8670.53.1. (a) Following an oil spill, the administrator, in
consultation with the Treasurer, shall notify the Governor if the
administrator determines that it is likely that there will not be
sufficient moneys in the fund, including both projected revenues to
the fund and the financial security obtained pursuant to subdivision
(o) of Section 8670.48, to pay, in a timely manner, the expected
costs permitted under this chapter.
(b) Following an oil spill, if the Treasurer has obtained
financial security pursuant to subdivision (o) of Section 8670.48 in
the form of a loan from the Pooled Money Investment Account, the
Treasurer shall notify the Governor if the draws on the financial
security will likely create a cashflow problem for the Pooled Money
Investment Account that would require the loan to be repaid and
replaced by borrowing from another source.
(c) Upon notification pursuant to subdivision (a) or (b), the
Governor shall request that the federal government pay the cost for
response, containment, cleanup, wildlife rehabilitation, and payment
of damages. If sufficient federal funds are not available within five
days, the Governor shall make a written request to the Treasurer to
borrow and deposit in the fund the amount necessary, as determined by
the administrator, to pay those estimated excess response costs,
including costs specified in paragraphs (1), (2), (3), (4), (6), and
(8) of subdivision (k) of Section 8670.48, and, if necessary, to
repay any draws upon the financial security obtained by the Treasurer
pursuant to subdivision (o) of Section 8670.48.
(d) The Governor, the Controller, the Treasurer, and the
administrator shall immediately take whatever action is necessary and
appropriate to ensure that the state has the ability to borrow the
maximum additional amount necessary to carry out this chapter.
(e) The party responsible for the spill shall be liable to the
state for all money borrowed by the Treasurer under this chapter,
including draws on the financial security obtained pursuant to
subdivision (o) of Section 8670.48, for the purpose of responding to
the oil spill, including principal, interest, and premium, if any,
and all associated fees, costs, and other charges incurred by the
state in connection with that borrowing, whether or not all or a
portion of the borrowed money has been repaid through the oil spill
response fee or by federal funds.
(f) No funds available pursuant to this article may be expended
for any activities which result in a net environmental enhancement.
It is the intent of the Legislature that borrowed funds be expended
solely for oil spill response, containment, cleanup, wildlife
rehabilitation, and damages resulting from oil spills.
8670.53.2. Money borrowed pursuant to this chapter, including draws
on the financial security obtained pursuant to subdivision (o) of
Section 8670.48, shall be expended and repaid pursuant to Sections
8670.48 and 8670.49. So long as any of those borrowings are
outstanding, fees and any other moneys in the fund are pledged to the
repayment of the borrowings, to the extent provided in a resolution
of the Pooled Money Investment Board in connection with a loan from
the Pooled Money Investment Account or a resolution of issuance for
any other borrowing arranged by the Treasurer. The pledge shall
constitute a first lien and security interest, ratably with all other
prior or subsequent borrowings unless the Treasurer provides in a
resolution of issuance, that any borrowing shall constitute a junior
lien, which shall immediately attach on the fees deposited in the
fund, and shall be effective, binding, and enforceable against the
state and any other person asserting rights therein without need of
any physical delivery, recordation, filing, or other action.
8670.53.3. (a) For purposes of this section, the following
definitions shall apply:
(1) "Bond" means any bond, note, commercial paper, bond
anticipation note, or other evidence of indebtedness that the
Treasurer is authorized to issue for purposes of this chapter.
(2) "Standby arrangement" means a line of credit, letter of
credit, or other financial arrangement with a financial institution
or lending entity that allows for ready access to money.
(b) To provide funds to pay for costs of an oil spill, as set
forth in Section 8670.48, in excess of money in the fund as set forth
in subdivision (a) of Section 8670.53.1, the Treasurer shall make
necessary financial arrangements to obtain the additional money
needed to pay those costs, and that borrowing shall be reimbursed or
repaid from future deposits into the fund. The Treasurer may also
enter any financial arrangement necessary or appropriate to refund
any draw by the administrator pursuant to subdivision (o) of Section
8670.48, and that borrowing shall be reimbursed or repaid from future
deposits into the fund. The financial arrangements may take the
following forms, or any combination thereof:
(1) Establishment of one or more standby arrangements.
(2) Sale of bonds to provide funds for purposes of this chapter,
to repay any prior drawings by the Treasurer on a standby arrangement
or any drawings by the administrator on the financial security
obtained by the Treasurer pursuant to subdivision (o) of Section
8670.48, to repay money borrowed from the Pooled Money Investment
Account, or to refund or extend any previously issued bonds.
