53550. The following terms shall have the following meanings:
(a) "Local agency" means public district, public corporation,
authority, agency, board, commission, county, city and county, city,
school district, or other public entity.
(b) "Bonds" means bonds, warrants, notes or other evidence of
indebtedness of a local agency or any improvement district or zone
thereof payable, both principal and interest, from the proceeds of ad
valorem taxes or ad valorem assessments which may be levied without
limitation as to rate or amount upon property in the local agency or
any improvement district or zone thereof subject to taxation or
assessment, or any outstanding indebtedness payable to the State
Board of Equalization as repayment of the local agency's share of
refunds made as a result of the California Court of Appeal decision
in Aerospace Corporation v. State Board of Equalization, 218 Cal.
App. 3d 1300, which indebtedness is hereby imposed on all the local
agencies that are required to participate in the refund obligations
arising from this decision and that are declared and determined to
have been imposed by law.
(c) "Legislative body" means the board of directors or other
governing body of the local agency, unless the context otherwise
requires.
(d) "Principal act" means the law under which bonds to be refunded
were issued.
(e) "Costs of issuing the refunding bonds" means those of the
following costs and expenses designated by the legislative body in
the resolution providing for the issuance of the bonds:
(1) All expenses incident to the calling, retiring or paying of
the bonds to be refunded and to the issuance of refunding bonds,
including the charges of any escrow agent or trustee in connection
with the issuance of the refunding bonds or in connection with the
redemption or retirement of the bonds to be refunded.
(2) Either of the following:
(A) 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.
(B) 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.
(3) Any premium necessary in the calling or retiring of the bonds
to be refunded.
(f) "Designated costs of issuing the refunding bonds" means
whichever of the items specified in subdivision (e) that are
designated by the legislative body in the resolution providing for
the issuance of refunding bonds.
(g) "Federal securities" means those securities described in
Sections 1360 and 1360.1 of the Financial Code.
53551. The legislative body of any local agency may issue
negotiable coupon bonds, to be denominated refunding bonds, for the
purpose of refunding any of the indebtedness of the local agency
evidence by bonds, whether due or not due, or which has or may
hereafter become payable at the option of such local agency or by
consent of the bondholders, or by any lawful means, whether such
indebtedness, evidenced by bonds be now existing or may hereafter be
created, and there shall not be moneys in a special fund in the
treasury of such local agency irrevocably pledged to the payment or
redemption of all such bonds; but the amount of such refunding bonds
to be issued under the provisions of this article shall first be
determined by such legislative body by resolution entered upon the
minutes of such legislative body.
53552. Whenever the legislative body of a local agency determines
that prudent management of the fiscal affairs of the local agency
requires that it issue refunding bonds under the provisions of this
article, it may do so without submitting the question of the issuance
of the refunding bonds to a vote of the qualified electors of the
local agency, unless the legislative body determines to submit the
question to a vote, in which case the election shall be held in
accordance with the principal act pursuant to which the bonds to be
refunded were issued. Refunding bonds shall not be issued if the
total net interest cost to maturity on the refunding bonds plus the
principal amount of the refunding bonds exceeds the total net
interest cost to maturity on the bonds to be refunded plus the
principal amount of the bonds to be refunded, provided that this
limitation shall not apply to bonds issued to refund indebtedness
imposed by subdivision (b) of Section 53550 as a result of the court
decision in Aerospace Corporation v. State Board of Equalization, 218
Cal. App. 3d 1300. Subject to this limitation, the principal amount
of the refunding bonds may be more than, less than, or the same as
the principal amount of the bonds to be refunded.
53553. When the legislative body determines to issue refunding
bonds pursuant to this article, it shall adopt a resolution providing
for the issuance of such bonds. Such resolution shall:
(a) Describe the bonds being refunded; and the date on which it is
anticipated that the exchange, purchase or call and redemption
necessary to effect the refunding shall occur;
(b) Fix the date of such refunding bonds;
(c) Designate the denomination or denominations thereof;
(d) Fix the rate or rates of interest to be borne by such
refunding bonds, which rate or rates shall not exceed 8 percent per
annum, payable semiannually, except that interest for the first year
from date of issuance may be payable at the end of said year;
(e) Fix the maturity dates of such refunding bonds, which shall
not exceed 40 years from the date of such refunding bonds, or the
latest maturity date of the bonds being refunded, whichever occurs
earlier;
(f) Designate the place or places of payment of both principal and
interest;
(g) Prescribe the form of such refunding bonds; and
(h) State the designated costs of issuing the refunding bonds.
