91550. There is in state government the California Industrial
Development Financing Advisory Commission, consisting of five
members, as follows:
(a) The Treasurer, who shall serve as chairperson.
(b) The Controller.
(c) The Director of Finance.
(d) The Secretary of Business, Transportation and Housing.
(e) The Commissioner of Corporations.
Members of the commission may each designate a deputy or employee
in his or her agency to act for him or her at all meetings of the
commission. The first meeting shall be convened by the Treasurer.
91551. All members of the commission shall serve thereon without
compensation.
91552. The commission shall meet on the call of the chairperson, or
at the request of a majority of the members, or at the request of
the Governor. A majority of all members of the advisory commission
constitutes a quorum for the transaction of business.
91553. The chairperson of the commission on its behalf shall
appoint an executive director who shall serve at the pleasure of the
commission and shall receive an annual salary which shall be
established by the chairperson of the commission. The commission may
delegate to the executive director the authority to enter contracts
on behalf of the commission. The commission may employ such
additional staff as it deems necessary and appropriate to carry out
the provisions of this title. The commission shall charge fees
commensurate with its direct expenses and those of the office of the
State Treasurer in performing its duties pursuant to this title.
Amounts received under this section shall be deposited in the
Industrial Development Fund which is hereby created and shall be
available, when appropriated, for the expenses of the commission.
Until such time as fees are received by the commission and
appropriated pursuant to this section for the expenses of the
commission, the commission may borrow such moneys as may be required
for the purpose of meeting necessary expenses of initial organization
and operation of the commission.
91554. Upon order of the commission, any surplus in the Industrial
Development Fund not required for the expenses of the commission
shall be transferred, in accordance with the commission's order, to
common reserve funds established by the commission pursuant to
Section 91560. These moneys may be used, without further
appropriation by the Legislature, for the purposes authorized by
Section 91560.
91555. The commission may do the following:
(a) Assist authorities and state agencies in the planning,
preparation, marketing, and sale of bonds, pursuant to this chapter,
to reduce cost, protect the issuer's credit, and determine public
benefits and detriments.
(b) Collect, maintain, and provide financial, economic,
governmental, and social data on local government units pertinent to
their ability to administer industrial development revenue bonds.
(c) Prepare guidelines or assist in preparation of informational
documents necessary for such offerings.
(d) Collect, maintain, and provide information on debt authorized,
sold and outstanding, and serve as a clearinghouse for local issues
of industrial development revenue bonds.
(e) Maintain contact with municipal bond underwriters, credit
rating agencies, investors, and others to improve the market for
local government debt issues.
(f) Undertake or commission studies on methods to reduce the costs
of state and local issues.
(g) Recommend changes in state law and local practices to improve
the sale and servicing of such local bonds.
91556. The commission may assist authorities in making the
determinations required by Section 91530 and may establish by
regulation the nature of the information required for the making of
such determinations.
91557. The commission may establish by regulation the nature of the
information required for the making of the determinations pursuant
to Section 91531.
91558. (a) The commission may, upon request of two or more
authorities, in order to share expenses and facilitate bond issuance,
act as a pooling agent to issue bonds on a joint or composite basis
for companies which have applied for financing to the participating
authorities. Authorities shall enter into written agreements with the
commission specifying the projects which are to be delegated to the
commission for financing pursuant to this section.
(b) Prior to issuance of any bonds pursuant to this section, the
authority and public agency shall have completed the procedures
required by Section 91530.
(c) The commission may issue bonds as requested and authorized by
this section. For these purposes, the commission is granted all of
the powers of an authority and may enter into project agreements and
take all steps toward the sale, issuance, and security of bonds in
the same manner as authorities may do. The resolution required by
Section 91537 shall be adopted by the commission rather than by an
authority.
91558.5. (a) For purposes of this section, the following terms have
the following meanings:
(1) "Economic development lenders" may include public, private, or
quasi-public community development loan funds, microenterprise
funds, community development corporation-based loan funds, community
and economic development venture funds, revolving loan funds, and
community development financial institutions, as defined in Section
1805.200 of Title 12 of the Code of Federal Regulations.
(2) "Fund" means the Community and Economic Development Fund
established pursuant to subdivision (b).
(3) "Measured criteria" means evaluation of active loans based
upon the lender's original underwriting criteria, including, but not
limited to, the payment history of the borrower, the relationship
between the lender and borrower, and the borrower's pledged
collateral. "Measured criteria" also includes traditional credit risk
analysis.
(4) "Overcollateralization" means the assignment of collateral in
excess of the principal amount of the debt secured by that
collateral.
(5) "Reserve fund" means cash assets held in the fund to offset
loan losses otherwise intended to meet the dividend obligations of
the commission pursuant to this section. The reserve fund may be
capitalized by the transfer to the fund made by the act adding this
section, by loan payments from loans pledged to the commission by
economic development lenders pursuant to subdivision (d), and by
revenue generated through the bonds secured by those loans.
(6) "Subordination" means the commission's right to receive
payment on the loans securing the bonds issued by the commission
shall be subordinate to the obligations owed to the purchasers of
those bonds.
(b) The Community and Economic Development Fund is hereby created
in the State Treasury and, notwithstanding Section 13340, this fund
is continuously appropriated to the commission for purposes of this
section. The commission may expend up to 10 percent of any moneys
appropriated by the Legislature to the fund for administrative costs
directly related to the implementation of this section.
(c) The commission shall establish procedures to evaluate and
certify the participation of economic development lenders in the
state in a program that allows lenders to recapitalize their
financial resources in order to meet the current demands of
borrowers. The evaluation and certification procedures shall include
the performance of due diligence on the part of economic development
lenders and for each loan a lender seeks to pledge as collateral to
the commission pursuant to subdivision (f).
(d) To the extent funds are appropriated by the Legislature for
the purposes of this subdivision, the commission shall develop and
maintain a data base on economic development lenders in the state,
including, but not limited to, the asset size of each lender, average
loan size and loan duration, borrower target groups, and loan
default and loan loss rates. The data base shall also include
information on loans pledged by economic development lenders to
participate in the program.
(e) To the extent funds are appropriated by the Legislature for
the purposes of this subdivision, the commission shall recommend
minimum standards for loan documentation, loan underwriting, and loan
servicing for economic development lenders who participate in the
program. The loan documentation, underwriting, and servicing
standards shall be designed to promote uniformity in the commission's
process of loan evaluation and due diligence for individual loans.
The loan documentation and underwriting standards shall seek to be
consistent with the mission of economic development lenders eligible
for participation under this part. The commission shall develop
measurement criteria for consideration of existing loans pledged for
participation in the program that were made by economic development
lenders prior to the establishment of the minimum standards.
(f) To the extent funds are appropriated by the Legislature for
the purposes of this subdivision, the commission shall provide
technical assistance to lenders in order to increase utilization of
the minimum loan documentation, loan underwriting, and loan servicing
standards.
(g) Once certified by the commission to participate in the
program, economic development lenders may pledge as collateral to the
commission current and active loans in exchange for cash liquidity.
The amount of cash liquidity available for each loan shall be
determined on a loan-by-loan basis, shall be based upon the projected
income from the loan and the perceived risk of the loan, and shall
provide the economic development lender a reasonable value for the
loan asset. The income stream from loans pledged as collateral to the
commission shall accrue to the commission in order to regenerate the
fund.
