Article 4. Revenue Bonds of California Government Code >> Title 7.8. >> Chapter 3. >> Article 4.

The commission may issue bonds for the acquisition, construction, reconstruction, completion, addition, betterment, improvement, extension, or repair of the regional transit terminal or any part thereof, and any indenture under which bonds are issued may provide for the payment of any incidental expenses, including legal, engineering, fiscal, financial consultant, and other expenses, connected with issuing and disposing of the bonds, for all amounts required for the creation of an operating fund, or construction fund, reserve fund, sinking fund, or other special fund, for all other incidental expenses connected with the acquisition, construction, or completion of the regional transit terminal or any part thereof, for reimbursement of advances by the commission or by others for such purposes and for working capital. The total amount of bonds that may be issued by the commission shall not be limited as to aggregate principal amount, except as the commission may provide in any indenture.

The validity of the authorization and issuance of any bonds by the commission is not dependent on or affected in any way, except to the extent provided in the indenture by:
  (a) Proceedings taken by the commission or the department for the acquisition, construction, or completion of the regional transit terminal or any part thereof.
  (b) Any contracts made by the commission or the department in connection with the acquisition, construction, or completion of the regional transit terminal or any part thereof.
  (c) The failure to complete any part of the regional transit terminal for which bonds are authorized to be issued.

The commission shall issue bonds in its name. These bonds shall constitute obligations of the commission only, and neither the payment of the principal of any such bond nor the payment of interest thereon constitutes a debt, liability, or obligation of any county, city, city and county, district, or political subdivision, or of the State of California. All bonds issued by the commission shall contain a recital on their face that neither the payment of the principal, or any part thereof, nor the payment of any interest thereon constitutes a debt, liability, or obligation of any county, city, city and county, district, or political subdivision, or of the State of California.

The commission shall determine the time, form, and manner of the issuance of bonds. The bonds shall be payable only out of specified revenues as the commission shall determine at the time of their issuance.

The commission may enter into indentures providing for the principal amount, date or dates, maturities, interest rate, denominations, form, registration, transfer, interchange, and other provisions of such bonds and coupons, and the terms and conditions upon which the bonds 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 may include such covenants and agreements on the part of the commission as the commission deems necessary or advisable for the issue, payment, better security, or protection of the bonds issued thereunder.

An indenture may include a clause requiring the commission 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, all in accordance with such indenture.

An indenture may include a clause requiring the department to continuously operate the regional transit terminal and other facilities in an efficient and economical manner.

An indenture may include a clause requiring the department to make all necessary repairs, renewals, and replacements to the regional transit terminal and to keep it at all times in good repair, working order, and condition.

An indenture may include a clause requiring the commission 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 requiring the commission to pay and discharge, or cause to be paid and discharged, 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 the regional transit terminal or which might impair the security of the bonds.

An indenture may include a clause which limits, restricts, or prohibits any right, power, or privilege of the commission to mortgage or otherwise encumber, sell, lease, or dispose of all, or any part, of the regional transit terminal, or to enter into any other agreement which impairs or impedes the operation of the terminal, 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 requiring the commission to fix, prescribe, and collect rates, rents, fees, or other charges in connection with the regional transit terminal and, in addition, to provide a margin of safety in the collection thereof as further security for the bonds.

An indenture may include a clause requiring the commission to hold in trust the proceeds of the bonds and 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 commission to apply the proceeds of the sale of any issue of bonds except as provided in the indenture.

An indenture may include a clause limiting the power of the commission to issue additional bonds except upon such terms and conditions as are set forth in the indenture.

An indenture may include a clause requiring, specifying, or limiting the kind, amount, and character of insurance to be maintained by the department on the regional transit terminal, or any part thereof, and the use and disposition of the proceeds of any such insurance thereafter collected. Such insurance may include fire, casualty, fidelity, public liability, property damage, or any other type or kind of insurance deemed desirable by the department, including use and occupancy insurance or insurance against loss of revenues from any cause.

An indenture may include a clause providing the events of default and the terms and conditions upon which such default and its consequences may be waived. An indenture may include a clause designating the rights, limitations, power, and duties arising upon breach by the commission or department of any of the covenants, conditions, or obligations contained in any indenture; provided, that no indenture shall limit or restrict the rights granted to bondholders by Article 7 (commencing with Section 67620).

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 commission 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. Such 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 commission may agree that bonds held by the commission, by any department or agency of the State of California, or by any public corporation, 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.

An 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 commission may designate a bank or trust company, qualified to do business in this state, as a trustee for the commission and 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 commission shall fix and determine, in an indenture, the conditions upon which any indenture trustee shall receive, hold, or disburse any or all revenues collected for, or on account of, the commission. The commission shall, in an indenture, prescribe the duties and powers of such indenture trustee with respect to the issuance, authentication, sale, and delivery of the bonds and the payment of principal and interest thereof, 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 commission may issue bonds in series and may divide any series 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 commission, at or prior to the issue thereof. The commission may provide for successive issues or may provide for one maximum issue. The commission may provide that all bonds, or the bonds of any specified issue, shall be paid from and secured by the revenues of the specified facilities, all in the manner and upon the terms set forth in the indenture.

Bonds may be issued as coupon bonds or as registered bonds. The commission 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 commission may determine.

