Bill Text: CA AB1550 | 2009-2010 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Department of Water Resources: refunding bonds.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Passed) 2009-08-06 - Chaptered by Secretary of State - Chapter 154, Statutes of 2009. [AB1550 Detail]

Download: California-2009-AB1550-Introduced.html

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BILL NUMBER: AB 1550	INTRODUCED
	BILL TEXT


INTRODUCED BY   Committee on Banking and Finance (Nava (Chair),
Evans, Fong, Fuentes, Mendoza, Ruskin, Swanson, and Torres)

                        MARCH 10, 2009

   An act to amend Section 80130 of the Water Code, relating to
electricity.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1550, as introduced, Committee on Banking and Finance.
Department of Water Resources: refunding bonds.
   Existing law authorizes the Department of Water Resources to
administer contracts entered into before January 1, 2003, for the
purchase of electricity, and to sell electricity to retail end-use
customers and, with certain exceptions, local publicly owned
utilities, at not more than the department's acquisition costs.
Existing law requires the department to recover those costs through
the issuance of bonds, in an amount up to $13,423,000,000, or as
otherwise specified, to be repaid by ratepayers. Existing law
authorizes the department to refund those bonds and specifies that
the refunding of bonds to obtain a lower interest rate is not subject
to the aggregate amount of bonds authorized to be issued.
   This bill would grant additional authority to the department to
refund those bonds, including the authority to refund bonds bearing a
variable interest rate with bonds bearing interest at a fixed
interest rate and to refund bonds if a national recognized rating
agency reduces or withdraws, or proposes to reduce or withdraw, the
rating assigned to specified indebtedness. The bill would specify
that refunding bonds issued by the department pursuant to this
program before January 1, 2010, are deemed to have been issued for
one or more of these authorized purposes.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 80130 of the Water Code is amended to read:
   80130.   (a)    The department may incur
indebtedness and issue bonds as evidence thereof, provided that bonds
may not be issued in an amount the debt service on which, to the
extent payable from the fund, is estimated by the department to
exceed the amounts estimated to be available in the fund for their
payment.  The 
    (b)     The  department may authorize
the issuance of bonds (excluding notes issued in anticipation of the
issuance of bonds and retired from the proceeds of those bonds) in an
aggregate amount up to the greater of thirteen billion four hundred
twenty-three million dollars ($13,423,000,000) or the amount
calculated by multiplying by a factor of four the annual revenues
generated by the California Procurement Adjustment, as determined by
the commission pursuant to Section 360.5 of the Public Utilities Code
 ; provided, such   if the  aggregate
amount shall   does  not exceed thirteen
billion four hundred twenty-three million dollars ($13,423,000,000).
 Nothing in this 
    (c)     This  section  shall
  does not  prohibit the department from issuing
bonds prior to the effective date of this bill based upon the
authorization granted to the department by the provisions of Chapter
4 of the Statutes of 2001-02 First Extraordinary Session. 
Refunding 
    (d)     (1)     Refunding
 of bonds  to obtain a lower interest rate 
 for any of the following purposes  shall not be included in
the calculation of the aggregate  amount. In  
amount:  
   (A) Refunding bonds to obtain a lower interest rate.  
   (B) Refunding bonds bearing a variable interest rate with bonds
bearing interest at a fixed interest rate.  
   (C) Refunding bonds if any nationally recognized rating agency
reduces or withdraws, or proposes to reduce or withdraw, the rating
assigned to indebtedness under this chapter that is secured by bond
insurance policies, credit or liquidity facilities issued by the
provider of a bond insurance policy, or a credit or liquidity
facility securing the bonds being refunded.  
   (2) All refunding bonds issued by the department under this
chapter before January 1, 2010, shall be deemed to have been issued
for one or more purposes described in this subdivision and shall not
be included in the calculation of the aggregate amount. 
    (e)     In  addition, before the
issuance of bonds in a public offering, the department shall
establish a mechanism to ensure that the bonds will be sold at
investment grade ratings and repaid on a timely basis from pledged
revenues. This mechanism may include, but is not limited to, an
agreement between the department and the commission as described in
Section 80110.