BILL NUMBER: SBX1 6 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Burton and Bowen
(Principal coauthors: Assembly Members Florez, Goldberg, and
Shelley)
(Coauthors: Senators Karnette, Kuehl, and Scott)
(Coauthors: Assembly Members Aroner, Cedillo, Firebaugh, Frommer,
Keeley, Papan, Romero, Steinberg, Thomson, and Wiggins)
JANUARY 18, 2001
An act to add Division 1.5 (commencing with Section 3300) to the
Public Utilities Code, relating to electrical power.
LEGISLATIVE COUNSEL'S DIGEST
SB 6, as introduced, Burton. California Consumer Power and
Conservation Financing Authority.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations
and other specified entities.
The Warren-Alquist State Energy Resources Conservation and
Development Act requires the State Energy Resources Conservation and
Development Commission (Energy Commission) to certify sufficient
sites and related facilities that are required to provide a supply of
electric power sufficient to accommodate projected demand for power
statewide. The Energy Commission administers existing law with
respect to energy conservation.
This bill would create the California Consumer Power and
Conservation Financing Authority, with powers and responsibilities as
prescribed, including the issuance of bonds, for the purposes of
augmenting electric generating facilities and to ensure a sufficient
and reliable supply of electricity, financing incentives for
investment in cost-effective energy-efficient appliances and energy
demand reduction, achieving a specified energy capacity reserve
level, providing financing for the retrofit of inefficient electric
powerplants, renewable energy and conservation, and, where
appropriate, developing strategies for the authority to facilitate a
dependable supply of natural gas at reasonable prices to the public.
The bill would create in the State Treasury the California Consumer
Power and Conservation Financing Authority Fund, and all money in the
fund, upon appropriation, would be available for the support of the
authority.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Division 1.5 (commencing with Section 3300) is added to
the Public Utilities Code, to read:
DIVISION 1.5. CALIFORNIA CONSUMER POWER AND CONSERVATION
FINANCING AUTHORITY ACT
CHAPTER 1. GENERAL PROVISIONS AND DEFINITIONS
3300. The Legislature finds and declares that in order to furnish
the citizens of California with reliable, affordable electrical
power, to ensure sufficient power reserves, to assure stability and
rationality in California's electricity market, to encourage energy
efficiency and conservation as well as the use of renewable energy
resources, and to protect the public health, welfare, and safety, the
state needs to finance, purchase, lease, own, operate, acquire, or
otherwise provide financial assistance for public and private
facilities for the generation and transmission of electricity and for
renewable energy, energy efficiency, and conservation programs.
3301. This division shall be known and may be cited as the
California Consumer Power and Conservation Financing Authority Act.
3302. As used in this division, unless the context otherwise
requires, the following terms have the following meanings:
(a) "Act" means the California Consumer Power and Conservation
Financing Authority Act.
(b) "Authority" means the California Consumer Power and
Conservation Financing Authority established pursuant to Section 3320
and any board, commission, department, or officer succeeding to the
functions thereof, or to whom the powers conferred upon the authority
by this division shall be given by law.
(c) "Board" means the Board of Directors of the California
Consumer Power and Conservation Financing Authority.
(d) "Bond purchase agreement" means a contractual agreement
executed between the authority and a participating party, or a
special purpose trust authorized by the authority or a participating
party, or both, whereby the authority or special purpose trust
authorized by the authority agrees to purchase bonds of the
participating party for retention or sale.
(e) "Bonds" means bonds, including structured, senior, and
subordinated bonds or other securities; loans; notes, including bond
revenue, tax or grant anticipation notes; commercial paper; floating
rate and variable maturity securities; and any other evidences of
indebtedness or ownership, including certificates of participation or
beneficial interest, asset backed certificates, or lease-purchase or
installment purchase agreements, whether taxable or excludable from
gross income for state and federal income taxation purposes.
(f) "Commission" means the Public Utilities Commission.
(g) "Cost," as applied to a program, project or portion thereof
financed under this division, means all or any part of the cost of
construction, renovation, and acquisition of all lands, structures,
real or personal property, rights, rights-of-way, franchises,
licenses, easements, and interests acquired or used for a project;
the cost of demolishing or removing any buildings or structures on
land so acquired, including the cost of acquiring any lands to which
the buildings or structures may be moved; the cost of all machinery,
equipment, and financing charges; interest prior to, during, and for
a period after, completion of construction, renovation, or
acquisition, as determined by the authority; provisions for working
capital; reserves for principal and interest and for extension,
enlargements, additions, replacements, renovations, and improvements;
and the cost of architectural, engineering, financial and legal
services, plans, specifications, estimates, administrative expenses,
and other expenses necessary or incidental to determining the
feasibility of any project or incidental to the construction,
acquisition, or financing of any project.
