ARTICLE 13. Collateralized Borrowing [53595. - 53595.55.]

Cal. Government Code - GOV 13.

in effect

Cal. Government Code - GOV § 53595. Section 53595.

As used in this article: (a) “Debt instruments” means bonds, notes, certificates of participation, or other evidences of indebtedness issued by a local agency pursuant to this article. (b) “Indenture” means the instrument providing the terms and conditions for the issuance of the debt instruments, and may be a resolution, order, agreement, or other instrument. (c) “Legislative body” means the city council, board of supervisors, or other legislative or governing body of a local agency. (d) “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. (e) “Redevelopment agency” means a redevelopment agency established pursuant to Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code and includes a community development commission exercising the powers granted to a redevelopment agency pursuant to Section 34141 of the Health and Safety Code. (f) “Tax increment” means that portion of tax revenues allocated to a redevelopment agency pursuant to subdivision (b) of Section 33670 of the Health and Safety Code. (g) “Tax increment agreement” means any agreement between a local agency and a redevelopment agency which allocates tax increment to the local agency pursuant to Section 33401 of the Health and Safety Code. (h) “Tax increment revenues” means tax increment received or receivable by a local agency pursuant to a tax increment agreement.

Cal. Government Code - GOV § 53595.5. Section 53595.5.

This article shall apply only to local agencies located within a county with a population of over 4,000,000 persons.

Cal. Government Code - GOV § 53595.10. Section 53595.10.

A local agency may pledge, sell, transfer, assign, or otherwise dispose of tax increment revenues for any purpose for which the general funds of the local agency may be expended.

Cal. Government Code - GOV § 53595.15. Section 53595.15.

(a) A pledge by a local agency of tax increment revenues received pursuant to a tax increment agreement shall be valid and binding upon the local agency from the time the pledge is made for the benefit of pledgees and successors in interest thereof. The tax increment revenues pledged by the local agency or its assignees shall immediately, upon receipt by the local agency from the redevelopment agency, be subject to the lien of the pledge without physical delivery or further act. (b) Except as otherwise specified in this section, the lien of the pledge shall be valid and binding against all parties, irrespective of whether the parties have notice of the claim. The indenture by which the pledge is created need not be recorded. The pledge shall remain a valid and binding pledge until the debt instruments secured by the pledge are no longer outstanding. (c) Nothing in this article affects the rights, duties, or obligations of a redevelopment agency with regard to the allocation of tax increment by a redevelopment agency to a local agency pursuant to a tax increment agreement, the terms of which shall exclusively govern the rights, duties, and obligations of the redevelopment agency. This article does not vest in any pledgee, holder of debt instruments, successor in interest thereof, or any person, other than the local agency, any lien, right, claim, interest, or cause of action against a redevelopment agency for tax increment revenues held by, or to be received by, the redevelopment agency.

Cal. Government Code - GOV § 53595.20. Section 53595.20.

(a) A local agency may, from time to time, issue its negotiable debt instruments payable from, secured by, collateralized by, or representing interests in, tax increment revenues. The debt instruments may be issued to provide funds for capital expenditures, payment of rent or debt service, purchases of fixed assets, deposits into reserves created to improve the financial condition of the local agency, or other similar expenditures. The debt instrument proceeds may also be used to pay operating costs of the local agency if that use has been approved by a four-fifths vote of all the members of the governing body of the local agency. In no case, however, shall the proceeds of any debt instrument be used to pay for increased salary or benefit for officers or employees of a local agency. (b) (1) The debt instruments may be issued as serial debt instruments, term debt instruments, or both, and may be issued in those series or classes as the legislative body of the local agency may determine. The debt instruments shall bear the date or dates, mature at the time or times, bear interest at the rate or rates, fixed or variable, be payable at the time or times, be in the denominations, be in the form, either coupon or registered, carry the registration privileges, be executed in the manner, be payable in lawful money of the United States of America at the place or places, and be subject to terms of redemption, as the indenture relating to the debt instruments may provide. (2) The debt instruments may be sold at public or private sale, for the price or prices and upon these terms and conditions as the legislative body of the local agency shall determine. The local agency may sell the debt instruments at a price below the par value thereof. Pending preparation of the definitive debt instruments, the local agency may issue interim receipts or certificates or temporary debt instruments which shall be exchanged for the definitive debt instruments. The recitals of regularity of proceedings in any debt instrument issued or sold under this article shall be conclusive evidence of compliance with this article and of the validity of the debt instrument. (c) The debt instruments shall be signed by the chairperson of the legislative body and by any authorized officer of the local agency by manual or facsimile signature. Neither the members of the legislative body of a local agency nor any person executing the debt instruments shall be personally liable on the debt instruments or be subject to any personal liability or accountability by reason of the issuance or execution thereof. (d) The local agency shall have the power to purchase its debt instruments out of any funds available therefor. The local agency may hold, pledge, cancel, or resell the debt instruments, subject to, and in accordance with, agreements with holders of debt instruments.