(h) Loans pledged to the commission pursuant to subdivision (g)
shall serve as collateral for bonds issued by the commission. The
revenue generated by the issuance of bonds secured by those loans
shall be used to regenerate the fund and may also be used by the
commission to establish and recapitalize a reserve fund. The
commission may provide credit enhancements for these bonds in order
to support the credit quality of the bonds and increase their
marketability to investors. Credit enhancements by the commission may
include, but shall not be limited to, overcollateralization,
subordination, third party letters of credit, or a reserve fund
dedicated to ensure full and timely repayment of the bonds.
(i) The commission shall report to the Governor and the
Legislature on or before January 1, 2004, on the effectiveness of
this program in creating a secondary market for community and
economic development lenders and on any recommended changes to the
program established by this section.
(j) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2005, deletes or extends
that date. This subdivision shall not, however, apply to any bonds
secured by loans pledged to the commission pursuant to this section,
if those bonds were issued prior to, and remain outstanding on,
January 1, 2005. Those bonds shall remain outstanding until their
redemption date or until the time that they are purchased or mature,
and the commission may issue bonds for the purpose of refunding those
outstanding bonds only for the purpose of reducing the commission's
borrowing costs, and provided further that the term of the bonds so
refunded is not extended. Upon prepayment of the loans securing those
bonds, the bonds shall be redeemed as soon as practicable.
91559. (a) The commission is authorized from time to time to issue
its negotiable bonds, notes, debentures, or other securities,
collectively called "bonds," in order to provide funds for financing
projects or achieving any of its other purposes, except that the
commission is not authorized to issue industrial development bonds.
Without limiting the generality of the foregoing, the bonds may be
authorized to finance a single project for a single company, a series
of projects for a single company, or several projects for several
participating parties. In anticipation of the sale of these bonds,
the commission may issue negotiable bond anticipation notes and may
renew the notes from time to time. The notes shall be paid from any
revenues of the commission or other moneys available therefor and not
otherwise pledged, or from the proceeds of the sale of the bonds of
the commission in anticipation of which they were issued. The notes
shall be issued in the same manner as the bonds. The notes and
agreements relating to notes and bond anticipation notes,
collectively called "notes," and the resolution or resolutions
authorizing the notes may contain any provisions, conditions, or
limitations which a bond, agreement relating to the bond, and bond
resolution of the commission may contain.
(b) Except as may otherwise be expressly provided by the
commission, every issue of its bonds or notes shall be general
obligations of the commission payable from any revenues or moneys of
the commission available therefor and not otherwise pledged, subject
only to any agreements with the holders of particular bonds or notes
pledging any particular revenues or moneys and subject to any
agreements with any company. Notwithstanding that the bonds, notes,
or obligations may be payable from a special fund, they shall be, and
shall be deemed to be, for all purposes negotiable instruments,
subject only to the provisions of the bonds, notes, or other
obligations for registration.
(c) The bonds may be issued as serial bonds or as term bonds, or
the commission, in its discretion, may issue bonds of both types. The
bonds shall be authorized by resolution of the commission and shall
bear the date or dates, mature at the time or times, not exceeding 40
years from their respective dates, bear interest at the rate or
rates, be payable at the time or times, be in the denominations, be
in the form, either coupon or registered, carry the registration
privileges, be executed in the manner, be payable in lawful money of
the United States at the place or places, and be subject to the terms
of redemption, as the resolution or resolutions may provide. The
bonds or notes may be sold by the Treasurer at public or private
sale, for the price or prices and on the terms and conditions as the
commission shall determine, after giving due consideration to the
recommendations of any company to be assisted from the proceeds of
the bonds or notes. Pending preparation of definitive bonds, the
Treasurer may issue interim receipts, certificates, or temporary
bonds that shall be exchanged for the definitive bonds. The Treasurer
may sell any bonds, notes, or other evidence of indebtedness at a
price below the par value thereof.
(d) Any resolution or resolutions authorizing any bonds or any
issue of bonds may contain provisions, which shall be a part of the
contract with the holders of the bonds to be authorized, as to the
following:
(1) Pledging the full faith and credit of the commission or
pledging all or any part of the revenues of any project or any
revenue-producing contract or contracts made by the commission with
any individual, partnership, corporation, or association or other
body, public or private, or other moneys of the commission, to secure
the payment of the bonds or of any particular issue of bonds,
subject to those agreements with bondholders as may then exist.
(2) The rentals, fees, purchase payments, loan repayments, and
other charges to be charged, and the amounts to be raised in each
year thereby, and the use and disposition of the revenues.
(3) The setting aside of reserves or sinking funds, and the
regulation and disposition thereof.
(4) Limitations on the right of the commission or its agent to
restrict or regulate the use of the project or projects to be
financed out of the proceeds of the bonds or any particular issue of
bonds.
(5) Limitations on the purpose to which the proceeds of the sale
of any issue of bonds then or thereafter to be issued may be applied,
and pledging those proceeds to secure the payment of the bonds or
any issue of the bonds.
(6) Limitations on the issuance of additional bonds, the terms
upon which additional bonds may be issued and secured, and the
refunding of outstanding bonds.
(7) The procedure, if any, by which the terms of any contract with
bondholders may be amended or abrogated, the amount of bond that the
holders of which are required to consent thereto, and the manner in
which the consent may be given.
(8) Limitations on expenditures for operating, administrative,
cost of issuance, or other expenses of the commission.
(9) Defining the acts or omissions to act that constitute a
default in the duties of the commission to holders of its
obligations, and providing the rights and remedies of the holders in
the event of a default.
(10) The mortgaging of any project and the site of the project for
the purpose of securing the bondholders.
(11) The mortgaging of land, improvements, or other assets owned
by a company for the purpose of securing the bondholders.
(12) Procedures for the selection of projects to be financed with
the proceeds of the bonds authorized by the resolution, if the bonds
are sold in advance of designation of the projects, and participating
parties to receive the financing.
(e) Neither the members of the commission, nor any person
executing the bonds or notes shall be liable personally on the bonds
or notes or be subject to any personal liability or accountability by
reason of the issuance thereof.
(f) The commission shall have the power out of any funds available
for these purposes to purchase its bonds or notes. The commission
may hold, pledge, cancel, or resell those bonds, subject to and in
accordance with agreements with the bondholders.
(g) Any funds of the commission, including without limitation,
proceeds from the sale of bonds or notes, may be invested in any
obligations of any state or local government meeting the requirements
of subsection (a) of Section 103 of the Internal Revenue Code of
1986 (26 U.S.C. Sec. 103(a)) including mutual funds, trusts, and
similar instruments representing a pool of obligations. The Treasurer
may adopt regulations providing appropriate investment standards for
those investments. If the Treasurer determines it to be necessary to
assure compliance with federal tax laws or regulations, the
commission may, notwithstanding any other law, deposit funds received
as fees from the issuance of its obligations with a bank or trust
company acting on behalf of the commission.
