This law defines important terms related to refunding bonds. Refunding bonds are used by governments to manage existing debt more effectively. The 'costs of issuing refunding bonds' includes a variety of expenses involved in issuing new bonds to replace older ones. This can cover fees for legal advice, financial consultants, underwriters, accountants, printing, and more. It also includes interest on the new bonds up to two years, any unpaid interest or premiums on the old bonds, and other related costs. 'Designated costs' are specific expenses chosen by the legislative body. 'Federal securities' refers to specific government-backed financial instruments, including Treasury notes and bonds, and those supported by the U.S. Small Business Administration.
In this chapter, the following terms are used with the following meanings:
(a)CA Streets and Highways Code § 9600(a) “Costs of issuing refunding bonds” means those of the following costs and expenses which are designated by the legislative body in the resolution providing for the issuance of the bonds.
(1)CA Streets and Highways Code § 9600(a)(1) All expenses incident to the calling, retiring, or paying of the bonds to be refunded and to the issuance of refunding bonds, including, but not limited to, any bond counsel, financial consultants, underwriters, certified public accountants, and rating agency fees, printing and advertising costs, city administrative expenses, and the charges of any escrow agent or trustee in connection with the issuance of the refunding bonds or in connection with the redemption or retirement of the bonds to be refunded.
(2)CA Streets and Highways Code § 9600(a)(2) Interest upon the refunding bonds from the September 2 next preceding the date of sale thereof to not later than the September 2 next succeeding two years from the date.
(3)CA Streets and Highways Code § 9600(a)(3) Any accrued and unpaid interest on the bonds to be refunded.
(4)CA Streets and Highways Code § 9600(a)(4) Any premium necessary in the calling or retiring of the bonds to be refunded.
(5)CA Streets and Highways Code § 9600(a)(5) Any amount that the city pays or transfers, or has previously paid or transferred, either from a special reserve fund or from surplus funds, into the redemption fund securing the bonds to be refunded and the penalties and interest thereon, if the amounts and the penalties and interest thereon are included in and limited to the particular reassessments levied upon those subdivisions of land securing the original assessment installments which are delinquent and for which the payments or transfers are made.
(b)CA Streets and Highways Code § 9600(b) “Designated costs of issuing the refunding bonds” means whichever of the items specified in paragraphs (1), (2), (3), (4), and (5) of subdivision (a) which are designated by the legislative body in the resolution providing for the issuance of refunding bonds.
(c)CA Streets and Highways Code § 9600(c) “Federal securities” means those securities described in Sections 1360 and 1360.1 of the Financial Code and includes United States Treasury notes, bonds, bills, or certificates of indebtedness, or obligations for which the faith and credit of the United States are pledged for the payment of principal and interest, including the guaranteed portions of small business administration loans, so long as the loans are obligations for which the faith and credit of the United States are pledged for the payment of principal and interest.
refunding bonds bond issuance costs legislative resolution bond counsel fees financial consultant expenses underwriter fees printing and advertising costs city administrative expenses escrow agent charges bond interest accrued interest premium for retiring bonds redemption fund federal securities United States Treasury notes
(Amended by Stats. 1986, Ch. 874, Sec. 21. Effective September 17, 1986.)
This section means that whenever a government wants to issue new bonds to refinance existing ones, they must officially approve it through a formal decision, known as a resolution.
The legislative body shall provide for the issuance of the refunding bonds by resolution.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
Section 9601.5 states that the rules found in Section 8769 about bonds also apply to bonds issued in San Bernardino County under this particular division of the law. Essentially, it's saying, 'Hey, the rules we talked about in Section 8769? They count here too.'
Section 8769 shall apply to bonds issued pursuant to this division in the County of San Bernardino.
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(Added by Stats. 1987, Ch. 10, Sec. 1. Effective April 28, 1987.)
This law states that when refunding bonds are issued, their total amount must match the principal amount of a reassessment that has been approved by a legislative body, according to specific sections (either Section 9525 or 9535).
The refunding bonds shall be issued in a principal amount equal to the total principal amount of the reassessment as approved and confirmed by the legislative body pursuant to either Section 9525 or Section 9535.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
This law states that refunding bonds are backed by current reassessments on a property, and if needed, future reassessments can also secure these bonds.
The refunding bonds shall represent and be secured by the reassessments and any later reassessments which may be levied or issued upon the same property in lieu of the reassessments.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
This law explains the rules for issuing refunding bonds under this division. First, these bonds must be in fully registered form and the denominations can be decided by the legislative body. They must be dated on or after the reassessment recording date. The bonds need to be signed by the treasurer and the clerk, but signatures can also be printed or engraved if the legislative body allows it. Lastly, the bonds are to be numbered and must include details about interest rates and maturity dates as agreed with the bond buyers.