53554. Such refunding bonds shall:
(a) Be negotiable in form;
(b) Recite that they are bonds of the local agency issuing the
bonds;
(c) Recite that they are issued pursuant to the provisions of this
article;
(d) Be executed in the name of the local agency; and
(e) Be signed by the president or chairman of the legislative body
of the local agency, and executed, countersigned or attested by such
officer or officers of the local agency as are required to execute,
countersign or attest bonds issued pursuant to the principal act, as
the case may be.
The interest coupons shall be signed in the same manner as
interest coupons attached to bonds issued by the local agency
pursuant to the principal act. The provisions of the Uniform
Facsimile Signatures of Public Officials Act (Chapter 6, (commencing
with Section 5500), Division 6, Title 1) apply to refunding bonds
issued pursuant to this article.
53555. Refunding bonds issued pursuant to this article may be
exchanged for the bonds to be refunded on such basis as the
legislative body determines is for the benefit of the local agency
but in no case on the basis that the principal amount of refunding
bonds exceeds the principal amount of the bonds to be refunded plus
the costs of issuing the refunding bonds. As an alternative to
exchanging the refunding bonds for the bonds to be refunded, the
legislative body may sell the refunding bonds at public or private
sale for not less than their par value. The proceeds of any sale of
refunding bonds for cash shall be placed in the treasury of the local
agency to the credit of a fund to be established for the purpose of
refunding the bonds to be refunded, which fund shall be designated
the "funding fund," and such proceeds shall be applied only as
permitted by this article.
53556. The designated costs of issuing the refunding bonds may be
paid by the purchaser of the refunding bonds or may be paid from any
other legally available source, including the general fund of the
local agency, other available revenues of the local agency under the
control of the legislative body, the proceeds of sale of the
refunding bonds, the interest or other gain derived from the
investment of any of the proceeds of sale of the refunding bonds, any
other moneys in escrow or in trust or any combination thereof as the
legislative body may determine; provided, however, that any amounts
paid by the local agency other than from the proceeds of sale of the
refunding bonds or from interest or other gains derived from the
investment of such proceeds shall be added to the total net interest
cost to maturity on the refunding bonds in determining whether the
test of the second sentence of Section 53552 has been met.
53557. Any proceeds of sale of any refunding bonds may be deposited
in escrow or trust with any bank or trust company within or without
the state, or both within and without the state, and shall be secured
in accordance with the laws applicable to funds of the local agency
and may (along with any other moneys available for that purpose
similarly deposited) be invested or reinvested in federal securities.
53558. Such proceeds and investments in escrow or trust shall be in
an amount at the time of issuance of such refunding bonds which is
certified by a certified public accountant licensed to practice in
this state to be sufficient to meet the requirements of subdivision
(a) or paragraph (b) of this section.
(a) Such proceeds and investments, together with any interest or
other gain to be derived from any such investment, shall be in an
amount at least sufficient to pay (i) the principal of and interest
and redemption premiums, if any, on the refunded bonds as they become
due or at designated dates prior to maturity (in connection with
which the legislative body has exercised or has obligated itself to
exercise a redemption privilege on behalf of the local agency) and
(ii) the designated costs of issuance of the refunding bonds, or
(b) Such proceeds and investments, together with any interest or
other gain to be derived from any such investment, shall be in an
amount at least sufficient to pay (i) the principal of and interest
and redemption premiums, if any, on the refunding bonds prior to the
maturity of the bonds to be refunded or prior to a designated date or
dates before the maturity of the bonds to be refunded (in connection
with which the legislative body has exercised or has obligated
itself to exercise a redemption privilege on behalf of the local
agency), (ii) the principal of and any redemption premiums due on
such refunded bonds at maturity or at said designated date or dates
and (iii) the designated costs of issuance of the refunding bonds.
53559. Following the issuance of any refunding bonds pursuant to
this article, the legislative body of the local agency shall provide
for the payment of principal and interest thereon in the same manner
and at the same times as it provides for payment of principal and
interest on bonds issued pursuant to its principal act and which
constitute general obligations of such local agency. The legislative
body may provide in the resolution of issuance of such refunding
bonds for the pledge of revenues of any revenue-producing facility of
the local agency as additional security for the refunding bonds to
the same extent that such revenues were pledged as additional
security for the bonds to be refunded.
