SECTIONS 80130-80134 - California Statutes

WATER CODE

SECTION 80130-80134

80130. (a) The department may incur indebtedness and issue bonds as
evidence thereof, provided that bonds may not be issued in an amount
the debt service on which, to the extent payable from the fund, is
estimated by the department to exceed the amounts estimated to be
available in the fund for their payment.
(b) The department may authorize the issuance of bonds (excluding
notes issued in anticipation of the issuance of bonds and retired
from the proceeds of those bonds) in an aggregate amount up to the
greater of thirteen billion four hundred twenty-three million dollars
($13,423,000,000) or the amount calculated by multiplying by a
factor of four the annual revenues generated by the California
Procurement Adjustment, as determined by the commission pursuant to
Section 360.5 of the Public Utilities Code if the aggregate amount
does not exceed thirteen billion four hundred twenty-three million
dollars ($13,423,000,000).
(c) This section does not prohibit the department from issuing
bonds prior to the effective date of this bill based upon the
authorization granted to the department by the provisions of Chapter
4 of the Statutes of 2001-02 First Extraordinary Session.
(d) (1) Refunding bonds for any of the following purposes shall
not be included in the calculation of the aggregate amount:
(A) Refunding bonds to obtain a lower interest rate.
(B) Refunding bonds bearing a variable interest rate with bonds
bearing interest at a fixed interest rate.
(C) Refunding bonds if any nationally recognized rating agency
reduces or withdraws, or proposes to reduce or withdraw, the rating
assigned to securities that are secured by bond insurance policies,
credit or liquidity facilities issued by the provider of a bond
insurance policy, or a credit or liquidity facility securing the
bonds being refunded.
(2) All refunding bonds issued by the department under this
chapter before January 1, 2010, shall be deemed to have been issued
for one or more purposes described in this subdivision and shall not
be included in the calculation of the aggregate amount.
(e) In addition, before the issuance of bonds in a public
offering, the department shall establish a mechanism to ensure that
the bonds will be sold at investment grade ratings and repaid on a
timely basis from pledged revenues. This mechanism may include, but
is not limited to, an agreement between the department and the
commission as described in Section 80110.

80132. (a) Bonds may be issued by the department upon authorization
by written determination of the director of the department with the
approval of the Director of Finance and the State Treasurer. The
Department of Finance shall notify the Chairperson of the Joint
Legislative Budget Committee and the chairperson of the committee in
each house that considers appropriations of its written
determination. The bonds shall be sold at such prices and in such
manner, and on such terms and conditions, as shall be specified in
such determination, and such determination may contain or authorize
any other provision, condition, or limitation not inconsistent
herewith and such provisions as may be deemed reasonable and proper
for the security of the bondholders. Bonds may mature at such time or
times, and bear interest at such rate or rates, which may be fixed
or variable and be determined by reference to an index or such other
method, as shall be specified in such determination. Neither the
person executing the determination to issue bonds nor any person
executing bonds shall be personally liable therefor or be subject to
any personal liability or accountability by reason of the issuance
thereof.
(b) In the discretion of the department, any bonds may be secured
by a trust agreement by and between the department and a corporate
trustee, which may be any trust company or bank having trust powers
within or without the state, or the State Treasurer. Notwithstanding
any other provision of law, the State Treasurer shall not be deemed
to have a conflict of interest by reason of acting as such trustee.
The department may enter into such contracts or arrangements as it
shall deem to be necessary or appropriate for the issuance and
further security of the bonds.
(c) Bonds shall be legal investments for all trust funds, the
funds of all insurance companies, banks both commercial and savings,
trust companies, executors, administrators, trustees, and other
fiduciaries, for state school funds, pension funds, and, for any
funds that may be invested in county, school, or municipal bonds.
(d) Notwithstanding that bonds may be payable from a special fund,
they shall be deemed to be negotiable instruments for all purposes.
(e) Any and all bonds, their transfer and the income therefrom
shall at all times be free from taxation of every kind by the state
and by all political subdivisions of the state.
(f) Bonds shall not be deemed to constitute a debt or liability of
the state or of any political subdivision thereof, other than the
department, or a pledge of the faith and credit of the state or of
any such political subdivision but shall be payable solely from the
funds herein provided for. All bonds shall contain a statement to the
following effect: "Neither the faith and credit nor the taxing power
of the State of California is pledged to the payment of the
principal of or interest on this bond." The issuance of bonds shall
not directly or indirectly or contingently obligate the state or any
political subdivision thereof to levy or to pledge any form of
taxation whatever therefor or to make any appropriation for their
payment.
(g) The department may pledge or assign any revenues under any
obligation entered into, and rights to receive the same, and moneys
on deposit in the fund and income or revenue derived from the
investment thereof, as security for the department's obligations
hereunder. It is the intention of the Legislature that any pledge of
moneys, revenues, or property made by the department shall be valid
and binding from the time when the pledge is made; that the moneys,
revenues, or property so pledged and thereafter collected from retail
end use customers, or paid directly or indirectly to or for the
account of the department, is hereby made, and shall immediately be,
subject to the lien of such pledge without any physical delivery
thereof or further act; that the lien of any such pledge shall be
valid and binding as against all parties having claims of any kind in
tort, contract, or otherwise against the department irrespective of
whether such parties have notice thereof, and that no resolution or
instrument by which such pledge or lien created pursuant to this
subdivision is expressed, confirmed, or approved need be filed or
recorded in order to perfect such pledge or lien. The provisions
hereof shall in all respects govern the creation, perfection,
priority, and enforcement of any lien created hereby or hereunder.

80134. (a) The department shall, and in any obligation entered into
pursuant to this division may covenant to, at least annually, and
more frequently as required, establish and revise revenue
requirements sufficient, together with any moneys on deposit in the
fund, to provide all of the following:
(1) The amounts necessary to pay the principal of and premium, if
any, and interest on all bonds as and when the same shall become due.
(2) The amounts necessary to pay for power purchased by it and to
deliver it to purchasers, including the cost of electric power and
transmission, scheduling, and other related expenses incurred by the
department, or to make payments under any other contracts,
agreements, or obligations entered into by it pursuant hereto, in the
amounts and at the times the same shall become due.
(3) Reserves in such amount as may be determined by the department
from time to time to be necessary or desirable.
(4) The pooled money investment rate on funds advanced for
electric power purchases prior to the receipt of payment for those
purchases by the purchasing entity.
(5) Repayment to the General Fund of appropriations made to the
fund pursuant hereto or hereafter for purposes of this division,
appropriations made to the Department of Water Resources Electric
Power Fund, and General Fund moneys expended by the department
pursuant to the Governor's Emergency Proclamation dated January 17,
2001.
(6) The administrative costs of the department incurred in
administering this division.
(b) The department shall notify the commission of its revenue
requirement pursuant to Section 80110.