BILL NUMBER: SBX2 12 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Johannessen
MAY 17, 2001
An act to add Chapter 11 (commencing with Section 6475) to Part 1
of Division 3 of the Water Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 12, as introduced, Johannessen. Water Storage Facilities:
Revenue Bonds.
Existing law authorizes the Department of Water Resources to
construct and maintain the state water project, which includes
hydroelectric facilities.
This bill would do all of the following:
(1) Require the department to plan, construct and operate water
storage facilities, gas pipelines, electric transmission lines, and
to loan money to private entities to construct generating facilities.
The water storage facilities would provide water storage and
hydroelectric power.
(2) Create the California Natural Gas Pipeline and Electric
Transmission Board.
(3) Require the California Water Commission and board to approve
any plans before the department commences construction, as specified.
(4) Provide for the issuance of up to $8,000,000,000 in revenue
bonds to fund water storage facilities and loans, and up to
$2,000,000,000 to fund gas pipelines and electric transmission lines.
(5) Require all hydroelectric power produced by the water storage
facilities to be sold for use in California unless a specified
operating reserve capacity is achieved within the state.
(6) Require the Director of Water Resources to submit all
resolutions of issuance for revenue bonds to the California Water
Commission or to the California Natural Gas Pipeline and Electrical
Transmission Board, as specified, for approval.
(7) Establish in the State Treasury the Hydroelectric Water
Storage Development Bond Fund.
(8) Provide for the conditions and procedures for the issuance of
the revenue bonds.
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. Chapter 11 (commencing with Section 6475) is added to
Part 1 of Division 3 of the Water Code, to read:
CHAPTER 11. WATER STORAGE AND HYDROELECTRIC POWER PRODUCTION
Article 1. Projects
6475. As used in this chapter the following terms have the
following meanings:
(a) "Board" means the California Natural Gas Pipeline and Electric
Transmission Board.
(b) "Commission" means the California Water Commission.
(c) "Fund" means the Hydroelectric Water Storage Development Bond
Fund established by Section 6476.
(d) "Water storage facilities" means all of the following
facilities:
(1) ____
(2) ____
(3) ____
(4) ____
(5) ____
(e) "Pipeline facilities" means ____.
(f) "Electric transmission lines" means ____.
6476. There is hereby established in the State Treasury the
Hydroelectric Water Storage Development Bond Fund to fund all of the
following pursuant to this chapter:
(a) The acquisition, construction, completion and operation of
water storage facilities.
(b) The construction and operation of natural gas pipelines.
(c) The construction and operation of electric transmission lines.
(d) Loans for private entities to construct electrical generation
facilities.
6477. (a) The department shall plan, construct, and operate all
of the following:
(1) The water storage facilities specified in subdivision (d) of
Section 6475.
(2) The pipeline facilities specified in subdivision (e) of
Section 6475.
(3) Notwithstanding any other provision of law, the electric
transmission lines specified in subdivision (f) of Section 6476.
(b) The department is authorized to acquire and dispose of
property as needed for the purposes authorized by this chapter.
Article 2.5 (commencing with Section 250) of Chapter 2.5 of Division
1 is applicable to the acquisition and disposal of property pursuant
to this chapter.
(c) The department, at a rate equal to the state's interest costs
plus a reasonable administrative fee, shall provide loans to private
entities to construct electric generation facilities.
6478. (a) The commission shall approve any plans for water
storage facilities before the department commences construction.
(b) The board shall approve any plans before the department
commences construction of a pipeline facility or electrical
transmission line, and any loans.
6479. A water storage facility constructed pursuant to this
chapter shall provide hydroelectric power. No storage facility shall
be constructed unless the commission determines that during the
terms of the revenue bonds that will be issued to construct the water
storage facility, the revenues derived from the distribution of
water and electric power from the water storage facility will meet
the yearly requirements of subdivision (d) of Section 6485.
6480. All electric power generated by the water storage
facilities constructed pursuant to this chapter shall only be sold
intrastate for use in California unless the operating reserve
capacity from all generating sources of electricity within the state
is 10 percent or greater. If electricity is sold interstate, any
contract shall include a provision that the terms of the contract are
not operable during the term of the contract when the operating
reserve capacity from all generating sources of electricity within
the state drops below 10 percent.