91559.1. In the discretion of the commission, any bonds issued
under the provisions of this article may be secured by a trust
agreement by and between the commission and a corporate trustee or
trustee, which may be the Treasurer or any trust company or bank
having the powers of a trust company within or without the state. The
trust agreement or the resolution providing for the issuance of the
bonds may pledge or assign the revenues to be received or proceeds of
any contract or contracts pledged and may convey or mortgage the
project or projects, or any portion thereof, to be financed out of
the proceeds of the bonds. The trust agreement or resolution
providing for the issuance of the bonds may contain provisions for
protecting and enforcing the rights and remedies of the bondholders
as may be reasonable and proper and not in violation of the law,
including particularly provisions that have been specifically
authorized in this article to be included in any resolution or
resolutions of the commission authorizing bonds thereof. Any bank or
trust company doing business under the laws of this state which may
act as depositary of the proceeds of bonds or of revenues or other
moneys may furnish indemnifying bonds or pledge securities as may be
required by the commission. Any trust agreement may set forth the
rights and remedies of the bondholders and of the trustee or
trustees, and may restrict the individual right of action by
bondholders. In addition to the foregoing, any trust agreement or
resolution may contain other provisions as the commission may deem
reasonable and proper for the security of the bondholders.
Notwithstanding any other provision of law, the Treasurer shall not
be deemed to have a conflict of interest by reason of acting as
trustee pursuant to this division. All expenses incurred in carrying
out the provisions of the trust agreement or resolution may be
treated as a part of the cost of the operation of a project.
91559.2. Bonds issued under the provisions of this article shall
not be deemed to constitute a debt or liability of the state or of
any political subdivision thereof, other than the commission, or a
pledge of the faith and credit of the state or of any political
subdivision, other than the commission, but shall be payable solely
from the funds herein provided therefor. All bonds shall contain on
the face thereof a statement to the effect: "Neither the faith and
credit nor the taxing power of the State of California is pledged to
the payment of the principal of or interest on this bond." The
issuance of bonds under the provisions of this article shall not
directly or indirectly or contingently obligate the state or any
political subdivision thereof to levy or to pledge any form of
taxation whatever therefor or to make any appropriation for their
payment. Nothing contained in this section shall prevent nor be
construed to prevent the commission from pledging its full faith and
credit to the payment of bonds or issue of bonds authorized pursuant
to this article.
91559.3. (a) The commission is authorized to issue bonds of the
commission for the purpose of refunding any bonds, notes, or
securities of the commission then outstanding, including the payment
of any redemption premium thereon and any interest accrued or to
accrue to the earliest or subsequent date of redemption, purchase, or
maturity of those bonds, and, if deemed advisable by the commission,
for the additional purpose of paying all or any part of the cost of
constructing and acquiring additions, improvements, extensions, or
enlargements of a project or any portion thereof.
(b) The proceeds of any bonds issued for the purpose of refunding
outstanding bonds, notes, or securities may, in the discretion of the
commission, be applied to the purchase, retirement at maturity, or
redemption prior to maturity, of any outstanding bonds either on
their earliest redemption date or dates, any subsequent redemption
date or dates, upon their purchase or maturity, or paid to a third
person to assume the commission's obligation to make the payments,
and may, pending that application, be placed in escrow to be applied
to the purchase, retirement at maturity, or redemption on the date or
dates determined by the commission.
(c) Any proceeds placed in escrow may, pending their use, be
invested and reinvested in obligations or securities authorized by
resolutions of the commission, payable or maturing at the time or
times as are appropriate to assure the prompt payment of the
principal, interest, and redemption premium, if any, of the
outstanding bonds to be refunded at maturity or redemption of the
bonds to be refunded either at their earliest redemption date or
dates or any subsequent redemption date or dates. The interest,
income, and profits, if any, earned or realized on any investment may
also be applied to the payment of the outstanding bonds to be
refunded or to the payment of interest on the refunding bonds. After
the terms of the escrow have been fully satisfied and carried out,
any balance of the proceeds and interest, income and profits, if any,
earned or realized on the investments thereof may be returned to the
commission for use by the commission.
(d) The portion of the proceeds of any bonds issued for the
additional purpose of paying all or any part of the cost of
constructing and acquiring additions, improvements, extensions, or
enlargements of a project may be invested and reinvested in
obligations or securities authorized by resolution of the commission,
maturing not later than the time or times when the proceeds will be
needed for the purpose of paying all or any part of the cost. The
interest, income, and profits, if any, earned or realized on the
investments may be applied to the payment of all or any part of the
cost or may be used by the commission in any lawful manner.
(e) All of those refunding bonds are subject to this article in
the same manner and to the same extent as other bonds issued pursuant
to this article.
91559.4. The State of California does pledge to and agree with the
holders of the bonds, notes, and other obligations issued pursuant to
this article, and with those parties who may enter into contracts
with the commission pursuant to the provisions of this article, that
the state will not limit, alter, or restrict the rights hereby vested
in the commission until the bonds, together with the interest
thereon, are fully paid and discharged and those contracts are fully
performed on the part of the commission. The commission as agent for
the state is authorized to include this pledge and undertaking for
the state in those bonds or contracts.
91550. There is in state government the California Industrial
Development Financing Advisory Commission, consisting of five
members, as follows:
(a) The Treasurer, who shall serve as chairperson.
(b) The Controller.
(c) The Director of Finance.
(d) The Secretary of Business, Transportation and Housing.
(e) The Commissioner of Corporations.
Members of the commission may each designate a deputy or employee
in his or her agency to act for him or her at all meetings of the
commission. The first meeting shall be convened by the Treasurer.
91551. All members of the commission shall serve thereon without
compensation.
91552. The commission shall meet on the call of the chairperson, or
at the request of a majority of the members, or at the request of
the Governor. A majority of all members of the advisory commission
constitutes a quorum for the transaction of business.
91553. The chairperson of the commission on its behalf shall
appoint an executive director who shall serve at the pleasure of the
commission and shall receive an annual salary which shall be
established by the chairperson of the commission. The commission may
delegate to the executive director the authority to enter contracts
on behalf of the commission. The commission may employ such
additional staff as it deems necessary and appropriate to carry out
the provisions of this title. The commission shall charge fees
commensurate with its direct expenses and those of the office of the
State Treasurer in performing its duties pursuant to this title.
Amounts received under this section shall be deposited in the
Industrial Development Fund which is hereby created and shall be
available, when appropriated, for the expenses of the commission.
Until such time as fees are received by the commission and
appropriated pursuant to this section for the expenses of the
commission, the commission may borrow such moneys as may be required
for the purpose of meeting necessary expenses of initial organization
and operation of the commission.
91554. Upon order of the commission, any surplus in the Industrial
Development Fund not required for the expenses of the commission
shall be transferred, in accordance with the commission's order, to
common reserve funds established by the commission pursuant to
Section 91560. These moneys may be used, without further
appropriation by the Legislature, for the purposes authorized by
Section 91560.
91555. The commission may do the following:
(a) Assist authorities and state agencies in the planning,
preparation, marketing, and sale of bonds, pursuant to this chapter,
to reduce cost, protect the issuer's credit, and determine public
benefits and detriments.
(b) Collect, maintain, and provide financial, economic,
governmental, and social data on local government units pertinent to
their ability to administer industrial development revenue bonds.
(c) Prepare guidelines or assist in preparation of informational
documents necessary for such offerings.
(d) Collect, maintain, and provide information on debt authorized,
sold and outstanding, and serve as a clearinghouse for local issues
of industrial development revenue bonds.
