SECTIONS 5450-5452 - California Statutes

GOVERNMENT CODE

SECTION 5450-5452

5450. (a) "Bonds" means any bonds, notes, bond anticipation notes,
commercial paper, or other evidences of indebtedness, or lease,
installment purchase, or other agreements, or certificates of
participation therein, that are not issued pursuant to statutory
authority containing a provision governing the perfection and
priority of pledges of collateral unless the provision provides that
this chapter shall govern.
(b) "Collateral" means any revenues, moneys, accounts receivable,
contractual rights to payment, and other rights to payment of
whatever kind, subject to the pledge provided for or created in a
pledge document.
(c) "Pledge document" means the resolution, ordinance, indenture,
trust agreement, loan agreement, lease, installment sale agreement,
reimbursement or similar agreement with any provider of credit
enhancement for bonds, pledge agreement, or similar agreement in
which the pledge is provided for or created.
(d) "Pledge" means, and as used in any pledge document shall be
deemed to create, a grant of a lien on and a security interest in and
pledge of the collateral referred to in a pledge document.
(e) "Public body" means the state or any city, county, city and
county, district, other political subdivision of the state, public
authority, or other public corporation which is authorized to issue
bonds. "Public body" shall not include any private person,
partnership, corporation, or other private entity, including any
nonprofit private entity.
(f) "Security interest" means a prior claim on any revenues,
moneys, accounts receivable, contractual rights to payment, or other
rights to payment, which are pledged in a pledge document, unless
otherwise provided in the pledge document.

5451. (a) A pledge of collateral by any public body to secure,
directly or indirectly, the payment of the principal or redemption
price of, or interest on, any bonds, or any reimbursement or similar
agreement with any provider of credit enhancement for bonds, which is
issued by or entered into by a public body, shall be valid and
binding in accordance with the terms of the pledge document from the
time the pledge is made for the benefit of pledgees and successors
thereto.
(b) The collateral shall immediately be subject to the pledge, and
the pledge shall constitute a lien and security interest which shall
immediately attach to the collateral and be effective, binding, and
enforceable against the pledgor, its successors, purchasers of the
collateral, creditors, and all others asserting the rights therein,
to the extent set forth, and in accordance with, the pledge document
irrespective of whether those parties have notice of the pledge and
without the need for any physical delivery, recordation, filing, or
further act.

5452. Nothing in this chapter shall be construed to authorize new
or increased authority to issue bonds.