Article 2. California Natural Gas Pipeline and Electric
Transmission Board
6482. (a) There is hereby established in state government the
California Natural Gas Pipeline and Electric Transmission Board. The
Board shall have five members, including the chairperson.
(b) The Governor shall appoint three members. The Senate Rules
Committee shall appoint one member. The Speaker of the Assembly
shall appoint one member.
(c) Three members constitute a quorum.
(d) A majority of the members of the board shall select from among
the members the chairperson of the board.
(e) Members of the board shall serve four-year terms beginning on
the effective date of this section. A member shall serve until his
or her successor is appointed. A vacancy or vacancies shall not
impair the right of the remaining members to exercise all of the
powers of the board unless there are insufficient members to
constitute a quorum.
(f) (1) Each member shall receive a per diem of one hundred
dollars ($100) for each day actually spent in the discharge of
official duties. A member shall be reimbursed for traveling and
other expenses necessarily incurred in the performance of his or her
official duties.
(2) Notwithstanding any other provision of law, a member may not
receive per diem compensation when the member also receives
compensation for his or her regular public employment.
6483. (a) The board may do all of the following:
(1) Adopt, amend, and rescind rules and regulations to carry out
its duties under this chapter. The rules and regulations shall be
adopted in accordance with the Administrative Procedure Act as
defined in Section 11370 of the Government Code.
(2) Employ in accordance with state law up to five staff including
an executive director.
(b) The offices of the board shall be in the department's
Sacramento office building.
(c) Meetings of the board shall be in Sacramento and shall be open
to the public in accordance with the provisions of the Bagley-Keene
Open Meeting Act as defined in Section 11120 of the Government Code.
(d) The board shall do all of the following:
(1) Approve plans of the department before the department
commences constructions of a pipeline facility or electrical
transmission line.
(2) Establish by regulation the conditions for the department to
loan revenue bond funds to private entities for the construction of
electrical generation facilities.
(3) Establish a subaccount in the fund to be known as the fund
loan revolving subaccount for the purpose of loaning funds under
subdivision (d) of Section 6476 and for receiving repayment of those
funds.
(4) Approve or disapprove department resolutions for issuance of
revenue bonds for purposes of subdivisions (e) and (f) of Section
6475 and subdivision (d) of Section 6476.
Article 3. Fiscal Provisions
6485. (a) Revenue bonds may be issued by the department at those
times and in those amounts that do not exceed ten billion dollars
($10,000,000,000) for the purposes of this chapter.
(b) Proceeds of the sale of revenue bonds issued for purposes of
this chapter shall be deposited in the fund. Upon appropriation,
money may be withdrawn from the fund upon requisition of the
department for the purpose of carrying out this chapter. Up to two
billion dollars ($2,000,000,000) shall be expended for the purposes
of subdivisions (e) and (f) of Section 6475. Up to eight billion
dollars ($8,000,000,000) shall be expended for the purposes of
subdivision (d) of Section 6475 and subdivision (d) of Section 6476.
(c) The revenues from the sale of water and power from the water
storage facilities constructed pursuant to this chapter and from the
charges for use of the pipeline facilities and electric transmission
lines constructed pursuant to this chapter shall be pledged first to
the payment of the principal of and interest on the revenue bonds and
to all funds created for the further security of those revenue
bonds, including reserve fund, sinking fund, and all other payments
required to be made in connection with the revenue bonds.
(d) During the time that revenue bonds are outstanding, the
department shall establish, fix, and collect payments on all sales of
water and power, and charges for the use of pipeline facilities and
electric transmission facilities. The payments shall produce an
amount which, together with income derived from investments, will
yield revenues which, in the aggregate, will be sufficient with
respect to the then immediately ensuing fiscal year to pay and
provide for all of the following:
(1) Interest to become due and payable in that ensuing fiscal year
on all revenue bonds.
(2) The principal amount of all serial revenue bonds maturing by
their terms during that fiscal year.
(3) The aggregate minimum sinking fund payments, if any, required
to be made for that fiscal year on account of revenue bonds then
outstanding.
(4) Sums as may be required as reserve fund or funds payments due
in that fiscal year.
(5) The estimated expenses of maintenance, operation, and
administration of the water storage facilities as provided in the
budget of the department for that fiscal year.