(3) Borrowing from the Pooled Money Investment Account.
(4) Any other financial arrangement the Treasurer determines to be
appropriate and cost effective.
(c) The Treasurer may enter into any financial arrangement
authorized in subdivision (b) at any time, or from time to time, on a
negotiated or competitive bid basis, as the Treasurer shall
determine to be advisable.
(d) (1) The Governor, in any written request to the Treasurer
pursuant to subdivision (c) of Section 8670.53.1, shall, to the
extent feasible, state both of the following:
(A) The amount of funds needed each month over the period covered
by the request.
(B) The estimated income to the fund each month from all sources
that will be available to pay or retire any debt service or to pay
any other expenses, fees, or costs incurred in connection with
obligations issued pursuant to this chapter.
(2) The Governor may submit multiple requests to the Treasurer
with respect to the same oil spill, or with respect to different oil
spills. On receipt of a written request pursuant to this section, the
Treasurer may draw on a standby arrangement, may use any other
financial arrangement, or may issue bonds to provide funds not
exceeding the amounts requested.
(e) Upon receipt of a written request for funds from the Governor,
the following shall occur:
(1) The Treasurer shall convene a meeting of the Pooled Money
Investment Board to obtain the funds through interim borrowing from
the Pooled Money Investment Account except that no meeting is
required where the request to borrow is for the purpose of repayment
of a loan from the Pooled Money Investment Account.
(2) The Treasurer shall ensure that the funds will thereafter be
available in accordance with a financing schedule mutually agreeable
to the administrator and the Treasurer.
(f) This article does not require the Treasurer to borrow more
money than can be repaid from amounts available to the fund for that
purpose. The Treasurer shall not be required to consider as available
to the fund any future deposits resulting from an increase of the
fees specified in Section 8670.48.5 until that increase has actually
become effective. Once effective, the administrator shall not
retract, reduce, or reject the increase unless the Treasurer
certifies to the administrator that the retraction, reduction, or
rejection will not diminish the security for, or ability to repay,
amounts borrowed under this article or drawn pursuant to subdivision
(o) of Section 8670.48. The amount of borrowing that can be repaid
from amounts available to the fund for that purpose shall be
determined by the Treasurer in his or her sole discretion, giving due
consideration to factors concerning security for, marketability of,
and repayment of, any financial arrangements or other obligations
that the Treasurer elects to make, incur, or issue for the purposes
of complying with this chapter.
8670.53.4. (a) With the exception of borrowing from the Pooled
Money Investment Account, which shall be on the terms determined by
the Pooled Money Investment Board, the entry into or issuance of any
financial arrangement pursuant to this article and obtaining the
financial security pursuant to subdivision (o) of Section 8670.48,
including the issuance of bonds, or other obligations, shall be
authorized by a resolution adopted by the Treasurer. Any of these
financial arrangements, including bonds or other obligations, (1) may
be negotiable, (2) may be payable to order or to the bearer, (3) may
be in any denomination, (4) shall be payable not later than 20 years
from the date of issuance, (5) may bear interest at a fixed or
variable rate or rates to be determined as provided by the resolution
and payable as provided therein, (6) may be payable on a fixed date
or upon demand of the holder, (7) may be made subject to the
prepayment or redemption at the option of the state or at the option
of the holder, and (8) may contain such other terms as the Treasurer
may determine to be necessary and appropriate.
(b) In connection with any financial arrangement made or issued by
the Treasurer pursuant to this chapter, including the issuance of
bonds or other obligations, the Treasurer may obtain or arrange for
any insurance, letter of credit, or other credit enhancement or
liquidity arrangements as the Treasurer determines to be appropriate
and cost effective, and may enter into any contracts or agreements
for those arrangements not inconsistent with this chapter.
(c) Proceeds of any borrowing authorized pursuant to this chapter,
including from the issuance of any bonds, other obligations, or
drawings on any standby arrangement or other financial arrangements,
shall be deposited in the fund.
(d) Any bonds or other obligations issued under this chapter may
be secured by a trust agreement or indenture by and between the state
and a trustee. The trustee may be the Treasurer or a bank or trust
company chartered under the laws of this state or of the United
States and designated by the Treasurer.
(e) The Treasurer may provide for the issuance and sale or
exchange of refunding bonds for the purpose of redeeming, retiring,
or purchasing for retirement, outstanding bonds at or before their
maturity, if the Treasurer and the administrator determines that
refunding is necessary or advisable in order to do either of the
following:
(1) To effect a favorable reorganization of the debt structure of
the bonds.