53560. Upon the issuance, sale and delivery or exchange of
refunding bonds pursuant to this article:
(a) If only the refunding bonds remain outstanding, such refunding
bonds shall constitute indebtedness of the local agency issuing such
bonds and shall be included in any computation of general obligation
indebtedness of such local agency for purposes of any debt
limitation applicable to bonds of such local agency under the
principal act or for any other lawful purpose;
(b) If both the refunding bonds and the bonds to be refunded
remain outstanding for any period of time following the date of the
issuance, sale and delivery of the refunding bonds, then until the
date on which the bonds to be refunded are no longer outstanding;
(i) If the local agency has met the test of subdivision (a) of
Section 53558 the refunding bonds shall constitute indebtedness of
the local agency issuing such bonds and shall be included in any
computation of general obligation indebtedness of such local agency
for purposes of any debt limitation applicable to bonds of such local
agency under the principal act or for any other lawful purpose, but
the bonds to be refunded shall no longer be considered outstanding in
any computation of the general obligation indebtedness of such local
agency;
(ii) If the local agency has met the test of subdivision (b)
Section 53558 then such refunding bonds shall, until the date on
which the refunding bonds are no longer outstanding, constitute a
special obligation of the local agency issuing such bonds and shall
not be included in any computation of general obligation indebtedness
of such local agency for any purpose, and the bonds to be refunded
shall be considered outstanding in any computation of the general
obligation bonded indebtedness of such local agency; but from and
after the date on which the refunded bonds are no longer outstanding
the refunding bonds shall constitute indebtedness of the local agency
issuing such bonds and shall be included in any computation of
general obligation indebtedness.
53561. It is hereby declared that it is a public purpose for a
local agency to issue refunding bonds for the purposes set forth in
this article and to invest and reinvest the proceeds thereof, and any
other funds legally available therefor, for the purposes set forth
herein; provided, however, that it is the intent of this article, and
this article shall be so construed, that in no single fiscal year
shall a tax be levied or shall funds of a local agency other than
those expressly permitted herein be used to pay the principal of and
interest and redemption premium, if any, on both the refunding bonds
and on the bonds to be refunded.
53562. The powers conferred by this article are in addition and
supplemental to, and not in substitution for, and the limitations
imposed by this article shall not affect the powers conferred by, any
other law.
53569. Before selling any refunding bonds subject to the provisions
of this article, any local agency shall advertise such bonds for
sale at public sale and shall invite sealed bids therefor by
publication of a notice once at least 10 days before the date of such
public sale in a newspaper of general circulation circulated within
the boundaries of each local agency to be aided by the public project
to be financed by the issuance of such bonds; provided that, if an
issue of bonds is less than five hundred thousand dollars ($500,000),
a local agency is not required to advertise such bonds for public
sale or to accept bids thereon pursuant to this section. If one or
more satisfactory bids are received pursuant to such notice, such
bonds shall be awarded to the highest responsible bidder. If no bids
are received or if the local agency determines that the bids received
are not satisfactory as to price or responsibility of the bidders,
the local agency may reject all bids received, if any, and either
readvertise or sell such bonds at private sale.
53550. The following terms shall have the following meanings:
(a) "Local agency" means public district, public corporation,
authority, agency, board, commission, county, city and county, city,
school district, or other public entity.
(b) "Bonds" means bonds, warrants, notes or other evidence of
indebtedness of a local agency or any improvement district or zone
thereof payable, both principal and interest, from the proceeds of ad
valorem taxes or ad valorem assessments which may be levied without
limitation as to rate or amount upon property in the local agency or
any improvement district or zone thereof subject to taxation or
assessment, or any outstanding indebtedness payable to the State
Board of Equalization as repayment of the local agency's share of
refunds made as a result of the California Court of Appeal decision
in Aerospace Corporation v. State Board of Equalization, 218 Cal.
App. 3d 1300, which indebtedness is hereby imposed on all the local
agencies that are required to participate in the refund obligations
arising from this decision and that are declared and determined to
have been imposed by law.
(c) "Legislative body" means the board of directors or other
governing body of the local agency, unless the context otherwise
requires.
(d) "Principal act" means the law under which bonds to be refunded
were issued.
(e) "Costs of issuing the refunding bonds" means those of the
following costs and expenses designated by the legislative body in
the resolution providing for the issuance of the bonds:
(1) All expenses incident to the calling, retiring or paying of
the bonds to be refunded and to the issuance of refunding bonds,
including the charges of any escrow agent or trustee in connection
with the issuance of the refunding bonds or in connection with the
redemption or retirement of the bonds to be refunded.