(e) The revenue bond principal and interest payments and any
premium payable upon revenue bonds called for redemption, and all
payments required for reserve funds, sinking funds and all other
funds and accounts created as further security for the revenue bonds
constitute a first, direct, and exclusive charge and lien on all
revenues from the sale of water and power from the water storage
facilities constructed pursuant to this chapter and the interest or
other income derived therefrom. Those revenues, together with any
interest or other income earned thereon, and the funds and the
interest and income earned thereon, constitute a trust fund for the
security and payment of the revenue bonds and shall not be used or
pledged for any other purpose or transferred to any other fund as
long as any of the revenue bonds are outstanding and unpaid.
(f) Revenue bonds authorized under any resolution of issuance
approved by the commission or the board shall be sold by the
Treasurer upon the request of the department at public or private
sale and at the times and in the amounts as the department deems
necessary to provide sufficient funds for the purposes for which the
revenue bonds are then authorized. However, the revenue bonds shall
not be sold at less than 95 percent of their par value and accrued
interest thereon to the date of delivery. No revenue bonds
authorized under any resolution of issuance may be sold at private
sale unless the sale and the terms thereof have been approved in
writing by the commission or board, as appropriate. Successive
issues of the revenue bonds within the limits of the authorization
for the issuance of revenue bonds, in the event any limitations are
included in the proceedings for the issuance of the revenue bonds,
shall be equally and regularly secured without preference, priority,
or distinction as to security or otherwise by reason of time of
issue, or sale. All purchase contracts shall be deemed to constitute
a pool for all bonds of any issue or series, except as revenue bonds
of various series may differ with respect to dates, numbers,
interest rates, maturity, redemption provisions, sinking fund
provisions, or otherwise as expressly authorized or provided in any
resolution of issuance.
(g) In the event the Treasurer shall proceed with the sale of
revenue bonds, all costs and expenses of publication of notice of
sale shall be a charge against the department and shall be paid by
the department. The department shall pay the cost of printing,
lithographing, or otherwise preparing the revenue bonds, the charges
of any duly authorized agent of the Treasurer appointed for the
payment of principal and interest of the revenue bonds in any place
other than the office of the Treasurer, any expenses incurred in
connection with delivery of the revenue bonds including the fees and
expenses of municipal bond attorneys whose opinion on the validity of
the revenue bonds is to be provided by the department without charge
to the successful purchaser of the revenue bonds. The department is
authorized to employ any nationally known municipal bond attorneys
and the Attorney General for the purpose of rendering legal opinions
as to the validity of the revenue bonds to be furnished to the
purchaser of the revenue bonds without cost. The department is also
authorized to employ or appoint independent financial consultants,
attorneys, certified public accountants, public accountants,
engineers, or other independent consultants whose services or
opinions are necessary or advisable in connection with the issuance
and sale of revenue bonds. Payment for those services shall be made
from the proceeds of the sale of the revenue bonds or from any other
funds available to the department on a warrant duly drawn by the
Controller for that purpose. Those expenses may also include the
cost of delivering revenue bonds at any place other than the office
of the Treasurer, including transportation and insurance costs and
the costs of using uniform identification numbers as specified by the
Committee on Uniform Security Identification Procedure on the bonds
including filing fees, printing, and related costs.
6486. Whenever the department determines that revenue bonds
should be issued for purposes of subdivision (d) of Section 6475, the
director shall submit a resolution of issuance to the commission,
which shall consider and approve or disapprove any resolution of
issuance so submitted. Whenever the department determines that
revenue bonds should be issued for purposes of subdivision (e) or (f)
of Section 6476 or subdivision (d) of Section 6477, the director
shall submit a resolution of issuance to the board which shall
consider and approve or disapprove any resolution of issuance so
submitted. Upon approval, by a resolution adopted by a majority of
the members of the commission or board, as appropriate, the
resolution of issuance shall become effective and the Treasurer shall
cause the revenue bonds authorized thereunder to be prepared in
accordance with the terms of the resolution of issuance.
6487. Revenue bonds shall be issued in the name of the department
and as the obligation of the department, but neither the principal
of, nor the interest on, any revenue bonds shall be or become a lien,
charge or liability against the State of California, the department,
or against the property or funds of any of them, except to the
extent of the pledge of revenues as may be provided by the resolution
of issuance pursuant to which the revenue bonds are issued. Every
revenue bond shall contain a recital substantially as follows:
"Neither the faith and credit nor the taxing power of the State of
California is pledged to the payment of the principal of or interest
on this bond."
