Law:Title 17. California Fiscal Recovery Financing Act (California)

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Contents

Chapter 1. General Provisions

Ca Codes (gov:99000-99003) Government Code Section 99000-99003



99000. This title shall be known and may be cited as the California Fiscal Recovery Financing Act.


99001. It is the intent of the Legislature in enacting this title to provide for an efficient, equitable, and economical means of funding the accumulated budget deficit in order to preserve public education and critical health and safety programs.


99002. The Legislature finds and declares as follows: (a) The bonds authorized to be issued by the authority under this title, and any ancillary obligations entered into with respect to the bonds, are not a debt or liability of the state subject to Section 1 of Article XVI of the California Constitution. The appropriation, if any, by the Legislature of special sales tax revenues to the California Fiscal Recovery Financing Authority created in Section 99004 is not payment on a debt or liability of the state subject to Section 1 of Article XVI of the California Constitution. (b) Temporary special sales tax revenues deposited in the Fiscal Recovery Fund created in Section 99008 do not constitute General Fund revenues for the purposes of Section 8 of Article XVI of the California Constitution or any other provision of law. (c) It is the intent of the Legislature that the moneys deposited in the Fiscal Recovery Fund shall not be available for any purpose other than payment of the principal, interest, premium, if any, and replenishment of reserves of the bonds, payment of ancillary obligations, or payment of administrative expenses of the California Fiscal Recovery Financing Authority. (d) It is the intent of the Legislature that the proceeds of the bonds issued pursuant to this title shall be used solely to eliminate the accumulated budget deficit identified as of June 30, 2003, or to refund outstanding bonds issued for that purpose. It is further the intent of the Legislature that any bonds issued pursuant to this title, and any ancillary obligations entered into in relation to those bonds, be repaid in the shortest practicable time consistent with favorable bond ratings and marketing considerations. Any legislation that results in an extension of the period during which the additional special sales taxes provided for in Sections 6051.5 and 6201.5 of the Revenue and Taxation Code are imposed beyond the time necessary to satisfy any obligations incurred to eliminate the accumulated budget deficit identified as of June 30, 2003 shall be deemed to be an increase in taxes requiring a two-thirds vote of each house of the Legislature. (e) It is the intent of the Legislature that the only appropriation made by this title is set forth in subdivision (d) of Section 99008.

99003. Unless the context requires otherwise, the following definitions shall govern the construction of this title: (a) "Accumulated budget deficit" means the estimated negative balance, excluding any projected deficit financing proceeds, of the Special Fund for Economic Uncertainties as of June 30, 2003, as certified by the Director of Finance prior to the issuance of any bonds pursuant to this title. (b) "Ancillary obligation" means the obligation of the authority under any of the following, entered into by the authority in connection with any bonds issued under this title: (1) A credit enhancement or liquidity agreement, including any credit enhancement or liquidity agreement in the form of bond insurance, letter of credit, standby bond purchase agreement, reimbursement agreement, liquidity facility, or other similar arrangement. (2) A remarketing agreement. (3) An auction agent agreement. (4) A broker-dealer agreement or other agreement relating to the marketing of the bonds. (5) An interest rate or other type of swap or hedging contract. (6) An investment agreement, forward purchase agreement, or similar structured investment contract. (c) "Authority" means the California Fiscal Recovery Financing Authority created by Section 99004. (d) "Available revenues" means the special sales tax revenues appropriated pursuant to this title by the Legislature to pay principal, interest, premium, if any, replenishment of reserves, and any related costs on the bonds issued pursuant to this title or to pay amounts relating to any ancillary obligations, together with any reserves or other amounts that have been deposited with the trustee to pay the bonds or to pay ancillary obligations and any investment earnings on any of those funds. Notwithstanding any other provision of law, the Legislature shall not be obligated to appropriate or otherwise make available any other funds to pay the bonds or to pay ancillary obligations. (e) "Board" means the State Board of Equalization. (f) "Bonds" means any bonds, notes, bond anticipation notes, interim certificates, debentures, or similar instruments issued by the authority pursuant to this title. (g) "Fiscal Recovery Fund" means the special fund created by Section 99008. (h) "Indenture" means any resolution, trust agreement, indenture, certificate, or other instrument authorizing the issuance of bonds by the authority pursuant to this title, and providing for their security and repayment. (i) "Special sales tax revenues" means the proceeds of that portion of the sales and use tax temporarily imposed by the state pursuant to Section 6051.5 or 6201.5 of the Revenue and Taxation Code. (j) "Trustee" means the Treasurer or a bank or trust company within or without the state acting as trustee for any issue of bonds under this title and, if there is more than one issue of bonds, shall refer to the trustee for each issue of bonds respectively. In the event there are cotrustees for an issue of bonds, "trustee" shall refer to those cotrustees collectively.