(2) Either of the following:
(A) 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.
(B) 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.
(3) Any premium necessary in the calling or retiring of the bonds
to be refunded.
(f) "Designated costs of issuing the refunding bonds" means
whichever of the items specified in subdivision (e) that are
designated by the legislative body in the resolution providing for
the issuance of refunding bonds.
(g) "Federal securities" means those securities described in
Sections 1360 and 1360.1 of the Financial Code.
53551. The legislative body of any local agency may issue
negotiable coupon bonds, to be denominated refunding bonds, for the
purpose of refunding any of the indebtedness of the local agency
evidence by bonds, whether due or not due, or which has or may
hereafter become payable at the option of such local agency or by
consent of the bondholders, or by any lawful means, whether such
indebtedness, evidenced by bonds be now existing or may hereafter be
created, and there shall not be moneys in a special fund in the
treasury of such local agency irrevocably pledged to the payment or
redemption of all such bonds; but the amount of such refunding bonds
to be issued under the provisions of this article shall first be
determined by such legislative body by resolution entered upon the
minutes of such legislative body.
53552. Whenever the legislative body of a local agency determines
that prudent management of the fiscal affairs of the local agency
requires that it issue refunding bonds under the provisions of this
article, it may do so without submitting the question of the issuance
of the refunding bonds to a vote of the qualified electors of the
local agency, unless the legislative body determines to submit the
question to a vote, in which case the election shall be held in
accordance with the principal act pursuant to which the bonds to be
refunded were issued. Refunding bonds shall not be issued if the
total net interest cost to maturity on the refunding bonds plus the
principal amount of the refunding bonds exceeds the total net
interest cost to maturity on the bonds to be refunded plus the
principal amount of the bonds to be refunded, provided that this
limitation shall not apply to bonds issued to refund indebtedness
imposed by subdivision (b) of Section 53550 as a result of the court
decision in Aerospace Corporation v. State Board of Equalization, 218
Cal. App. 3d 1300. Subject to this limitation, the principal amount
of the refunding bonds may be more than, less than, or the same as
the principal amount of the bonds to be refunded.
53553. When the legislative body determines to issue refunding
bonds pursuant to this article, it shall adopt a resolution providing
for the issuance of such bonds. Such resolution shall:
(a) Describe the bonds being refunded; and the date on which it is
anticipated that the exchange, purchase or call and redemption
necessary to effect the refunding shall occur;
(b) Fix the date of such refunding bonds;
(c) Designate the denomination or denominations thereof;
(d) Fix the rate or rates of interest to be borne by such
refunding bonds, which rate or rates shall not exceed 8 percent per
annum, payable semiannually, except that interest for the first year
from date of issuance may be payable at the end of said year;
(e) Fix the maturity dates of such refunding bonds, which shall
not exceed 40 years from the date of such refunding bonds, or the
latest maturity date of the bonds being refunded, whichever occurs
earlier;
(f) Designate the place or places of payment of both principal and
interest;
(g) Prescribe the form of such refunding bonds; and
(h) State the designated costs of issuing the refunding bonds.
53554. Such refunding bonds shall:
(a) Be negotiable in form;
(b) Recite that they are bonds of the local agency issuing the
bonds;
(c) Recite that they are issued pursuant to the provisions of this
article;
(d) Be executed in the name of the local agency; and
(e) Be signed by the president or chairman of the legislative body
of the local agency, and executed, countersigned or attested by such
officer or officers of the local agency as are required to execute,
countersign or attest bonds issued pursuant to the principal act, as
the case may be.
The interest coupons shall be signed in the same manner as
interest coupons attached to bonds issued by the local agency
pursuant to the principal act. The provisions of the Uniform
Facsimile Signatures of Public Officials Act (Chapter 6, (commencing
with Section 5500), Division 6, Title 1) apply to refunding bonds
issued pursuant to this article.
53555. Refunding bonds issued pursuant to this article may be
exchanged for the bonds to be refunded on such basis as the
legislative body determines is for the benefit of the local agency
but in no case on the basis that the principal amount of refunding
bonds exceeds the principal amount of the bonds to be refunded plus
the costs of issuing the refunding bonds. As an alternative to
exchanging the refunding bonds for the bonds to be refunded, the
legislative body may sell the refunding bonds at public or private
sale for not less than their par value. The proceeds of any sale of
refunding bonds for cash shall be placed in the treasury of the local
agency to the credit of a fund to be established for the purpose of
refunding the bonds to be refunded, which fund shall be designated
the "funding fund," and such proceeds shall be applied only as
permitted by this article.