(h) "Electrical corporation" has the same meaning as that term is
defined in Section 218.
(i) "Energy Commission" means the State Energy Resources
Conservation and Development Commission.
(j) "Financial assistance" in connection with a project, includes,
but is not limited to, any combination of grants, loans, the
proceeds of bonds issued by the authority or a special purpose trust,
insurance, guarantees or other credit enhancements or liquidity
facilities, and contributions of money, property, labor, or other
things of value, as may be approved by resolution of the board or the
participating party, or both; the purchase or retention of authority
bonds, the bonds of a participating party for their retention or for
sale by the authority, or the issuance of authority bonds or the
bonds of a special purpose trust used to fund the cost of a project
for which a participating party is directly or indirectly liable,
including, but not limited to, bonds, the security for which is
provided in whole or in part pursuant to the powers granted by this
division; bonds for which the authority has provided a guarantee or
enhancement, including, but not limited to, the purchase of the
subordinated bonds of the participating party, the subordinated bonds
of a special purpose trust, or the retention of the subordinated
bonds of the authority pursuant to this division; or any other type
of assistance deemed appropriate by the authority or the
participating party.
(k) "Fund" means the California Consumer Power and Conservation
Financing Authority Fund.
(l) "Loan agreement" means a contractual agreement executed
between the authority or a special purpose trust and a participating
party that provides that the authority or special purpose trust will
loan funds to the participating party and that the participating
party will repay the principal and pay the interest and redemption
premium, if any, on the loan.
(m) "Local publicly owned electric utility" has the same meaning
as that term is defined in Section 9604.
(n) "Participating party" means either of the following:
(1) Any person, company, corporation, partnership, firm, or other
entity or group of entities, whether organized for profit or not for
profit, engaged in business or operations within the state and that
applies for financial assistance from the authority for the purpose
of implementing a project.
(2) Any subdivision of the state or local government, including
departments, agencies, commissions, cities, counties, nonprofit
corporations, special districts, assessment districts, and joint
powers authorities within the state or any combination of these
subdivisions, that has, or proposes to acquire, an interest in a
project and that makes application to the authority for financial
assistance in a manner prescribed by the authority.
(o) "Project" means plants, facilities, equipment, appliances,
structures, expansions, and improvements within the state that serve
the purposes of this division as approved by the authority, and all
activities and expenses necessary to initiate and complete those
projects.
(p) "Revenues" means all receipts, purchase payments, loan
repayments, lease payments, and all other income or receipts derived
by the authority or a participating party from the sale, lease, or
other financing arrangement undertaken by the authority, a
participating party, including, but not limited to, all receipts from
a bond purchase agreement, and any income or revenue derived from
the investment of any money in any fund or account of the authority
or a participating party.
(q) "Special purpose trust" means a trust, partnership, limited
partnership, association, corporation, nonprofit corporation, or
other entity authorized under the laws of the state to serve as an
instrumentality of the state to accomplish public purposes and
authorized by the authority to acquire, by purchase or otherwise, for
retention or sale, the bonds of a participating party or of the
authority made or entered into pursuant to this division and to issue
special purpose trust bonds or other obligations secured by these
bonds or other sources of public or private revenues.
(r) "State" means the State of California.
3304. Any action taken pursuant to this division is exempt from
the Administrative Procedure Act, as defined in Section 11370 of the
Government Code.
CHAPTER 2. PURPOSE OF THE CALIFORNIA CONSUMER POWER AND
CONSERVATION FINANCING AUTHORITY
3310. The authority may only exercise its powers pursuant to
Article 4 (commencing with Section 3340) of Chapter 3 for the
following purposes:
(a) Establish, finance, purchase, lease, own, operate, acquire
generating facilities and other projects, on its own or through
agreements with public and private third parties or joint ventures
with public or private entities, or provide financial assistance for
projects by participating parties and generating facilities, to
ensure a sufficient and reliable supply of electricity for California'
s consumers at just and reasonable rates.
(b) Finance incentives, administered by the Energy Commission, the
commission, and other approved participating parties for consumers
and businesses to invest in cost-effective energy efficient
appliances, renewable energy projects, and other programs that will
reduce the demand for energy in California.