(e) Maintain contact with municipal bond underwriters, credit
rating agencies, investors, and others to improve the market for
local government debt issues.
(f) Undertake or commission studies on methods to reduce the costs
of state and local issues.
(g) Recommend changes in state law and local practices to improve
the sale and servicing of such local bonds.
91556. The commission may assist authorities in making the
determinations required by Section 91530 and may establish by
regulation the nature of the information required for the making of
such determinations.
91557. The commission may establish by regulation the nature of the
information required for the making of the determinations pursuant
to Section 91531.
91558. (a) The commission may, upon request of two or more
authorities, in order to share expenses and facilitate bond issuance,
act as a pooling agent to issue bonds on a joint or composite basis
for companies which have applied for financing to the participating
authorities. Authorities shall enter into written agreements with the
commission specifying the projects which are to be delegated to the
commission for financing pursuant to this section.
(b) Prior to issuance of any bonds pursuant to this section, the
authority and public agency shall have completed the procedures
required by Section 91530.
(c) The commission may issue bonds as requested and authorized by
this section. For these purposes, the commission is granted all of
the powers of an authority and may enter into project agreements and
take all steps toward the sale, issuance, and security of bonds in
the same manner as authorities may do. The resolution required by
Section 91537 shall be adopted by the commission rather than by an
authority.
91558.5. (a) For purposes of this section, the following terms have
the following meanings:
(1) "Economic development lenders" may include public, private, or
quasi-public community development loan funds, microenterprise
funds, community development corporation-based loan funds, community
and economic development venture funds, revolving loan funds, and
community development financial institutions, as defined in Section
1805.200 of Title 12 of the Code of Federal Regulations.
(2) "Fund" means the Community and Economic Development Fund
established pursuant to subdivision (b).
(3) "Measured criteria" means evaluation of active loans based
upon the lender's original underwriting criteria, including, but not
limited to, the payment history of the borrower, the relationship
between the lender and borrower, and the borrower's pledged
collateral. "Measured criteria" also includes traditional credit risk
analysis.
(4) "Overcollateralization" means the assignment of collateral in
excess of the principal amount of the debt secured by that
collateral.
(5) "Reserve fund" means cash assets held in the fund to offset
loan losses otherwise intended to meet the dividend obligations of
the commission pursuant to this section. The reserve fund may be
capitalized by the transfer to the fund made by the act adding this
section, by loan payments from loans pledged to the commission by
economic development lenders pursuant to subdivision (d), and by
revenue generated through the bonds secured by those loans.
(6) "Subordination" means the commission's right to receive
payment on the loans securing the bonds issued by the commission
shall be subordinate to the obligations owed to the purchasers of
those bonds.
(b) The Community and Economic Development Fund is hereby created
in the State Treasury and, notwithstanding Section 13340, this fund
is continuously appropriated to the commission for purposes of this
section. The commission may expend up to 10 percent of any moneys
appropriated by the Legislature to the fund for administrative costs
directly related to the implementation of this section.
(c) The commission shall establish procedures to evaluate and
certify the participation of economic development lenders in the
state in a program that allows lenders to recapitalize their
financial resources in order to meet the current demands of
borrowers. The evaluation and certification procedures shall include
the performance of due diligence on the part of economic development
lenders and for each loan a lender seeks to pledge as collateral to
the commission pursuant to subdivision (f).
(d) To the extent funds are appropriated by the Legislature for
the purposes of this subdivision, the commission shall develop and
maintain a data base on economic development lenders in the state,
including, but not limited to, the asset size of each lender, average
loan size and loan duration, borrower target groups, and loan
default and loan loss rates. The data base shall also include
information on loans pledged by economic development lenders to
participate in the program.
(e) To the extent funds are appropriated by the Legislature for
the purposes of this subdivision, the commission shall recommend
minimum standards for loan documentation, loan underwriting, and loan
servicing for economic development lenders who participate in the
program. The loan documentation, underwriting, and servicing
standards shall be designed to promote uniformity in the commission's
process of loan evaluation and due diligence for individual loans.
The loan documentation and underwriting standards shall seek to be
consistent with the mission of economic development lenders eligible
for participation under this part. The commission shall develop
measurement criteria for consideration of existing loans pledged for
participation in the program that were made by economic development
lenders prior to the establishment of the minimum standards.
(f) To the extent funds are appropriated by the Legislature for
the purposes of this subdivision, the commission shall provide
technical assistance to lenders in order to increase utilization of
the minimum loan documentation, loan underwriting, and loan servicing
standards.
(g) Once certified by the commission to participate in the
program, economic development lenders may pledge as collateral to the
commission current and active loans in exchange for cash liquidity.
The amount of cash liquidity available for each loan shall be
determined on a loan-by-loan basis, shall be based upon the projected
income from the loan and the perceived risk of the loan, and shall
provide the economic development lender a reasonable value for the
loan asset. The income stream from loans pledged as collateral to the
commission shall accrue to the commission in order to regenerate the
fund.
(h) Loans pledged to the commission pursuant to subdivision (g)
shall serve as collateral for bonds issued by the commission. The
revenue generated by the issuance of bonds secured by those loans
shall be used to regenerate the fund and may also be used by the
commission to establish and recapitalize a reserve fund. The
commission may provide credit enhancements for these bonds in order
to support the credit quality of the bonds and increase their
marketability to investors. Credit enhancements by the commission may
include, but shall not be limited to, overcollateralization,
subordination, third party letters of credit, or a reserve fund
dedicated to ensure full and timely repayment of the bonds.
(i) The commission shall report to the Governor and the
Legislature on or before January 1, 2004, on the effectiveness of
this program in creating a secondary market for community and
economic development lenders and on any recommended changes to the
program established by this section.
(j) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2005, deletes or extends
that date. This subdivision shall not, however, apply to any bonds
secured by loans pledged to the commission pursuant to this section,
if those bonds were issued prior to, and remain outstanding on,
January 1, 2005. Those bonds shall remain outstanding until their
redemption date or until the time that they are purchased or mature,
and the commission may issue bonds for the purpose of refunding those
outstanding bonds only for the purpose of reducing the commission's
borrowing costs, and provided further that the term of the bonds so
refunded is not extended. Upon prepayment of the loans securing those
bonds, the bonds shall be redeemed as soon as practicable.
91559. (a) The commission is authorized from time to time to issue
its negotiable bonds, notes, debentures, or other securities,
collectively called "bonds," in order to provide funds for financing
projects or achieving any of its other purposes, except that the
commission is not authorized to issue industrial development bonds.
Without limiting the generality of the foregoing, the bonds may be
authorized to finance a single project for a single company, a series
of projects for a single company, or several projects for several
participating parties. In anticipation of the sale of these bonds,
the commission may issue negotiable bond anticipation notes and may
renew the notes from time to time. The notes shall be paid from any
revenues of the commission or other moneys available therefor and not
otherwise pledged, or from the proceeds of the sale of the bonds of
the commission in anticipation of which they were issued. The notes
shall be issued in the same manner as the bonds. The notes and
agreements relating to notes and bond anticipation notes,
collectively called "notes," and the resolution or resolutions
authorizing the notes may contain any provisions, conditions, or
limitations which a bond, agreement relating to the bond, and bond
resolution of the commission may contain.