6488. All revenue bonds shall bear the facsimile signature of the
director and shall be authenticated by the trustee. The interest
coupons attached to any revenue bond shall bear a facsimile of the
signature of the director.
In case any official whose signature or countersignature appears
on the revenue bonds or coupons ceases to be that official before the
revenue bonds so signed or countersigned have been actually executed
or delivered, the signature or countersignature is nevertheless
valid and sufficient for all purposes as if the person had remained
in office until the delivery of the revenue bonds and the revenue
bonds and coupons shall be issued and shall be as binding upon the
department as though the person who signed the revenue bonds or
coupons had been that official on the date borne by the revenue bonds
or coupons and on the date of delivery. The revenue bonds may be
signed and sealed on behalf of the department by that person as if,
at the actual date of execution of the revenue bonds, the person was
the director as the case may be, although, on the date borne by the
revenue bonds, the person was not that official.
6489. The validity of the authorization and issuance of any
revenue bonds shall not be dependent on or affected by the validity
or regularity of any proceedings relating to the expenditure of the
proceeds thereof or the validity of any contracts or payments
received for water and power thereon pledged to pay revenue bonds.
6490. Reference on the face of any revenue bonds to a resolution
of issuance by its date of adoption, or the apparent date on the face
thereof, shall be sufficient to incorporate all of the provisions
thereof and of this chapter into the body of the revenue bonds and
their appurtenant coupons. Each taker and subsequent holder of the
revenue bonds or coupons, whether the coupons are attached to, or
detached from, the revenue bonds, shall have recourse to all of the
provisions of the resolution of issuance and of this chapter and
shall be bound thereby.
6491. (a) A resolution of issuance may provide for all of the
following:
(1) The issuance of revenue bonds in one or more series and for
the aggregate principal amount of any series thereof. Any series of
revenue bonds may consist of serial revenue bonds or of term revenue
bonds with sinking fund requirements or partially of serial revenue
bonds and partially of term revenue bonds with sinking fund
requirements.
(2) Supplemental resolutions of issuance as may from time to time
be required to fix and determine the terms and conditions of each
series of revenue bonds.
(3) The dates to be borne by revenue bonds and by each series
issued thereunder and for the dates of maturity thereof.
(4) The payment of interest on revenue bonds annually or
semiannually or in part annually and in part semiannually, upon dates
and at rates as may be provided for by the director. The first
interest payment may be at any time on or before one year from the
date of the revenue bonds.
(5) The call and redemption of revenue bonds issued thereunder,
upon terms, conditions and notice, and upon the payment of premium,
as may be fixed in the resolution. No revenue bond shall be subject
to call or redemption prior to its fixed maturity date unless the
right to exercise the call is expressly stated on the face of the
revenue bond.
(6) The forms, denominations, registration, transfer, and
interchange of revenue bonds issued thereunder. Revenue bonds may be
issued as coupon revenue bonds or as registered revenue bonds in any
denomination or denominations authorized by the resolution of
issuance.
(7) The interchange of coupon revenue bonds and registered revenue
bonds, and for the registration of coupon revenue bonds as to
principal only or as to both principal and interest. Revenue bonds
of different denominations, in either coupon or registered form, may
be made exchangeable for revenue bonds of an equal aggregate
principal amount, but of different denominations upon terms as may be
provided in the resolution of issuance.
(8) The replacement of lost, destroyed, or mutilated revenue bonds
or coupons.
(9) The issuance of temporary or interim revenue bonds,
certificates, or receipts pending the preparation and delivery of
definitive revenue bonds. The temporary or interim revenue bonds,
certificates, or receipts may be of any denomination and with or
without coupons.
(10) The payment of the principal and interest of revenue bonds at
any place within or without the State of California and in specified
coin or currency of the United States and may include a covenant to
maintain, in each city in which any outstanding revenue bonds shall
be expressed to be payable, an office or agency where revenue bonds
and interest coupons thereon may be presented for payment.
(11) The means by which payments of principal and interest of
revenue bonds shall be secured.
