California Government Code 53595.25 – (a) A local agency may provide for the issuance of debt …
(a) A local agency may provide for the issuance of debt instruments for the purpose of refunding any debt instruments or any class, series, or issue of debt instruments of the local agency then outstanding, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption, purchase, or maturity of debt instruments.
(b) The proceeds of any debt instruments issued for the purpose of refunding of outstanding debt instruments may, in the discretion of the local agency, be (1) applied to the purchase, redemption prior to maturity, or retirement at maturity of any outstanding debt instruments on their redemption date or dates, or (2) paid to a third person to assume the local agency’s obligation to make the payments, and may, pending that application, be placed in escrow to be reapplied to the purchase, retirement at maturity, or redemption on the date or dates determined by the local agency.
Terms Used In California Government Code 53595.25
- Debt instruments: means bonds, notes, certificates of participation, or other evidences of indebtedness issued by a local agency pursuant to this article. See California Government Code 53595
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Legislative body: means the city council, board of supervisors, or other legislative or governing body of a local agency. See California Government Code 53595
- Local agency: means any city, county, city and county, district, including, but not limited to, a school district or other public entity authorized to enter into a tax increment agreement. See California Government Code 53595
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes any person, firm, association, organization, partnership, limited liability company, business trust, corporation, or company. See California Government Code 17
(c) Any proceeds placed in escrow may, pending their use, be invested and reinvested in obligations or securities authorized by resolutions of the legislative body of the local agency, payable or maturing at the time or times as are appropriate to ensure the prompt payment of the principal, interest, and redemption premium if any, of the outstanding debt instruments to be refunded. The interest, income, and profits, if any, earned or realized on this investment may also be applied to the payment of the outstanding debt instruments to be refunded or to the payment of interest on the refunding debt instruments. After the terms of the escrow have been fully satisfied and carried out, any balance of the proceeds and interest, income, and profits, if any, earned or realized on the investment thereof may be returned to the local agency for use by the local agency.
(d) All of the refunding debt instruments are subject to this article in the same manner, and to the same extent, as other debt instruments issued pursuant to this article.
(Added by Stats. 1993, Ch. 902, Sec. 1. Effective October 8, 1993.)