(2) To effect a saving in debt service cost, as measured by the
present value of that saving.
8670.53.5. Any financial arrangements made or issued pursuant to
this article or subdivision (o) of Section 8670.48, including the
issuance of bonds or other obligations, and the repayment of any of
these obligations, shall be special obligations of the state secured
solely by the moneys in the fund. None of these financial
arrangements, including bonds or other obligations, shall be or
become a lien, charge, or liability against the State of California
or against its property or funds except to the extent of the pledges
expressly made by this article. Each of these financial arrangements,
including bonds or other obligations, shall contain a recital
stating that neither the payment of the principal thereof, nor any
interest thereon, constitutes a debt, liability, or general
obligation of the State of California other than as provided in this
article, and neither the faith and credit nor the taxing power of the
state are pledged to the repayment thereof.
8670.53.7. (a) All financial arrangements made or issued pursuant
to this article or subdivision (o) of Section 8670.48, including
bonds or other obligations, are a legal investment for any of the
following:
(1) Trust funds.
(2) Funds of insurers.
(3) Funds of savings and loan associations.
(4) Funds of banks.
(5) Funds of state agencies, cities, counties, cities and
counties, or other public agencies or corporations.
(b) All financial arrangements, made or issued pursuant to this
article or subdivision (o) of Section 8670.48, including bonds or
other obligations, are acceptable and may be used as security for the
faithful performance of any public or private trust or obligation or
for the performance of any act, including the use of notes by banks
as security for deposits of funds of the state and its agencies, or
of any city, county, city and county, or other public agency or
corporation.
8670.53.8. Notwithstanding Section 13340, there is hereby
appropriated from the fund, without regard to fiscal years, any and
all moneys necessary to pay principal, interest, premium, if any, and
fees, costs, or charges of any kind incurred by the state under or
in connection with any standby arrangement, or other financial
arrangement, including bonds or other obligations, made or issued
pursuant to this article and pursuant to subdivision (o) of Section
8670.48, or any rebate penalty, or other payment necessary to
maintain the federal tax-exempt status of that financial arrangement,
including bonds or other obligations. The Treasurer shall advise the
administrator and the Controller of amounts necessary to pay the
principal, interest, premiums, fees, costs, or charges on any of
those arrangements or obligations made or issued pursuant to this
article and subdivision (o) of Section 8670.48, and those amounts
shall not be available for expenditure for other purposes.
8670.53.9. Whenever the Treasurer determines that it will increase
the marketability or reduce the cost of obtaining any standby
arrangement, other arrangement, or of issuing any bonds to obtain,
prior to or after sale, a legal opinion as to the validity of the
standby arrangement, other arrangement, or bonds from attorneys other
than the Attorney General, the Treasurer may obtain such a legal
opinion.
8670.53.95. Section 10295 and Sections 10336 to 10381, inclusive,
of the Public Contract Code shall not apply to agreements entered
into by the Treasurer in connection with making or issuing of any
financial arrangements, including the issuance of bonds or other
obligations, authorized by this article or by subdivision (o) of
Section 8670.48.
8670.53.1. (a) Following an oil spill, the administrator, in
consultation with the Treasurer, shall notify the Governor if the
administrator determines that it is likely that there will not be
sufficient moneys in the fund, including both projected revenues to
the fund and the financial security obtained pursuant to subdivision
(o) of Section 8670.48, to pay, in a timely manner, the expected
costs permitted under this chapter.
(b) Following an oil spill, if the Treasurer has obtained
financial security pursuant to subdivision (o) of Section 8670.48 in
the form of a loan from the Pooled Money Investment Account, the
Treasurer shall notify the Governor if the draws on the financial
security will likely create a cashflow problem for the Pooled Money
Investment Account that would require the loan to be repaid and
replaced by borrowing from another source.
(c) Upon notification pursuant to subdivision (a) or (b), the
Governor shall request that the federal government pay the cost for
response, containment, cleanup, wildlife rehabilitation, and payment
of damages. If sufficient federal funds are not available within five
days, the Governor shall make a written request to the Treasurer to
borrow and deposit in the fund the amount necessary, as determined by
the administrator, to pay those estimated excess response costs,
including costs specified in paragraphs (1), (2), (3), (4), (6), and
(8) of subdivision (k) of Section 8670.48, and, if necessary, to
repay any draws upon the financial security obtained by the Treasurer
pursuant to subdivision (o) of Section 8670.48.
(d) The Governor, the Controller, the Treasurer, and the
administrator shall immediately take whatever action is necessary and
appropriate to ensure that the state has the ability to borrow the
maximum additional amount necessary to carry out this chapter.