Refunding bonds issued pursuant to this division shall comply with the following requirements which shall be set forth in the resolution adopted pursuant to Section 9601:
(a)CA Streets and Highways Code § 9604(a) Bonds shall be in the fully registered form and of the denominations as the legislative body may determine.
(b)CA Streets and Highways Code § 9604(b) The bonds shall be dated on or after the date of the recording of the reassessment.
(c)CA Streets and Highways Code § 9604(c) Bonds shall be signed by the treasurer and the clerk, except that the legislative body may, by order, authorize the use of bonds with an engraved, printed, or lithographed signature of the treasurer and the clerk in lieu of a signature by hand. The legislative body may also authorize its seal to be placed on the bonds in a similar manner.
(d)CA Streets and Highways Code § 9604(d) Bonds shall be numbered appropriately and shall bear interest and mature as provided in the contract with the bond purchasers.
refunding bonds fully registered form denominations reassessment date legislative body treasurer's signature clerk's signature engraved signature printed signature lithographed signature seal bond numbering interest rates maturity dates bond purchasers
(Amended by Stats. 1986, Ch. 874, Sec. 22. Effective September 17, 1986.)
This law specifies that all refunding bonds must reach their maturity date on September 2nd.
All of the refunding bonds shall mature on September 2.
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(Amended by Stats. 1985, Ch. 65, Sec. 31. Effective June 6, 1985.)
This law mandates that the earliest a refunding bond can be scheduled to mature is at least 12 months plus a few days—specifically, the second day of September—after the bond's issuance date.
In no event shall the first maturity of any refunding bonds be earlier than the second day of September next succeeding 12 months after the date of the bonds.
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(Amended by Stats. 1985, Ch. 65, Sec. 32. Effective June 6, 1985.)
This law states that the final due date for paying off any refunding bonds can't be more than 39 years after the September 2nd that falls 12 months after the bonds were issued.
The last maturity of any refunding bonds shall not exceed 39 years from the second day of September next succeeding 12 months after the date of the bonds.
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(Amended by Stats. 1987, Ch. 1388, Sec. 25.)
This law states that when issuing new bonds to refinance existing ones in San Bernardino County, the new bonds cannot have a final maturity date longer than the longest maturity date allowed by the law under which the original bonds were issued.
For refunding bonds issued in the County of San Bernardino, the last maturity of any of these bonds shall not exceed the longest maturity currently authorized for bonds by the law pursuant to which the bonds to be refunded were issued.
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(Added by Stats. 1987, Ch. 10, Sec. 2. Effective April 28, 1987.)
This law states that when bonds are reissued to replace old ones (refunding bonds), the interest rate on these new bonds cannot be higher than the rate specified in the initial resolution that approves them.
The rate of interest on refunding bonds shall not exceed the rate set forth in the resolution of intention adopted pursuant to Section 9520.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
This law states that the interest payments for refunding bonds must be made twice a year, specifically on March 2 and September 2.
The interest on refunding bonds shall be payable on March 2, and September 2, respectively, of each year.
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(Amended by Stats. 1985, Ch. 65, Sec. 34. Effective June 6, 1985.)
This law section explains when the first interest payment is due for bonds. Normally, the initial interest payment is scheduled for the March 2nd before the September that is 12 months after the bond's date. However, if any interest is covered by funding, the legislative body can choose an earlier date for the first interest payment.
The first interest payment on the bonds shall be March 2 next preceding the second day of September next succeeding 12 months after the date of the bonds, except that, if any portion of the interest is funded, the legislative body may specify that the first payment of interest shall become due on any earlier interest payment date following the date of the bonds.
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(Amended by Stats. 1986, Ch. 874, Sec. 23. Effective September 17, 1986.)
This section explains that refunding bonds and their interest must be paid at the treasurer's office or any other location specified in the bonds.
Refunding bonds and the interest thereon shall be paid at the office of the treasurer or at any other place as is set forth in the bonds.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
This law states that once a bond is issued, it serves as undeniable proof that all processes for tax reassessments and the issuing of refunding bonds were conducted correctly. It also confirms the legitimacy of the bonds and all related processes that the bonds replaced.
Each bond shall be conclusive evidence of the regularity of all proceedings for the levy of reassessments and the issuance of the refunding bonds and of the validity of said bonds and of all proceedings of which the bonds refunded were conclusive evidence.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
This law allows a city's legislative body to issue new bonds, known as refunding bonds, to replace old bonds if bondholders agree. The city can either swap them directly with the old bonds or sell them. If using the proceeds from the sale, the money must go into a special fund just for paying off the old bonds.
