This article shall be known and may be cited as the Marks-Roos Local Bond Pooling Act of 1985.

The Legislature finds and declares all of the following:

All of the following definitions govern the construction and interpretation of this article:

as applied to a public capital improvement, a utility project, or portion of the improvement or utility project financed under this part, means all of the following:

lands to which the buildings or structures may be moved, and the cost of all machinery and equipment.

the feasibility of constructing any project or incidental to the construction or acquisition or financing of any public capital improvement or utility project.

electric revenue bonds or loans of a publicly owned utility that were issued to finance a utility project, whether at maturity, including acceleration of maturity upon an event of default, or upon redemption, including sinking fund redemption.

for rate reduction bonds or a contract, agreement, or other financial agreement entered into in connection with rate reduction bonds.

governing body of a local agency.

owned utility, on the electricity transmitted, generated, or distributed by the publicly owned utility, or on the water or wastewater pumped, acquired, supplied, or treated by the publicly owned utility.

owned and operated by a local agency or a department or other subdivision of a local agency and includes any successor to the powers and functions of the department or other subdivision.

following:

from any investment of any money in any fund or account established for the payment of principal or interest or premiums on bonds.

with vehicle license fees to a local agency pursuant to Section 10754.11 of the Revenue and Taxation Code.

It is the Legislature’s intent that this article be used to assist local agencies in financing public capital improvements, working capital, liability and other insurance needs, or projects whenever there are significant public benefits for taking that action. For the purposes of this article, “significant public benefits” means any of the following benefits to the citizens of the local agency:

located entirely within that city.

This article does not limit any other law authorizing, or providing for, the financing of public capital improvements. Likewise, this article does not limit any other law regarding local indebtedness, or limit the exercise of any other power of an authority created pursuant to this chapter. This article shall be deemed to provide a complete and supplemental method for exercising the powers authorized by this article, and shall be deemed as being supplemental to the powers conferred by other applicable laws. The issuance of bonds, financing, or refinancing under this article need not comply with the requirements of any other state laws applicable to the issuance of bonds, including, but not limited to, other articles of this chapter.

In addition to other powers specified in an agreement pursuant to Article 1 (commencing with Section 6500) and Article 2 (commencing with Section 6540), the authority may do any or all of the following:

delivered certificates of participation in a lease or installment sale agreement with any public or private entity, the authority, at its option, may issue or cause to be issued bonds, rather than certificates of participation, and enter into a loan agreement with the public or private entity.

improvement.

construction financing, or refinancing of public capital improvement, or any portion thereof or for the financing of working capital or insurance programs, or for the payment of the principal of and interest on bonds if the proceeds of those bonds are used for one or more of the purposes specified in this section.

indebtedness incurred by the local agency in connection with public capital improvements undertaken and completed.

rights to payment of any kind made by or to the authority pursuant to the authority granted in this part shall be valid and binding from the time the pledge is made for the benefit of the pledgees and successors thereto, against all parties irrespective of whether the parties have notice of the claim.

improvements, the authority may convey any or all of the project to the lessee or lessees.

any part thereof, on any loan, lease, or obligation or any instrument evidencing or securing the same, made or entered into pursuant to this article.

authorized by law for the investment of trust funds.

subject to a reduction of ad valorem property tax revenues required under Section 100.06 of the Revenue and Taxation Code pursuant to the suspension set forth in Section 100.05 of the Revenue and Taxation Code shall be afforded the opportunity to sell their Proposition 1A receivables to the authority.

their Proposition 1A receivables for sale to the authority and complete the application required by the authority.

pursuant to this subdivision, including the terms of optional early redemption provisions, if any, shall be approved by the Treasurer and the Director of Finance, who shall not unreasonably withhold their approval. The aggregate principal amount of all bonds issued pursuant to this subdivision shall not exceed two billion two hundred fifty million dollars ($2,250,000,000), and the rate of interest paid on those bonds shall not exceed 8 percent per annum. The authority shall exercise its best efforts to obtain the lowest cost financing possible. Any and all premium obtained shall be used for either of the following:

(ii) Section 10295 of the Public Contract Code.

(iii) Article 3 (commencing with Section 10300) and Article 4 (commencing with Section 10335) of, Chapter 2 of Part 2 of Division 2 of the Public Contract Code, except for the authority of the Department of

Finance under Section 10336 of the Public Contract Code to direct a state agency to transmit to it a contract for review, and except for Section 10348.5 of the Public Contract Code.