(12) A provision requiring the department to pay or cause to be
paid punctually the principal of all revenue bonds issued thereunder
and the interest thereon, on the dates, at the places and in the
manner provided in the revenue bonds and in the coupons appertaining
thereto.
(13) A provision requiring the department to preserve and protect
the security of the revenue bonds and the rights of the holders
thereof and to warrant and defend such rights.
(14) Provisions requiring, specifying, or limiting the kind,
amount, and character of insurance to be maintained by the department
on any property under the jurisdiction of the department and the use
and disposition of the proceeds of any insurance thereafter
collected.
(15) Provisions requiring the department to hold or cause to be
held in trust the revenues, or any part of the revenues, pledged to
the payment of revenue bonds and the interest thereon, and to apply
or cause to be applied revenues or such part of revenues, only as
provided in the resolution of issuance.
(16) A provision authorizing, or limiting the power of, the
department to issue additional revenue bonds and establishing the
terms and conditions upon which additional bonds may be issued.
(17) A clause providing the events of default and the terms and
conditions upon which any or all of the revenue bonds then or
thereafter issued may become or be declared due and payable prior to
maturity, and the terms and conditions upon which declaration and its
consequences may be waived.
(18) Provisions establishing the rights, powers and duties arising
upon breach by the department of any of the covenants, conditions,
or obligations contained therein.
(19) Provisions prescribing a procedure by which the terms and
conditions of the resolution may be subsequently amended or modified
with the consent of the commission and the vote or written consent of
the holders of a specified principal amount or specified proportion
of the revenue bonds issued and outstanding. The resolution may
include provisions for meetings of revenue bond holders and for the
manner in which the consent of the revenue bondholders may be given.
A resolution of issuance may provide that the revenue bonds held by
the department shall not be counted as outstanding revenue bonds or
be entitled to vote or consent, but shall nevertheless be subject to
any modification or amendment.
(20) That the revenue bonds issued thereunder and the interest
thereon shall be secured by all or part of the revenues or the
proceeds of sale of the revenue bonds, or both, and may establish a
lien upon the revenues or proceeds as the department, with the
approval of the commission, shall determine.
(21) A covenant that the department will duly pay and discharge,
or cause to be paid and discharged, any taxes, assessments, or other
governmental charges lawfully imposed upon any properties owned by or
under the jurisdiction of the department, or upon the revenues, as
well as any lawful claim for labor, materials, or supplies which, if
unpaid, might become a lien or charge upon the revenues, or which
might impair the security of the revenue bonds.
(22) Provisions requiring the preparation, filing, and publication
of financial statements with respect to the revenues, the funds
securing the revenue bonds, and the expenses, properties, and
operations of the department, including provisions for examinations
and reports by independent certified public accountants.
(23) A covenant that the department will at all times use its best
efforts to maintain the powers, functions, duties, and obligations
reposed in it pursuant to law at the time of adoption of the
resolution, and that it will not at any time voluntarily do, suffer,
or permit any act or thing, the effect of which would be to hinder,
delay, or imperil the payment of the indebtedness evidenced by any of
the revenue bonds or the performance or observance of any of the
covenants contained in the resolution.
(24) Provisions requiring, permitting, restricting, or governing
the deposit and investment of funds established for the security of
revenue bonds issued thereunder, and requiring that the deposits be
secured or specifying the type of security required for the deposits
irrespective of any law authorizing or permitting deposit or
investment of public funds generally.
(25) A covenant that the department or commission will make or
adopt and execute, or cause to be made, adopted, and executed, any
and all further resolutions, acts, deeds, conveyances, assignments,
or assurances as may be reasonably required for effectuating the
intention of the resolution of issuance and for better assuring and
confirming unto the holders of the revenue bonds the rights and
benefits provided in the resolution of issuance.
(26) Any and all covenants and agreements on the part of the
department, and for other acts or matters which the department,
subject to the approval of the commission, deems necessary or
convenient or advisable for the better security of the revenue bonds
issued thereunder or to make the revenue bonds more marketable.
(27) The creation of any other funds or accounts other than the
fund which will be deemed necessary or desirable for the payment of
or further security of revenue bonds. The resolution of issuance
establishing the fund or accounts may provide for the manner and
method of disbursement of those funds or accounts, the amounts to be
deposited therewith and withdrawn therefrom, the application of any
surplus moneys in any funds or accounts to the purchase or redemption
of revenue bonds and for the investment of moneys in funds or
accounts in particular bonds or obligations which are then made
eligible for those investments by the terms of the resolution.