Refunding bonds issued pursuant to this chapter may be exchanged for the bonds to be refunded on any basis the legislative body determines is for the benefit of the city if the bondholders consent to the exchange. As an alternative to exchanging the refunding bonds for the bonds to be refunded, the legislative body may sell the refunding bonds at public or private sale and at a price at or below par or with a premium. The proceeds of any sale of refunding bonds for cash shall be placed in the treasury of the local agency to the credit of a fund to be established for the purpose of refunding the bonds to be refunded, and the proceeds shall be applied only as permitted by this division.
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(Amended by Stats. 1987, Ch. 1388, Sec. 26.)
This law explains that the costs involved in issuing refunding bonds can be covered in various ways. The purchaser of the refunding bonds could foot the bill, or the money can come from other sources that are legally available, like the city’s general fund, other city revenues, or the proceeds from the bond sale itself. Additionally, gains from investments of the bond proceeds or money held in escrow or trust can be used to cover these costs, as decided by the city's legislative body.
The designated 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 the general fund of the city, other available revenues of the city under the control of the legislative body, the proceeds of sale of the refunding bonds, the interest or other gain derived from the investment of any of the proceeds of sale of the refunding bonds, any other moneys in escrow or in trust or any combination thereof as the legislative body may determine.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
This law allows the money from the sale of refunding bonds to be placed in escrow or trust with a bank or trust company, whether it's located inside or outside of California. The law also requires that these funds must be secured according to the city's laws and invested in federal securities.
Any proceeds of sale of any refunding bonds may be deposited in escrow or trust with any bank or trust company within or without the state, or both within and without the state, shall be secured in accordance with the laws applicable to funds of the city and shall be invested in federal securities.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
This section of the law requires that money from escrow or trust used for refunding bonds must be enough, as certified by a California-licensed CPA, to cover the payback of principal, interest, possible early redemption costs of the refunded bonds, and any costs related to issuing the new refunding bonds. The funds, together with any earnings from investments, should meet these obligations either when they’re due or on special early redemption dates.
The proceeds and investments in escrow or trust shall be in an amount at the time of issuance of such refunding bonds which is certified by a certified public accountant licensed to practice in this state to be sufficient, together with any interest or other gain to be derived from any such investment, to pay 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 (in connection with which the legislative body has exercised or has obligated itself to exercise a redemption privilege on behalf of the city), and the designated costs of issuance of the refunding bonds.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
When a city issues refunding bonds, which are used to pay off previous bonds, they must handle the payment of the bond's principal and interest just like they do with regular bonds. The money collected from new assessments will act as a security for paying these refunding bonds, similar to how the original assessments backed the old bonds.
Following the issuance of any refunding bonds pursuant to this article, the legislative body of the city shall provide for the payment of principal and interest thereon in the same manner and at the same times as it provides for payment of principal and interest on bonds issued pursuant to the act. The reassessments levied pursuant to this division shall be and constitute security for the payment of the refunding bonds in the same manner as the original unpaid assessments constituted security for the refunded bonds.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
If a city replaces old bonds with new refunding bonds, the city treasurer must cancel the old bonds.
Any outstanding refunded bonds which have been exchanged for refunding bonds shall be canceled by the city treasurer.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
This law requires the treasurer to maintain a detailed register of each bond, including information such as the series, number, date, amount, interest rate, and the registered owner. Additionally, the treasurer must cancel and file each bond once it is paid.
The treasurer shall keep a register in his or her office which shall show the series, number, date, amount, rate of interest, and registered owner of each bond. The treasurer shall cancel and file each bond paid.
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(Added by Stats. 1984, Ch. 496, Sec. 1. Effective July 17, 1984.)
This law permits a legislative body to decide if they want to set up a special reserve fund when they issue refunding bonds. If they decide to do this, they must include the amount for the reserve fund in the reassessment as outlined in another resolution.
The legislative body may provide, in the resolution authorizing the issuance of the refunding bonds, for the establishment from the proceeds of the sale of the refunding bonds of a special reserve fund for the refunding bonds pursuant to Part 16 (commencing with Section 8880) of Division 10.
If the legislative body elects to establish the reserve fund, it shall provide, in the resolution adopted pursuant to Section 9520, for the inclusion of the amount of the special reserve fund in the reassessment.
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(Added by Stats. 1986, Ch. 874, Sec. 24. Effective September 17, 1986.)
This law allows for variable rate bonds to be replaced with new variable rate bonds, specifically referring to bonds that were originally issued as variable rate bonds. It also clarifies that 'bonds' include 'refunding bonds' in this context.
Notwithstanding any other provision of this part, bonds originally issued as variable rate bonds pursuant to Part 6.5 (commencing with Section 8660) may be refunded by the issuance of variable rate bonds issued pursuant to that Part 6.5. For purposes of this section and that Part 6.5 “bonds” includes “refunding bonds.”
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(Added by Stats. 1990, Ch. 446, Sec. 20.)