Chapter 2. California Fiscal Recovery Financing Authority

Ca Codes (gov:99004-99007) Government Code Section 99004-99007



99004. (a) The California Fiscal Recovery Financing Authority is hereby created in state government solely for the purpose of the issuance and sale of the bonds and ancillary obligations authorized by this title and the performance of any necessary obligations related thereto. The authority is a public instrumentality of the state, and the exercise by the authority of the powers granted in this title is deemed and held to be the performance of an essential public function. (b) (1) The authority consists of all of the following members: (A) The Governor or his or her designee. (B) The Director of Finance. (C) The Treasurer. (D) The Controller. (E) The Secretary of Business, Transportation and Housing. (F) The Director of General Services. (G) The Director of Transportation. (2) Notwithstanding Section 7.5 or any other provision of law, any member may designate a deputy to act as that member in his or her place and stead for all purposes, as though the member were personally present. (3) The Legislature finds and declares that each member of the authority has previously acted as a member of a similar state agency or authority that issues revenue bonds and a finance committee that issues general obligation bonds, and has duties in relation to the payment of the accumulated budget deficit. (c) A majority of the members of the authority shall constitute a quorum of the authority and may act for the authority. (d) The Director of Finance shall serve as chairperson of the authority. (e) The Attorney General shall be the legal counsel for the authority. With the approval of the Attorney General, the authority may employ any legal counsel that in its judgment is necessary or advisable to enable it to carry out its duties and functions, including, but not limited to, the employment of any bond counsel deemed advisable in connection with the issuance and sale of bonds. (f) A member, officer, or agent of the authority shall not be subject to personal liability on any bonds or ancillary obligations or other obligations issued or entered into under this title or for any acts or omissions of members, officers, or agents in carrying out the powers and duties conferred by this title. (g) The members of the authority shall serve without compensation.


99005. The authority may do all of the following: (a) Sue and be sued. (b) Issue taxable or tax-exempt bonds for the purpose of funding the accumulated budget deficit and paying costs related thereto, including, but not limited to, reserves, capitalized interest, costs of obtaining or entering into any ancillary obligations, and costs of issuance, or for the purpose of refunding any bonds previously issued pursuant to this title and paying the costs related thereto. (c) Enter into ancillary obligations and other contracts deemed necessary or appropriate by the authority in connection with any bonds issued under this title. (d) Establish the terms and conditions for the financing program undertaken pursuant to this title. (e) Employ or contract for any services, including, but not limited to, consulting services and legal services authorized pursuant to subdivision (e) of Section 99004, or engage other agents or advisers in connection with the financing program, as deemed necessary by the authority. (f) In addition to all other powers specifically granted in this title, do all things necessary or convenient, including the delegation of necessary duties to the Director of Finance, as chairperson, and to the Treasurer, as agent for sale of the bonds, to carry out the powers and purposes of this title.


99006. (a) The Director of Finance shall, as chairperson of the authority, take all actions necessary to have included in the annual Governor's Budget for each fiscal year in which the Fiscal Recovery Fund is in existence and any bonds or ancillary obligations remain outstanding, an appropriation of the special sales tax revenues received in that fiscal year to pay those obligations. The director shall further use his or her best efforts to have included in the annual Budget Bill or another bill separate from the annual Budget Bill, for each fiscal year in which the Fiscal Recovery Fund is in existence and any bonds or ancillary obligations remain outstanding, an appropriation of the special sales tax revenues received in that fiscal year for the purposes of this title. The director shall notify the trustee and, if the trustee is not the Treasurer, notify the Treasurer, in each applicable year of the actions taken pursuant to this subdivision, including providing copies of the Governor's Budget and either the annual Budget Bill or other bill proposing an appropriation of the special sales tax revenue. (b) The Director of Finance shall notify the Treasurer, the trustee, and the board when, in each case, (1) and (2) of the following events have occurred: (1) Any of the following has occurred: (A) All bonds issued pursuant to this title and all related ancillary obligations have been paid or retired. (B) Payment of the principal of and interest on all bonds issued pursuant to this title and ancillary obligations have been irrevocably provided for pursuant to the indenture and no bonds are deemed "outstanding" pursuant to the indenture. (C) The Fiscal Recovery Fund holds sufficient funds to pay the principal of, and interest to final maturity on, all bonds issued pursuant to this title that are outstanding and to pay all ancillary obligations, if those funds were appropriated for that purpose by the Legislature. (D) No bonds were issued pursuant to this title and the Director of Finance, as chairperson of the authority, announces that no bonds will be issued pursuant to this title. (2) Any of the following has occurred: (A) All bonds issued pursuant to Title 18 (commencing with Section 99050) and all ancillary obligations relating thereto have been paid or retired. (B) Payment of the principal of and interest on all of those bonds and the payment of ancillary obligations identified in subparagraph (A) has been irrevocably provided for pursuant to the related resolution and no bonds or ancillary obligations are deemed "outstanding" pursuant to that resolution. (C) The Fiscal Recovery Fund holds sufficient funds to pay the principal of, and interest to final maturity on, all of the bonds and to pay ancillary obligations identified in subparagraph (A) that are outstanding. (D) The Economic Recovery Bond Act was not approved by the voters. (c) Notwithstanding any other provision of law, Section 5924 shall not apply to payment of any fees or costs of any ancillary obligations entered into by the authority or the Treasurer in connection with any bonds issued pursuant to this title. (d) For purposes of subdivision (d) of Section 6051.5, and subdivision (d) of Section 6201.5, of the Revenue and Taxation Code, and Section 99010 of this code, notification pursuant to subdivision (b) shall be deemed to be given by the Director of Finance only when the notifications described in both paragraph (1) and paragraph (2) of subdivision (b) have been given.


