ARTICLE 7. Limited Obligation Bonds [99320. - 99383.]

Cal. Public Utilities Code - PUC 7.

in effect

Cal. Public Utilities Code - PUC § 99320. Section 99320.

This article is not applicable in a county where the transit district has been provided bonding authority by statute.

Cal. Public Utilities Code - PUC § 99320.5. Section 99320.5.

If the transportation planning agency determines that the cost of an approved claim for capital expenditures for public transportation purposes, excluding highways, within a county is, together with all other approved claims to be paid from the local transportation fund of such county, in excess of the money in such fund for the fiscal year, the board of supervisors of such county shall be notified to call an election in conformity with the provisions of this article.

Cal. Public Utilities Code - PUC § 99321. Section 99321.

For purposes of this article, “limited obligation bonds” are bonds payable solely from the local transportation fund of the county. The money, or portion thereof, designated by the transportation planning agency in such fund to pay interest and redemption charges shall hereafter be referred to as “revenues.”

Cal. Public Utilities Code - PUC § 99322. Section 99322.

In determining the amount of bonds to be issued, the transportation planning agency may include: (a) All costs and estimated costs incidental to or connected with the acquisition, construction, improving or financing of the improvements. (b) All engineering, inspection, legal and fiscal agent’s fees, costs of the bond election and of the issuance of such limited obligation bonds, bond reserve funds and working capital and bond interest estimated to accrue during the construction period and for a period of not to exceed 12 months after completion of construction. (c) All costs for equipment.

Cal. Public Utilities Code - PUC § 99323. Section 99323.

The bonds and the resolution providing for their issuance shall state that they are limited obligation bonds payable solely from the revenues.

Cal. Public Utilities Code - PUC § 99324. Section 99324.

The term of bonds issued shall not exceed 31 years.

Cal. Public Utilities Code - PUC § 99325. Section 99325.

The bonds shall be sold as the transportation planning agency shall determine but for not less than a price which will produce a net interest cost that will not exceed an average of 7 percent a year as determined by standard tables of bond values.

Cal. Public Utilities Code - PUC § 99326. Section 99326.

The bonds are special obligations of the county and shall be a charge against and are secured by a lien upon and shall be payable, as to the principal thereof and interest thereon, and any premiums upon the redemption thereof, solely from the revenues and such funds as are described in the resolution authorizing the issuance of the bonds.

Cal. Public Utilities Code - PUC § 99327. Section 99327.

By resolution, the board of supervisors shall pledge, place a charge upon, and assign all or any part of the revenues for the security of the bonds.

Cal. Public Utilities Code - PUC § 99328. Section 99328.

The payment of interest on and principal of the bonds and any premiums upon the redemption of any thereof are secured by an exclusive pledge, charge, and lien upon all or the designated portion of the revenues.

Cal. Public Utilities Code - PUC § 99329. Section 99329.

The revenues and any interest earned on the revenues constitute a trust fund for the security and payment of the interest on and principal of the bonds.

Cal. Public Utilities Code - PUC § 99330. Section 99330.

So long as any bonds or interest thereon are unpaid following their maturity, the revenues or the designated portion and interest thereon shall not be used for any other purpose.

Cal. Public Utilities Code - PUC § 99331. Section 99331.

If the interest and principal of the bonds and all charges to protect or secure them are paid when due, an amount or amounts for other purposes may be apportioned from the revenues or the designated portion thereof.

Cal. Public Utilities Code - PUC § 99332. Section 99332.

Bonds of the same issue shall be equally secured by a pledge, charge, and lien upon the revenues specified in the resolution authorizing the issuance of the bonds, without priority for number, or date of bonds, of sale, of execution, or of delivery pursuant to this chapter and the resolution authorizing the issuance of the bonds; except that any county, with the consent of the transportation planning agency, may authorize the issuance of bonds of different series and may provide that the bonds in any series shall, to the extent and in the manner prescribed in the resolution, be subordinated and be junior in standing, with respect to the payment of principal and interest and the security thereof, to such other bonds as may be specified in the resolution.

Cal. Public Utilities Code - PUC § 99333. Section 99333.

The general fund or any other fund of the county shall not be liable for the payment of the bonds or their interest.

Cal. Public Utilities Code - PUC § 99334. Section 99334.

The general credit or taxing power of the county, other than the sales and use tax as herein provided, shall not be liable for the payment of the bonds or their interest.

Cal. Public Utilities Code - PUC § 99335. Section 99335.