(e) The party responsible for the spill shall be liable to the
state for all money borrowed by the Treasurer under this chapter,
including draws on the financial security obtained pursuant to
subdivision (o) of Section 8670.48, for the purpose of responding to
the oil spill, including principal, interest, and premium, if any,
and all associated fees, costs, and other charges incurred by the
state in connection with that borrowing, whether or not all or a
portion of the borrowed money has been repaid through the oil spill
response fee or by federal funds.
(f) No funds available pursuant to this article may be expended
for any activities which result in a net environmental enhancement.
It is the intent of the Legislature that borrowed funds be expended
solely for oil spill response, containment, cleanup, wildlife
rehabilitation, and damages resulting from oil spills.
8670.53.2. Money borrowed pursuant to this chapter, including draws
on the financial security obtained pursuant to subdivision (o) of
Section 8670.48, shall be expended and repaid pursuant to Sections
8670.48 and 8670.49. So long as any of those borrowings are
outstanding, fees and any other moneys in the fund are pledged to the
repayment of the borrowings, to the extent provided in a resolution
of the Pooled Money Investment Board in connection with a loan from
the Pooled Money Investment Account or a resolution of issuance for
any other borrowing arranged by the Treasurer. The pledge shall
constitute a first lien and security interest, ratably with all other
prior or subsequent borrowings unless the Treasurer provides in a
resolution of issuance, that any borrowing shall constitute a junior
lien, which shall immediately attach on the fees deposited in the
fund, and shall be effective, binding, and enforceable against the
state and any other person asserting rights therein without need of
any physical delivery, recordation, filing, or other action.
8670.53.3. (a) For purposes of this section, the following
definitions shall apply:
(1) "Bond" means any bond, note, commercial paper, bond
anticipation note, or other evidence of indebtedness that the
Treasurer is authorized to issue for purposes of this chapter.
(2) "Standby arrangement" means a line of credit, letter of
credit, or other financial arrangement with a financial institution
or lending entity that allows for ready access to money.
(b) To provide funds to pay for costs of an oil spill, as set
forth in Section 8670.48, in excess of money in the fund as set forth
in subdivision (a) of Section 8670.53.1, the Treasurer shall make
necessary financial arrangements to obtain the additional money
needed to pay those costs, and that borrowing shall be reimbursed or
repaid from future deposits into the fund. The Treasurer may also
enter any financial arrangement necessary or appropriate to refund
any draw by the administrator pursuant to subdivision (o) of Section
8670.48, and that borrowing shall be reimbursed or repaid from future
deposits into the fund. The financial arrangements may take the
following forms, or any combination thereof:
(1) Establishment of one or more standby arrangements.
(2) Sale of bonds to provide funds for purposes of this chapter,
to repay any prior drawings by the Treasurer on a standby arrangement
or any drawings by the administrator on the financial security
obtained by the Treasurer pursuant to subdivision (o) of Section
8670.48, to repay money borrowed from the Pooled Money Investment
Account, or to refund or extend any previously issued bonds.
(3) Borrowing from the Pooled Money Investment Account.
(4) Any other financial arrangement the Treasurer determines to be
appropriate and cost effective.
(c) The Treasurer may enter into any financial arrangement
authorized in subdivision (b) at any time, or from time to time, on a
negotiated or competitive bid basis, as the Treasurer shall
determine to be advisable.
(d) (1) The Governor, in any written request to the Treasurer
pursuant to subdivision (c) of Section 8670.53.1, shall, to the
extent feasible, state both of the following:
(A) The amount of funds needed each month over the period covered
by the request.
(B) The estimated income to the fund each month from all sources
that will be available to pay or retire any debt service or to pay
any other expenses, fees, or costs incurred in connection with
obligations issued pursuant to this chapter.
(2) The Governor may submit multiple requests to the Treasurer
with respect to the same oil spill, or with respect to different oil
spills. On receipt of a written request pursuant to this section, the
Treasurer may draw on a standby arrangement, may use any other
financial arrangement, or may issue bonds to provide funds not
exceeding the amounts requested.
(e) Upon receipt of a written request for funds from the Governor,
the following shall occur:
(1) The Treasurer shall convene a meeting of the Pooled Money
Investment Board to obtain the funds through interim borrowing from
the Pooled Money Investment Account except that no meeting is
required where the request to borrow is for the purpose of repayment
of a loan from the Pooled Money Investment Account.
(2) The Treasurer shall ensure that the funds will thereafter be
available in accordance with a financing schedule mutually agreeable
to the administrator and the Treasurer.