99007. Section 10295 of, and Article 4 (commencing with Section 10335) of Chapter 2 of Part 2 of Division 2 of, the Public Contract Code do not apply to agreements entered into by the authority or any individual to whom the authority delegates contracting authority in connection with the sale of bonds or other matters authorized under this title.


Chapter 3. Fiscal Recovery Fund

Ca Codes (gov:99008-99010) Government Code Section 99008-99010



99008. (a) The Fiscal Recovery Fund is hereby created as a special fund in the State Treasury. (b) Moneys in the Fiscal Recovery Fund shall be invested in the Surplus Money Investment Fund, except as otherwise provided in a resolution adopted pursuant to Title 18 (commencing with Section 99050), and any income from that investment shall be credited to the Fiscal Recovery Fund. (c) (1) Except for funds appropriated pursuant to subdivision (d), amounts in the Fiscal Recovery Fund, together with earnings thereon, shall be available solely for the purposes set forth in subdivision (c) of Section 99002 upon appropriation by the Legislature in each fiscal year. Upon an appropriation, if any, by the Legislature for the purposes specified in subdivision (c) of Section 99002 in a fiscal year, for the balance of that fiscal year all appropriated moneys then held or to be received in the Fiscal Recovery Fund for that purpose shall constitute available revenues and shall be disbursed to the trustee not less frequently than once per month. Available revenues shall belong to the authority, absolutely and unconditionally, and without any right of setoff, recoupment, or counterclaim. (2) Paragraph (1) and subdivision (d) shall become inoperative on the date on which all bonds and ancillary obligations issued pursuant to this title are not outstanding, as certified by the Director of Finance pursuant to paragraph (1) of subdivision (b) of Section 99006. On and after the date on which paragraph (1) and subdivision (d) become inoperative, the Fiscal Recovery Fund shall be used solely for the purpose set forth in Section 99072 and, as provided in Section 99072, shall be continuously appropriated for that purpose. (d) Notwithstanding Section 13340, an amount not to exceed one million dollars ($1,000,000) per fiscal year is hereby continuously appropriated from the Fiscal Recovery Fund to the authority, without regard to fiscal years, sufficient to pay administrative costs as approved by the Director of Finance.


99009. Moneys held in the Fiscal Recovery Fund may not be borrowed by, or available for transfer to, the General Fund pursuant to Section 16310 or any similar authority, or the General Cash Revolving Fund pursuant to Section 16381 or any similar authority.


99010. The Fiscal Recovery Fund may not be terminated until the Director of Finance provides the notification described in subdivision (b) of Section 99006. Notwithstanding any limitations contained in this title on the use of moneys in the Fiscal Recovery Fund and the interest earnings thereon, after the Director of Finance has provided that notification, and the board has ceased to collect the special sales tax revenues, any amounts remaining in the fund shall be disbursed as provided in an appropriation bill enacted by the Legislature, including, but not limited to, providing for a rebate to taxpayers of the excess special sales tax revenues collected.