The holder of the bonds or coupons shall not compel the exercise of the taxing power by the county, other than the sales and use tax as herein provided, or the forfeiture of its property.

Cal. Public Utilities Code - PUC § 99336. Section 99336.

The principal of and interest on the bonds and any premiums upon the redemption of any thereof are not a debt of the county, nor a legal or equitable pledge, charge, lien, or encumbrance upon any of its property, or upon any of its income, receipts, or revenues, except the revenues that may be legally applied, pledged, or otherwise made available to their payment.

Cal. Public Utilities Code - PUC § 99337. Section 99337.

Every bond shall recite in substance that the principal of and interest on the bond are payable solely from the revenues pledged to its payment and that the county is not obligated to pay it, except from the revenues.

Cal. Public Utilities Code - PUC § 99338. Section 99338.

The bonds and interest or income from the bonds are exempt from taxation in this state, except from gift, inheritance, and estate taxes.

Cal. Public Utilities Code - PUC § 99339. Section 99339.

In the resolution authorizing the bonds, the board of supervisors may, with the consent of the transportation planning agency, insert any of the provisions authorized by this article, which shall become a part of the contract with the bondholders.

Cal. Public Utilities Code - PUC § 99340. Section 99340.

The transportation planning agency may provide for limitations on: (a) The purpose to which the proceeds of sale of any issue of bonds may be applied. (b) The issuance of additional bonds for the same purpose and the lien of additional bonds.

Cal. Public Utilities Code - PUC § 99341. Section 99341.

The transportation planning agency may provide for events of default and terms upon which the bonds may be declared due before maturity and the terms upon which the declaration and its consequences may be waived.

Cal. Public Utilities Code - PUC § 99342. Section 99342.

The transportation planning agency may provide for the rights, liabilities, powers, and duties arising upon the county’s breach of any covenants, conditions, or obligations.

Cal. Public Utilities Code - PUC § 99343. Section 99343.

The transportation planning agency may provide for the vesting in a trustee of the right to enforce covenants to secure payment of or in relation to the bonds, and the trustee’s powers and duties and the limitation of his liabilities.

Cal. Public Utilities Code - PUC § 99344. Section 99344.

The transportation planning agency may provide for the terms upon which the bondholders or any percentage of them may enforce covenants or duties imposed by this article.

Cal. Public Utilities Code - PUC § 99345. Section 99345.

The transportation planning agency may require the board of supervisors to provide in the resolution for a procedure for amending or abrogating the terms of the resolution with the consent of the holders of a specified number of the bonds.

Cal. Public Utilities Code - PUC § 99346. Section 99346.

Any resolution containing such a procedure may also provide for meetings of bondholders or for their written assent without a meeting and the manner of consenting, with or without a meeting.

Cal. Public Utilities Code - PUC § 99347. Section 99347.

The resolution shall specifically state the effect of amendment upon the rights of the holders of all of the bonds and attached or detached interest coupons and shall be binding upon the holders of all of the bonds and coupons issued pursuant to the resolution.

Cal. Public Utilities Code - PUC § 99348. Section 99348.

The transportation planning agency may provide for any other acts and things necessary, convenient or desirable to secure the bonds or tending to make them more marketable.

Cal. Public Utilities Code - PUC § 99349. Section 99349.

The county shall pay or cause to be paid the principal and interest of the bonds on the date, at the place, and in the manner mentioned in the bonds and coupons and in accordance with the resolution authorizing their issuance.

Cal. Public Utilities Code - PUC § 99350. Section 99350.

During the period that any of the bonds and the interest thereon are unpaid, the county shall prescribe, revise and collect taxes in the manner provided by Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code.

Cal. Public Utilities Code - PUC § 99351. Section 99351.

After making allowances for contingencies and error in the estimates, the taxes, for the respective purposes hereinafter set forth, shall be at least sufficient to pay the following amounts in the order set forth: (a) The interest on and principal of the bonds as they become due and payable. (b) All payments required for compliance with the resolution authorizing the issuance of the bonds or any other contract with the bondholders, including the creation of sinking and reserve funds. (c) All payments to meet any other obligations of the county which are charges, liens, or encumbrances upon the revenues.

Cal. Public Utilities Code - PUC § 99352. Section 99352.

A separate, distinct and special account shall be created at or before the issuance of the bonds, which shall be maintained continuously in the local transportation fund during the time that any of the bonds or the interest thereon are outstanding and unpaid.

Cal. Public Utilities Code - PUC § 99353. Section 99353.