(b) The Treasurer shall act as trustee for the department and the
holders of the revenue bonds, to receive and disburse all the
revenues applicable to the payment of the principal of or interest on
the revenue bonds, including any reserve fund, sinking fund, or
other fund or account established for further securing the revenue
bonds. The department and the commission or board may provide in any
resolution of issuance for the appointment of a trustee other than
the Treasurer to represent and enforce the rights of holders of the
revenue bonds if, and in the manner and under conditions provided in
the resolution authorizing the revenue bonds, that trustee is a bank
or trust company duly qualified to do business in this state.
6492. (a) The department, subject to the approval of the
commission or board, as appropriate, may provide for the issuance,
sale, or exchange of refunding bonds for the purpose of redeeming or
retiring any bonds issued under this chapter. All provisions of this
chapter applicable to the issuance of revenue bonds are applicable
to the funding or refunding bonds and to the issuance, sale, or
exchange thereof. The department, with the approval of the
commission, or board, as appropriate, may adopt a resolution or
resolutions of issuance or supplemental resolutions authorizing the
issuance of such refunding bonds and fixing the terms and conditions
thereof.
(b) Refunding bonds may be issued in a principal amount sufficient
to provide funds for the payment of all revenue bonds to be refunded
thereby and in addition to the payment of all expenses incident to
the calling, retiring,
or paying of such outstanding revenue bonds and the issuance of the
refunding bonds. The expenses include any amount necessary to be
made available for the payment of interest upon such refunding bonds
from the date of sale thereof to the date of payment of the revenue
bonds to be refunded, or to the date upon which the revenue bonds to
be refunded will be paid pursuant to the call thereof or agreement
with the holders thereof, and the premium, if any, necessary to be
paid in order to call or retire the outstanding revenue bonds and the
interest accruing thereon to the date of the call or retirement.
(c) Refunding revenue bonds shall not constitute a debt or
obligation of the State of California but shall be revenue bonds of
the department of the same character and payable from the same funds
as other revenue bonds authorized pursuant to this chapter. Any and
all reserve or other funds applicable to the payment of the revenue
bonds to be refunded may, if so directed by the department, be
transferred to any reserve or other funds provided with respect to
the refunding bonds.
(d) The department may from time to time or at any time sell or
exchange refunding bonds for the purpose of retiring, paying, or
refunding either all or part of the outstanding revenue bonds, or of
one or more series thereof, as it deems advisable. The refunding
bonds may be issued and delivered as outstanding revenue bonds to be
refunded thereby mature or are about to mature or are subject to call
or redemption, or if the retirement thereof has been assured by
consent of the holders thereof. Refunding bonds may be delivered in
whole or in part in exchange for outstanding revenue bonds with the
consent of the holders.
6493. (a) The department, subject to the approval of the
commission or board, as appropriate, may borrow money in anticipation
of the sale of revenue bonds, and for that purpose may provide for
the issuance and sale of negotiable bond anticipation notes. Except
as otherwise provided in this section, the notes and the resolution
providing for their issuance may contain any provision, condition, or
limitation which a revenue bond or any resolution of issuance may
contain.
(b) The interest on bond anticipation notes shall be payable from
the same funds from which the interest on revenue bonds is payable.
The principal of the notes shall be payable from the proceeds of sale
of revenue bonds. The department shall not be precluded from paying
the principal from any other moneys lawfully available therefor.
6494. Any revenue bondholder may by mandamus or other appropriate
proceedings compel the performance of any of the duties imposed upon
any state official or employee or imposed upon the department or its
officers, agents, or employees with respect to the collection of
revenues from pledged contracts entered into by the department with
veterans, and the investment and disbursement of the proceeds
received from the sale of revenue bonds.
6495. The department may, in any resolution of issuance, define
the events of default, including among other things, default in the
payment of the principal or interest upon or premium due upon any
revenue bonds or default by the department in the observance of any
of the covenants, agreements, or conditions on its part to be
performed under the resolution of issuance, and may provide that upon
the happening of any event of default the holders of not less than
the majority in aggregate principal amount of the revenue bonds at
the time outstanding will be entitled to declare the principal of all
of the revenue bonds then outstanding and the interest accrued
thereon to be immediately due and payable.