(f) This article does not require the Treasurer to borrow more
money than can be repaid from amounts available to the fund for that
purpose. The Treasurer shall not be required to consider as available
to the fund any future deposits resulting from an increase of the
fees specified in Section 8670.48.5 until that increase has actually
become effective. Once effective, the administrator shall not
retract, reduce, or reject the increase unless the Treasurer
certifies to the administrator that the retraction, reduction, or
rejection will not diminish the security for, or ability to repay,
amounts borrowed under this article or drawn pursuant to subdivision
(o) of Section 8670.48. The amount of borrowing that can be repaid
from amounts available to the fund for that purpose shall be
determined by the Treasurer in his or her sole discretion, giving due
consideration to factors concerning security for, marketability of,
and repayment of, any financial arrangements or other obligations
that the Treasurer elects to make, incur, or issue for the purposes
of complying with this chapter.
8670.53.4. (a) With the exception of borrowing from the Pooled
Money Investment Account, which shall be on the terms determined by
the Pooled Money Investment Board, the entry into or issuance of any
financial arrangement pursuant to this article and obtaining the
financial security pursuant to subdivision (o) of Section 8670.48,
including the issuance of bonds, or other obligations, shall be
authorized by a resolution adopted by the Treasurer. Any of these
financial arrangements, including bonds or other obligations, (1) may
be negotiable, (2) may be payable to order or to the bearer, (3) may
be in any denomination, (4) shall be payable not later than 20 years
from the date of issuance, (5) may bear interest at a fixed or
variable rate or rates to be determined as provided by the resolution
and payable as provided therein, (6) may be payable on a fixed date
or upon demand of the holder, (7) may be made subject to the
prepayment or redemption at the option of the state or at the option
of the holder, and (8) may contain such other terms as the Treasurer
may determine to be necessary and appropriate.
(b) In connection with any financial arrangement made or issued by
the Treasurer pursuant to this chapter, including the issuance of
bonds or other obligations, the Treasurer may obtain or arrange for
any insurance, letter of credit, or other credit enhancement or
liquidity arrangements as the Treasurer determines to be appropriate
and cost effective, and may enter into any contracts or agreements
for those arrangements not inconsistent with this chapter.
(c) Proceeds of any borrowing authorized pursuant to this chapter,
including from the issuance of any bonds, other obligations, or
drawings on any standby arrangement or other financial arrangements,
shall be deposited in the fund.
(d) Any bonds or other obligations issued under this chapter may
be secured by a trust agreement or indenture by and between the state
and a trustee. The trustee may be the Treasurer or a bank or trust
company chartered under the laws of this state or of the United
States and designated by the Treasurer.
(e) The Treasurer may provide for the issuance and sale or
exchange of refunding bonds for the purpose of redeeming, retiring,
or purchasing for retirement, outstanding bonds at or before their
maturity, if the Treasurer and the administrator determines that
refunding is necessary or advisable in order to do either of the
following:
(1) To effect a favorable reorganization of the debt structure of
the bonds.
(2) To effect a saving in debt service cost, as measured by the
present value of that saving.
8670.53.5. Any financial arrangements made or issued pursuant to
this article or subdivision (o) of Section 8670.48, including the
issuance of bonds or other obligations, and the repayment of any of
these obligations, shall be special obligations of the state secured
solely by the moneys in the fund. None of these financial
arrangements, including bonds or other obligations, shall be or
become a lien, charge, or liability against the State of California
or against its property or funds except to the extent of the pledges
expressly made by this article. Each of these financial arrangements,
including bonds or other obligations, shall contain a recital
stating that neither the payment of the principal thereof, nor any
interest thereon, constitutes a debt, liability, or general
obligation of the State of California other than as provided in this
article, and neither the faith and credit nor the taxing power of the
state are pledged to the repayment thereof.
8670.53.7. (a) All financial arrangements made or issued pursuant
to this article or subdivision (o) of Section 8670.48, including
bonds or other obligations, are a legal investment for any of the
following:
(1) Trust funds.
(2) Funds of insurers.
(3) Funds of savings and loan associations.
(4) Funds of banks.
(5) Funds of state agencies, cities, counties, cities and
counties, or other public agencies or corporations.
(b) All financial arrangements, made or issued pursuant to this
article or subdivision (o) of Section 8670.48, including bonds or
other obligations, are acceptable and may be used as security for the
faithful performance of any public or private trust or obligation or
for the performance of any act, including the use of notes by banks
as security for deposits of funds of the state and its agencies, or
of any city, county, city and county, or other public agency or
corporation.