(c) Achieve an adequate energy reserve capacity in California by
2006.
(d) Provide financing for owners of aged, inefficient, electric
powerplants to perform necessary retrofits to improve the efficiency
and environmental performances of those powerplants.
(e) Acquire transmission facilities pursuant to Article 5
(commencing with Section 3350) of Chapter 3.
CHAPTER 3. THE CALIFORNIA CONSUMER POWER AND CONSERVATION
FINANCING AUTHORITY
Article 1. Creation of the Authority
3320. (a) There is hereby created in the state government the
California Consumer Power And Conservation Financing Authority, which
shall be responsible for administering this division.
(b) The authority shall be under the direction of an executive
director, who shall be appointed by a majority of the members of the
board, and shall serve at the direction of the board.
(c) The authority shall implement the purposes of Chapter 2
(commencing with Section 3310), and to that end finance projects and
programs in accordance with this division, all to the mutual benefit
of the people of the state and to protect their health, welfare, and
safety.
Article 2. Board of Directors
3325. (a) The authority shall be governed by a seven-member board
of directors that shall consist of the following persons:
(1) Two individuals appointed by the Governor, subject to
confirmation by the Senate. These two members shall have
considerable experience in power generation, conservation, and
financing.
(2) The Chair of the Energy Commission.
(3) The President of the commission.
(4) A member of the public appointed by the Senate Rules
Committee.
(5) A member of the public appointed by the Speaker of the
Assembly.
(6) The State Treasurer.
(b) Any appointed member of the board shall serve at the pleasure
of the appointing power.
(c) Four of the members shall constitute a quorum and the
affirmative vote of four board members shall be necessary for any
action to be taken by the board.
(d) Except as provided in this subdivision, the members of the
board shall serve without compensation, but shall be reimbursed for
actual and necessary expenses incurred in the performance of their
duties to the extent that reimbursement for these expenses is not
otherwise provided or payable by another public agency, and shall
receive one hundred dollars ($100) for each full day of attending
meetings of the authority.
3326. (a) The members of the board shall be subject to the
Political Reform Act of 1974 (Title 9 (commencing with Section
81000)) of the Government Code, the applicable rules and standards of
the Municipal Securities Rulemaking Board, and all other applicable
provisions of law.
(b) The board may purchase insurance for its fiduciaries or for
itself to cover liability or losses occurring by reason of the act or
omission of a fiduciary, if the insurance permits recourse by the
insurer against the fiduciary in the case of a breach of a fiduciary
obligation by the fiduciary.
3327. Meetings of the board shall be open to the public and
shall be conducted in accordance with the Bagley-Keene Open Meeting
Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1
of Division 3 of Title 2 of the Government Code).
Article 3. Executive Director
3330. The executive director shall manage and conduct the
business and affairs of the authority and the fund subject to the
direction of the board. Except as otherwise provided in this section,
the board may assign to the executive director, by resolution, those
duties generally necessary or convenient to carry out its powers and
purposes under this division. Any action involving final approval
of any bonds, notes, loans, or other financial assistance shall
require the approval of a majority of the members of the board.
Article 4. Powers of the Authority
3340. The authority is authorized and empowered to do any of the
following:
(a) Adopt an official seal.
(b) Sue and be sued in its own name.
(c) Adopt rules and regulations for the regulation of its affairs
and the conduct of its business.
(d) Do all things generally necessary or convenient to carry out
its powers and the purposes under this division.
3341. The board may do all of the following:
(a) Exercise the power of eminent domain.
(b) Issue bonds and authorize special purpose trusts to issue
bonds to pay all or part of the cost of any project, or to otherwise
carry out the purposes of this division.
(c) Enter into joint powers agreements with eligible public
agencies pursuant to Chapter 5 (commencing with Section 6500) of
Division 7 of Title 1 of the Government Code.
(d) Subject to any statutory or constitutional limitation on their
use, do any of the following:
(1) Engage the services of private consultants to render
professional and technical assistance and advice in carrying out the
purposes of this division; employ attorneys and other advisers as
may, in the determination of the board, be necessary in connection
with the issuance and sale, or authorization of special purpose
trusts for the issuance and sale, of any bonds.
(2) Contract for engineering, architectural, accounting, or other
services of appropriate state agencies as may, in the determination
of the board, be necessary for the successful development of a
project.
