GOVERNMENT CODE
SECTION 53850-53858



53850.  (a) As used in this article, "local agency" means a county,
city and county, city, school district of any type, community college
district, county board of education, or any other municipal or
public corporation or district.
   (b) For purposes of this article only, "local agency" also
includes a charter school. This subdivision does not make a charter
school a local agency for any purpose other than for this article.



53851.  The powers conferred by this article are in addition to and
an alternative to any power conferred by any other law for borrowing
by a local agency and any amount borrowed hereunder shall not be
considered in any limitation on the amount which may be borrowed by
any such local agency under any other law.



53852.  On or after the first day of any fiscal year a local agency
may borrow money pursuant to this article, the indebtedness to be
represented by a note or notes issued to the lender pursuant to this
article. The money borrowed may be used and expended by the local
agency for any purpose for which the local agency is authorized to
use and expend moneys, including but not limited to current expenses,
capital expenditures, investment and reinvestment, and the discharge
of any obligation or indebtedness of the local agency.



53852.5.  Proceeds of sales or funds set aside for the repayment of
any notes issued pursuant to this article shall not be invested for a
term that exceeds the term of the notes.



53853.  (a) The note or notes shall be issued pursuant to a
resolution adopted by the legislative body of the local agency
authorizing the issuance of the note or notes, except that the note
or notes of a county board of education, school district, charter
school, or community college district that has not been accorded
fiscal accountability status pursuant to Section 1080, 42647, 42650,
or 85266 of the Education Code shall be issued in the name of the
school district, charter school, or community college district by the
board of supervisors of the county, the county superintendent of
which has jurisdiction over the school district, charter school, or
community college district, as soon as possible following receipt of
a resolution of the governing board or body of the school district,
charter school, or community college district requesting the
borrowing and the note or notes of a county board of education shall
be issued in the name of the county board of education by the board
of supervisors of the county as soon as possible following receipt of
a resolution of the county board of education requesting that the
county assist in that borrowing. The school district, charter school,
community college district, or county board of education that
submits that resolution to the county board of supervisors shall
simultaneously provide a copy of the resolution to the county
superintendent of schools and the county treasurer.
   (b) Notwithstanding subdivision (a), if the appropriate county
board of supervisors fails to authorize, by resolution, the issuance
of a note or notes in the name of a county board of education, school
district, charter school, or community college district as specified
by that subdivision within 45 calendar days following its receipt of
the resolution of the county board of education, the governing board
of the school district or community college district, or the
governing body of the charter school requesting that issuance, or if
the county board of supervisors notifies the county board of
education, school district, charter school, or community college
district that it will not authorize that issuance within that 45-day
period, then the note or notes may be issued by the county board of
education, school district, charter school, or community college
district in its name pursuant to the previously adopted resolution.
The resolution adopted by the governing board or body of the school
district, charter school, or community college district, or by the
county board of education, shall not contain direction to the county
treasurer for the investment of any proceeds of the note or notes
while deposited in the county treasury, but may direct the investment
of proceeds of the note or notes held by a trustee and any other
amounts held by that trustee or pledged for repayment or security of
the note or notes. This subdivision applies only in the case of a
note or notes of a county board of education, school district,
charter school, or community college district to be issued in
conjunction with a note or notes of one or more other county board of
education, school district, charter school, or community college
district. A county board of supervisors, county treasurer, or county
auditor shall not be deemed to have any fiduciary responsibility with
regard to any note or notes issued pursuant to this subdivision.
This subdivision shall not apply to a county board of education,
school district, charter school, or community college district that
is under the authority of a trustee as a result of accepting an
emergency apportionment.
   (c) Notes authorized to be issued may be issued from time to time
as provided in the resolution. The resolution of the county board of
education, school district, charter school, or community college
district shall set forth the form and the manner of execution of the
note or notes.


53854.  Any note issued under this article may be negotiable, may be
payable to order or to bearer and may be in any denomination. Such
note shall be payable not later than the last day of the fiscal year
in which it is issued; provided that such note may be made payable
during the fiscal year succeeding the fiscal year in which issued,
but in no event later than 15 months after the date of issue, when
such note is payable only from revenue received or accrued during the
fiscal year in which issued. Such note may bear interest not to
exceed 10 percent per annum, payable as provided therein. Such
interest may be represented by coupons attached to said note.



