the payment of such bonds and the interest thereon, or to
any reserve or other fund created for the further protection of the
bonds, and to apply such revenues or cause them to be applied only as
provided in the indenture.
An indenture may include a clause limiting the power of the
board to apply the proceeds of the sale of any issue of bonds for the
acquiring, constructing, or completing of any improvement or any
part thereof, or more than one of such improvements.
An indenture may include a clause limiting the power of the
board to issue additional bonds for the purpose of acquiring,
constructing or completing any improvement or any part thereof.
An indenture may include a clause requiring, specifying or
limiting the kind, amount and character of insurance to be maintained
by the board on any improvement, or any part thereof, and the use
and disposition of the proceeds of any such insurance thereafter
collected.
An indenture may include a clause providing the events of
default and the terms and conditions upon which any or all of the
bonds then or thereafter issued may become or be declared due and
payable prior to maturity, and the terms and conditions upon which
such declaration and its consequences may be waived.
An indenture may include a clause designating the rights,
limitations, powers and duties arising upon breach by the board of
any of the covenants, conditions, or obligations contained in any
indenture.
An indenture may include a clause prescribing a procedure by
which the terms and conditions of the indenture may be subsequently
amended or modified with the consent of the board and the vote or
written assent of the holders of a specified principal amount of the
bonds issued and outstanding. Such clause may provide for meetings of
bondholders and for the manner in which the consent of the
bondholders may be given. The clause shall specifically state the
effect of such amendment or modification upon the rights of the
holders of all of the bonds and interest coupons appertaining
thereto, whether attached thereto or detached therefrom.
With respect to any clause providing for the modification or
amendment of an indenture, the board may agree that bonds held by the
board, by any department, political subdivision or agency of the
State of California, or by any public corporation, municipality,
district or political subdivision shall not be counted as outstanding
bonds, or be entitled to vote or assent but shall nevertheless, be
subject to any such modification or amendment.
The indenture may include a clause providing for such other
acts and matters as may be necessary or convenient or desirable in
order to secure the bonds or to make the bonds more marketable.
The board may designate a bank or trust company, qualified
to do business in this State, as a trustee for the holders of bonds
issued hereunder, and may authorize the trustee to act on behalf of
the holders of the bonds, or any stated percentage thereof, and to
exercise and prosecute on behalf of the holders of the bonds such
rights and remedies as may be available to the holders.
The board shall fix and determine the conditions upon which
any trustee shall receive, hold or disburse any or all revenues
collected for or on account of the bondholders. The board shall
prescribe the duties and powers of such trustee with respect to the
payment of principal and interest on the bonds, the redemption of the
bonds, the registration and discharge from registration of the
bonds, and the management of any sinking fund or other funds provided
as security for the bonds.
The board may issue bonds in series or may divide any issue
into one or more divisions and fix different maturities or dates of
such bonds, different rates of interest, or prescribe different terms
and conditions for the bonds of the several series or divisions. It
is not necessary that all bonds of the same authorized issue be of
the same kind or character, have the same security, or be of the same
interest rate, but the terms thereof shall in each case be provided
for by the board, at or prior to the issue thereof. The board may
provide for successive issues or may provide for one maximum issue.
Bonds may be issued as coupon bonds or as registered bonds.
The board may provide for the interchange of coupon bonds for
registered bonds and registered bonds for coupon bonds, and may
provide that the bonds shall be registered as to principal only, or
as to both principal and interest, or otherwise as the board may
determine.
Bonds shall bear interest at a rate of not to exceed 8
percent per annum, payable annually or semiannually or in part
annually and in part semiannually. Prior to the issuance of bonds the
board may fix limitations or restrictions on the payment of
interest.
Bonds may be callable upon such terms, conditions, and upon
such notice as the board may determine, and upon the payment of the
premium fixed by the board in the proceedings for the issuance of the
bonds. No bond is subject to call or redemption prior to its fixed
maturity date unless the right to exercise such call is expressly
stated on the face of the bond.