Chapter 4. Bond Provisions

Ca Codes (gov:99011-99016) Government Code Section 99011-99016



99011. (a) The authority, at any time or from time to time, upon the request of the Director of Finance, may issue bonds for the purposes set forth in subdivision (b) of Section 99005. Each issue of bonds may be in an amount sufficient to provide for the funding of all or a portion of the accumulated budget deficit, for funding any necessary reserves and capitalized interest, for obtaining or entering into any ancillary obligations deemed necessary or desirable by the authority, for paying costs of issuance of the bonds as approved by the Director of Finance, or for refunding any bonds previously issued by the authority. (b) Bonds issued pursuant to this title, and any ancillary obligations entered into with respect to those bonds, are not a debt or liability of the state or of any political subdivision thereof or a pledge of the full faith and credit of the state or of any political subdivision thereof, and shall be payable by the authority solely from available revenues. Notwithstanding any other provision of law, the Legislature is not obligated to appropriate special sales tax revenues or any other funds or otherwise make any other funds available to pay debt service on the bonds or to pay ancillary obligations issued or entered into pursuant to this title. All bonds shall contain on the face thereof a statement to the effect that the bonds are a special obligation of the authority payable solely from available revenues, including moneys deposited in the Fiscal Recovery Fund, if and to the extent appropriated in each fiscal year for that purpose by the Legislature; that the Legislature is not obligated to make such an appropriation or to provide any other funds for the repayment of the bonds; that neither the state nor any political subdivision thereof, except the authority to the extent provided in this subdivision, is obligated to pay the bonds or the interest thereon; that neither the full faith and credit nor the taxing power of the state or any political subdivision thereof is pledged to the payment of the principal of or interest on the bonds; and that the authority has no taxing power. (c) (1) On request of the Director of Finance, the authority may issue bond anticipation notes, payable within a period not to exceed two years, from the proceeds of the sale of bonds or from available revenues, or both, as provided in the indenture pertaining to the bond anticipation notes. (2) Notwithstanding paragraph (1), if bonds that are not bond anticipation notes have not been issued at the maturity date of an issue of bond anticipation notes, the authority may renew those notes from time-to-time, provided the final maturity date of any such renewal notes shall not be later than six years from the date of initial issuance of a series of bond anticipation notes. The authority may not renew any bond anticipation notes after issuance of bonds in an amount sufficient to refund those notes.


99012. (a) The indenture may provide any or all of the following for the bonds: (1) The form of the bonds, which may be issued as serial bonds, term bonds, or installment bonds, or any combination thereof. (2) The date or dates to be borne by the bonds. (3) The time or times of maturity of the bonds. (4) The interest, fixed or variable, to be borne by the bonds. (5) The time or times that the bonds shall be payable. (6) The denominations, form, and registration privileges of the bonds. (7) The manner of execution of the bonds. (8) The place or places the bonds are payable, which may include one or more paying agents within or outside of the state. (9) The terms of redemption, tender, or purchase of the bonds. (10) The establishment of funds and accounts to be held by a trustee to provide for payment or security for the bonds or ancillary obligations or related costs. (11) Any other terms and conditions deemed necessary by the authority. (b) Pursuant to Section 5702, the Treasurer shall serve as agent for the offer and sale of the bonds. The bonds may be sold at either a competitive or negotiated sale, at the time or times, at a premium or a discount, or with neither, and with all other terms and conditions that the Treasurer, in his or her capacity as agent for sale of state bonds, shall determine.

99013. The proceeds of the bonds, exclusive of amounts required to be held by the authority for reserves, capitalized interest, or costs of issuance and ancillary obligations, as authorized by subdivision (a) of Section 99011, shall be deposited in the General Fund to fund all or a portion of the accumulated budget deficit, or shall be used to refund bonds previously issued pursuant to this title.


99014. (a) At the discretion of the authority, any bonds issued pursuant to this title may be secured by an indenture by and between the authority and a trustee. The indenture may contain any provision to protect and enforce the rights and remedies of the bond owners that is reasonable and proper and not in violation of law. The indenture may set forth the rights and remedies of the bond owners and of the trustee or trustees and may restrict the individual right of action by bond owners. (b) Any trust funds or accounts created by the indenture may be held outside the State Treasury. Available revenues deposited in a trust fund or account held outside the State Treasury are hereby pledged to secure the bonds and ancillary obligations, subject to application for the purposes and pursuant to the terms set forth in the indenture. The available revenues so pledged shall immediately be subject to the lien of the pledge without filing, physical delivery, or other act, and the lien of the pledge shall be superior to all other claims and liens of any kind whatsoever. (c) In addition to the requirements of subdivisions (a) and (b), any indenture described in this section may contain any other provisions the authority may deem reasonable and proper for the security of the bond owners.