(3) Pay the reasonable costs of consulting engineers, architects,
accountants, and construction, land use and environmental experts
employed by any participating party if, in the determination of the
board, those services are necessary for the successful development of
a project.
(e) Charge and equitably apportion among participating parties or
other public or private entities the authority's administrative costs
and expenses, including operating and financing-related costs
incurred in the exercise of the powers and duties conferred by this
division.
(f) Acquire, take title to, and sell by installment sale or
otherwise, lands, structures, real or personal property, rights,
rights-of-way, franchises, easements, and other interests in lands
that are located within the state as the authority determines to be
necessary or convenient for the financing of the project, upon terms
and conditions that it considers to be reasonable.
(g) Make, receive, or serve as a conduit for the making of, or
otherwise provide for, grants, contributions, guarantees, insurance,
credit enhancements or liquidity of facilities, or other financial
enhancements to a participating party as financial assistance for a
project. The sources may include bond proceeds, dedicated taxes,
state appropriations, federal appropriations, federal grants and loan
funds, public and private sector retirement system funds, and
proceeds of loans from the Pooled Money Investment Account, or any
other source of money, property, labor, or other things of value.
(h) Make loans to any participating party, either directly or by
making a loan to a lending institution or other financial
intermediary, in connection with the financing of a project in
accordance with an agreement between the authority and a
participating party, either as a sole lender or in participation with
other lenders.
(i) Make loans to any participating party, either directly or by
making a loan to a lending institution, in accordance with an
agreement between the authority and the participating party to
refinance indebtedness incurred by the participating party in
connection with projects undertaken and completed prior to any
agreement with the authority or expectation that the authority would
provide financing, either as a sole lender or in participation with
other lenders.
(j) Mortgage all or any portion of the authority's interest in a
project and the property on which any project is located, whether
owned or thereafter acquired, including the granting of a security
interest in any property, tangible or intangible.
(k) Assign or pledge all or any portion of the authority's
interests in assets, things of value, mortgages, deeds of trust,
bonds, bond purchase agreements, loan agreements, indentures of
mortgage or trust, or similar instruments, notes, and security
interests in property, tangible or intangible and the revenues
therefrom, of a participating party to which the authority has made
loans, and the revenues therefrom, including payment or income from
any interest owned or held by the authority, for the benefit of the
holders of bonds.
(l) Lease the project being financed to a participating party,
upon terms and conditions that the authority deems proper; charge and
collect rents therefor; terminate any lease upon the failure of the
lessee to comply with any of the obligations thereof; include in any
lease, if desired, provisions that the lessee shall have options to
renew the lease for a period or periods, and at rents determined by
the authority; purchase any or all of the project; or, upon payment
of all the indebtedness incurred by the authority for the financing
of the project, the authority may convey, any or all of the project
to the lessee or lessees.
(m) Issue, obtain, or aid in obtaining, from any department or
agency of the United States, from other agencies of the state, or
from any private company, any insurance or guarantee to, or for, the
payment or repayment of interest or principal, or both, or any part
thereof, on any loan, lease, or obligation or any instrument
evidencing or securing the same, made or entered into pursuant to
this division.
(n) Enter into any agreement or contract, execute any instrument,
and perform any act or thing necessary or convenient to, directly or
indirectly, secure the authority's bonds, the bonds issued by a
special purpose trust, or a participating party's obligations to the
authority or to a special purpose trust, including, but not limited
to, bonds of a participating party purchased by the authority or a
special purpose trust for retention or sale, with funds or moneys
that are legally available and that are due or payable to the
participating party by reason of any grant, allocation, apportionment
or appropriation of the state or agencies thereof, to the extent
that the Controller shall be the custodian at any time of these funds
or moneys, or with funds or moneys that are or will be legally
available to the participating party, the authority, or the state or
any agencies thereof by reason of any grant, allocation,
apportionment, or appropriation of the federal government or agencies
thereof; and in the event of written notice that the participating
party has not paid or is in default on its obligations to the
authority or a special purpose trust, direct the Controller to
withhold payment of those funds or moneys from the participating
party over which it is or will be custodian and to pay the same to
the authority or special purpose trust or their assignee, or direct
the state or any agencies thereof to which any grant, allocation,
apportionment or appropriation of the federal government or agencies
thereof is or will be legally available to pay the same upon receipt
by the authority or special purpose trust or their assignee, until
the default has been cured and the amounts then due and unpaid have
been paid to the authority or special purpose trust or their
assignee, or until arrangements satisfactory to the authority or
special purpose trust have been made to cure the default.