(C) Any costs incurred by the Treasurer in connection with any Proposition 1A financing shall be reimbursed out of the proceeds of the financing.

agency as necessary to establish and maintain the security of bonds issued by the authority for the purpose of purchasing the Proposition 1A receivables and, if applicable, the exclusion from gross income of interest on the bonds for federal income tax purposes. Any transfer of some or all of a Proposition 1A receivable by a local agency to the authority under this article that the governing documents state is a sale shall be treated as an absolute sale and transfer of the property so transferred to the authority and not as a pledge or grant of a security interest by the local agency to secure a borrowing. The characterization of the transfer of any Proposition 1A receivable as an absolute sale by the local agency shall not be negated or adversely affected by any of the following:

agency’s acquisition of an ownership interest in any residual interest or a subordinate interest in the Proposition 1A receivable.

Proposition 1A receivable shall automatically be perfected without the need for physical delivery, recordation, filing, or further act, and the provisions of Division 9 (commencing with Section 9101) of the Commercial Code and Sections 954.5 to 955.1, inclusive, of the Civil Code shall not apply to the sale. None of the Proposition 1A receivables sold by the local agency pursuant to this article shall be subject to garnishment, levy, execution, attachment, or other process, writ, including, but not limited to, a writ of mandate, or remedy in connection with the assertion or enforcement of any debt, claim, settlement, or judgment against the local agency. On or before the effective date of any sale of a Proposition 1A receivable, the local agency shall notify the Controller that the Proposition 1A receivable has been sold to the authority and irrevocably instruct the payer that, as of the effective date, payments on the Proposition 1A receivable so sold are to be made directly to the authority or any trustee

or agent appointed by the authority.

containing the name of the taxing agency and the final certified amount of the Proposition 1A receivable for each taxing agency.

utility are, or upon issuance would be, rated investment grade by a nationally recognized rating agency. In its application to an authority for the financing or refinancing, the local agency shall specify the utility project to be financed by the rate reduction bonds, the maximum principal amount, the maximum interest rate, and the maximum stated terms of the rate reduction bonds.

issuance under the provisions of this section. The

Capital Programs and Climate Financing Authority shall determine that an issue of rate reduction bonds is qualified for issuance under this section, if the issuance satisfies all of the following:

(ii) The projected financing costs fall within the normal range of financing costs for comparable types of debt issuance.

(B) The

Capital Programs and Climate Financing Authority shall determine that an issue of rate reduction bonds is qualified for issuance pursuant to subparagraph (A) solely on the basis of the submitted documentation referred to in subparagraph (A), and the determination shall not be conditional in any respect, including conditional on the submission or review of additional material after the determination.

Capital Programs and Climate Financing Authority for costs incurred in administering this section. The Capital Programs and Climate Financing Authority may charge additional fees in an amount equal to the amount of any additional expenses incurred by the authority in retaining an independent financial advisor to review the application under circumstances involving the verification of all requirements of this section. Any fees for review and processing of the application shall be nonrefundable.

and Climate Financing Authority shall take action on any completed application submitted to it pursuant to this section no later than the next meeting of the Capital Programs and Climate Financing Authority that occurs after at least 60 days following receipt of the application.

of that chapter, including Section 11349.6, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare.

Capital Programs and Climate Financing Authority shall require information from applicants to ensure that the necessary data is available to complete this report. The report may be submitted as a part of the report required pursuant to Section 44538 of the Health and Safety Code. The report shall include all of the following:

(ii) A listing of proposed issuances qualified under the provisions of this section.

(iii) A report of bonds sold, the interest rates on the bonds, whether the bond sales were pursuant to public bid or were negotiated, and any rating given the bonds by a nationally recognized securities rating organization.

(iv) A specification of proposed issuances qualified but not yet issued.

(B) A report to be submitted pursuant to this paragraph shall be submitted in compliance with Section 9795.

entity whose function is to provide public independent analysis of a public utility’s actions as they relate to water, wastewater, or electric rates.

the utility project in accordance with this section.

These benefits may include, but are not limited to, lower interest rates on rate reduction bonds and more favorable capitalization and debt service coverage ratio treatment that results in gross or present value lifetime savings for the publicly owned utility.

rate reduction bonds, the financing resolution adopted in connection with the issuance of rate reduction bonds shall be irrevocable. The financing resolution with respect to financing or refinancing a utility project or projects with rate reduction bonds for a publicly owned utility shall include all of the following:

(A) The addition of a separate charge to the bill of each customer of the publicly owned utility in the class or classes of customers specified in the financing resolution.