99015. (a) The authority may provide for the issuance of bonds any portion of which is to be used for the purpose of refunding outstanding bonds, including the payment of the principal thereof and interest and redemption premiums, if any, thereon. The proceeds of bonds issued to refund any outstanding bonds may be applied to the retirement of those outstanding bonds at maturity, or the redemption, on any redemption date, or purchase of the outstanding bonds prior to maturity, upon the terms and subject to the conditions the authority shall deem advisable. (b) Notwithstanding any other provision of this title, the authority may not issue refunding bonds with a final maturity date later than the final maturity date of the series of bonds being refunded, unless the Legislature has adopted legislation by a two-thirds vote of each house, extending the imposition of a special sales tax or taxes to provide for payment of the refunding bonds. This subdivision shall not apply to bonds issued to refund bond anticipation notes issued pursuant to subdivision (c) of Section 99011.

99016. The exercise of the powers granted by this title shall be in all respects for the benefit of the people of the state. Any and all bonds issued by the authority, 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.



Chapter 5. Miscellaneous Provisions

Ca Codes (gov:99017-99040) Government Code Section 99017-99040



99017. This title, being necessary for the health, welfare, and safety of the people of the state, shall be liberally construed to effect its purposes.

99018. This title shall be deemed to provide a complete, additional, and alternative method for doing the things authorized in its provisions, and shall be regarded as supplemental and additional to the powers conferred by other laws. The sale and issuance of bonds, the application of proceeds to the funding of the accumulated budget deficit, and the refunding of prior bonds and the entering into of any ancillary obligation under this title, are not required to comply with the requirements of any other state or local law applicable to the issuance of bonds or ancillary obligations. The purposes authorized in subdivision (c) of Section 99002 may be effectuated and bonds are authorized to be issued for any of those purposes, notwithstanding that any other state or local law may provide for those purposes or for the issuance of bonds for the same or similar purposes, and without regard to the requirements, restrictions, limitations, or other provisions contained in any other state or local law.


99019. Bonds issued pursuant to this title are a legal investment for any state special fund or trust fund, notwithstanding any provision of state or local law limiting the investments that may be made by the fund. The bonds shall be legal investments in which all public officers and public bodies of the state and its political subdivisions, all municipalities and municipal subdivisions, all insurance companies and associations and other persons carrying on an insurance business, all banks, bankers, banking institutions, including savings and loan associations, building and loan associations, trust companies, savings banks and savings associations, investment companies, and other persons carrying on banking business, all administrators, guardians, executors, trustees, and other fiduciaries, and all persons authorized to invest in bonds or other obligations of the state, may properly and legally invest funds, including capital, in their control or belonging to them. The bonds may be used by any such private financial institution, person, or association as security for public officers and bodies of the state or any agency or political subdivision of the state and all municipalities and public corporations for any purpose for which the deposit of bonds or other obligations of the state is authorized by law, including deposits to secure public funds.


99020. (a) The authority may bring an action to determine the validity of any bonds to be issued, or ancillary obligations and other contracts to be entered into, under this title pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. For the purposes of Section 860 of the Code of Civil Procedure, any action initiated pursuant to this section shall be brought in the Superior Court in the County of Sacramento. (b) Any action brought to enforce any provision of this title shall be brought in the Superior Court in the County of Sacramento and shall have priority over civil matters not themselves having priority. (c) Notwithstanding any other provision of law, the exclusive means to obtain review of a superior court judgment entered in an action brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure to determine the validity of any bonds to be issued, or ancillary obligations or other contracts to be entered into, under this title shall be by petition to the Supreme Court for writ of review. Any such petition shall be filed within 15 days following the notice of entry of the superior court judgment, and no extension of that period may be allowed. If no petition is filed within the time allowed therefor, or the petition is denied, with or without opinion, the decision of the superior court shall be final and enforceable as provided in subdivision (a) of Section 870 of the Code of Civil Procedure. In any case in which a petition has been filed within the time allowed therefor, the Supreme Court shall make any orders it deems proper in the circumstances. If no answering party appeared in the superior court action, the only issues that may be raised in the petition are those related to the jurisdiction of the superior court.


99040. The Director of Finance shall immediately notify the Joint Legislative Budget Committee, the Executive Officer of the Franchise Tax Board, the Executive Director of the State Board of Equalization, and the Director of the Department of Motor Vehicles when and if an amendment to the California Constitution is approved at a statewide election held during the 2009 calendar year, that limits the total amount that, under Section 20 of Article XVI of the California Constitution, may be transferred by statute from the Budget Stabilization Account, or any successor to that account, to the General Fund.


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