(o) Purchase, with the proceeds of the authority's bonds, bonds
issued by, or for the benefit of, any participating party in
connection with a project, pursuant to a bond purchase agreement or
otherwise. Bonds purchased pursuant to this division may be held by
the authority, pledged or assigned by the authority, or sold to
public or private purchasers at public or negotiated sale, in whole
or in part, separately or together with other bonds issued by the
authority, and notwithstanding any other provision of law, may be
bought by the authority at private sale.
(p) Enter into purchase and sale agreements with all entities,
public and private, including state and local government pension
funds, with respect to the sale or purchase of bonds.
(q) Authorize a special purpose trust or trusts to purchase or
retain proceeds of the bonds of a special purpose trust or bonds
issued by, or for the benefit of, any participating party in
connection with a project or issued by the authority or a special
purpose trust, pursuant to a bond purchase agreement or otherwise.
Bonds purchased pursuant to this division may be held by a special
purpose entity, pledged or assigned by a special purpose entity, or
sold to public or private purchasers at public or negotiated sale, in
whole or in part, with or without structuring, subordination or
credit enhancement, separately or together with other bonds issued by
a special purpose trust, and notwithstanding any other provision of
law, may be bought by the authority or by a special purpose trust at
private sale.
3342. The fiscal powers granted to the authority by this division
may be exercised without regard or reference to any other
department, division, or agency of the state, except the Legislature
or as otherwise stated in this division. This division shall be
deemed to provide an alternative method of doing the things
authorized by this division, and shall be regarded as supplemental
and additional to powers conferred by other laws.
3343. No member of the board or any person executing bonds of the
authority or a special purpose trust pursuant to this division shall
be personally liable on the bonds or subject to any personal
liability or accountability by reason of the issuance thereof.
3344. All expenses incurred in carrying out this division shall
be payable solely from funds provided under the authority of this
division and no liability or obligation shall be imposed upon the
State of California and, none shall be incurred by the authority
beyond the extent to which moneys shall have been provided under this
division. Under no circumstances shall the authority create any
debt, liability, or obligation on the part of the State of California
payable from any source whatsoever other than the moneys provided
under this division.
3345. Bonds issued under this division shall not be deemed to
constitute a debt or liability of the state or of any political
subdivision thereof, other than the authority, or a pledge of the
faith and credit of the state or of any political subdivision, other
than the authority, but shall be payable solely from the funds herein
provided therefor. All bonds issued under this division shall
contain on the face thereof a statement to the following effect:
"Neither the faith and credit nor the taxing power of the State of
California or any local agency is pledged to the payment of the
principal of or interest on this bond." The issuance of bonds under
this division 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. Nothing in this section shall
prevent nor be construed to prevent the authority from pledging its
full faith and credit to the payment of bonds or issue of bonds
authorized pursuant to this division.
Article 5. Generation Facilities
3350. All generation facilities constructed or improved pursuant
to this division shall comply with Chapter 1 (commencing with Section
1720) of Part 7 of Division 2 of the Labor Code.
3351. All generation-related projects financed pursuant to this
division shall provide power to the consumers of this state at just
and reasonable rates, as determined by the commission or the
governing board of a municipal public utility.
3352. The activities of the authority under this division are
intended to supplement private sector power generation, consistent
with achieving reasonable energy capacity reserves within five years
of the effective date of the division.
3353. The authority shall have the authority to receive and act
on applications for financial assistance from owners of existing
powerplants that are 30 years old or older whose owners or operators
commit to undertake capacity expansion through facility retrofits,
new construction, or both, that will improve the efficiency and
environmental performance of generation facilities.
Article 6. Acquisition of Transmission
3360. (a) On January 1, 2002, the authority, in consultation with
the commission, shall determine and report to the Legislature, the
feasibility of the state acquiring, operating, and maintaining the
transmission facilities currently owned by the electrical
corporations and local publicly owned electric utilities of the
state. The report shall include an economic analysis of that
acquisition, describe how the authority would commence the
acquisition, and determine whether an acquisition is in the interest
of the citizens of the state.
(b) Upon determining that state acquisition, operation, and
maintenance of the transmission facilities owned by the electrical
corporations and local publicly owned electric utilities of the state
is in the interest of the citizens of the state, but no sooner than
60 days after the date that the report described in subdivision (a)
is submitted to the Legislature, the authority may commence the
acquisition.