53556. The designated costs of issuing the refunding bonds may be
paid by the purchaser of the refunding bonds or may be paid from any
other legally available source, including the general fund of the
local agency, other available revenues of the local agency under the
control of the legislative body, the proceeds of sale of the
refunding bonds, the interest or other gain derived from the
investment of any of the proceeds of sale of the refunding bonds, any
other moneys in escrow or in trust or any combination thereof as the
legislative body may determine; provided, however, that any amounts
paid by the local agency other than from the proceeds of sale of the
refunding bonds or from interest or other gains derived from the
investment of such proceeds shall be added to the total net interest
cost to maturity on the refunding bonds in determining whether the
test of the second sentence of Section 53552 has been met.
53557. Any proceeds of sale of any refunding bonds may be deposited
in escrow or trust with any bank or trust company within or without
the state, or both within and without the state, and shall be secured
in accordance with the laws applicable to funds of the local agency
and may (along with any other moneys available for that purpose
similarly deposited) be invested or reinvested in federal securities.
53558. Such proceeds and investments in escrow or trust shall be in
an amount at the time of issuance of such refunding bonds which is
certified by a certified public accountant licensed to practice in
this state to be sufficient to meet the requirements of subdivision
(a) or paragraph (b) of this section.
(a) Such proceeds and investments, together with any interest or
other gain to be derived from any such investment, shall be in an
amount at least sufficient to pay (i) the principal of and interest
and redemption premiums, if any, on the refunded bonds as they become
due or at designated dates prior to maturity (in connection with
which the legislative body has exercised or has obligated itself to
exercise a redemption privilege on behalf of the local agency) and
(ii) the designated costs of issuance of the refunding bonds, or
(b) Such proceeds and investments, together with any interest or
other gain to be derived from any such investment, shall be in an
amount at least sufficient to pay (i) the principal of and interest
and redemption premiums, if any, on the refunding bonds prior to the
maturity of the bonds to be refunded or prior to a designated date or
dates before the maturity of the bonds to be refunded (in connection
with which the legislative body has exercised or has obligated
itself to exercise a redemption privilege on behalf of the local
agency), (ii) the principal of and any redemption premiums due on
such refunded bonds at maturity or at said designated date or dates
and (iii) the designated costs of issuance of the refunding bonds.
53559. Following the issuance of any refunding bonds pursuant to
this article, the legislative body of the local agency shall provide
for the payment of principal and interest thereon in the same manner
and at the same times as it provides for payment of principal and
interest on bonds issued pursuant to its principal act and which
constitute general obligations of such local agency. The legislative
body may provide in the resolution of issuance of such refunding
bonds for the pledge of revenues of any revenue-producing facility of
the local agency as additional security for the refunding bonds to
the same extent that such revenues were pledged as additional
security for the bonds to be refunded.
53560. Upon the issuance, sale and delivery or exchange of
refunding bonds pursuant to this article:
(a) If only the refunding bonds remain outstanding, such refunding
bonds shall constitute indebtedness of the local agency issuing such
bonds and shall be included in any computation of general obligation
indebtedness of such local agency for purposes of any debt
limitation applicable to bonds of such local agency under the
principal act or for any other lawful purpose;
(b) If both the refunding bonds and the bonds to be refunded
remain outstanding for any period of time following the date of the
issuance, sale and delivery of the refunding bonds, then until the
date on which the bonds to be refunded are no longer outstanding;
(i) If the local agency has met the test of subdivision (a) of
Section 53558 the refunding bonds shall constitute indebtedness of
the local agency issuing such bonds and shall be included in any
computation of general obligation indebtedness of such local agency
for purposes of any debt limitation applicable to bonds of such local
agency under the principal act or for any other lawful purpose, but
the bonds to be refunded shall no longer be considered outstanding in
any computation of the general obligation indebtedness of such local
agency;
(ii) If the local agency has met the test of subdivision (b)
Section 53558 then such refunding bonds shall, until the date on
which the refunding bonds are no longer outstanding, constitute a
special obligation of the local agency issuing such bonds and shall
not be included in any computation of general obligation indebtedness
of such local agency for any purpose, and the bonds to be refunded
shall be considered outstanding in any computation of the general
obligation bonded indebtedness of such local agency; but from and
after the date on which the refunded bonds are no longer outstanding
the refunding bonds shall constitute indebtedness of the local agency
issuing such bonds and shall be included in any computation of
general obligation indebtedness.