8670.53.8. Notwithstanding Section 13340, there is hereby
appropriated from the fund, without regard to fiscal years, any and
all moneys necessary to pay principal, interest, premium, if any, and
fees, costs, or charges of any kind incurred by the state under or
in connection with any standby arrangement, or other financial
arrangement, including bonds or other obligations, made or issued
pursuant to this article and pursuant to subdivision (o) of Section
8670.48, or any rebate penalty, or other payment necessary to
maintain the federal tax-exempt status of that financial arrangement,
including bonds or other obligations. The Treasurer shall advise the
administrator and the Controller of amounts necessary to pay the
principal, interest, premiums, fees, costs, or charges on any of
those arrangements or obligations made or issued pursuant to this
article and subdivision (o) of Section 8670.48, and those amounts
shall not be available for expenditure for other purposes.
8670.53.9. Whenever the Treasurer determines that it will increase
the marketability or reduce the cost of obtaining any standby
arrangement, other arrangement, or of issuing any bonds to obtain,
prior to or after sale, a legal opinion as to the validity of the
standby arrangement, other arrangement, or bonds from attorneys other
than the Attorney General, the Treasurer may obtain such a legal
opinion.
8670.53.95. Section 10295 and Sections 10336 to 10381, inclusive,
of the Public Contract Code shall not apply to agreements entered
into by the Treasurer in connection with making or issuing of any
financial arrangements, including the issuance of bonds or other
obligations, authorized by this article or by subdivision (o) of
Section 8670.48.
8670.53.1. (a) Following an oil spill, the administrator, in
consultation with the Treasurer, shall notify the Governor if the
administrator determines that it is likely that there will not be
sufficient moneys in the fund, including both projected revenues to
the fund and the financial security obtained pursuant to subdivision
(o) of Section 8670.48, to pay, in a timely manner, the expected
costs permitted under this chapter.
(b) Following an oil spill, if the Treasurer has obtained
financial security pursuant to subdivision (o) of Section 8670.48 in
the form of a loan from the Pooled Money Investment Account, the
Treasurer shall notify the Governor if the draws on the financial
security will likely create a cashflow problem for the Pooled Money
Investment Account that would require the loan to be repaid and
replaced by borrowing from another source.
(c) Upon notification pursuant to subdivision (a) or (b), the
Governor shall request that the federal government pay the cost for
response, containment, cleanup, wildlife rehabilitation, and payment
of damages. If sufficient federal funds are not available within five
days, the Governor shall make a written request to the Treasurer to
borrow and deposit in the fund the amount necessary, as determined by
the administrator, to pay those estimated excess response costs,
including costs specified in paragraphs (1), (2), (3), (4), (6), and
(8) of subdivision (k) of Section 8670.48, and, if necessary, to
repay any draws upon the financial security obtained by the Treasurer
pursuant to subdivision (o) of Section 8670.48.
(d) The Governor, the Controller, the Treasurer, and the
administrator shall immediately take whatever action is necessary and
appropriate to ensure that the state has the ability to borrow the
maximum additional amount necessary to carry out this chapter.
(e) The party responsible for the spill shall be liable to the
state for all money borrowed by the Treasurer under this chapter,
including draws on the financial security obtained pursuant to
subdivision (o) of Section 8670.48, for the purpose of responding to
the oil spill, including principal, interest, and premium, if any,
and all associated fees, costs, and other charges incurred by the
state in connection with that borrowing, whether or not all or a
portion of the borrowed money has been repaid through the oil spill
response fee or by federal funds.
(f) No funds available pursuant to this article may be expended
for any activities which result in a net environmental enhancement.
It is the intent of the Legislature that borrowed funds be expended
solely for oil spill response, containment, cleanup, wildlife
rehabilitation, and damages resulting from oil spills.
8670.53.2. Money borrowed pursuant to this chapter, including draws
on the financial security obtained pursuant to subdivision (o) of
Section 8670.48, shall be expended and repaid pursuant to Sections
8670.48 and 8670.49. So long as any of those borrowings are
outstanding, fees and any other moneys in the fund are pledged to the
repayment of the borrowings, to the extent provided in a resolution
of the Pooled Money Investment Board in connection with a loan from
the Pooled Money Investment Account or a resolution of issuance for
any other borrowing arranged by the Treasurer. The pledge shall
constitute a first lien and security interest, ratably with all other
prior or subsequent borrowings unless the Treasurer provides in a
resolution of issuance, that any borrowing shall constitute a junior
lien, which shall immediately attach on the fees deposited in the
fund, and shall be effective, binding, and enforceable against the
state and any other person asserting rights therein without need of
any physical delivery, recordation, filing, or other action.