(b) Except as may otherwise be expressly provided by the
commission, every issue of its bonds or notes shall be general
obligations of the commission payable from any revenues or moneys of
the commission available therefor and not otherwise pledged, subject
only to any agreements with the holders of particular bonds or notes
pledging any particular revenues or moneys and subject to any
agreements with any company. Notwithstanding that the bonds, notes,
or obligations may be payable from a special fund, they shall be, and
shall be deemed to be, for all purposes negotiable instruments,
subject only to the provisions of the bonds, notes, or other
obligations for registration.
(c) The bonds may be issued as serial bonds or as term bonds, or
the commission, in its discretion, may issue bonds of both types. The
bonds shall be authorized by resolution of the commission and shall
bear the date or dates, mature at the time or times, not exceeding 40
years from their respective dates, bear interest at the rate or
rates, be payable at the time or times, be in the denominations, be
in the form, either coupon or registered, carry the registration
privileges, be executed in the manner, be payable in lawful money of
the United States at the place or places, and be subject to the terms
of redemption, as the resolution or resolutions may provide. The
bonds or notes may be sold by the Treasurer at public or private
sale, for the price or prices and on the terms and conditions as the
commission shall determine, after giving due consideration to the
recommendations of any company to be assisted from the proceeds of
the bonds or notes. Pending preparation of definitive bonds, the
Treasurer may issue interim receipts, certificates, or temporary
bonds that shall be exchanged for the definitive bonds. The Treasurer
may sell any bonds, notes, or other evidence of indebtedness at a
price below the par value thereof.
(d) Any resolution or resolutions authorizing any bonds or any
issue of bonds may contain provisions, which shall be a part of the
contract with the holders of the bonds to be authorized, as to the
following:
(1) Pledging the full faith and credit of the commission or
pledging all or any part of the revenues of any project or any
revenue-producing contract or contracts made by the commission with
any individual, partnership, corporation, or association or other
body, public or private, or other moneys of the commission, to secure
the payment of the bonds or of any particular issue of bonds,
subject to those agreements with bondholders as may then exist.
(2) The rentals, fees, purchase payments, loan repayments, and
other charges to be charged, and the amounts to be raised in each
year thereby, and the use and disposition of the revenues.
(3) The setting aside of reserves or sinking funds, and the
regulation and disposition thereof.
(4) Limitations on the right of the commission or its agent to
restrict or regulate the use of the project or projects to be
financed out of the proceeds of the bonds or any particular issue of
bonds.
(5) Limitations on the purpose to which the proceeds of the sale
of any issue of bonds then or thereafter to be issued may be applied,
and pledging those proceeds to secure the payment of the bonds or
any issue of the bonds.
(6) Limitations on the issuance of additional bonds, the terms
upon which additional bonds may be issued and secured, and the
refunding of outstanding bonds.
(7) The procedure, if any, by which the terms of any contract with
bondholders may be amended or abrogated, the amount of bond that the
holders of which are required to consent thereto, and the manner in
which the consent may be given.
(8) Limitations on expenditures for operating, administrative,
cost of issuance, or other expenses of the commission.
(9) Defining the acts or omissions to act that constitute a
default in the duties of the commission to holders of its
obligations, and providing the rights and remedies of the holders in
the event of a default.
(10) The mortgaging of any project and the site of the project for
the purpose of securing the bondholders.
(11) The mortgaging of land, improvements, or other assets owned
by a company for the purpose of securing the bondholders.
(12) Procedures for the selection of projects to be financed with
the proceeds of the bonds authorized by the resolution, if the bonds
are sold in advance of designation of the projects, and participating
parties to receive the financing.
(e) Neither the members of the commission, nor any person
executing the bonds or notes shall be liable personally on the bonds
or notes or be subject to any personal liability or accountability by
reason of the issuance thereof.
(f) The commission shall have the power out of any funds available
for these purposes to purchase its bonds or notes. The commission
may hold, pledge, cancel, or resell those bonds, subject to and in
accordance with agreements with the bondholders.
(g) Any funds of the commission, including without limitation,
proceeds from the sale of bonds or notes, may be invested in any
obligations of any state or local government meeting the requirements
of subsection (a) of Section 103 of the Internal Revenue Code of
1986 (26 U.S.C. Sec. 103(a)) including mutual funds, trusts, and
similar instruments representing a pool of obligations. The Treasurer
may adopt regulations providing appropriate investment standards for
those investments. If the Treasurer determines it to be necessary to
assure compliance with federal tax laws or regulations, the
commission may, notwithstanding any other law, deposit funds received
as fees from the issuance of its obligations with a bank or trust
company acting on behalf of the commission.
91559.1. In the discretion of the commission, any bonds issued
under the provisions of this article may be secured by a trust
agreement by and between the commission and a corporate trustee or
trustee, which may be the Treasurer or any trust company or bank
having the powers of a trust company within or without the state. The
trust agreement or the resolution providing for the issuance of the
bonds may pledge or assign the revenues to be received or proceeds of
any contract or contracts pledged and may convey or mortgage the
project or projects, or any portion thereof, to be financed out of
the proceeds of the bonds. The trust agreement or resolution
providing for the issuance of the bonds may contain provisions for
protecting and enforcing the rights and remedies of the bondholders
as may be reasonable and proper and not in violation of the law,
including particularly provisions that have been specifically
authorized in this article to be included in any resolution or
resolutions of the commission authorizing bonds thereof. Any bank or
trust company doing business under the laws of this state which may
act as depositary of the proceeds of bonds or of revenues or other
moneys may furnish indemnifying bonds or pledge securities as may be
required by the commission. Any trust agreement may set forth the
rights and remedies of the bondholders and of the trustee or
trustees, and may restrict the individual right of action by
bondholders. In addition to the foregoing, any trust agreement or
resolution may contain other provisions as the commission may deem
reasonable and proper for the security of the bondholders.
Notwithstanding any other provision of law, the Treasurer shall not
be deemed to have a conflict of interest by reason of acting as
trustee pursuant to this division. All expenses incurred in carrying
out the provisions of the trust agreement or resolution may be
treated as a part of the cost of the operation of a project.
91559.2. Bonds issued under the provisions of this article shall
not be deemed to constitute a debt or liability of the state or of
any political subdivision thereof, other than the commission, or a
pledge of the faith and credit of the state or of any political
subdivision, other than the commission, but shall be payable solely
from the funds herein provided therefor. All bonds shall contain on
the face thereof a statement to the effect: "Neither the faith and
credit nor the taxing power of the State of California is pledged to
the payment of the principal of or interest on this bond." The
issuance of bonds under the provisions of this article shall not
directly or indirectly or contingently obligate the state or any
political subdivision thereof to levy or to pledge any form of
taxation whatever therefor or to make any appropriation for their
payment. Nothing contained in this section shall prevent nor be
construed to prevent the commission from pledging its full faith and
credit to the payment of bonds or issue of bonds authorized pursuant
to this article.
91559.3. (a) The commission is authorized to issue bonds of the
commission for the purpose of refunding any bonds, notes, or
securities of the commission then outstanding, including the payment
of any redemption premium thereon and any interest accrued or to
accrue to the earliest or subsequent date of redemption, purchase, or
maturity of those bonds, and, if deemed advisable by the commission,
for the additional purpose of paying all or any part of the cost of
constructing and acquiring additions, improvements, extensions, or
enlargements of a project or any portion thereof.
