Article 6. Indebtedness of California Public Utilities Code >> Division 10. >> Part 1. >> Chapter 6. >> Article 6.

A district may borrow money and incur indebtedness, and may issue bonds or other evidences of indebtedness. No indebtedness shall be incurred exceeding the ordinary annual income and revenue of the district without the approval of a two-thirds vote of the voters voting on the proposition to incur such indebtedness; except that a further vote of the voters is not required for any indebtedness incurred within the purposes and not exceeding the available amount of any previously authorized bond issue, and as to such indebtedness the proceeds of any of the bonds unexpended in the treasury of the district, or the par value of any of the bonds which are unsold shall be deemed a part of the ordinary annual income and revenue of the district.

A district may borrow money for the purpose of defraying the expenses of a district lawfully incurred after the commencement of the fiscal year, but prior to the time moneys from the tax levy for the fiscal year are received by a district, in a sum which shall not exceed five cents ($0.05) on each one hundred dollars ($100) of assessed valuation of taxable property in a district at the time the moneys are borrowed, and may evidence such borrowing by notes bearing interest at a rate not to exceed six (6) percent per annum. The notes shall be payable from the tax levy from the then current fiscal year, which levy shall contain a sum sufficient to provide for the payment of the notes and the interest thereon. The form of said notes and the proceedings relating to their issuance and sale, will be governed by the applicable provisions contained in Article 7 (commencing at Section 53820) of Chapter 4 of Part 1 of Division 2 of Title 5 of the Government Code. The maturity of said notes shall not exceed two (2) years.

No district shall incur an indebtedness for public works which in the aggregate exceeds 20 percent of the assessed value of all the real and personal property within the district.

Indebtedness which has been incurred for the acquisition, construction, and operation of transit facilities, where the revenue from the transit facilities for three years or more next preceding has been sufficient to pay the interest and principal due on any bonds issued for its construction or acquisition, in addition to the cost of operation and maintenance, shall not be counted and included in ascertaining the limit of indebtedness.

A district may accept, without limitation by any other provisions of this division requiring approval of indebtedness, contributions or loans from the United States, this State, or any department, instrumentality, or agency of either thereof, for the purpose of financing the acquisition, construction, maintenance, and operation of transit facilities, and may enter into contracts and cooperate with, and accept cooperation from, the United States, this State, or any department, instrumentality, or agency of either thereof, in the acquisition, construction, maintenance, and operation, and in financing the acquisition, construction, maintenance, and operation, of any such transit facilities in accordance with any legislation which Congress or the Legislature of the State of California may have heretofore adopted or may hereafter adopt, under which aid, assistance, and cooperation may be furnished by the United States or this State in the acquisition, construction, maintenance, and operation or in financing the acquisition, construction, maintenance, and operation of any such transit facilities. A district may do any and all things necessary in order to avail itself of such aid, assistance, and cooperation under any federal or state legislation now or hereafter enacted. Any evidence of indebtedness issued under this section shall constitute a negotiable instrument.

The district may purchase equipment such as cars, trolley buses and motorbuses, and rolling equipment, and may execute agreements, leases and equipment trust certificates in the forms customarily used by private corporations engaged in the transit business appropriate to effect the purchase and leasing of rolling equipment and may dispose of the equipment trust certificates upon the terms and conditions as the board may deem appropriate. All money required to be paid by the district pursuant to the agreements, leases and equipment trust certificates provided for in this section shall be payable solely from the revenue or income to be derived from the transit facilities and from grants and loans as provided in Section 25844. Payment for equipment, or the rental of equipment, may be made in installments, and the deferred installments may be evidenced by equipment trust certificates payable solely from revenue or income as provided in this section, and title to the equipment shall not vest in the district until the equipment trust certificates are paid.

The agreement to purchase or lease may direct the vendor or lessor to sell and assign or lease the rolling equipment to a bank or trust company, duly authorized to transact business in the State of California, as trustee, for the benefit and security of the equipment trust certificates and may direct the trustee to deliver the rolling equipment to one or more designated officers of the district and may authorize the district to simultaneously execute and deliver an installment purchase agreement or a lease of the equipment to the district.

The agreements and leases shall be duly acknowledged before a person authorized by law to take acknowledgments of deeds and in the form required for acknowledgment of deeds. The agreements, leases, and equipment trust certificates shall be authorized by resolution of the district and shall contain such covenants, conditions and provisions as may be deemed necessary or appropriate to insure the payment of the equipment trust certificates from the revenue or income to be derived from the transit system.

The covenants, conditions and provisions of the agreements, leases, and equipment trust certificates shall not conflict with any of the provisions of any trust agreement securing the payment of bonds, notes or certificates of the district.

An executed copy of each agreement or lease shall be filed in the Office of the Secretary of State, who will be entitled to receive one dollar ($1) for each copy filed with him and which filing shall constitute notice to any subsequent judgment creditor or any subsequent purchaser. Each vehicle so purchased or leased shall have the name of the owner or lessor plainly marked on both sides thereof, followed by the appropriate words, "owner and lessor" or "owner and vendor," as the case may be.