SECTIONS 16940-16943 - California Statutes

GOVERNMENT CODE

SECTION 16940-16943

16940. This chapter shall be known and may be cited as the
California Pension Restructuring Bond Act of 2004.

16941. It is the intent of the Legislature, in enacting this
chapter, to provide for an efficient, equitable, and economical means
of satisfying certain pension obligations of the state. Bonds shall
be issued pursuant to this chapter only when the Director of Finance
determines that the state's pension obligations are anticipated to be
reduced as a result of changes in the Public Employees' Retirement
Law that reduce contributions to the Public Employees' Retirement
System, and it is in the best interest of the state to issue bonds
pursuant to this chapter to accelerate a portion of the state's
anticipated lower pension obligations.

16942. The Legislature hereby finds and declares that the state's
obligation to pay its pension obligations to the Public Employees'
Retirement System in the amounts established by the Board of
Administration of the Public Employees' Retirement System, cannot be
deferred by the state; that the state's pension obligations are due
and payable at predetermined times; and that the Controller is
required to pay those pension obligations when they are due. The
Legislature further finds that the state's pension obligations cannot
be included in an accumulated state budget deficit, as defined in
Section 1.3 of Article XVI of the California Constitution. Further,
the Legislature finds that its pension obligations are imposed by
law, and not subject to Section 1 of Article XVI of the California
Constitution and that the bonds authorized to be issued under this
chapter have the same character under the Constitution as the pension
obligations funded or refunded.

16943. Unless the context otherwise requires, the following
definitions shall govern the construction of this chapter:
(a) "Ancillary obligation" means the obligation of the state under
any credit enhancement or liquidity agreement, including any of the
following:
(1) An obligation in the form of bond insurance, a letter of
credit, standby bond purchase agreement, reimbursement agreement,
liquidity facility, or other similar arrangement.
(2) An obligation under any remarketing agreement, auction agent
agreement, broker-dealer agreement, or other agreement relating to
the marketing of the bonds, interest rate or other type of swap or
hedging contract.
(3) An obligation under any investment agreement, forward purchase
agreement, or similar structured investment contract, entered into
by the committee in connection with any bonds issued under this
chapter.
(b) "Bonds" means any bonds, notes, bond anticipation notes,
interim certificates, debentures, or other obligations or forms of
indebtedness issued pursuant to this chapter.
(c) "Committee" means the Pension Obligation Bond Committee
established pursuant to Section 16920.
(d) "Pension obligations" means the obligations of the state or
any state agency to the retirement system imposed by the retirement
laws in the amounts determined by the board of administration of the
retirement system.
(e) "Program" means the program established by this chapter under
which the committee shall issue bonds for the purpose of funding or
refunding pension obligations.
(f) "Retirement laws" means Section 17 of Article XVI of the
California Constitution and the Public Employees' Retirement Law
(Part 3 (commencing with Section 20000) of Division 5) and any other
laws providing for payment to be made by the state or any state
agency to the retirement system to provide retirement benefits to
employees of the state or any other individuals for which the state
has an obligation to pay all or a portion of the contributions to the
retirement system to ensure the payment of retirement benefits to
those individuals.
(g) "Retirement system" means the Public Employees' Retirement
System established pursuant to the Public Employees' Retirement Law
(Part 3 (commencing with Section 20000) of Division 5).