SECTIONS 53998-53999 - California Statutes

GOVERNMENT CODE

SECTION 53998-53999

53998. For purposes of this chapter, "Proposition 1A receivable"
means the right to payment of moneys due or to become due to a local
agency pursuant to clause (iii) of subparagraph (B) of paragraph (1)
of subdivision (a) of Section 25.5 of Article XIII of the California
Constitution and Section 100.06 of the Revenue and Taxation Code.

53999. (a) (1) Notwithstanding any other law, a local agency may
sell Proposition 1A receivables that have not been sold pursuant to
subdivision (b) of Section 6588.6 to a special fund of the local
agency or another local agency, and enter into one or more sales
agreements with the purchaser of the Proposition 1A receivable on the
terms the local agency deems appropriate.
(2) Except for Proposition 1A receivables created as a result of
reallocations pursuant to paragraph (2) of subdivision (b) of Section
100.06 of the Revenue and Taxation Code, a local agency shall
complete a sale made pursuant to this section on or before November
2, 2009.
(b) (1) A local agency may make no more than five sales of its
Proposition 1A receivables pursuant to this section.
(2) A transfer of some or all of a Proposition 1A receivable by a
local agency to a purchaser of the receivable under this section is a
sale and shall be treated as an absolute sale and transfer of the
property so transferred and not as a pledge or grant of a security
interest by the local agency to secure a borrowing.
(3) The characterization of the transfer of a Proposition 1A
receivable as an absolute sale by a local agency shall not be negated
or adversely affected by any of the following:
(A) The fact that only a portion of the Proposition 1A receivable
is transferred.
(B) By the local agency's acquisition of an ownership interest in
any residual interest or a subordinate interest in the Proposition 1A
receivable.
(C) By any characterization of the purchaser for purposes of
accounting, taxation, or securities regulation.
(D) By any other factor.
(c) (1) On and after the effective date of each transfer of a
Proposition 1A receivable pursuant to this section that the governing
documents state is a sale, the local agency shall have no right,
title, or interest in or to the Proposition 1A receivable so
transferred.
(2) A Proposition 1A receivable transferred pursuant to this
subdivision shall be the property of the purchaser and not of the
local agency, and shall be owned, received, held, and disbursed only
by the purchaser or any trustee or agent of the purchaser.
(3) A sale of some or all of any 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.
(4) A Proposition 1A receivable sold by the local agency pursuant
to this chapter shall not 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.
(d) 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 purchaser and
irrevocably instruct the Controller that, as of the effective date,
payments on the Proposition 1A receivable so sold are to be made
directly to the purchaser or any trustee or agent appointed by the
purchaser.