Bonds shall bear interest at a rate of not to exceed 7 percent per annum, payable annually or semiannually, or in part annually and in part semiannually.

Bonds may be callable upon such terms and conditions and upon such notice as the commission may determine, and upon the payment of the premium fixed by the commission in the proceedings for the issuance of the bonds. No bond shall be 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 commission may provide for the payment of the principal and interest of bonds at any place or places within or without the State of California, and in any specified lawful coin or currency of the United States of America.

The commission may provide for the execution and authentication of bonds by the manual, lithographed, or printed facsimile signature of officers of the commission, and by additional authentication by a trustee or fiscal agent appointed by the commission. 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 commission. Bonds may be serial bonds or sinking fund bonds with such maturities as the commission 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 commission may fix terms and conditions for the sale or other disposition of any authorized issue of bonds. The commission may sell bonds at less than their par or face value, but no issue of bonds may be sold at an aggregate price below the par or face value thereof if such sale would result in a net interest cost to the commission, calculated upon the entire issue so sold, of more than 7 percent per annum, payable semiannually, according to standard tables of bond values. All bonds issued and sold for cash pursuant to this chapter shall be sold on sealed proposals to the highest bidder, either bidding alone or in conjunction with others, after advertising for bids by publication of notice of sale once, not less than 10 days prior to the date of sale, in a newspaper of general circulation printed and published in the City and County of San Francisco. The commission may reject any and all bids submitted and may thereafter sell the bonds so advertised for sale at private sale to any financially responsible bidder, either bidding alone or in conjunction with others, under such terms and conditions as it deems most advantageous to its own interest, but the bonds shall not be sold at a price below that of the highest bid which was rejected. The commission may contract loans and borrow money through the sale of bonds to the United States of America or any of its departments or agencies, upon such terms and conditions as may be agreed to. Such bonds shall be subject to all other provisions of this chapter, except the requirement that bonds be sold on sealed proposals to the highest bidder after advertising for bids.

The commission may provide, in the proceedings for the issuance of bonds, that the bonds and the interest thereon constitute such lien upon the revenues of the regional transit terminal or any part thereof acquired, constructed, or completed, improved, or extended, by the department as may be provided for in the indenture. The indenture may provide that the bonds shall be secured by the revenues derived from the entire regional transit terminal or from revenues of only certain designated facilities therein.

Interest on bonds may be paid out of the proceeds of the sale of the bonds during the period required for construction of the regional transit terminal or any part thereof, and for a period not to exceed three years thereafter as may be provided for in the indenture.

Pending the actual issuance or delivery of definitive bonds, the commission 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 thereon, are exempt from all taxation by the State of California or any public corporation other than gift, inheritance and franchise taxes.

The commission may provide for the issuance, sale, or exchange of refunding bonds for the purpose of redeeming or retiring any bonds issued by the commission. All provisions of this chapter applicable to the issuance of bonds are applicable to the refunding bonds and to the issuance, sale, or exchange thereof.

Refunding bonds may be issued in a principal amount sufficient to provide funds for the payment of all bonds to be 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 refunding bonds. These expenses may include the difference in amount between the par value of the refunding bonds and any amount less than par for which the refunding bonds are sold, any amount necessary to be made available for the payment of interest upon such refunding bonds from the date of sale thereof 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 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.

The commission may apply to the State Treasurer under the Districts Securities Law (Division 10 (commencing with Section 20000) of the Water Code), as such law now reads or may hereafter be amended to read, for the certification of any bonds issued by it as legal investments for savings banks and other funds, but such certification shall not be a condition precedent to the issuance of any bonds by the commission nor shall the State Treasurer have any jurisdiction over the expenditure of any proceeds of bonds certified by it. If the State Treasurer determines that the bonds are adequately secured and that the revenues of the commission applicable to the payment thereof are, or probably will be, sufficient to pay the principal and interest on the bonds, and if the State Treasurer certifies to that effect, the bonds so certified shall be eligible as legal investments for both public and private funds in the same manner as provided in the Districts Securities Law. The commission may issue bonds with or without such certification and shall not be precluded from issuing bonds subsequently without such certification, notwithstanding the fact that earlier issues of bonds may have been certified as legal investments.

Prior to the issuance of any bonds, the commission may commence in the Superior Court of the State of California, in and for the City and County of San Francisco, a special proceeding to determine the right to issue the bonds and their validity. Such proceedings shall be instituted and prosecuted in the same manner as provided by Sections 860 to 870, inclusive, of the Code of Civil Procedure, as these sections now read or may hereafter be amended to read, and these sections shall apply to and govern all such proceedings instituted under this chapter. Such proceeding shall be a proceeding in rem and the judgment rendered therein shall be conclusive against all persons whomsoever.

No indenture need be recorded or filed in any public office, other than the office of the commission. The pledge of revenues provided in any indenture shall take effect forthwith as provided therein, and irrespective of the date of receipt of such revenues by the commission or the indenture trustee. Such pledge shall be effective as provided in the indenture without physical delivery of the revenues to the commission or to the indenture trustee.

Subject to any applicable provisions which may be contained in an indenture, the commission may invest any available funds in bonds issued by it and may hold, cancel, or resell such bonds.

While any bonds issued by the commission remain outstanding and unpaid, the power of the department to establish, levy, and collect rents, fees, and other charges in connection with the regional transit terminal shall not be diminished or impaired.