53561. It is hereby declared that it is a public purpose for a
local agency to issue refunding bonds for the purposes set forth in
this article and to invest and reinvest the proceeds thereof, and any
other funds legally available therefor, for the purposes set forth
herein; provided, however, that it is the intent of this article, and
this article shall be so construed, that in no single fiscal year
shall a tax be levied or shall funds of a local agency other than
those expressly permitted herein be used to pay the principal of and
interest and redemption premium, if any, on both the refunding bonds
and on the bonds to be refunded.
53562. The powers conferred by this article are in addition and
supplemental to, and not in substitution for, and the limitations
imposed by this article shall not affect the powers conferred by, any
other law.
53569. Before selling any refunding bonds subject to the provisions
of this article, any local agency shall advertise such bonds for
sale at public sale and shall invite sealed bids therefor by
publication of a notice once at least 10 days before the date of such
public sale in a newspaper of general circulation circulated within
the boundaries of each local agency to be aided by the public project
to be financed by the issuance of such bonds; provided that, if an
issue of bonds is less than five hundred thousand dollars ($500,000),
a local agency is not required to advertise such bonds for public
sale or to accept bids thereon pursuant to this section. If one or
more satisfactory bids are received pursuant to such notice, such
bonds shall be awarded to the highest responsible bidder. If no bids
are received or if the local agency determines that the bids received
are not satisfactory as to price or responsibility of the bidders,
the local agency may reject all bids received, if any, and either
readvertise or sell such bonds at private sale.
53550. The following terms shall have the following meanings:
(a) "Local agency" means public district, public corporation,
authority, agency, board, commission, county, city and county, city,
school district, or other public entity.
(b) "Bonds" means bonds, warrants, notes or other evidence of
indebtedness of a local agency or any improvement district or zone
thereof payable, both principal and interest, from the proceeds of ad
valorem taxes or ad valorem assessments which may be levied without
limitation as to rate or amount upon property in the local agency or
any improvement district or zone thereof subject to taxation or
assessment, or any outstanding indebtedness payable to the State
Board of Equalization as repayment of the local agency's share of
refunds made as a result of the California Court of Appeal decision
in Aerospace Corporation v. State Board of Equalization, 218 Cal.
App. 3d 1300, which indebtedness is hereby imposed on all the local
agencies that are required to participate in the refund obligations
arising from this decision and that are declared and determined to
have been imposed by law.
(c) "Legislative body" means the board of directors or other
governing body of the local agency, unless the context otherwise
requires.
(d) "Principal act" means the law under which bonds to be refunded
were issued.
(e) "Costs of issuing the refunding bonds" means those of the
following costs and expenses designated by the legislative body in
the resolution providing for the issuance of the bonds:
(1) All expenses incident to the calling, retiring or paying of
the bonds to be refunded and to the issuance of refunding bonds,
including the charges of any escrow agent or trustee in connection
with the issuance of the refunding bonds or in connection with the
redemption or retirement of the bonds to be refunded.
(2) Either of the following:
(A) 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.
(B) 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.
(3) Any premium necessary in the calling or retiring of the bonds
to be refunded.
(f) "Designated costs of issuing the refunding bonds" means
whichever of the items specified in subdivision (e) that are
designated by the legislative body in the resolution providing for
the issuance of refunding bonds.
(g) "Federal securities" means those securities described in
Sections 1360 and 1360.1 of the Financial Code.
53551. The legislative body of any local agency may issue
negotiable coupon bonds, to be denominated refunding bonds, for the
purpose of refunding any of the indebtedness of the local agency
evidence by bonds, whether due or not due, or which has or may
hereafter become payable at the option of such local agency or by
consent of the bondholders, or by any lawful means, whether such
indebtedness, evidenced by bonds be now existing or may hereafter be
created, and there shall not be moneys in a special fund in the
treasury of such local agency irrevocably pledged to the payment or
redemption of all such bonds; but the amount of such refunding bonds
to be issued under the provisions of this article shall first be
determined by such legislative body by resolution entered upon the
minutes of such legislative body.