(B) A description of the financial calculation, formula, or other method that the authority is to use to determine the utility project charge. The calculation, formula, or other method shall include a periodic adjustment method to the then current utility project charge, to be applied at least

annually, that shall be used by the authority to correct for any overcollection or undercollection of financing costs from the utility project charge or any other adjustment necessary to ensure timely payment of the financing costs of the rate reduction bonds, including, but not limited to, the adjustment of the utility project charge to pay any debt service coverage requirement for the rate reduction bonds. The financial calculation, formula, or other method, including the periodic adjustment method, established in the financing resolution pursuant to this section, and the allocation of utility project charges to, and among, customers of the publicly owned utility shall be decided solely by the governing body of the authority and shall be final and conclusive. In no event shall the periodic adjustment method established in the financing resolution be applied less frequently than required by the

financing resolution and the documents relating to the applicable rate reduction bonds. Once the financial calculation, formula, or other method for determining the utility project charge, and the periodic adjustment method, have been established in the financing resolution and have become final and conclusive as provided in this section, they shall not be changed.

(C) Notwithstanding any other provision of this section, the imposition of a utility project charge shall comply with the requirements of Article XIII D of the California Constitution, to the extent applicable, including, but not limited to, the provision of a notice containing the initial amount of the proposed utility project charge and the periodic adjustment method by which the utility project charge amount could subsequently change.

(D) A requirement that the authority enter into a servicing agreement for the collection of the utility project charge with the local agency for which the financing is undertaken or its publicly owned utility and the local agency or its publicly owned utility shall act as a servicing agent for purposes of collecting the utility project charge as long as the servicing agreement remains in effect. Moneys collected by the local agency or its publicly owned utility, acting as a servicing agent on behalf of the authority, as a utility project charge shall be held in trust for the exclusive benefit of the persons entitled to the financing costs to be paid, directly or indirectly, from the utility project charge and shall not lose their character as revenues of the authority by virtue of possession by the local agency or its publicly owned utility. The

local agency or its publicly owned utility shall provide the authority with the information as to estimated sales of water, wastewater, or electrical services and any other information concerning the publicly owned utility required by the authority in connection with the initial establishment and the adjustment of the utility project charge.

authority shall require, in its financing resolution with respect to a utility project charge, that as long as a customer in the class or classes of customers specified in the financing resolution receive water or electricity or discharge wastewater through the facilities of the publicly owned utility, the customer shall pay the utility project charge regardless of whether or not the customer has an agreement to purchase water or electricity or discharge wastewater from a person or entity other than the publicly owned utility. The utility project charge shall be a nonbypassable charge to all customers of the publicly owned utility in the class or classes of customers specified in the financing resolution at the time of adoption of the financing resolution and all future customers in that class or classes. If a customer of the publicly owned utility that is subject to a utility project

charge enters into an agreement to purchase water or electricity or discharge wastewater from a person or entity other than the publicly owned utility, the customer shall remain liable for the payment of its share of the utility project charge as if it had not entered into the agreement. The liability may be discharged by the continued payment of its share of the utility project charge as it accrues or by a one-time payment, as determined by the authority. All provisions of a financing resolution adopted pursuant to this subdivision shall be binding on the authority.

and their publicly owned utilities is authorized to use its established collection policies and all rights and remedies provided by law to enforce payment and collection of the utility project charge. In no event shall a person liable for a utility project charge be entitled or authorized to withhold payment, in whole or in part, of the utility project charge for any reason.

to use to determine the utility project charge pursuant to the financing resolution expeditiously after the authority’s determination that the adjustment is required.

usage or wastewater discharge subject to the utility project charge, sufficient to pay on a timely basis the financing costs associated with the rate reduction bonds when due. The pledge of a utility project charge to secure the payment of rate reduction bonds shall be irrevocable, and the State of California, the authority, or any limited liability company acting pursuant to subdivision (j) shall not reduce, impair, or otherwise adjust the utility project charge, except that the authority shall implement the periodic adjustments to the utility project charge relating to rate reduction bonds as required by the applicable financing resolution and the documents relating to the rate reduction bonds. Revenue from a utility project charge shall be deemed special revenue of the authority and shall not constitute revenue of the local agency or its publicly owned utility for any purpose, including, without

limitation, any dedication, commitment, or pledge of revenue, receipts, or other income that the local agency or its publicly owned utility has made or will make for the security of any of its obligations.

