As used in this article:

The Legislature, by the enactment of this article, intends the county and cities therein to use any additional funds provided them by this article to supplement existing local revenues being used for public transportation purposes. The county and the cities therein are further encouraged to maintain their existing commitment of local funds for public transportation purposes.

A retail transactions and use tax ordinance applicable in the incorporated and unincorporated territory of the county may be adopted by the commission in accordance with Section 130410 and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, if two-thirds of the electors voting on the measure vote to approve its imposition at a special election called for that purpose by the commission and an expenditure plan is adopted pursuant to Section 130406.

The commission, in the ordinance, shall state the nature of the tax to be imposed, shall provide the tax rate or rates or the maximum tax rate or rates, and shall specify the purposes for which the revenue derived from the tax will be used.

The revenues from the taxes imposed pursuant to this article may be allocated by the commission for public transportation purposes, including, but not limited to, construction, maintenance, and operation of streets, roads, and highways, and the construction and maintenance of public transit systems, including exclusive public mass transit guideway systems, available now or hereafter. The revenues may also be used for improvements to the state highway system in the manner otherwise provided by law. However, the revenues shall not be allocated for transit operations.

operators within the county.

population residing in incorporated areas of the county. Before adoption of an expenditure plan, the commission shall also conduct public hearings on that plan.

notice is given pursuant to subdivision (b) except as follows:

supervisors, or city councils representing 25 percent of the cities in the county, adopt a resolution protesting the proposed amendments. If protested, the proposed amendments shall become effective only if the commission follows the approval procedure in subdivision (d) of Section 130406.

The expenditure plan adopted pursuant to Section 130406, and any amendment adopted pursuant to Section 130407, shall include a provision for an annual allocation of funds to the county and the cities therein for public transportation purposes.

In making annual allocations to the county and the cities therein, the commission may allocate the proceeds of any limited tax bonds authorized by the voters pursuant to Section 130412.

An amended expenditure plan adopted pursuant to Section 130407 may include a provision to reduce a tax rate to percentages lower than that approved by the voters and may further provide for an increase of the tax rate if it has previously been lowered; but the tax rate may not be increased to a rate above the tax rate approved by the voters. Any revised tax rate may be adopted only if the commission determines, by a two-thirds vote, that the proceeds of the taxes with the altered tax rate will be sufficient to provide for the payment of principal and interest of any limited tax bonds and any other indebtedness incurred by the commission which was to be

payable from the proceeds of the retail transactions and use tax.

If a retail transactions and use tax is adopted pursuant to this article, the commission shall prepare and submit a report to the Department of Transportation, to the board of supervisors, to the city council of each city in the county, and to each public transit operator within the county on or before January 1 of the year following the end of the first full fiscal year after the date that the taxes are imposed pursuant to this article and annually thereafter. The report shall evaluate, and report the progress made in, the implementation of the expenditure plan in the preceding fiscal year.

voting.

The commission may, as part of the same ballot proposition to approve the imposition of a retail transactions and use tax, seek authorization to issue bonds payable solely from the proceeds of the retail transactions and use tax. The maximum bonded indebtedness which may be authorized shall be an amount equal to the sum of the principal and interest on the bonds not to exceed the estimated proceeds of the retail transactions and use tax for a period of 30 years. The actual wording of the proposition on any short form of ballot card, label, or other device, regardless of the system of voting used, shall read as follows:

The commission may further, as part of the same proposition, submit to the voters a proposal to increase any appropriations limits heretofore imposed upon the commission by the amount of the proceeds of the sales tax not entitled to an exemption from those limits as debt service. In this case, the ballot proposition shall, in addition to the language set forth in Sections 130411 and 130412, further include the following words: “and increases the appropriations limit.”

the bonds.

issuance of bonds shall state all of the following:

issued, shall run before maturity, which shall not exceed 31 years from the date thereof or the date of each series thereof.

article or any other law.

maturity unless it contains a recital to that effect or unless a statement to that effect is printed thereon.

manually affixed. If any officer whose signature appears on bonds or coupons ceases to be such an officer before the delivery of the bonds, the officer’s signature is as effective as if the officer had remained in office.

satisfactory as to price or responsibility of the bidders, the commission may reject all bids received, if any, and either readvertise or sell the bonds at private sale.

Delivery of any bonds may be made at any place either inside or outside the state, and the purchase price may be received in cash or bank credits.

All accrued interest and premiums received on the sale of bonds shall be placed in the fund to be used for the payment of principal of and interest on the bonds and the remainder of the proceeds of the bonds shall be placed in the treasury of the commission and applied to secure the bonds or for the purposes for which the debt was incurred; provided, however, that when the purposes have been accomplished, any moneys remaining shall be either (a) transferred to the fund to be used for the payment of principal of and interest on the bonds or (b) placed in a fund to be used for the purchase of outstanding bonds of the commission from time to time in the open

market at such prices and in such manner, either at public or private sale or otherwise, as the commission may determine. Bonds so purchased shall be canceled immediately.

refunded out of the proceeds of the sale of the refunding bonds, or to the date upon which the bonds to be refunded will be paid pursuant to call or agreement with the holders of such bonds or (b) the interest upon the bonds to be refunded from the date of sale of the refunding bonds to the date of payment of the bonds to be refunded or to the date upon which the bonds to be refunded will be paid pursuant to call or agreement with the holders of the bonds.

available therefor, including the revenues from the retail transactions and use taxes imposed pursuant to this article. If not previously otherwise paid, the bond anticipation notes, or any portion thereof, or the interest thereon, shall be paid from the proceeds of the next sale of the bonds of the commission in anticipation of which the notes were issued.

conditions, or limitations which a resolution of the commission authorizing the issuance of bonds may contain.

Any bonds which shall be issued under the provisions of this article shall be legal investment for all trust funds; for the funds of insurance companies, commercial and savings banks, and trust companies; and for state school funds; and whenever any money or funds may, by any law now or hereafter enacted, be invested in bonds of cities, cities and counties, counties, school districts, or other districts within the state, that money or funds may be invested in the bonds issued under this article, and whenever bonds of cities, cities and counties, counties, school districts, or other districts within this state may, by any law now or hereafter enacted, be used

as security for the performance of any act or the deposit of any public moneys, the bonds issued under this article may be so used. The provisions of this article shall be in addition to all other laws relating to legal investments and shall be controlling as the latest expression of the Legislature with respect thereto.

Any action or proceeding wherein the validity of the adoption of the retail transactions and use tax ordinance provided for in this article or the issuance of any bonds thereunder or any of the proceedings in relation thereto is contested, questioned, or denied, shall be commenced within six months from the date of the election at which the ordinance is approved; otherwise, the bonds and all proceedings in relation thereto, including the adoption and approval of the ordinance, shall be held to be valid and in every respect legal and incontestable.

If the measure to adopt the transaction and use tax pursuant to Section 130401 is not submitted to the electors on or before December 31, 1985, then this article shall remain in effect only until January 1, 1986, and as of that date is repealed unless a later enacted statute, which is chaptered before January 1, 1986, repeals or extends that date.