SECTIONS 59280-59286 - California Statutes

GOVERNMENT CODE

SECTION 59280-59286

59280. The legislative body shall have power under this chapter to
refund bonds which constitute an indebtedness of a local agency or
any improvement district or zone thereof payable, both principal and
interest, from the proceeds of ad valorem taxes or ad valorem
assessments which may be levied without limitation as to rate or
amount upon property in the local agency or in the improvement
district or zone thereof subject to taxation or assessment.

59281. Refunding bonds may be issued under this chapter for the
purpose of refunding any indebtedness of the local agency which is
evidenced by bonds, whether due or not due or which may thereafter
become payable at the option of such local agency or by consent of
the bondholders or by any lawful means.

59282. The incidental costs of issuing the refunding bonds may be
paid by the purchaser of the refunding bonds or may be paid from any
other legally available source including, without limitation, the
general fund of the local agency, other available revenues of the
local agency under the control of the legislative body, the proceeds
of the sale of the refunding bonds, the interest or other gain
derived from investment of any of the proceeds of the sale of the
refunding bonds, any other moneys in escrow or in trust, or any
combination thereof, as the legislative body may determine.

59283. The proceeds of the sale of any refunding bonds shall be
deposited in escrow or in trust with any bank or trust company within
or without the state, or both within or without the state, and shall
be secured in accordance with the laws applicable to funds of the
local agency and may, along with any other moneys available for that
purpose similarly deposited, be invested or reinvested in federal
securities. The term "federal securities" means those securities
described in Sections 1360 and 1360.1 of the Financial Code or
Section 53601 of this code.

59284. Such proceeds and reinvestments in escrow or in trust shall
be in an amount at the time of the issuance of such refunding bonds
sufficient to meet the requirements of either subdivision (a) or (b)
of this section. Such proceeds and reinvestments in escrow or in
trust shall also be certified by a certified public accountant
licensed to practice in this state to be of an amount sufficient to
meet such requirements.
(a) Such proceeds and investments, together with any interest or
other gain to be derived from any such investment, shall be in an
amount at least sufficient to pay (i) the principal of, and interest
and redemption premiums if any, on, the refunded bonds as they become
due, or at designated dates prior to maturity if the legislative
body has exercised or has obligated itself to exercise a redemption
privilege on behalf of the local agency, and (ii) the designated
costs of issuance of the refunding bonds; or
(b) Such proceeds and investments, together with any interest or
other gain to be derived from any such investment, shall be in an
amount at least sufficient to pay (i) the principal of, and interest
and redemption premiums if any, on, the refunding bonds prior to the
maturity of the bonds to be refunded or prior to a designated date or
dates before the maturity of the bonds to be refunded if the
legislative body has exercised or has obligated itself to exercise a
redemption privilege on behalf of the local agency, (ii) the
principal of, and any redemption premiums due on, such refunded bonds
at maturity or at such designated date or dates and (iii) the
designated costs of issuance of the refunding bonds.

59285. Upon the issuance, sale and delivery or exchange of
refunding bonds pursuant to this article, if both the refunding bonds
and the bonds to be refunded remain outstanding for any period of
time following the date of the issuance, sale and delivery of the
refunding bonds, then until the date on which the bonds to be
refunded are no longer outstanding:
(a) If the local agency has met the test of subdivision (a) of
Section 59284, the bonds to be refunded shall no longer be considered
outstanding in any computation of the general obligation
indebtedness of such local agency;
(b) If the local agency has met the test of subdivision (b) of
Section 59284, then the bonds to be refunded shall be considered
outstanding in any computation of the general obligation bonded
indebtedness of such local agency until the date on which the
refunded bonds are retired.

59286. In proceeding under the alternatives provided for in this
article, it shall be unnecessary for the legislative body to give
notice to the bondholders and to obtain their consents or to obtain
written proposals from them, and the provisions in this chapter
relating to such consents or proposals from the original bondholders
shall not be applicable to any proceedings conducted pursuant to the
authority in this article.