(b) The proceeds of any bonds issued for the purpose of refunding
outstanding bonds, notes, or securities may, in the discretion of the
commission, be applied to the purchase, retirement at maturity, or
redemption prior to maturity, of any outstanding bonds either on
their earliest redemption date or dates, any subsequent redemption
date or dates, upon their purchase or maturity, or paid to a third
person to assume the commission's obligation to make the payments,
and may, pending that application, be placed in escrow to be applied
to the purchase, retirement at maturity, or redemption on the date or
dates determined by the commission.
(c) Any proceeds placed in escrow may, pending their use, be
invested and reinvested in obligations or securities authorized by
resolutions of the commission, payable or maturing at the time or
times as are appropriate to assure the prompt payment of the
principal, interest, and redemption premium, if any, of the
outstanding bonds to be refunded at maturity or redemption of the
bonds to be refunded either at their earliest redemption date or
dates or any subsequent redemption date or dates. The interest,
income, and profits, if any, earned or realized on any investment may
also be applied to the payment of the outstanding bonds to be
refunded or to the payment of interest on the refunding bonds. After
the terms of the escrow have been fully satisfied and carried out,
any balance of the proceeds and interest, income and profits, if any,
earned or realized on the investments thereof may be returned to the
commission for use by the commission.
(d) The portion of the proceeds of any bonds issued for the
additional purpose of paying all or any part of the cost of
constructing and acquiring additions, improvements, extensions, or
enlargements of a project may be invested and reinvested in
obligations or securities authorized by resolution of the commission,
maturing not later than the time or times when the proceeds will be
needed for the purpose of paying all or any part of the cost. The
interest, income, and profits, if any, earned or realized on the
investments may be applied to the payment of all or any part of the
cost or may be used by the commission in any lawful manner.
(e) All of those refunding bonds are subject to this article in
the same manner and to the same extent as other bonds issued pursuant
to this article.
91559.4. The State of California does pledge to and agree with the
holders of the bonds, notes, and other obligations issued pursuant to
this article, and with those parties who may enter into contracts
with the commission pursuant to the provisions of this article, that
the state will not limit, alter, or restrict the rights hereby vested
in the commission until the bonds, together with the interest
thereon, are fully paid and discharged and those contracts are fully
performed on the part of the commission. The commission as agent for
the state is authorized to include this pledge and undertaking for
the state in those bonds or contracts.
91550. There is in state government the California Industrial
Development Financing Advisory Commission, consisting of five
members, as follows:
(a) The Treasurer, who shall serve as chairperson.
(b) The Controller.
(c) The Director of Finance.
(d) The Secretary of Business, Transportation and Housing.
(e) The Commissioner of Corporations.
Members of the commission may each designate a deputy or employee
in his or her agency to act for him or her at all meetings of the
commission. The first meeting shall be convened by the Treasurer.
91551. All members of the commission shall serve thereon without
compensation.
91552. The commission shall meet on the call of the chairperson, or
at the request of a majority of the members, or at the request of
the Governor. A majority of all members of the advisory commission
constitutes a quorum for the transaction of business.
91553. The chairperson of the commission on its behalf shall
appoint an executive director who shall serve at the pleasure of the
commission and shall receive an annual salary which shall be
established by the chairperson of the commission. The commission may
delegate to the executive director the authority to enter contracts
on behalf of the commission. The commission may employ such
additional staff as it deems necessary and appropriate to carry out
the provisions of this title. The commission shall charge fees
commensurate with its direct expenses and those of the office of the
State Treasurer in performing its duties pursuant to this title.
Amounts received under this section shall be deposited in the
Industrial Development Fund which is hereby created and shall be
available, when appropriated, for the expenses of the commission.
Until such time as fees are received by the commission and
appropriated pursuant to this section for the expenses of the
commission, the commission may borrow such moneys as may be required
for the purpose of meeting necessary expenses of initial organization
and operation of the commission.
91554. Upon order of the commission, any surplus in the Industrial
Development Fund not required for the expenses of the commission
shall be transferred, in accordance with the commission's order, to
common reserve funds established by the commission pursuant to
Section 91560. These moneys may be used, without further
appropriation by the Legislature, for the purposes authorized by
Section 91560.
91555. The commission may do the following:
(a) Assist authorities and state agencies in the planning,
preparation, marketing, and sale of bonds, pursuant to this chapter,
to reduce cost, protect the issuer's credit, and determine public
benefits and detriments.
(b) Collect, maintain, and provide financial, economic,
governmental, and social data on local government units pertinent to
their ability to administer industrial development revenue bonds.
(c) Prepare guidelines or assist in preparation of informational
documents necessary for such offerings.
(d) Collect, maintain, and provide information on debt authorized,
sold and outstanding, and serve as a clearinghouse for local issues
of industrial development revenue bonds.
(e) Maintain contact with municipal bond underwriters, credit
rating agencies, investors, and others to improve the market for
local government debt issues.
(f) Undertake or commission studies on methods to reduce the costs
of state and local issues.
(g) Recommend changes in state law and local practices to improve
the sale and servicing of such local bonds.
91556. The commission may assist authorities in making the
determinations required by Section 91530 and may establish by
regulation the nature of the information required for the making of
such determinations.
91557. The commission may establish by regulation the nature of the
information required for the making of the determinations pursuant
to Section 91531.
91558. (a) The commission may, upon request of two or more
authorities, in order to share expenses and facilitate bond issuance,
act as a pooling agent to issue bonds on a joint or composite basis
for companies which have applied for financing to the participating
authorities. Authorities shall enter into written agreements with the
commission specifying the projects which are to be delegated to the
commission for financing pursuant to this section.
(b) Prior to issuance of any bonds pursuant to this section, the
authority and public agency shall have completed the procedures
required by Section 91530.
(c) The commission may issue bonds as requested and authorized by
this section. For these purposes, the commission is granted all of
the powers of an authority and may enter into project agreements and
take all steps toward the sale, issuance, and security of bonds in
the same manner as authorities may do. The resolution required by
Section 91537 shall be adopted by the commission rather than by an
authority.
91558.5. (a) For purposes of this section, the following terms have
the following meanings:
(1) "Economic development lenders" may include public, private, or
quasi-public community development loan funds, microenterprise
funds, community development corporation-based loan funds, community
and economic development venture funds, revolving loan funds, and
community development financial institutions, as defined in Section
1805.200 of Title 12 of the Code of Federal Regulations.
(2) "Fund" means the Community and Economic Development Fund
established pursuant to subdivision (b).
(3) "Measured criteria" means evaluation of active loans based
upon the lender's original underwriting criteria, including, but not
limited to, the payment history of the borrower, the relationship
between the lender and borrower, and the borrower's pledged
collateral. "Measured criteria" also includes traditional credit risk
analysis.
(4) "Overcollateralization" means the assignment of collateral in
excess of the principal amount of the debt secured by that
collateral.
(5) "Reserve fund" means cash assets held in the fund to offset
loan losses otherwise intended to meet the dividend obligations of
the commission pursuant to this section. The reserve fund may be
capitalized by the transfer to the fund made by the act adding this
section, by loan payments from loans pledged to the commission by
economic development lenders pursuant to subdivision (d), and by
revenue generated through the bonds secured by those loans.