6496. Whenever a bank or trust company is acting as trustee by
reason of any default, or for the protection of the interests of the
revenue bondholders, the bank or trust company as the trustee shall
take the action that the holders or registered owners of 25 percent
in principal amount of all the revenue bonds then outstanding shall
request in writing; provided, that the bank or trust company as the
trustee may request reasonable security before taking any action so
requested.
6497. No remedy conferred upon or reserved to the holders of
revenue bonds is intended to be exclusive of any other remedy or
remedies now or hereafter provided by law and each and every such
remedy shall be cumulative and shall be in addition to every other
remedy given under this chapter or now or hereafter existing at law
or in equity or by statute or otherwise.
6498. While any of the revenue bonds remain outstanding the
powers, duties, or existence of the department and of every other
official or agency of the State of California shall not be diminished
or impaired in any manner that will adversely affect the interests
and rights of the holders of the revenue bonds.
6499. (a) All revenue bonds and the income therefrom are at all
times exempt from taxation in the State of California.
(b) All revenue bonds shall be legal investments for all trust
funds, for the funds of all insurance companies, banks (both
commercial and savings), trust companies, state school funds, and any
pension funds, public or private.
(c) Any money or funds which may by law be invested in bonds of
the State of California may be invested in revenue bonds authorized
under this chapter.
(d) Whenever any bonds of the State of California may by law be
used as security for the performance of any act or the deposit of any
public money, revenue bonds authorized under this chapter may be so
used.
(e) All revenue bonds, subject to the provisions for registration
contained therein, are negotiable instruments.
(f) The department may include in the proceedings authorizing the
issuance of revenue bonds any provisions not inconsistent with this
chapter that limit, restrict, or regulate the holding, deposit,
investment, and application of money consisting of the proceeds from
the sale of the revenue bonds or the revenues or other income
received from the sale of water or power by the department, and the
provisions shall constitute a contract with the holders of the
revenue bonds and shall be binding upon the department and all other
officers, officials, and agencies of the State of California and upon
the state so long as any of the revenue bonds are outstanding.
(g) Warrants for the payments to be made on account of the revenue
bonds either as to principal, interest, premium, or otherwise shall
be duly drawn by the Controller, upon the request of the Treasurer,
whenever the drawing of the warrants is required in order to make the
payments.
(h) Notwithstanding anything contained in this chapter, the
proceeds received from the sale of revenue bonds and any revenues
received by the department from the contracts for water and power
entered into by the department may, upon appropriation, be used to
defray any expenses incurred by the department or the Treasurer in
connection with, and incidental to, the issuance and sale of revenue
bonds, including expenses for preparation, inspections and
examinations, surveys, and reports which may be required by the
purchasers of, and any legal opinions deemed necessary or advisable
by the department in connection with the issuance of revenue bonds,
except that the proceedings authorizing the issuance of such revenue
bonds may contain appropriate provisions governing the use and
application of the proceeds from the sale of the revenue bonds or
other revenues received by the department for the purposes specified
in this chapter.
(i) If any article, section, subdivision, sentence, clause, or
phrase of this chapter is for any reason held to be unconstitutional
or invalid or unenforceable, the decision shall not affect the
validity or enforceability of the remaining portions of the chapter.
The Legislature hereby declares that it would have passed this
chapter and each article, section, subdivision, sentence, clause, and
phrase hereof irrespective of the fact that any one or more
articles, sections, subdivisions, sentences, clauses, and phrases may
be declared unconstitutional, invalid, or unenforceable.
(j) All money in any of the funds or accounts created or
authorized to be created in any resolution of issuance under the
provisions of this chapter is hereby appropriated for expenditure in
carrying out the purposes herein and therein provided.
(k) For the purposes of meeting the necessary expenses of initial
organization and operation until the date the department derives
revenues or proceeds from bonds or notes as provided under this
chapter, the department may, with the approval of the Department of
Finance, borrow money as needed from the General Fund in the State
Treasury. The borrowed moneys shall be repaid with interest from the
first proceeds from the sale of bonds or notes as provided under
this chapter.