53552. Whenever the legislative body of a local agency determines
that prudent management of the fiscal affairs of the local agency
requires that it issue refunding bonds under the provisions of this
article, it may do so without submitting the question of the issuance
of the refunding bonds to a vote of the qualified electors of the
local agency, unless the legislative body determines to submit the
question to a vote, in which case the election shall be held in
accordance with the principal act pursuant to which the bonds to be
refunded were issued. Refunding bonds shall not be issued if the
total net interest cost to maturity on the refunding bonds plus the
principal amount of the refunding bonds exceeds the total net
interest cost to maturity on the bonds to be refunded plus the
principal amount of the bonds to be refunded, provided that this
limitation shall not apply to bonds issued to refund indebtedness
imposed by subdivision (b) of Section 53550 as a result of the court
decision in Aerospace Corporation v. State Board of Equalization, 218
Cal. App. 3d 1300. Subject to this limitation, the principal amount
of the refunding bonds may be more than, less than, or the same as
the principal amount of the bonds to be refunded.
53553. When the legislative body determines to issue refunding
bonds pursuant to this article, it shall adopt a resolution providing
for the issuance of such bonds. Such resolution shall:
(a) Describe the bonds being refunded; and the date on which it is
anticipated that the exchange, purchase or call and redemption
necessary to effect the refunding shall occur;
(b) Fix the date of such refunding bonds;
(c) Designate the denomination or denominations thereof;
(d) Fix the rate or rates of interest to be borne by such
refunding bonds, which rate or rates shall not exceed 8 percent per
annum, payable semiannually, except that interest for the first year
from date of issuance may be payable at the end of said year;
(e) Fix the maturity dates of such refunding bonds, which shall
not exceed 40 years from the date of such refunding bonds, or the
latest maturity date of the bonds being refunded, whichever occurs
earlier;
(f) Designate the place or places of payment of both principal and
interest;
(g) Prescribe the form of such refunding bonds; and
(h) State the designated costs of issuing the refunding bonds.
53554. Such refunding bonds shall:
(a) Be negotiable in form;
(b) Recite that they are bonds of the local agency issuing the
bonds;
(c) Recite that they are issued pursuant to the provisions of this
article;
(d) Be executed in the name of the local agency; and
(e) Be signed by the president or chairman of the legislative body
of the local agency, and executed, countersigned or attested by such
officer or officers of the local agency as are required to execute,
countersign or attest bonds issued pursuant to the principal act, as
the case may be.
The interest coupons shall be signed in the same manner as
interest coupons attached to bonds issued by the local agency
pursuant to the principal act. The provisions of the Uniform
Facsimile Signatures of Public Officials Act (Chapter 6, (commencing
with Section 5500), Division 6, Title 1) apply to refunding bonds
issued pursuant to this article.
53555. Refunding bonds issued pursuant to this article may be
exchanged for the bonds to be refunded on such basis as the
legislative body determines is for the benefit of the local agency
but in no case on the basis that the principal amount of refunding
bonds exceeds the principal amount of the bonds to be refunded plus
the costs of issuing the refunding bonds. As an alternative to
exchanging the refunding bonds for the bonds to be refunded, the
legislative body may sell the refunding bonds at public or private
sale for not less than their par value. The proceeds of any sale of
refunding bonds for cash shall be placed in the treasury of the local
agency to the credit of a fund to be established for the purpose of
refunding the bonds to be refunded, which fund shall be designated
the "funding fund," and such proceeds shall be applied only as
permitted by this article.
53556. The designated costs of issuing the refunding bonds may be
paid by the purchaser of the refunding bonds or may be paid from any
other legally available source, including the general fund of the
local agency, other available revenues of the local agency under the
control of the legislative body, the proceeds of sale of the
refunding bonds, the interest or other gain derived from the
investment of any of the proceeds of sale of the refunding bonds, any
other moneys in escrow or in trust or any combination thereof as the
legislative body may determine; provided, however, that any amounts
paid by the local agency other than from the proceeds of sale of the
refunding bonds or from interest or other gains derived from the
investment of such proceeds shall be added to the total net interest
cost to maturity on the refunding bonds in determining whether the
test of the second sentence of Section 53552 has been met.
53557. Any proceeds of sale of any refunding bonds may be deposited
in escrow or trust with any bank or trust company within or without
the state, or both within and without the state, and shall be secured
in accordance with the laws applicable to funds of the local agency
and may (along with any other moneys available for that purpose
similarly deposited) be invested or reinvested in federal securities.
53558. Such proceeds and investments in escrow or trust shall be in
an amount at the time of issuance of such refunding bonds which is
certified by a certified public accountant licensed to practice in
this state to be sufficient to meet the requirements of subdivision
(a) or paragraph (b) of this section.