required by this section and the servicing agreement with the local agency while the rate reduction bonds remain outstanding.

notice and final report for the rate reduction bonds submitted to the California Debt and Investment Advisory Commission pursuant to Section 8855 a statement that the rate reduction bonds are being issued pursuant to this section. An authority issuing rate reduction bonds shall include in its final report for the rate reduction bonds submitted to the California Debt and Investment Advisory Commission pursuant to Section 8855 the estimated savings or local agency benefit, if applicable pursuant to paragraph (4) of subdivision (c), realized by issuing the rate reduction bonds rather than bonds payable from the revenues of the publicly owned utility for whose benefit the rate reduction bonds were issued. Rate reduction bonds shall be nonrecourse to the credit or any assets of the local agency and the publicly owned utility for which the utility

project is financed and shall be payable from, and secured by a pledge of, the utility project property relating to the rate reduction bonds and any additional security or credit enhancement specified in the documents relating to the rate reduction bonds.

this section, a financing resolution, any other resolution of the authority, or the provisions of the documents relating to rate reduction bonds to the effect that the authority shall take action with respect to the utility project property relating to the rate reduction bonds shall be binding upon the authority, as its governing body may be constituted from time to time, and the authority shall have no power or right to rescind, alter, or amend any resolution or document containing the requirement.

applicable financing resolution or otherwise, to revalue or revise for ratemaking purposes the financing costs of rate reduction bonds, determine that the financing costs for the related rate reduction bonds or the utility project charge is unjust or unreasonable, or in any way reduce or impair the value of utility project property that includes the utility project charge, either directly or indirectly; nor shall the amount of revenues arising with respect to the financing costs for the related rate reduction bonds or the utility project charge be subject to reduction, impairment, postponement, or termination for any reason until all financing costs to be paid from the utility project charge are fully met and discharged. Except as otherwise provided in this section with respect to adjustments to a utility project charge, the State of California does hereby pledge and agree with the owners of rate reduction

bonds that the State of California shall neither limit nor alter the financing costs or the utility project property, including the utility project charge, relating to the rate reduction bonds, or any rights in, to, or under, the utility project property until all financing costs with respect to the rate reduction bonds are fully met and discharged. This section does not preclude limitation or alteration if and when adequate provision shall be made by law for the protection of the owners. The authority is authorized to include this pledge and undertaking by the State of California in the governing documents for rate reduction bonds. Notwithstanding any other provision of this section, the authority shall make the adjustments to the utility project charge relating to rate reduction bonds provided by this section and the documents related to those rate reduction bonds as may be necessary to ensure timely payment of

all financing costs with respect to the rate reduction bonds. The adjustments shall not impose the utility project charge upon classes of customers that were not subject to the utility project charge pursuant to the financing resolution imposing the utility project charge.

or credit enhancements in connection with rate reduction bonds. All the rate reduction bonds shall contain on the face thereof a statement to the following effect:

Neither the full faith and credit nor the taxing power of the State of California or any political subdivision thereof is pledged to the payment of the principal of, or interest on, this bond.

for contracts securing rate reduction bonds, whether or not the revenues and proceeds arising with respect thereto have accrued.

exist a first priority statutory lien on all utility project property, then existing or, thereafter arising, to secure the payment of the rate reduction bonds. This lien shall arise pursuant to law by operation of this section automatically without any action on the part of the authority, the local agency or its publicly owned utility, or any other person. This lien shall secure the payment of all financing costs, then existing or subsequently arising, to the holders of the rate reduction bonds, the trustee or representative for the holders of the rate reduction bonds, and any other entity specified in the financing resolution or the documents relating to the rate reduction bonds. This lien shall attach to the utility project property regardless of who shall own, or shall subsequently be determined to own, the utility project property including any local agency or its publicly owned utility, the authority,

or any other person. This lien shall be valid and enforceable against the owner of the utility project property and all third parties upon the effectiveness of the financing resolution without any further public notice.

by the local agency or its publicly owned utility, in payment of revenues arising with respect to the utility project property, any court in the state, upon the application by the beneficiaries of the statutory lien, and without limiting any other remedies available to the beneficiaries by reason of the default, shall order the sequestration and payment to the beneficiaries of revenues arising with respect to the utility project property.

