California Government Code
(a) All issues of bonds may be qualified for issuance under this section.
(b) The commission may refuse to qualify an issue unless it finds that the proposed issuance is fair, just, and equitable to a purchaser of the bonds, and that the bonds proposed to be issued and the methods to be used by an authority in issuing them are not such as, in its opinion, will work a fraud upon the purchaser thereof.
(c) The commission may impose when qualifying an issue under this section conditions imposing a legend condition restricting the transferability thereof, impounding the proceeds from the sale thereof, or any other
condition, if the commission finds that without the condition the issuance will be unfair, unjust, or inequitable to a purchaser of the bonds. The commission may in its discretion modify or remove any of the conditions when, in its opinion, they are no longer necessary or appropriate.
(d) The commission may refuse to qualify an issue of bonds under this section that is proposed to be issued in exchange for one or more outstanding bonds, or bonds and claims, or partly in the exchange and partly for cash or property, unless it approves the terms and conditions of the issuance and exchange and the fairness of the terms and conditions, and may hold a hearing upon the fairness of the terms and conditions, at which all persons to whom it is proposed to issue bonds or to deliver any other consideration in the exchange have the right to appear.
(e) The commission may refuse to qualify an
issue unless it finds that the bonds issued in connection with the project by the authority will be adequately secured and the revenues and other funds applicable to the payment of the bonds are, or upon the acquisition of the facilities that the bonds finance, will be sufficient to pay the principal of and the interest on the bonds.
(f) The commission may refuse to qualify an issue of bonds proposed pursuant to Section 1401 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), or any amendments thereto, unless it finds that the issuer has approved the issuance of bonds for the project pursuant to a resolution in compliance with the American Recovery and Reinvestment Act of 2009 and that the project meets the criteria established by the American Recovery and Reinvestment Act of 2009.
(g) (1)The commission may establish one or more reserve
funds to provide financial assistance to businesses on behalf of issuers of qualifying bond issues. The reserve may be established and replenished with grants, allocations, reimbursements, appropriations, awards, or other funds from federal, state, or nonprofit agencies, programs, or sources. The commission shall adopt criteria and procedures for funding cost of issuance for qualifying bond issues through a secure fund under this subdivision. The commission shall not levy taxes or impose fees, except the fees as authorized by this act.
(2) The commission may establish one or more reserve funds to provide financial assistance, the form of which may be, but is not limited to, any of the following:
(A) Payments of part or all of the cost of acquiring letters of credit for qualified bonds.
(B) Payments of part or all of
the cost of acquiring insurance for qualified bonds.
(C) Payments of part or all of the cost of acquiring guarantees for qualified bonds.
(D) Payments of part or all of the cost of acquiring other forms of credit support for qualifying bonds.
(E) Payments of part or all of the cost of issuance for qualified bonds.
(3) Each reserve fund established pursuant to this subdivision shall be deposited in a special account established by the Controller. Notwithstanding any other law, and subject to any requirements of federal tax law or regulations relative to maintaining the tax-exempt status of the obligations of any qualified bonds, all interest or other gains earned by investment or deposit of money in the special account pursuant to any provision of Part 2
(commencing with Section 16300) of Division 4 of Title 2 or pursuant to any other provision of law shall be credited to, and deposited in, the account.
(4) Any funds of the commission, including proceeds from the sale of bonds or notes issued on or after January 1, 2010, money set aside for the commission’s administrative expenses, and reserve funds created under this subdivision, may be invested in any obligations of any state or local government including mutual funds, trusts, and similar instruments representing a pool of obligations. The Treasurer may adopt regulations providing appropriate investment standards for these investments. If the Treasurer determines it is necessary to ensure compliance with federal tax laws or regulations, the commission may, notwithstanding any other law, deposit funds received as fees from the issuance of obligations or received as reserve funds pursuant to this subdivision, with a bank or trust company acting
on behalf of the authority.