(6) "Subordination" means the commission's right to receive
payment on the loans securing the bonds issued by the commission
shall be subordinate to the obligations owed to the purchasers of
those bonds.
(b) The Community and Economic Development Fund is hereby created
in the State Treasury and, notwithstanding Section 13340, this fund
is continuously appropriated to the commission for purposes of this
section. The commission may expend up to 10 percent of any moneys
appropriated by the Legislature to the fund for administrative costs
directly related to the implementation of this section.
(c) The commission shall establish procedures to evaluate and
certify the participation of economic development lenders in the
state in a program that allows lenders to recapitalize their
financial resources in order to meet the current demands of
borrowers. The evaluation and certification procedures shall include
the performance of due diligence on the part of economic development
lenders and for each loan a lender seeks to pledge as collateral to
the commission pursuant to subdivision (f).
(d) To the extent funds are appropriated by the Legislature for
the purposes of this subdivision, the commission shall develop and
maintain a data base on economic development lenders in the state,
including, but not limited to, the asset size of each lender, average
loan size and loan duration, borrower target groups, and loan
default and loan loss rates. The data base shall also include
information on loans pledged by economic development lenders to
participate in the program.
(e) To the extent funds are appropriated by the Legislature for
the purposes of this subdivision, the commission shall recommend
minimum standards for loan documentation, loan underwriting, and loan
servicing for economic development lenders who participate in the
program. The loan documentation, underwriting, and servicing
standards shall be designed to promote uniformity in the commission's
process of loan evaluation and due diligence for individual loans.
The loan documentation and underwriting standards shall seek to be
consistent with the mission of economic development lenders eligible
for participation under this part. The commission shall develop
measurement criteria for consideration of existing loans pledged for
participation in the program that were made by economic development
lenders prior to the establishment of the minimum standards.
(f) To the extent funds are appropriated by the Legislature for
the purposes of this subdivision, the commission shall provide
technical assistance to lenders in order to increase utilization of
the minimum loan documentation, loan underwriting, and loan servicing
standards.
(g) Once certified by the commission to participate in the
program, economic development lenders may pledge as collateral to the
commission current and active loans in exchange for cash liquidity.
The amount of cash liquidity available for each loan shall be
determined on a loan-by-loan basis, shall be based upon the projected
income from the loan and the perceived risk of the loan, and shall
provide the economic development lender a reasonable value for the
loan asset. The income stream from loans pledged as collateral to the
commission shall accrue to the commission in order to regenerate the
fund.
(h) Loans pledged to the commission pursuant to subdivision (g)
shall serve as collateral for bonds issued by the commission. The
revenue generated by the issuance of bonds secured by those loans
shall be used to regenerate the fund and may also be used by the
commission to establish and recapitalize a reserve fund. The
commission may provide credit enhancements for these bonds in order
to support the credit quality of the bonds and increase their
marketability to investors. Credit enhancements by the commission may
include, but shall not be limited to, overcollateralization,
subordination, third party letters of credit, or a reserve fund
dedicated to ensure full and timely repayment of the bonds.
(i) The commission shall report to the Governor and the
Legislature on or before January 1, 2004, on the effectiveness of
this program in creating a secondary market for community and
economic development lenders and on any recommended changes to the
program established by this section.
(j) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2005, deletes or extends
that date. This subdivision shall not, however, apply to any bonds
secured by loans pledged to the commission pursuant to this section,
if those bonds were issued prior to, and remain outstanding on,
January 1, 2005. Those bonds shall remain outstanding until their
redemption date or until the time that they are purchased or mature,
and the commission may issue bonds for the purpose of refunding those
outstanding bonds only for the purpose of reducing the commission's
borrowing costs, and provided further that the term of the bonds so
refunded is not extended. Upon prepayment of the loans securing those
bonds, the bonds shall be redeemed as soon as practicable.
91559. (a) The commission is authorized from time to time to issue
its negotiable bonds, notes, debentures, or other securities,
collectively called "bonds," in order to provide funds for financing
projects or achieving any of its other purposes, except that the
commission is not authorized to issue industrial development bonds.
Without limiting the generality of the foregoing, the bonds may be
authorized to finance a single project for a single company, a series
of projects for a single company, or several projects for several
participating parties. In anticipation of the sale of these bonds,
the commission may issue negotiable bond anticipation notes and may
renew the notes from time to time. The notes shall be paid from any
revenues of the commission or other moneys available therefor and not
otherwise pledged, or from the proceeds of the sale of the bonds of
the commission in anticipation of which they were issued. The notes
shall be issued in the same manner as the bonds. The notes and
agreements relating to notes and bond anticipation notes,
collectively called "notes," and the resolution or resolutions
authorizing the notes may contain any provisions, conditions, or
limitations which a bond, agreement relating to the bond, and bond
resolution of the commission may contain.
(b) Except as may otherwise be expressly provided by the
commission, every issue of its bonds or notes shall be general
obligations of the commission payable from any revenues or moneys of
the commission available therefor and not otherwise pledged, subject
only to any agreements with the holders of particular bonds or notes
pledging any particular revenues or moneys and subject to any
agreements with any company. Notwithstanding that the bonds, notes,
or obligations may be payable from a special fund, they shall be, and
shall be deemed to be, for all purposes negotiable instruments,
subject only to the provisions of the bonds, notes, or other
obligations for registration.
(c) The bonds may be issued as serial bonds or as term bonds, or
the commission, in its discretion, may issue bonds of both types. The
bonds shall be authorized by resolution of the commission and shall
bear the date or dates, mature at the time or times, not exceeding 40
years from their respective dates, bear interest at the rate or
rates, be payable at the time or times, be in the denominations, be
in the form, either coupon or registered, carry the registration
privileges, be executed in the manner, be payable in lawful money of
the United States at the place or places, and be subject to the terms
of redemption, as the resolution or resolutions may provide. The
bonds or notes may be sold by the Treasurer at public or private
sale, for the price or prices and on the terms and conditions as the
commission shall determine, after giving due consideration to the
recommendations of any company to be assisted from the proceeds of
the bonds or notes. Pending preparation of definitive bonds, the
Treasurer may issue interim receipts, certificates, or temporary
bonds that shall be exchanged for the definitive bonds. The Treasurer
may sell any bonds, notes, or other evidence of indebtedness at a
price below the par value thereof.
(d) Any resolution or resolutions authorizing any bonds or any
issue of bonds may contain provisions, which shall be a part of the
contract with the holders of the bonds to be authorized, as to the
following:
(1) Pledging the full faith and credit of the commission or
pledging all or any part of the revenues of any project or any
revenue-producing contract or contracts made by the commission with
any individual, partnership, corporation, or association or other
body, public or private, or other moneys of the commission, to secure
the payment of the bonds or of any particular issue of bonds,
subject to those agreements with bondholders as may then exist.
(2) The rentals, fees, purchase payments, loan repayments, and
other charges to be charged, and the amounts to be raised in each
year thereby, and the use and disposition of the revenues.
(3) The setting aside of reserves or sinking funds, and the
regulation and disposition thereof.
(4) Limitations on the right of the commission or its agent to
restrict or regulate the use of the project or projects to be
financed out of the proceeds of the bonds or any particular issue of
bonds.