All designated revenues shall be deposited in the special account and payments shall be made therefrom as provided in Section 99351.

Cal. Public Utilities Code - PUC § 99354. Section 99354.

The county shall preserve and protect the security of the bonds and the rights of the bondholders and warrant and defend their rights against all claims and demands of all persons.

Cal. Public Utilities Code - PUC § 99355. Section 99355.

In order to fully preserve and protect the priority and security of the bonds, the county shall pay from the special account in the local transportation fund and discharge all lawful claims for labor, materials and supplies, which if unpaid may become a lien or charge upon the designated revenues prior or superior to the lien of the bonds or impair the security of the bonds.

Cal. Public Utilities Code - PUC § 99356. Section 99356.

The county shall hold in trust the revenues pledged to the payment of the principal of and interest on the bonds for the benefit of the bondholders and shall apply the same pursuant to the resolution authorizing the issuance of the bonds or to the resolution as modified.

Cal. Public Utilities Code - PUC § 99357. Section 99357.

The county may invest funds held in reserve, or in any sinking fund, or funds not required for immediate disbursement, in property or securities in which counties may legally invest funds subject to their control. No such investment shall be made in contravention of any covenant or agreement in any resolution authorizing the issuance of any outstanding bonds.

Cal. Public Utilities Code - PUC § 99358. Section 99358.

The county shall keep proper books of record and accounts of the revenues, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the revenues.

Cal. Public Utilities Code - PUC § 99359. Section 99359.

At all times the books shall be subject to the inspection of the holders of not less than 10 percent of the outstanding bonds or their representatives authorized in writing.

Cal. Public Utilities Code - PUC § 99360. Section 99360.

The county shall cause to be published a summary statement showing the amount of revenues deposited which are required as security for payment of the principal of and interest on the bonds, the disbursements from such revenues in reasonable detail, and a general financial statement.

Cal. Public Utilities Code - PUC § 99361. Section 99361.

The statement shall be published annually, not more than 120 days after the close of each fiscal year. The county shall furnish a copy of the statement to any bondholder upon request.

Cal. Public Utilities Code - PUC § 99362. Section 99362.

In the resolution authorizing the bonds, the county may agree that the statement shall be prepared or audited by an independent certified public accountant and shall be in the form and contain the detail specified in the resolution.

Cal. Public Utilities Code - PUC § 99363. Section 99363.

The duties set forth in this article do not require the county to expend any funds other than revenues pledged to secure payment of the principal of or interest on bonds as provided in this article.

Cal. Public Utilities Code - PUC § 99364. Section 99364.

A fiscal or paying agent may be appointed as now or as may hereafter be provided in Article 7 (commencing with Section 54550), Chapter 6, Part 1, Division 2, Title 5 of the Government Code.

Cal. Public Utilities Code - PUC § 99365. Section 99365.

An action to determine the validity of bonds may be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure.

Cal. Public Utilities Code - PUC § 99366. Section 99366.

Bondholders shall have the remedies as now or as may hereafter be provided in Article 10 (commencing with Section 54640), Chapter 6, Part 1, Division 2, Title 5 of the Government Code.

Cal. Public Utilities Code - PUC § 99367. Section 99367.

The bonds may be refunded in the manner now or as may hereafter be provided in Article 11 (commencing with Section 54660), Chapter 6, Part 1, Division 2, Title 5 of the Government Code.

Cal. Public Utilities Code - PUC § 99368. Section 99368.

Without the issuance of bonds hereunder, a pledge or allocation from revenues for the payment of bonds and interest issued or to be issued under any other law, may be made upon the approval thereof in the manner provided for the issuance of bonds hereunder.

Cal. Public Utilities Code - PUC § 99369. Section 99369.

All bonds issued in pursuance of the provisions of this article shall by their issuance be conclusive evidence of the regularity, validity and legal sufficiency of all proceedings, acts and determinations in any wise pertaining thereto, had or made hereunder; and, after the same have been issued, no sales tax levied or collected for the purpose of paying the principal or interest on the bonds shall be held to be invalid or illegal, or set aside by reason of any error, informality, irregularity, omission or defect in any of the proceedings, acts or determinations in any wise pertaining to the issuance or payment of the bonds, and not amounting to a want of due process of law under the Constitution.

Cal. Public Utilities Code - PUC § 99370. Section 99370.

All bonds by their issuance in pursuance of the provisions of this article shall by their issuance be conclusive evidence of the regularity, validity and sufficiency of all proceedings, acts and determinations in any wise pertaining thereto, had or made hereunder.