53855.  The resolution authorizing the issuance of any note may
provide that such note shall be subject to call and redemption prior
to maturity, at the option of the local agency, at such price or
prices as may be fixed in the resolution, not exceeding a premium of
3 percent of the par value of the note so subject to redemption. The
resolution shall fix the method of giving notice of redemption to the
holder of the note to be redeemed and the price or prices at which
the note shall be subject to redemption. A note so subject to call
and redemption prior to maturity shall contain a recital to that
effect on its face, and no note shall be subject to call or
redemption prior to its fixed maturity date unless it contains such
recital.



53856.  Any taxes, income, revenue, cash receipts, or other moneys
of the local agency, including moneys deposited in inactive or term
deposits, may be pledged to the payment of the note or notes and the
interest thereon, except, however, that no moneys which, when
received by the local agency, will be encumbered for a special
purpose may be pledged for the payment of the note or notes or the
interest thereon unless an equivalent amount of the proceeds from
said note or notes is set aside for and used for said special
purpose. The resolution authorizing the issuance of the note or notes
shall specify what taxes, income, revenue, cash receipts or other
moneys are pledged for the payment thereof. The note or notes and the
interest thereon shall be a first lien and charge against, and shall
be payable from the first moneys received by the local agency from,
such pledged moneys.
   For the purposes of this section, "revenue" includes, but is not
limited to, revenue from the state and federal governments.



53856.1.  (a) The Board of Supervisors of Orange County, in the
resolution authorizing the issuance of any note or notes, may provide
that the board elects to guarantee payment of the note or notes in
accordance with the following:
   (1) If Orange County elects to participate under this section, it
shall provide notice to the Controller of that election, which notice
shall include a schedule for the repayment of principal and interest
on the notes, and identify a note trustee appointed by Orange County
for the purposes of this section.
   (2) In the event that, for any reason, the funds made available
pursuant to this article for the payment of principal and interest of
the notes will not be sufficient for that purpose at the time
payment on principal, interest, or both, is required as to any one or
more of those notes, Orange County shall so notify the trustee. The
trustee shall immediately communicate that information to the
affected noteholders and to the Controller.
   (3) When the Controller receives notice from the trustee as
described in paragraph (2) that the funds made available pursuant to
this article for the payment of principal and interest of the notes
is not sufficient for that purpose at the time payment on principal,
interest, or both, is required as to any one or more of those notes,
the Controller shall make an apportionment to the trustee in the
amount of that required payment for the purpose of making that
payment. The Controller shall make that payment only from moneys
credited to the Motor Vehicle License Fee Account in the
Transportation Tax Fund to which Orange County is entitled at that
time under Chapter 5 (commencing with Section 11001) of Part 5 of
Division 2 of the Revenue and Taxation Code, and shall thereupon
reduce, by the amount of the payment, the subsequent allocation or
allocations to which Orange County would otherwise be entitled under
that chapter.
   (4) As an alternate to the procedure set forth in paragraphs (2)
and (3), Orange County may specify in the notice provided to the
Controller pursuant to paragraph (1) a schedule of payments to be
made on specified dates to the trustee, and the Controller shall,
subject to the limitation in the second sentence of paragraph (3),
make apportionments to the trustee in the amount of the required
payments on the specified dates.
   (b) This section shall not be construed to obligate the State of
California to make any payment to Orange County from the Motor
Vehicle License Fee Account in the Transportation Tax Fund in any
amount or pursuant to any particular allocation formula, or to make
any other payment to Orange County, including, but not limited to,
any payment in satisfaction of any debt or liability incurred or
guaranteed by Orange County in accordance with this section.




53857.  Notwithstanding the provisions in Section 53856, any note
issued pursuant to this article shall be a general obligation of the
local agency, and, to the extent not paid from the taxes, income,
revenue, cash receipts or other moneys of the local agency pledged
for the payment thereof shall be paid with the interest thereon from
any other moneys of the local agency lawfully available therefor;
provided, however, that any tax levied by a county for interest on
notes for borrowed money shall be in addition to all other taxes and
shall not be less than sufficient to pay the interest on notes for
borrowed money as is to become due before the time for making the
next general tax levy.


53858.  Notes shall not be issued pursuant to this article in any
fiscal year in an amount which, when added to the interest payable
thereon, shall exceed 85 percent of the estimated amount of the then
uncollected taxes, income, revenue, cash receipts, and other moneys
of the local agency which will be available for the payment of said
notes and the interest thereon; provided, however, that to the extent
that any principal of or interest on such notes is secured by a
pledge of the amount in any inactive or term deposit of the local
agency, the term of which will terminate during said fiscal year,
such principal and interest may be disregarded in computing said
limit.
   For the purposes of this section, "revenue" includes, but is not
limited to, revenue from the state and federal governments.