the subject of any similar case or proceeding under any other law, whether federal or State of California, as long as any payment obligation from utility project property remains with respect to the rate reduction bonds.

agreement of the company in connection with the issuance of rate reduction bonds. Reference to the authority in this section and in all related defined terms shall mean or include the company as necessary to implement this

subdivision.

water by the local agency or its publicly owned utility.

priorities identified in the program guidelines of the CalConserve Water Use Efficiency Revolving Loan Program established pursuant to Division 30 (commencing with Section 81000) of the Water Code. An efficiency improvement shall not include living vegetation.

fee, administrative fee, bond counsel fee, bond placement or underwriting fee, remarketing fee, broker dealer fee, independent manager fee, municipal adviser fee, accounting report fee, engineering report fee, rating agency fee, and payment made under an interest rate swap agreement.

of the California Constitution in the Counties of Alameda, Contra Costa, Los Angeles, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma.

of the authority to operate the program.

(ii) Define the geographical scope of the operation of the program as an area that is limited to only the territories within which retail water service is provided by those local agencies that have expressly requested the authority to provide funding for the local agency’s customers through the program, in accordance with the requirements of paragraph (3).

(iii) Specify the types of efficiency improvements that may be financed by the program.

(iv) Approve a standardized servicing agreement.

(B) The authority acknowledges receipt of the resolution described in subparagraph (C) of paragraph (3).

(C) The authority may determine that all proceedings were valid and in conformity with the requirements of this paragraph and that finding shall be final and conclusive.

for a public hearing that shall be held at least 30 days later and directing the clerk or secretary of the legislative body to publish a notice of the hearing at least five days before the hearing in a newspaper of general circulation in the boundaries of the local agency. If the local agency wishes to pledge its water enterprise revenue as security for the payment of the principal of, and interest and redemption premium on, bonds issued by the authority in the event that efficiency charges are insufficient for those purposes pursuant to paragraph (5) of subdivision (f), the legislative body shall declare that intention in the resolution.

revenue, if applicable, would provide significant public benefits in accordance with the criteria specified in Section 6586.

(ii) Declares that the operation of the program by the authority in the local agency’s geographic boundaries would provide significant public benefits in accordance with the criteria specified in Section 6586.

(iii) Specifies the types of efficiency improvements that may be financed by the program.

(iv) Approves the standardized servicing agreement and authorizes one or more designated officials of the local agency to execute and deliver the servicing agreement with the authority.

(vi) If applicable, authorizes execution and delivery of one or more pledge agreements to evidence a pledge.

(vii) In the resolution, the legislative body may determine that all proceedings were valid and in conformity with the requirements of this section and that finding shall be

final and conclusive.

the period and in the amount specified in the agreement unless the efficiency charge is prepaid in the manner set forth in the agreement. The period designated for repayment shall not exceed the estimated useful life of the funded efficiency improvements.

being suspended until the efficiency improvement is repaired and returned to service.

the following information:

program requirements established by the authority.

complies with program requirements established by the authority, consistent with paragraph (5) of subdivision (b).

enforce payment and collection of the efficiency charge. A person liable for an efficiency charge shall not be entitled or authorized to withhold payment, in whole or in part, of the efficiency charge for any reason. If the property on which the efficiency improvement is located is sold or transferred to a subsequent customer, any portion of the efficiency charge that is past due and owing at the time of the sale or transfer shall not transfer to the transferee of the property. The failure of the prior customer to pay the efficiency charge shall not prevent the subsequent customer from obtaining water service from the local agency or its publicly owned utility.

the efficiency improvement is located until the efficiency charge related to the efficiency improvement has been repaid in full or the efficiency charge has been transferred to a subsequent customer who receives water service at a property with installed efficiency measures for the remainder of the obligation. Notwithstanding any other provision of this section, the efficiency charge shall not transfer to a subsequent customer, shall not continue to be associated with the meter at the property, and shall remain an obligation of the previous customer if the efficiency improvements were removed or damaged, and not restored to service, by the previous customer. A local agency or its publicly owned utility shall record, no later than 10 days after funding an efficiency improvement, a notice of efficiency charge

in the records of the county recorder of the county in which the customer’s property is located. A county recorder, upon recording a notice of efficiency charge, shall index the notice of efficiency charge in the general index by the name of the owner of the real property where the meter affected by the efficiency charge will be located. The notice shall include the address or legal description

of, the assessor’s parcel number of, and the name of the owner of, the real property where the meter affected by the efficiency charge will be located. The notice shall be entitled “NOTICE OF EFFICIENCY CHARGE” and shall comply with Section 27324. The notice shall contain contact information for the person or entity authorized to provide a prompt and accurate written statement of the outstanding charges and payoff amounts related to the efficiency charge for which the notice of efficiency charge was recorded. The recordation of the notice of efficiency charge shall be considered sufficient notice to a subsequent customer at a property with installed efficiency measures of the customer’s obligation

to pay the efficiency charge for installed measures.

