California Streets and Highways Code
As an alternative to any other authority, a legislative body may, at its discretion, issue bonds bearing a variable interest rate pursuant to this division. This part does not alter or restrict authority to authorize assessments or issue bonds pursuant to any other provision of this division in any way. All provisions of this division shall apply to proceedings pursuant to this part, except as expressly provided in this part.
The legislative body may determine to issue serial or term bonds, or both, bearing a variable interest rate that represent and are secured by assessments which are made to pay the cost of any authorized work or improvement. The bonds shall be sold at not less than 95 percent of the principal amount in the manner determined by the legislative body.
If the legislative body determines to issue bonds as provided in this part to represent the expense of any proposed work or improvement, it shall, in the resolution of intention to do the work, do all of the following:
(a) Declare that the serial or term bonds are issued pursuant to this division to represent the expenses of the proposed work or improvement.
(b) Specify that the bonds may bear a variable rate of interest.
(c) Specify the maximum rate of interest which the bonds may bear.
The bonds shall be substantially in the form set forth in Section 8652, except as revised to conform to this part.
The unpaid assessments shall be payable in substantially the manner set forth in subdivision (a) of Section 8680, or in substantially the same manner, but at more frequent intervals, as provided by the legislative body by resolution. The legislative body may designate an official, including an official other than the county tax collector, or other agent, to collect and maintain records of the collection of the assessments, including a procedure other than through the property tax collection procedure prescribed in this division. The legislative body may authorize an additional assessment to pay the costs of collection, not to exceed the percentages or amounts set forth in Section 8682, and an additional amount to cover the costs of registration, not to exceed the percentages and amounts set forth in Section 8682.1. The legislative body may authorize an additional assessment to pay for incidental expenses of the financing. The assessments and the interest on the assessments for each pay period are payable at the end of the pay period and are delinquent thereafter, and shall bear the same proportionate penalties and interest after delinquency as the assessment installments in the subject proceedings.
Interest on all unpaid assessments shall run from the date of the bonds, and shall be computed for each interest pay period at the date determined pursuant to the terms of the bond for that interest pay period.
Each bond, or any portion of the bond in a fixed amount or any integral multiple of the fixed amount, shall be subject to redemption in advance of its maturity on any interest payment date upon payment to the registered owner of the principal and accrued interest to the date of redemption together with a redemption premium, if any, as determined by the legislative body, not to exceed 5 percent of the principal.
The legislative body may, by resolution, specify that the interest rate on the bonds may vary from time to time as determined by a bond index or some other means prescribed in the resolution.
The legislative body may, by resolution, specify terms and conditions under which the bonds may be converted to a fixed interest rate.
The legislative body may, by resolution, specify terms and conditions under which the city agrees to repurchase the bonds. The legislative body may secure a letter of credit or other instrument to secure payment or repurchase of any bonds, and the resulting costs, including costs of initially securing, maintaining, or making any payments arising from the exercise of, a letter of credit or other instrument, may be treated as incidental expenses. The legislative body may engage a remarketing agent and an indexing agent, subject to terms and conditions agreed to by the legislative body, and the resulting costs may be treated as incidental expenses.
The notice of assessment recorded with the county recorder pursuant to Section 3114 shall include the following statement:
Notice is further given that unpaid assessments are subject to interest at a variable interest rate.