Cal. Public Utilities Code - PUC § 99371. Section 99371.

Any action, suit or proceeding of any kind or nature in which the validity of any of the proceedings taken under the provisions of this article is questioned or attacked, shall be filed within 30 days after the day of the adoption of the resolution providing for the issuance of the bonds and in case such action is not brought raising such issue within such period, then thereafter all persons whatsoever shall be barred in any action, suit or proceeding from pleading, asserting or claiming that any of the proceedings or other actions herein specified, were defective, faulty or invalid in any respect.

Cal. Public Utilities Code - PUC § 99372. Section 99372.

This article and all of its provisions shall be liberally construed to the end that the purposes hereof may be effective. If any section, subsection, sentence, clause or phrase of this article is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this article. It is hereby declared that this article would have been passed irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared unconstitutional.

Cal. Public Utilities Code - PUC § 99373. Section 99373.

Proceedings are initiated to issue bonds within the meaning of this article when the board of supervisors, by majority vote, adopts a resolution in conformity with the notification from the director.

Cal. Public Utilities Code - PUC § 99374. Section 99374.

At its next subsequent meeting, the board of supervisors shall pass an ordinance ordering the submission of the proposition of incurring a bonded debt for the purposes set forth in the resolution to the qualified voters of the county at an election held for that purpose.

Cal. Public Utilities Code - PUC § 99375. Section 99375.

Propositions for more than one object or purpose may be submitted at the same election.

Cal. Public Utilities Code - PUC § 99376. Section 99376.

The ordinance shall recite: (a) The object and purpose of incurring the indebtedness. (b) The estimated cost of the public improvements. (c) The amount of the principal of the indebtedness. (d) The rate or maximum rate of interest on the indebtedness, which shall not exceed 7 percent, and need not be recited if it does not exceed 4 1 2 percent. Such interest shall be payable semiannually, except that interest for the first year after the date of the bonds may be made payable at the end of such year. (e) The date of the election. (f) The manner of holding the election and the procedure for voting for or against the proposition.

Cal. Public Utilities Code - PUC § 99377. Section 99377.

The ordinance may provide that the estimated cost stated therein of the public improvements includes any or all of the following: (a) Legal or other fees incidental to or connected with the authorization, issuance and sale of the bonds. (b) The costs of printing the bonds and other costs and expenses incidental to or connected with the authorization, issuance and sale of the bonds. (c) If the public improvements are revenue-producing public works, bond interest estimated to accrue during the construction period and for a period of not to exceed 12 months after completion of construction. If such statement is made, the proceeds of the sale of the bonds may be used to pay such of the foregoing as are stated in the ordinance. This section shall not be construed to authorize a city to use the proceeds of the sale of bonds for a purpose for which it could not use its general fund.

Cal. Public Utilities Code - PUC § 99378. Section 99378.

The ordinance shall be published once a day for at least seven days in a newspaper published at least six days a week in the county, or once a week for two weeks in a newspaper published less than six days a week in the county. If there are no such newspapers, it shall be posted in three public places in the county for two succeeding weeks. No other notice need be given.

Cal. Public Utilities Code - PUC § 99379. Section 99379.

If an election called pursuant to this article is consolidated with any other election, the ordinance calling the bond election need not set forth the election precincts, polling places and officers of election, but may provide that the precincts, polling places and officers of election shall be the same as those set forth in the ordinance, order, resolution or notice calling or providing for or listing or designating the precincts, polling places and election officers for the election with which the election called pursuant to this article is consolidated, and shall refer to such ordinance, order, resolution or notice by number and title or date of adoption, or by date or proposed date of publication and the name of the newspaper in which publication has been or will be made, or by any other definite description.

Cal. Public Utilities Code - PUC § 99380. Section 99380.

Except as otherwise provided in the ordinance, the election shall be conducted as other county elections.

Cal. Public Utilities Code - PUC § 99381. Section 99381.

If two-thirds of the electors voting on the proposition vote for it, the bonds shall be issued.

Cal. Public Utilities Code - PUC § 99382. Section 99382.

When two or more propositions for incurring indebtedness are submitted at the same election, the votes cast for and against each proposition shall be counted separately.

Cal. Public Utilities Code - PUC § 99383. Section 99383.

If any proposition is defeated, the transportation planning agency shall reconsider the application pertaining thereto. Another election on a substantially similar proposition shall not be called within the county pursuant to this article within six months after the prior election.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026