Article 7. Renewable Energy and Conservation
3365. (a) The authority may establish programs that provide
loans, under terms and conditions approved by the authority, to any
participating party, which, in turn, shall use that loan to make
financial assistance available to California consumers and businesses
for electric and natural gas energy conservation, and for the use of
renewable energy resources.
(b) The purposes for which loans provided pursuant to subdivision
(a) may include, but shall not be limited to, any of the following:
(1) The purchase of consumer appliances and home improvements with
electric and gas energy efficiency or renewable energy
characteristics, as approved by the Energy Commission, the
commission, or a participating public utility, as applicable, and
certified by the applicable party as having been installed or
completed.
(2) The purchase or lease of business equipment and facility
improvements with electric and gas energy efficiency or renewable
energy characteristics, as approved by the Energy Commission, the
commission, or a participating public utility, as applicable, and
certified by the applicable party as having been installed or
completed.
3366. As a condition of receipt of a loan pursuant to Section
3365, a participating party shall be required to conduct a
comprehensive marketing program that makes consumers aware of the
availability of these financial assistance programs.
Article. 8 Natural Gas Plans
3368. The commission shall obtain from each natural gas supplier
under its jurisdiction, plans regarding the supplier's future
investments in natural gas exploration, development, and
transportation to meet California's needs at reasonable costs to the
consumers, and shall provide these reports to the authority, as
prescribed by subdivision (a).
(a) Each natural gas supplier shall, within 90 calendar days of
the effective date of this division, submit the report required by
this section to the commission, and the commission shall forward that
report to the authority not later than 10 business days after
receipt of the report.
(b) The authority, based on these reports and in consultation with
the commission, shall develop appropriate strategies for the
authority to facilitate a dependable supply of natural gas at
reasonable prices to the public. These strategies may include the
ability of the authority to finance activities to supplement private
sector supplies of natural gas, if it is determined to be in the best
interests of the state, using the same powers under this division
applicable to supplementing private sector supplies of electricity.
CHAPTER 4. CALIFORNIA CONSUMER POWER AND CONSERVATION
FINANCING AUTHORITY FUND
3370. (a) There is hereby created in the State Treasury the
California Consumer Power and Conservation Financing Authority Fund
for expenditure by the authority for the purpose of implementing the
objectives and provisions of this division. The authority may
establish within the fund additional accounts and subaccounts.
(b) The assets of the fund shall be available for the payment of
the salaries and other expenses charged against it in accordance with
this division.
(c) All moneys in the fund, upon appropriation, shall be available
for expenditure for the purposes stated in this division.
(d) The fund, on behalf of the authority, may borrow or receive
moneys from the authority, or from any federal, state, or local
agency or private entity, to create reserves in the fund as provided
in this division and as authorized by the board.
CHAPTER 5. BONDS
3380. (a) The board may so authorize, and the authority may issue
bonds, notes or other forms of indebtedness, as authorized by this
division, for the purposes provided in this division in the amount of
____ dollars ($____).
(b) Of the amount specified in subdivision (a), ____ dollars
($____) initially shall be reserved for the programs authorized by
Article 7 (commencing with Section 3365) of Chapter 3.
(c) Any portion of the initial reserved amount specified in
subdivision (b) that is not issued on or prior to January 1, 2004,
may be issued for other purposes of the authority, upon approval of
the board.
3381. Bonds issued by the authority are 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.
(b) Any and all bonds issued by the authority or special purpose
trust, 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.
(c) The issuance of bonds under this division 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.
(d) The state does hereby pledge to, and agrees with the holders
of any bonds issued under this division, and with those parties who
may enter into contracts with the authority pursuant to this
division, that the state will not limit or alter the rights hereby
vested in the authority to finance any project and to fulfill the
terms of any loan agreement, lease, or other contract with the
authority pursuant to this division, or in any way impair the rights
or remedies of the bond holders or of the parties until those bonds,
together with the interest thereon, are fully discharged or provision
for this discharge has been made and those contracts are fully
performed on the part of the authority. The authority, as agent for
the state, may include this pledge and undertaking for the state in
its obligations and contracts.
3382. The authority may request and obtain, upon approval of the
Pooled Money Investment Board, a loan from the Pooled Money
Investment Account. This loan may be subject to the terms negotiated
with the Pooled Money Investment Account, including, but not limited
to, a pledge of authority bond proceeds or revenues.