Notwithstanding any other provision of law, a local hospital district may issue revenue bonds pursuant to the provisions of Chapter 6 (commencing with Section 54300) of Part 1 of Division 2 of Title 5 of the Government Code. However, the provisions of Article 3 (commencing with Section 54380) of Chapter 6 of Part 1 of Division 2 of Title 5 of the Government Code shall not be applicable to local hospital districts.
Chapter 5Revenue Bonds
Section § 32315
This law states that local hospital districts in California are allowed to issue revenue bonds following certain government code regulations. However, specific rules in another section (Article 3, starting with Section 54380) do not apply to them.
local hospital district revenue bonds Chapter 6 government code regulation issue bonds Section 54300 Section 54380 exemptions funding healthcare public finance bond issuance hospital funding
Section § 32316
The board of directors of a district can decide to issue bonds, but they need at least four-fifths of the board members to agree. These bonds can't exceed 50% of the average value of the district's total income from the past three years. The money from these bonds can be used in several ways: to buy, build, upgrade, finance, or refinance a project, or to pay off existing debts like bonds and loans, including any related costs.
By resolution of the board of directors adopted by a vote of four-fifths of the membership of the board, the district may issue bonds of not more than a maximum of 50 percent of the average of the district’s gross revenues for the preceding three years, pursuant to Chapter 6 (commencing with Section 54300) of Part 1 of Division 2 of Title 5 of the Government Code, to provide funds for the acquisition, construction, improvement, financing or refinancing of an enterprise, or the refunding of any bonds, notes, loans, or other indebtedness of the district, including, but not limited to, any or all expenses incidental thereto, or connected therewith, or any combination of two or more of those purposes.
board of directors bond issuance maximum bond limit gross revenues district financing acquisition construction improvement financing refinancing debts capital projects resolution requirement four-fifths vote enterprise funding
Section § 32317
This law outlines what must be included in a resolution when a district decides to issue bonds. It must state why the bonds are issued, their estimated cost, and their principal amount. The interest rate cannot go above 12% annually, and the frequency of interest payments must be specified. Lastly, it should clarify that the bonds are revenue bonds paid only from the project's revenues, not secured by taxes.
The resolution adopted pursuant to Section 32316 shall include all of the following:
(a)CA Health and Safety Code § 32317(a)
The purpose for which the bonds are proposed to be issued.
(b)CA Health and Safety Code § 32317(b)
The estimated cost of the acquisition, construction, improvement, financing, and refinancing.
(c)CA Health and Safety Code § 32317(c)
The principal amount of the bonds.
(d)CA Health and Safety Code § 32317(d)
The maximum rate of the interest on the bonds, which shall not exceed 12 percent per year, and the frequency of interest payments.
(e)CA Health and Safety Code § 32317(e)
A statement that the bonds are to be revenue bonds, payable exclusively from the revenues of the enterprise, and that the bonds are not to be secured by the taxing power of the district.
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Section § 32318
This law states that a resolution made under Section 32316 needs to be made public by publishing it in a local newspaper once a week for two weeks. If there isn’t a local newspaper, it should be published in the closest one. Additionally, if there’s no local newspaper, the resolution must be posted in three public locations within the district for two weeks.
The resolution adopted pursuant to Section 32316 shall be published once a week for two successive weeks in a newspaper of general circulation published in the district, or if there is none, in the newspaper of general circulation published nearest to the district. If there is no newspaper of general circulation published in the district, the resolution shall also be posted in three public places in the district for two succeeding weeks.
resolution publication newspaper of general circulation public posting Section 32316 district notification local newspaper public places resolution announcement publication frequency district communication
Section § 32319
This California law allows the board of directors to sell bonds in two ways: they can either invite sealed bids and sell to the highest responsible bidder or they can choose to sell the bonds privately if four-fifths of the board agrees to it.
The board of directors may sell the bonds pursuant to the resolution as follows:
(a)CA Health and Safety Code § 32319(a)
By giving notice inviting sealed bids and selling to the highest responsible bidder.
(b)CA Health and Safety Code § 32319(b)
By private sale, pursuant to a vote of four-fifths of the entire board.
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Section § 32320
This law states that a hospital district in California cannot sell revenue bonds unless the sale agreement is formally approved by the board of directors through an ordinance. Moreover, this agreement can be challenged by the public through a referendum as outlined in a specific part of the Elections Code.
No hospital district shall sell revenue bonds until a formal agreement of the sale has been approved by the board of directors, by ordinance, which shall state that the agreement is subject to referendum as provided by Article 1 (commencing with Section 9300) of Chapter 4 of Division 9 of the Elections Code.
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Section § 32321
This section explains that if a district adopts an ordinance under Section 32320, it must be published in a local newspaper once a week for two weeks starting within 15 days of adoption. If there is no local newspaper, it should be published in the nearest newspaper or posted in three public places in the district for two weeks.
The district's board can introduce and pass an ordinance by majority vote during regular meetings. Residents in the district have the right to call for a referendum to potentially overturn the ordinance, similar to a public vote.
(a)CA Health and Safety Code § 32321(a)
Any ordinance subject to Section 32320 shall be published after adoption once a week for two successive weeks, commencing within 15 days after adoption, in a newspaper of general circulation published in the district, or if there is none, in the newspaper of general circulation published nearest to the district. If there is no newspaper of general circulation published in the district, the ordinance shall also be posted in three public places in the district for two succeeding weeks.
(b)CA Health and Safety Code § 32321(b)
The board of directors of the district may introduce and enact an ordinance at any regular or adjourned regular meeting by the approving votes of a majority of all its members. The electors of the district shall have the right to petition for referendum on an ordinance pursuant to Article 2 (commencing with Section 9140) of Chapter 2 of Division 9 of the Elections Code, except that all computations referred to in those sections, and officers of the county mentioned in those sections, shall be construed to refer to comparable computations and officers of the district. For the purpose of the section, the term “electors” means the electors of territory entitled to vote at elections for the members of the board of directors.
ordinance publication district newspaper referendum rights district board voting public posting ordinance electorate rights ordinance adoption process majority vote public notice requirements petition for referendum district board meetings local legislation voter rights in district publication requirements
Section § 32322
This California law states that if a local law (ordinance) allowing the sale of revenue bonds by a district is overturned by a public vote or withdrawn by the district’s board, the district cannot propose another ordinance to sell revenue bonds for one year after that decision.
If an ordinance enacted pursuant to Section 32320 is subjected to a successful referendum election, or is repealed or rescinded by the board of directors, no ordinance authorizing the district to sell revenue bonds shall be adopted by the district for a period of one year from the date of the referendum repeal or rescission.
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