(5) Limitations on the purpose to which the proceeds of the sale
of any issue of bonds then or thereafter to be issued may be applied,
and pledging those proceeds to secure the payment of the bonds or
any issue of the bonds.
(6) Limitations on the issuance of additional bonds, the terms
upon which additional bonds may be issued and secured, and the
refunding of outstanding bonds.
(7) The procedure, if any, by which the terms of any contract with
bondholders may be amended or abrogated, the amount of bond that the
holders of which are required to consent thereto, and the manner in
which the consent may be given.
(8) Limitations on expenditures for operating, administrative,
cost of issuance, or other expenses of the commission.
(9) Defining the acts or omissions to act that constitute a
default in the duties of the commission to holders of its
obligations, and providing the rights and remedies of the holders in
the event of a default.
(10) The mortgaging of any project and the site of the project for
the purpose of securing the bondholders.
(11) The mortgaging of land, improvements, or other assets owned
by a company for the purpose of securing the bondholders.
(12) Procedures for the selection of projects to be financed with
the proceeds of the bonds authorized by the resolution, if the bonds
are sold in advance of designation of the projects, and participating
parties to receive the financing.
(e) Neither the members of the commission, nor any person
executing the bonds or notes shall be liable personally on the bonds
or notes or be subject to any personal liability or accountability by
reason of the issuance thereof.
(f) The commission shall have the power out of any funds available
for these purposes to purchase its bonds or notes. The commission
may hold, pledge, cancel, or resell those bonds, subject to and in
accordance with agreements with the bondholders.
(g) Any funds of the commission, including without limitation,
proceeds from the sale of bonds or notes, may be invested in any
obligations of any state or local government meeting the requirements
of subsection (a) of Section 103 of the Internal Revenue Code of
1986 (26 U.S.C. Sec. 103(a)) including mutual funds, trusts, and
similar instruments representing a pool of obligations. The Treasurer
may adopt regulations providing appropriate investment standards for
those investments. If the Treasurer determines it to be necessary to
assure compliance with federal tax laws or regulations, the
commission may, notwithstanding any other law, deposit funds received
as fees from the issuance of its obligations with a bank or trust
company acting on behalf of the commission.
91559.1. In the discretion of the commission, any bonds issued
under the provisions of this article may be secured by a trust
agreement by and between the commission and a corporate trustee or
trustee, which may be the Treasurer or any trust company or bank
having the powers of a trust company within or without the state. The
trust agreement or the resolution providing for the issuance of the
bonds may pledge or assign the revenues to be received or proceeds of
any contract or contracts pledged and may convey or mortgage the
project or projects, or any portion thereof, to be financed out of
the proceeds of the bonds. The trust agreement or resolution
providing for the issuance of the bonds may contain provisions for
protecting and enforcing the rights and remedies of the bondholders
as may be reasonable and proper and not in violation of the law,
including particularly provisions that have been specifically
authorized in this article to be included in any resolution or
resolutions of the commission authorizing bonds thereof. Any bank or
trust company doing business under the laws of this state which may
act as depositary of the proceeds of bonds or of revenues or other
moneys may furnish indemnifying bonds or pledge securities as may be
required by the commission. Any trust agreement may set forth the
rights and remedies of the bondholders and of the trustee or
trustees, and may restrict the individual right of action by
bondholders. In addition to the foregoing, any trust agreement or
resolution may contain other provisions as the commission may deem
reasonable and proper for the security of the bondholders.
Notwithstanding any other provision of law, the Treasurer shall not
be deemed to have a conflict of interest by reason of acting as
trustee pursuant to this division. All expenses incurred in carrying
out the provisions of the trust agreement or resolution may be
treated as a part of the cost of the operation of a project.
91559.2. Bonds issued under the provisions of this article shall
not be deemed to constitute a debt or liability of the state or of
any political subdivision thereof, other than the commission, or a
pledge of the faith and credit of the state or of any political
subdivision, other than the commission, but shall be payable solely
from the funds herein provided therefor. All bonds shall contain on
the face thereof a statement to the effect: "Neither the faith and
credit nor the taxing power of the State of California is pledged to
the payment of the principal of or interest on this bond." The
issuance of bonds under the provisions of this article shall not
directly or indirectly or contingently obligate the state or any
political subdivision thereof to levy or to pledge any form of
taxation whatever therefor or to make any appropriation for their
payment. Nothing contained in this section shall prevent nor be
construed to prevent the commission from pledging its full faith and
credit to the payment of bonds or issue of bonds authorized pursuant
to this article.
91559.3. (a) The commission is authorized to issue bonds of the
commission for the purpose of refunding any bonds, notes, or
securities of the commission then outstanding, including the payment
of any redemption premium thereon and any interest accrued or to
accrue to the earliest or subsequent date of redemption, purchase, or
maturity of those bonds, and, if deemed advisable by the commission,
for the additional purpose of paying all or any part of the cost of
constructing and acquiring additions, improvements, extensions, or
enlargements of a project or any portion thereof.
(b) The proceeds of any bonds issued for the purpose of refunding
outstanding bonds, notes, or securities may, in the discretion of the
commission, be applied to the purchase, retirement at maturity, or
redemption prior to maturity, of any outstanding bonds either on
their earliest redemption date or dates, any subsequent redemption
date or dates, upon their purchase or maturity, or paid to a third
person to assume the commission's obligation to make the payments,
and may, pending that application, be placed in escrow to be applied
to the purchase, retirement at maturity, or redemption on the date or
dates determined by the commission.
(c) Any proceeds placed in escrow may, pending their use, be
invested and reinvested in obligations or securities authorized by
resolutions of the commission, payable or maturing at the time or
times as are appropriate to assure the prompt payment of the
principal, interest, and redemption premium, if any, of the
outstanding bonds to be refunded at maturity or redemption of the
bonds to be refunded either at their earliest redemption date or
dates or any subsequent redemption date or dates. The interest,
income, and profits, if any, earned or realized on any investment may
also be applied to the payment of the outstanding bonds to be
refunded or to the payment of interest on the refunding bonds. After
the terms of the escrow have been fully satisfied and carried out,
any balance of the proceeds and interest, income and profits, if any,
earned or realized on the investments thereof may be returned to the
commission for use by the commission.
(d) The portion of the proceeds of any bonds issued for the
additional purpose of paying all or any part of the cost of
constructing and acquiring additions, improvements, extensions, or
enlargements of a project may be invested and reinvested in
obligations or securities authorized by resolution of the commission,
maturing not later than the time or times when the proceeds will be
needed for the purpose of paying all or any part of the cost. The
interest, income, and profits, if any, earned or realized on the
investments may be applied to the payment of all or any part of the
cost or may be used by the commission in any lawful manner.
(e) All of those refunding bonds are subject to this article in
the same manner and to the same extent as other bonds issued pursuant
to this article.
91559.4. The State of California does pledge to and agree with the
holders of the bonds, notes, and other obligations issued pursuant to
this article, and with those parties who may enter into contracts
with the commission pursuant to the provisions of this article, that
the state will not limit, alter, or restrict the rights hereby vested
in the commission until the bonds, together with the interest
thereon, are fully paid and discharged and those contracts are fully
performed on the part of the commission. The commission as agent for
the state is authorized to include this pledge and undertaking for
the state in those bonds or contracts.
