SECTIONS 53530-53534 - California Statutes

GOVERNMENT CODE

SECTION 53530-53534

53530. As used in this article:
(a) "Local agency" means county, city, city and county, public
district, public entity or authority, or other public or municipal
corporation, including redevelopment agencies, housing authorities,
and industrial development authorities.
(b) "Bonds" means bonds, warrants, notes or other evidences of
indebtedness of a local agency or zone or improvement district
thereof.

53531. Any provision of law specifying the maximum interest rate on
bonds to the contrary notwithstanding, bonds may bear interest at a
coupon rate or rates as determined by the legislative body in its
discretion but not to exceed 12 percent per year payable as permitted
by law, unless some higher rate is permitted by law.

53531.1. (a) The Legislature hereby finds and declares that, in
enacting and amending Sections 53530 and 53531, the intent has been,
and continues to be, to provide general authority to local agencies
to issue bonds bearing interest at the coupon rate specified in
Section 53531, as amended from time to time. This general authority
is intended to be in addition to, and not limited by, specific
provisions authorizing bonds of particular local agencies. Due to the
general application of Section 53531, it has been unnecessary to
amend the numerous statutes which contain their own specific maximum
interest rates. This section contains the intent of the Legislature
in previously enacting and amending Sections 53530 and 53531 and does
not affect Section 53532 or 53533. This section does not constitute
a change in, but is declaratory of, the existing law in effect since
1969.
(b) All bonds of any local agency issued prior to the effective
date of this section, and bearing interest at coupon rates within the
maximum rate specified in Section 53531, as in effect at the time of
issuance, are legal, valid, and binding obligations of the local
agency.
(c) The authority provided to all local agencies in Section 53531
to issue bonds bearing interest at a coupon rate in accordance with
that section is in addition to, and not limited by, any power or
limitation made applicable to local agencies by any other law enacted
before or on or after the effective date of this section, unless the
other law specifically provides otherwise.

53532. The provisions of Section 53531 shall apply only to coupon
rates and shall not affect the power of a local agency to sell bonds
at a discount below par if permitted by law. Any provision of law
permitting bonds to be sold at a discount but specifying a maximum
interest yield on bonds sold at a discount to the contrary
notwithstanding, the bonds may be sold at a price yielding to the
purchaser an effective interest rate of not to exceed 12 percent per
year, payable as permitted by law, according to standard tables of
bond values.

53533. Notwithstanding Section 53531 or any other provision of law
establishing limitations on the rate of interest of any indebtedness
or obligation of a city, county, or city and county the rate of
interest on any indebtedness or obligation thereof which is payable
to the federal government or any agency or instrumentality thereof or
any indebtedness or obligation guaranteed by the federal government
or any instrumentality thereof may be at a rate higher than the
limitations established in any other law if such rate is the rate
established by the federal government or any instrumentality thereof.
Any such indebtedness or obligation shall be in such form and
denomination, have such maturity, and be subject to such conditions
as may be prescribed by the federal government or agency or
instrumentality thereof.

53534. Any provision of law to the contrary notwithstanding, a
city, county, or city and county may enter into contracts commonly
known as "interest rate swap agreements" or "forward payment
conversion agreements" with any person providing for the exchange of
payments between the person and the city, county, or city and county,
including, without limitation, contracts providing for the exchange
of fixed interest payments for floating payments or floating interest
payments for fixed payments, or a combination thereof. The contracts
may be made upon the terms and conditions established by the
legislative body of the city, county, or city and county. The
authority conferred by this section includes the authority to enter
into any and all contracts incident to the exercise of the authority
conferred by this section including, without limitation, contracts to
obtain credit enhancement devices and contracts for the performance
of professional services. However, these contracts may be made only
if all securities or bonds included in the contracts are rated in one
of the three highest rating categories by two nationally recognized
rating agencies selected by the legislative body of the city, county,
or city and county, and if there has been receipt, from any rating
agency rating the bonds, of written evidence that the contract will
not adversely affect the rating.