The board may provide for the payment of the principal and
interest of bonds at any place within or without the State of
California, and in specified coin or currency of the United States.
The board may provide for the execution and authentication
of bonds by the manual, lithographed or printed facsimile signature
of officers of the board. If any of the officers whose signatures or
countersignatures appear upon the bonds or coupons cease to be
officers before the delivery of the bonds or coupons, their
signatures or countersignatures are nevertheless valid and of the
same force and effect as if the officers had remained in office until
the delivery of the bonds and coupons.
Bonds shall bear dates prescribed by the board. Bonds may be
serial bonds or sinking fund bonds with such maturities as the board
may determine. No bond by its terms shall mature in more than 50
years from its own date and in the event any authorized issue is
divided into two or more series or divisions, the maximum maturity
date herein authorized shall be calculated from the date on the face
of each bond separately, irrespective of the fact that different
dates may be prescribed for the bonds of each separate series or
division of any authorized issue.
The board may fix terms and conditions for the sale or other
disposition of any authorized issue of bonds. The board may sell
bonds at less than their par or face value but no bond may be sold at
a price below the par or face value thereof which would result in a
sale price yielding to the purchaser an average of more than six (6)
percent per annum, payable semiannually, according to standard tables
of bond values.
The board may provide for the security of bonds.
Interest on bonds may be paid out of the proceeds of the
sale of the bonds during the actual construction of any project for
the acquisition, construction or completion of which the bonds have
been issued, and for a period of not to exceed two (2) years
thereafter as provided for in the indenture.
The board may provide in the proceedings for the issuance of
bonds that the bonds and the interest thereon constitute such lien
upon the revenues of any project acquired, constructed or completed
from the proceeds thereof as may be provided for in the indenture.
Pending the actual issuance or delivery of revenue bonds,
the board may issue temporary or interim bonds, certificates or
receipts of any denominations whatsoever, and with or without
coupons, to be exchanged for definitive bonds when ready for
delivery.
All bonds, and the interest or income therefrom, are exempt
from all taxation in this State other than gift, inheritance and
estate taxes.
The bonds issued under this chapter shall be subject to
investigation and certification by the State Treasurer under the
Districts Securities Law (Chapter 1 (commencing with Section 20000),
Division 10, Water Code) as such law reads or is hereafter amended to
read. If the State Treasurer determines that the bonds are
adequately secured and the revenues of the authority applicable to
the payment thereof are or will be sufficient to pay the principal
and interest of the bonds, and if the State Treasurer certifies to
that effect, the bonds shall be eligible as legal investments for
both public and private funds in the same manner as provided in the
Districts Securities Law.
The board may provide for the issuance, sale, or exhange of
refunding bonds for the purpose of redeeming or retiring any revenue
bonds issued by the board. All provisions of this chapter applicable
to the issuance of revenue bonds are applicable to the funding or
refunding bonds and to the issuance sale or exchange thereof.
Funding or refunding bonds may be issued in a principal
amount sufficient to provide funds for the payment of all bonds to be
funded or refunded thereby, and in addition for the payment of all
expenses incident to the calling, retiring or paying of such
outstanding bonds, and the issuance of such funding or refunding
bonds. These expenses include the difference in amount between the
par value of the funding or refunding bonds and any amount less than
par for which the funding or refunding bonds are sold, any amount
necessary to be made available for the payment of interest upon such
funding or refunding bonds from the date of sale thereof to the date
of payment of the bonds to be funded or refunded or to the date upon
which the bonds to be funded or refunded will be paid pursuant to the
call thereof or agreement with the holders thereof, and the premium,
if any, necessary to be paid in order to call or retire the
outstanding bonds and the interest accruing thereon to the date of
the call or retirement.
All bonds issued under the provisions of this chapter are
negotiable instruments, except when registered in the name of a
registered owner.
An action to determine the validity of bonds may be brought
pursuant to Chapter 9 (commencing with Section 860) of Title 10 of
Part 2 of the Code of Civil Procedure.