Cal. Government Code - GOV § 53595.25. Section 53595.25.

(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. (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.

Cal. Government Code - GOV § 53595.30. Section 53595.30.

(a) All moneys received pursuant to this article and pledged to the payment of any class, series, or issue of debt instruments, whether as tax increment revenues or from any other source, shall be deemed to be trust funds to be held and applied solely as provided in this article. Until the funds are applied as provided by this article, and notwithstanding any other provision of law, the moneys may be invested in obligations or securities authorized by resolutions of the legislative body of the local agency authorizing the issuance of debt instruments. (b) Any officer with whom, or any bank or trust company with which, the moneys are deposited shall act as trustee of the moneys and shall hold and apply the moneys for the purpose of this article, subject to any regulations of the local agency adopted pursuant to this article and the indenture securing the bonds.

Cal. Government Code - GOV § 53595.35. Section 53595.35.

(a) In the discretion of the legislative body of a local agency, any debt instruments issued under this article may be secured by an indenture by and between the local agency and a corporate trustee or trustees, which may be any trust company or bank having the powers of a trust company within or without the state. The indenture or resolution providing for the issuance of the debt instruments may pledge or assign the tax increment revenues or the interest of the local agency therein. The indenture may contain provisions for protecting and enforcing the rights and remedies of the holders of debt instruments as may be reasonable and proper and not in violation of law, including particular provisions specifically authorized by law to be included in any indenture of the local agency authorizing debt instruments pursuant to this article. The indenture may set forth the rights and remedies of the holders of debt instruments and of the trustee or trustees, and may restrict rights of action of holders of debt instruments. In addition to the foregoing, the indenture may contain other provisions as the local agency may deem necessary or desirable to facilitate the issuance and sale of the debt instruments or for the protection and security of the holders of debt instruments. (b) Any holder of debt instruments issued under this article or any of the coupons appertaining thereto, and the trustee or trustees under any indenture, except to the extent the rights herein given may be restricted by any indenture securing the debt instruments, may, either at law or in equity, by suit, action, mandamus, or other proceeding, protect and enforce any and all rights under the laws of the state or granted by this article or under indenture, and may enforce and compel the performance of all duties required by this article or by the indenture to be performed by the local agency or by any officer, employee, or agent thereof.

Cal. Government Code - GOV § 53595.40. Section 53595.40.

(a) Debt instruments issued under this article shall be payable solely from the tax increment revenues herein provided and not from any other assets or revenues of the issuing local agency. (b) The local agency issuing the debt instruments shall not pledge the faith or credit of the state or of any municipality or political subdivision thereof to secure the debt instruments. All debt instruments shall contain on the face thereof a statement to the effect that neither the State of California nor the local agency issuing the debt instruments shall be obligated to pay the principal of, premium, if any, or interest on the debt instruments, except from the revenues of the local agency pledged for payment, and that neither the faith and credit nor the taxing power of the State of California nor of any municipality or political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the debt instruments. (c) The issuance of debt instruments under this article shall not directly or indirectly or contingently obligate the state, a municipality, or any political subdivision of the state to levy or pledge any form of taxation whatever therefor or to make any appropriation for the payment thereof.

Cal. Government Code - GOV § 53595.45. Section 53595.45.

(a) Debt instruments issued by a local agency under this article are hereby made securities in which all (1) banks, bankers, savings banks, trust companies, and other persons carrying on a banking business, (2) all insurance companies, insurance associations, and other persons carrying on an insurance business, (3) all administrators, executors, guardians, trustees, and other fiduciaries, and (4) all other persons whatsoever who now are or may hereafter be authorized to invest in debt instruments or other obligations of the state, may properly and legally invest any funds, including capital belonging to them or within their control. (b) The debt instruments are hereby made securities which may properly and legally be deposited with, and received by, any state or municipal officers or agency of the state or municipality or political subdivision thereof for any purpose for which the deposit of debt instruments or other obligations of the state is now, or may hereafter be, authorized by law.

Cal. Government Code - GOV § 53595.50. Section 53595.50.

Any debt instruments issued under this article, their transfer, and in the income therefrom shall at all times be free from taxation of every kind by the state and by all municipalities and political subdivisions in the state.

Cal. Government Code - GOV § 53595.55. Section 53595.55.

This article shall be deemed to provide a complete, additional, and alternative method for doing the things authorized hereby and shall be regarded as supplemental and additional to powers conferred by other laws. This article shall be liberally construed so as to effectuate its purposes. To the extent that this article is inconsistent with any other general statute or special act or parts thereof, this article shall be deemed controlling.

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