(a) Such proceeds and investments, together with any interest or
other gain to be derived from any such investment, shall be in an
amount at least sufficient to pay (i) the principal of and interest
and redemption premiums, if any, on the refunded bonds as they become
due or at designated dates prior to maturity (in connection with
which the legislative body has exercised or has obligated itself to
exercise a redemption privilege on behalf of the local agency) and
(ii) the designated costs of issuance of the refunding bonds, or
(b) Such proceeds and investments, together with any interest or
other gain to be derived from any such investment, shall be in an
amount at least sufficient to pay (i) the principal of and interest
and redemption premiums, if any, on the refunding bonds prior to the
maturity of the bonds to be refunded or prior to a designated date or
dates before the maturity of the bonds to be refunded (in connection
with which the legislative body has exercised or has obligated
itself to exercise a redemption privilege on behalf of the local
agency), (ii) the principal of and any redemption premiums due on
such refunded bonds at maturity or at said designated date or dates
and (iii) the designated costs of issuance of the refunding bonds.
53559. Following the issuance of any refunding bonds pursuant to
this article, the legislative body of the local agency shall provide
for the payment of principal and interest thereon in the same manner
and at the same times as it provides for payment of principal and
interest on bonds issued pursuant to its principal act and which
constitute general obligations of such local agency. The legislative
body may provide in the resolution of issuance of such refunding
bonds for the pledge of revenues of any revenue-producing facility of
the local agency as additional security for the refunding bonds to
the same extent that such revenues were pledged as additional
security for the bonds to be refunded.
53560. Upon the issuance, sale and delivery or exchange of
refunding bonds pursuant to this article:
(a) If only the refunding bonds remain outstanding, such refunding
bonds shall constitute indebtedness of the local agency issuing such
bonds and shall be included in any computation of general obligation
indebtedness of such local agency for purposes of any debt
limitation applicable to bonds of such local agency under the
principal act or for any other lawful purpose;
(b) If both the refunding bonds and the bonds to be refunded
remain outstanding for any period of time following the date of the
issuance, sale and delivery of the refunding bonds, then until the
date on which the bonds to be refunded are no longer outstanding;
(i) If the local agency has met the test of subdivision (a) of
Section 53558 the refunding bonds shall constitute indebtedness of
the local agency issuing such bonds and shall be included in any
computation of general obligation indebtedness of such local agency
for purposes of any debt limitation applicable to bonds of such local
agency under the principal act or for any other lawful purpose, but
the bonds to be refunded shall no longer be considered outstanding in
any computation of the general obligation indebtedness of such local
agency;
(ii) If the local agency has met the test of subdivision (b)
Section 53558 then such refunding bonds shall, until the date on
which the refunding bonds are no longer outstanding, constitute a
special obligation of the local agency issuing such bonds and shall
not be included in any computation of general obligation indebtedness
of such local agency for any purpose, and the bonds to be refunded
shall be considered outstanding in any computation of the general
obligation bonded indebtedness of such local agency; but from and
after the date on which the refunded bonds are no longer outstanding
the refunding bonds shall constitute indebtedness of the local agency
issuing such bonds and shall be included in any computation of
general obligation indebtedness.
53561. It is hereby declared that it is a public purpose for a
local agency to issue refunding bonds for the purposes set forth in
this article and to invest and reinvest the proceeds thereof, and any
other funds legally available therefor, for the purposes set forth
herein; provided, however, that it is the intent of this article, and
this article shall be so construed, that in no single fiscal year
shall a tax be levied or shall funds of a local agency other than
those expressly permitted herein be used to pay the principal of and
interest and redemption premium, if any, on both the refunding bonds
and on the bonds to be refunded.
53562. The powers conferred by this article are in addition and
supplemental to, and not in substitution for, and the limitations
imposed by this article shall not affect the powers conferred by, any
other law.
53569. Before selling any refunding bonds subject to the provisions
of this article, any local agency shall advertise such bonds for
sale at public sale and shall invite sealed bids therefor by
publication of a notice once at least 10 days before the date of such
public sale in a newspaper of general circulation circulated within
the boundaries of each local agency to be aided by the public project
to be financed by the issuance of such bonds; provided that, if an
issue of bonds is less than five hundred thousand dollars ($500,000),
a local agency is not required to advertise such bonds for public
sale or to accept bids thereon pursuant to this section. If one or
more satisfactory bids are received pursuant to such notice, such
bonds shall be awarded to the highest responsible bidder. If no bids
are received or if the local agency determines that the bids received
are not satisfactory as to price or responsibility of the bidders,
the local agency may reject all bids received, if any, and either
readvertise or sell such bonds at private sale.