authority not to repair and return to service a failed efficiency improvement when failure did not involve damage, removal, or other fault of the customer, the entity responsible for the collection and servicing of the charge shall record a notice of removal of the efficiency charge in the records of the county recorder of the county in which the customer’s property is located. The notice of the removal of the efficiency charge shall include a reference to the recorded notice of the efficiency charge.

this section are not taxes, assessments, fees, or charges for the purposes of Articles XIII C and XIII D of the California Constitution and therefore the provisions of Articles XIII C and XIII D and Article 4.6 (commencing with Section 53750) of Chapter 4 of Part 1 of Division 2 of Title 5 are not applicable to voluntary efficiency charges levied pursuant to this section.

agency, or utility responsible for the collection of the efficiency charges shall ensure that the contact information in the notice of efficiency charge recorded in the records of the county recorder pursuant to this section is accurate so that interested parties may request and promptly receive a written and accurate payoff amount or verification of the outstanding charges associated with the recorded notice of efficiency charge. Furthermore, the authority, local agency, or utility shall on each water bill issued to the customer include a contact number where the customer can obtain the amount of the monthly efficiency charge and a description of the efficiency improvement for which the efficiency charge has been incurred.

agent or entity responsible for the collection of the efficiency charge changes, a new notice of efficiency charge shall be recorded within 10 days.

pledge of the efficiency charge, and will account for and remit these amounts to, or for the account of, the authority.

enforce payment and collection of the efficiency charge.

efficiency improvement on customer property pursuant to this section.

pursuant to this section. Revenue from an efficiency charge shall be deemed special revenue of the authority and shall not constitute revenue of the local agency or its publicly owned utility for any purpose, including, but not limited to, any dedication, commitment, or pledge of revenue, receipts, or other income that the local agency or its publicly owned utility has made or will make for the security of any of its obligations.

principal of, and interest and redemption premium on, bonds issued by the authority if efficiency charges are insufficient for that purpose, and may execute one or more pledge agreements pursuant to Section 5451 for the benefit of the authority or for the exclusive benefit of the persons entitled to the financing costs to be paid from the efficiency charges.

its publicly owned utility, references in this section to the local agency or to its publicly owned utility shall be deemed to refer to the entity providing water utility services in lieu of the local agency and that entity shall assume and perform all obligations of the local agency or its publicly owned utility required by this section and the servicing agreement with the authority while the bonds remain outstanding.

program from customers and local agencies or their publicly owned utilities.

An authority may enter into a bond purchase agreement with a local agency or agencies. The bond purchase agreement shall specify the maximum rate of interest, the cost of issuance, the amount of required reserve, and the procedure to be used in case of default. Notwithstanding any other provision of law, local agencies may sell their bonds to the authority on a negotiated basis without compliance with any public sale requirement included in the statutes under which the bonds are issued.

The authority may, from time to time, issue its bonds in the principal amount as the authority determines necessary to provide sufficient funds for its purposes, which may include, but shall not be limited to, providing funds for bond purchase agreements, payment of the purchase price of VLF receivables, payment of the purchase price of Proposition 1A receivables, financing utility projects, payment of interest on bonds of the authority, establishment of reserves to secure the bonds, and other expenditures of the authority incident to issuance of the bonds. The authority may also issue bonds for the purpose of making loans to local agencies, to the extent those local agencies are authorized by law to borrow moneys, or to purchase VLF receivables from local agencies as

provided in Section 6588.5, or to purchase Proposition 1A receivables as provided in Section 6588.6, and the loan or sale proceeds shall be used by the local agencies to pay for public capital improvements, working capital, or insurance programs. The aggregate principal amount of all bonds issued pursuant to this section that are backed by Proposition 1A receivables shall not exceed two billion two hundred fifty million dollars ($2,250,000,000), and that issuance shall be approved by the Department of Finance and the Treasurer.

