SECTIONS 54400-54435 - California Statutes

GOVERNMENT CODE

SECTION 54400-54435

54400. The legislative body may determine and provide in the
resolution for:
(a) The number of series in which the bonds are to be issued.
(b) The date the bonds are to bear.
(c) The maturity dates of the bonds, not exceeding forty years
from their respective dates.

54401. If the legislative body divides any issue of bonds into
series, it may prescribe, and state in the resolution, different
dates for the bonds of each series. The maximum maturity date of each
series shall be calculated from the date on the face of each bond
separately.

54402. The legislative body may determine and provide in the
resolution for:
(a) The issuance of any bonds or a series in the form of serial
bonds or sinking fund bonds with serial or term maturities.
(b) The interest of the bonds either fixed or variable, the rate
or rates, payable at the times and in the manner specified therein.
Under no conditions may the annual fixed or variable interest rate
exceed the maximum rate specified in Section 53531 of the Government
Code.
(c) The denomination of the bonds.
(d) The form of the bonds, coupon, registered, or book entry.
(e) The registration and conversion privileges of the bonds.
(f) The manner in which the bonds are to be executed.
(g) The medium and place of payment.
(h) The terms of redemption, with or without a premium.

54403. Any premium payable on the bonds shall be in the amount or
amounts specified by the legislative body.

54404. The bonds are not subject to call or redemption prior to
their fixed maturity date unless the right to exercise a call is
expressly stated on the face of the bonds.

54405. The resolution may provide the terms and conditions upon
which the bonds may be declared or become due and payable upon
specified defaults.

54406. The resolution may provide for the replacement of mutilated,
destroyed, stolen, or lost bonds.

54407. By resolution, the legislative body may provide the manner
for authenticating the bonds and other terms to be contained in the
bonds.

54408. Pending the preparation of the definitive bonds, interim
receipts or temporary bonds, exchangeable for definitive bonds may be
issued in the form and with the provisions the legislative body
determines.

54409. In the absence of an express recital on its face that the
bond or interim receipt is nonnegotiable, the bond or interim receipt
is a negotiable instrument.

54410. In determining the amount of bonds to be issued, the
legislative body may include:
(a) All costs and estimated costs incidental to or connected with
the acquisition, construction, improving or financing of the
enterprise.
(b) All engineering, inspection, legal and fiscal agent's fees,
costs of the bond election and of the issuance of said revenue bonds,
bond reserve funds and working capital and bond interest estimated
to accrue during the construction period and for a period of not to
exceed twelve months after completion of construction.

54411. Bonds bearing the signature of officers of the local agency
in office on the date of the signing are valid, notwithstanding that
before delivery the persons signing have ceased to be officers.

54412. The validity of the authorization and issuance of the bonds
is not affected by proceedings for the acquisition, construction, or
improving of the enterprise or by contracts in connection therewith.

54413. Any resolution authorizing bonds may provide that the bonds
may recite that it is issued pursuant to this chapter and bonds
containing such recital are conclusively deemed valid and issued in
conformity with this chapter.

54414. Reference on the face of the bonds to the resolution by its
date of adoption incorporates the provisions of the resolution and of
this chapter into the bonds and their coupons.

54415. Each taker and subsequent holder of the bonds and attached
or detached coupons has recourse to all of the provisions of the
resolution and of this chapter and is bound by their terms.

54416. The legislative body may issue and sell the bonds in the
manner it determines.

54417. The legislative body may sell the bonds in installments at
different times or as an entire series of bonds at one time.

54418. The legislative body may sell the bonds at a price above or
below par in a manner, at public or private sale, as it determines by
resolution. If the legislative body decides to sell the bonds at
private sale rather than public sale, the local agency shall send a
written statement to the California Debt Advisory Commission, no
later than two weeks after the sale of the bonds, explaining the
reasons for that decision.

54419. The sale price of all bonds sold shall include the interest
accrued to the date of delivery of and payment for the bonds.

54420. The bonds are special obligations of the local agency and
are secured by a pledge of and shall be a charge upon, and shall be
payable, as to the principal thereof, interest thereon, and any
premiums upon the redemption of any thereof, solely from and secured
by a lien upon the gross revenues of the enterprise and such funds as
are described in the resolution authorizing the issuance of the
bonds.

54421. By resolution the legislative body may pledge, place a
charge upon, and assign all or any part of the gross revenues of the
enterprise and of any and all funds referred to in Section 54478 for
the security of the bonds. The gross revenues of the enterprise
include revenues of improvements and extensions later constructed or
acquired and revenues of existing systems, plants, works, or
undertakings to be improved or extended or for the improvement or
extension of which the bonds are to be issued.

54422. The payment of interest on and principal of the bonds and
any premiums upon the redemption of any thereof are secured by a
pledge, charge, and lien upon the revenues of the enterprise and upon
such other funds as shall be specified in the resolution authorizing
the issuance of the bonds.

54423. The revenues and any interest earned on the revenues and all
other funds specified in the resolution authorizing the issuance of
the bonds constitute a trust fund for the security and payment of the
interest on and principal of the bonds.

54424. So long as any bonds or interest thereon are unpaid the
revenues and interest thereon shall not be used for any other
purpose, except as provided in Sections 54425 and 54426.

54425. If the interest and principal of the bonds and all charges
to protect or secure them are paid when due an amount for the
necessary and reasonable maintenance and operation costs of the
enterprise, which costs include the reasonable expenses of
management, repair and other expenses necessary to maintain and
preserve the enterprise in good repair and working order, may be
apportioned from the revenues, and subject to any limiting covenants
in the resolution providing for the issuance of bonds, the remaining
surplus may be used for any lawful purpose of the local agency.

54426. In its discretion the legislative body may provide in the
resolution providing for the issuance of the bonds that, the
principal, interest, and sums for other security funds shall be paid
from the revenues prior to paying the maintenance and operation costs
of the enterprise.

54427. Bonds of the same issue shall be equally secured by a
pledge, charge, and lien upon the revenues of the enterprise and all
other funds specified in the resolution authorizing the issuance of
the bonds, without priority for number, date of bonds, of sale, of
execution, or of delivery pursuant to this chapter and the resolution
authorizing the issuance of the bonds; except that any local agency
may authorize the issuance of bonds of different series and may
provide that the bonds in any series shall, to the extent and in the
manner prescribed in the resolution, be subordinated and be junior in
standing, with respect to the payment of principal and interest and
the security thereof, to such other bonds as may be specified in the
resolution.

54428. The general fund of the local agency is not liable for the
payment of the bonds or their interest.

54429. The credit or taxing power of the local agency is not
pledged for the payment of the bonds or their interest.

54430. The holder of the bonds or coupons shall not compel the
exercise of the taxing power by the local agency or the forfeiture of
its property.

54431. The principal of and interest on the bonds and any premiums
upon the redemption of any thereof are not a debt of the local
agency, nor a legal or equitable pledge, charge, lien, or
encumbrance, upon any of its property, or upon any of its income,
receipts, or revenues except the revenues of the enterprise and other
funds that may be legally applied, pledged, or otherwise made
available to their payment.

54432. Every bond shall recite in substance that the principal of
and interest on the bond are payable solely from the revenues and
other funds pledged or otherwise made available to its payment and
that the local agency is not obligated to pay it except from the
revenues of the enterprise and from such other funds.

54435. The bonds and interest or income from the bonds are exempt
from taxation in this State, except from gift, inheritance, and
estate taxes.