8670.53.3. (a) For purposes of this section, the following
definitions shall apply:
(1) "Bond" means any bond, note, commercial paper, bond
anticipation note, or other evidence of indebtedness that the
Treasurer is authorized to issue for purposes of this chapter.
(2) "Standby arrangement" means a line of credit, letter of
credit, or other financial arrangement with a financial institution
or lending entity that allows for ready access to money.
(b) To provide funds to pay for costs of an oil spill, as set
forth in Section 8670.48, in excess of money in the fund as set forth
in subdivision (a) of Section 8670.53.1, the Treasurer shall make
necessary financial arrangements to obtain the additional money
needed to pay those costs, and that borrowing shall be reimbursed or
repaid from future deposits into the fund. The Treasurer may also
enter any financial arrangement necessary or appropriate to refund
any draw by the administrator pursuant to subdivision (o) of Section
8670.48, and that borrowing shall be reimbursed or repaid from future
deposits into the fund. The financial arrangements may take the
following forms, or any combination thereof:
(1) Establishment of one or more standby arrangements.
(2) Sale of bonds to provide funds for purposes of this chapter,
to repay any prior drawings by the Treasurer on a standby arrangement
or any drawings by the administrator on the financial security
obtained by the Treasurer pursuant to subdivision (o) of Section
8670.48, to repay money borrowed from the Pooled Money Investment
Account, or to refund or extend any previously issued bonds.
(3) Borrowing from the Pooled Money Investment Account.
(4) Any other financial arrangement the Treasurer determines to be
appropriate and cost effective.
(c) The Treasurer may enter into any financial arrangement
authorized in subdivision (b) at any time, or from time to time, on a
negotiated or competitive bid basis, as the Treasurer shall
determine to be advisable.
(d) (1) The Governor, in any written request to the Treasurer
pursuant to subdivision (c) of Section 8670.53.1, shall, to the
extent feasible, state both of the following:
(A) The amount of funds needed each month over the period covered
by the request.
(B) The estimated income to the fund each month from all sources
that will be available to pay or retire any debt service or to pay
any other expenses, fees, or costs incurred in connection with
obligations issued pursuant to this chapter.
(2) The Governor may submit multiple requests to the Treasurer
with respect to the same oil spill, or with respect to different oil
spills. On receipt of a written request pursuant to this section, the
Treasurer may draw on a standby arrangement, may use any other
financial arrangement, or may issue bonds to provide funds not
exceeding the amounts requested.
(e) Upon receipt of a written request for funds from the Governor,
the following shall occur:
(1) The Treasurer shall convene a meeting of the Pooled Money
Investment Board to obtain the funds through interim borrowing from
the Pooled Money Investment Account except that no meeting is
required where the request to borrow is for the purpose of repayment
of a loan from the Pooled Money Investment Account.
(2) The Treasurer shall ensure that the funds will thereafter be
available in accordance with a financing schedule mutually agreeable
to the administrator and the Treasurer.
(f) This article does not require the Treasurer to borrow more
money than can be repaid from amounts available to the fund for that
purpose. The Treasurer shall not be required to consider as available
to the fund any future deposits resulting from an increase of the
fees specified in Section 8670.48.5 until that increase has actually
become effective. Once effective, the administrator shall not
retract, reduce, or reject the increase unless the Treasurer
certifies to the administrator that the retraction, reduction, or
rejection will not diminish the security for, or ability to repay,
amounts borrowed under this article or drawn pursuant to subdivision
(o) of Section 8670.48. The amount of borrowing that can be repaid
from amounts available to the fund for that purpose shall be
determined by the Treasurer in his or her sole discretion, giving due
consideration to factors concerning security for, marketability of,
and repayment of, any financial arrangements or other obligations
that the Treasurer elects to make, incur, or issue for the purposes
of complying with this chapter.
8670.53.4. (a) With the exception of borrowing from the Pooled
Money Investment Account, which shall be on the terms determined by
the Pooled Money Investment Board, the entry into or issuance of any
financial arrangement pursuant to this article and obtaining the
financial security pursuant to subdivision (o) of Section 8670.48,
including the issuance of bonds, or other obligations, shall be
authorized by a resolution adopted by the Treasurer. Any of these
financial arrangements, including bonds or other obligations, (1) may
be negotiable, (2) may be payable to order or to the bearer, (3) may
be in any denomination, (4) shall be payable not later than 20 years
from the date of issuance, (5) may bear interest at a fixed or
variable rate or rates to be determined as provided by the resolution
and payable as provided therein, (6) may be payable on a fixed date
or upon demand of the holder, (7) may be made subject to the
prepayment or redemption at the option of the state or at the option
of the holder, and (8) may contain such other terms as the Treasurer
may determine to be necessary and appropriate.