In the case of any authority in existence on January 1, 1988, no loans shall be made to local agencies for working capital or insurance, unless that purpose is first approved by resolution of the governing body of the authority by unanimous vote of all members of the governing body.

shall be general obligations of the authority payable from any revenues or moneys of the authority available therefor and not otherwise pledged. These revenues or moneys may include the proceeds of additional bonds, subject only to any agreements with the holders of particular bonds pledging any particular revenues or moneys. Notwithstanding that the bonds may be payable from a special fund, these bonds shall be deemed to be negotiable instruments for all purposes, subject only to the bond registration provisions.

(A) Bear the date of issuance.

(B) Bear the time of maturity, not exceeding 50 years from their date of issuance.

(C) Bear the rate of interest, either fixed or variable, and, if variable, not in excess of the maximum rate of interest specified therein.

(D) Be payable as to principal and interest at the time or times provided.

(E) Be in the denominations and in the form provided.

(F) Carry the registration privileges provided.

(G) Be executed in the manner provided.

(H) Be payable in lawful money of the United States at the place or places provided within or without the state.

(I) Be subject to the terms of redemption provided.

thereof, subject to the approval of the Department of Finance and the State Treasurer pursuant to subdivision (x) of Section 6588.

the bonds backed by Proposition 1A receivables and shall include those terms and conditions approved by the Treasurer and the Department of Finance.

Any resolution authorizing any bonds or any issue of bonds may contain the following provisions, which shall be a part of the contract with the holders of the bonds to be authorized:

bondholders as may then exist.

A resolution authorizing bonds or any issuance of bonds or accepting the benefit of any bonds or the proceeds of bonds shall be adopted by an authority only during a regular meeting held pursuant to Section 54954.

No member of the governing body of the authority shall be personally liable on the bonds or be subject to any personal liability or accountability by reason of the issuance of bonds.

The authority may, out of any funds available therefor, purchase its bonds. The authority may hold, pledge, cancel, or resell the bonds, subject to, and in accordance with, agreements with bondholders.

Any bonds issued under this article may be secured by a trust agreement between the authority and a corporate trustee or trustees, which may include any trust company or bank having the powers of a trust company within or without the state.

Bonds issued by the authority are legal investments for all trust funds, the funds of all insurance companies, banks, both commercial and savings, trust companies, executors, administrators, trustees, and other fiduciaries, for state school funds, and for any funds which may be invested in county, municipal, or school district bonds. These bonds are securities which may legally be deposited with, and received by, any state or municipal officer or agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now, or may hereafter be, authorized by law, including deposits to secure public funds. This authorization applies only to the extent that there exists evidence of indebtedness or debt securities of the participating party receiving financing through the issuance of these bonds which qualify for, or are eligible for, these purposes and uses.

The State of California does hereby pledge to, and agrees with, the holders of any bonds issued under this article, and with those parties who may enter into contracts with the authority pursuant to this article, that the state will not limit or alter the rights hereby vested in the authority to finance any public capital improvement and to fulfill the terms of any loan agreement, lease, or other contract with the authority pursuant to this part, or in any way impair the rights or remedies of the bonds or of the parties until those bonds, together with the interest thereon, are fully met and discharged and those contracts are fully performed on the part of the authority. However, nothing in this section precludes this limitation or alteration if and when adequate provision has been made by law for the protection of the holders of those bonds of the authority or those entering into those contracts with the authority.

All public capital improvements financed by the authority shall pay interest within a reasonable time after the authority receives revenues or proceeds from bonds as provided under this article.

All public capital improvements financed by the authority shall be constructed or completed subject to the rules and regulations of the authority. When the principal of, and interest on, bonds of the authority issued to finance the cost of a particular public capital improvement, including any refunding bonds issued to refund and refinance all, or any part, of these bonds, have been fully paid and retired, or when adequate provisions have been made for their payment and retirement and all other conditions of any resolution, lease, indenture, mortgage or deed of trust, security interest, or any other instrument authorizing and securing the bonds have been satisfied, and any lien created has been released in accordance with the provisions thereof, the authority is authorized, upon the terms and conditions it prescribes, to execute releases, release deeds, reassignments, deeds, and conveyances and to do all things necessary or required to convey or release its rights, title, and interest in the public capital improvement financed and in any other instruments pledged or transferred to secure bonds to local agencies, as their respective interests may appear.

Interest earned on any bonds issued by the authority shall at all times be free from state personal income tax and corporate income tax.

Local agencies may request advice from the California Debt and Investment Advisory Commission pursuant to Section 8859 regarding the formation of local bond pooling authorities and the planning, preparing, insuring, marketing, and selling of bonds as authorized pursuant to this article.

Notwithstanding Sections 863 and 869 of the Code of Civil Procedure, the Attorney General or the Treasurer may jointly or separately file an action pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure at any time up to 55 days after notice required by Section 6586.7 is mailed by certified mail to the Sacramento offices of both the Attorney General and the Treasurer.

Notwithstanding any other provision of law, an action may be brought under Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure, to determine the validity of any bonds issued under this article to finance the purchase of bonds for local agencies, the financing of public capital improvements or utility projects, or the purchase of VLF receivables pursuant to Section 6588.5 or Proposition 1A receivables pursuant to Section 6588.6 and any contracts of sale of VLF receivables or Proposition 1A receivables or utility project property entered into by any local agency, and any related documents. If an action is commenced, the action shall be brought in the jurisdiction in which the authority maintains its principal office and is not

required to be brought in the jurisdiction or jurisdictions of any of the local agencies. However, publication of summons, as provided in Section 861 of the Code of Civil Procedure, shall be made in the county in which the authority maintains its principal office and in each county in which any local agency that has sold bonds to the authority, for which a public capital improvement is being financed or that has entered into a sales agreement for a VLF receivable or a Proposition 1A receivable where the authority is located.

Pursuant to Section 6 of Article XVI of the California Constitution, local agencies may enter into a joint pooling agreement to form a single statewide insurance pooling arrangement administered by a single statewide agency for the payment of tort liability or public liability losses incurred by such agencies. The agency shall be known as the Local Agency Self-Insurance Authority.

As used in this chapter:

In addition to the powers specified in Chapter 5 (commencing with Section 6500), the authority may issue revenue bonds or certificates of participation, or both, to establish capital, surplus, and prudent reserves, and may secure payment of the bonds and interest by pledging all or part of its revenues from the receipt of premiums.

Except as otherwise provided in this chapter, Chapter 5 (commencing with Section 6500) applies to the authority.

The authority is not a state agency and has no power at any time or in any manner to pledge the credit of the state.

The authority shall be organized and administered by a board of directors. The original board shall be constituted and selected as follows:

There shall not be any liability in an individual or private capacity on the part of the board of directors or any member of the board, or any officer or employee of the authority for or on account of any act performed or obligation entered into in an official capacity, when done in good faith, without intent to defraud and in connection with the administration, management, or conduct of the authority or affairs relating to it. Members of the board and employees and officers of the authority are public employees for purposes of Division 3.6 (commencing with Section 810) of Title 1.

The authority shall be operated on an actuarially sound basis and become neither more nor less than self-supporting. For that purpose, loss experience and expense shall be ascertained and credits, refunds, and assessments may be made as determined appropriate by the board. The authority shall have the powers and duties set forth in this chapter and the powers and duties given it by its agreement. The original board may enter into the original joint powers agreement creating and governing the authority, which shall be made subject to subsequent modification and termination by the members of the authority.

The board shall do all of the following:

All those local agencies that request membership in the authority and meet the standards established by the authority pursuant to Section 6599.09, for entry into and continued participation in the authority may become members of the authority. If the authority determines that a local agency requesting membership meets the underwriting standards of the authority, the authority, upon receipt of the premium prescribed by the authority, shall admit the requesting local agency to membership. No local agency may be denied membership unless the board determines the agency cannot be actuarially safely underwritten. Premiums shall be based upon all appropriate actuarial data, including, but not limited to, claims and loss experience of applicant member agencies. Local agencies may request membership individually or through insurance joint powers authorities.

The authority may only cover risks to the extent that liability on any one occurrence exceeds one million dollars ($1,000,000), and may not provide coverage for any amount of liability on any one occurrence which exceeds twenty-five million dollars ($25,000,000).

The authority may establish limits on coverage for a member or category of members, but those limits may neither be less than the minimum nor more than the maximum limits established by Section 6599.21.

A local agency requesting membership from the authority may request coverage in any sum, so long as the coverage requested is neither less than the minimum nor more than the maximum limits established by Section 6599.21.