(b) In connection with any financial arrangement made or issued by
the Treasurer pursuant to this chapter, including the issuance of
bonds or other obligations, the Treasurer may obtain or arrange for
any insurance, letter of credit, or other credit enhancement or
liquidity arrangements as the Treasurer determines to be appropriate
and cost effective, and may enter into any contracts or agreements
for those arrangements not inconsistent with this chapter.
(c) Proceeds of any borrowing authorized pursuant to this chapter,
including from the issuance of any bonds, other obligations, or
drawings on any standby arrangement or other financial arrangements,
shall be deposited in the fund.
(d) Any bonds or other obligations issued under this chapter may
be secured by a trust agreement or indenture by and between the state
and a trustee. The trustee may be the Treasurer or a bank or trust
company chartered under the laws of this state or of the United
States and designated by the Treasurer.
(e) The Treasurer may provide for the issuance and sale or
exchange of refunding bonds for the purpose of redeeming, retiring,
or purchasing for retirement, outstanding bonds at or before their
maturity, if the Treasurer and the administrator determines that
refunding is necessary or advisable in order to do either of the
following:
(1) To effect a favorable reorganization of the debt structure of
the bonds.
(2) To effect a saving in debt service cost, as measured by the
present value of that saving.
8670.53.5. Any financial arrangements made or issued pursuant to
this article or subdivision (o) of Section 8670.48, including the
issuance of bonds or other obligations, and the repayment of any of
these obligations, shall be special obligations of the state secured
solely by the moneys in the fund. None of these financial
arrangements, including bonds or other obligations, shall be or
become a lien, charge, or liability against the State of California
or against its property or funds except to the extent of the pledges
expressly made by this article. Each of these financial arrangements,
including bonds or other obligations, shall contain a recital
stating that neither the payment of the principal thereof, nor any
interest thereon, constitutes a debt, liability, or general
obligation of the State of California other than as provided in this
article, and neither the faith and credit nor the taxing power of the
state are pledged to the repayment thereof.
8670.53.7. (a) All financial arrangements made or issued pursuant
to this article or subdivision (o) of Section 8670.48, including
bonds or other obligations, are a legal investment for any of the
following:
(1) Trust funds.
(2) Funds of insurers.
(3) Funds of savings and loan associations.
(4) Funds of banks.
(5) Funds of state agencies, cities, counties, cities and
counties, or other public agencies or corporations.
(b) All financial arrangements, made or issued pursuant to this
article or subdivision (o) of Section 8670.48, including bonds or
other obligations, are acceptable and may be used as security for the
faithful performance of any public or private trust or obligation or
for the performance of any act, including the use of notes by banks
as security for deposits of funds of the state and its agencies, or
of any city, county, city and county, or other public agency or
corporation.
8670.53.8. Notwithstanding Section 13340, there is hereby
appropriated from the fund, without regard to fiscal years, any and
all moneys necessary to pay principal, interest, premium, if any, and
fees, costs, or charges of any kind incurred by the state under or
in connection with any standby arrangement, or other financial
arrangement, including bonds or other obligations, made or issued
pursuant to this article and pursuant to subdivision (o) of Section
8670.48, or any rebate penalty, or other payment necessary to
maintain the federal tax-exempt status of that financial arrangement,
including bonds or other obligations. The Treasurer shall advise the
administrator and the Controller of amounts necessary to pay the
principal, interest, premiums, fees, costs, or charges on any of
those arrangements or obligations made or issued pursuant to this
article and subdivision (o) of Section 8670.48, and those amounts
shall not be available for expenditure for other purposes.
8670.53.9. Whenever the Treasurer determines that it will increase
the marketability or reduce the cost of obtaining any standby
arrangement, other arrangement, or of issuing any bonds to obtain,
prior to or after sale, a legal opinion as to the validity of the
standby arrangement, other arrangement, or bonds from attorneys other
than the Attorney General, the Treasurer may obtain such a legal
opinion.
8670.53.95. Section 10295 and Sections 10336 to 10381, inclusive,
of the Public Contract Code shall not apply to agreements entered
into by the Treasurer in connection with making or issuing of any
financial arrangements, including the issuance of bonds or other
obligations, authorized by this article or by subdivision (o) of
Section 8670.48.
