7.1.1 Report of Proposed Debt Issuance

7.1.1 Report of Proposed Debt Issuance

California Government Code Section 8855(i)(1) states that state or local government issuers of proposed debt issuance must file a Report of Proposed Debt Issuance with CDIAC no later than 30 days before the sale of debt. The Report of Proposed Debt Issuance consists of information related to the issuer, the authorization of the issuance, and details of the proposed issuance. The information submitted includes, but is not limited to the following: name of issuer, name of project, proposed amount of issuance, repayment source and term, type of debt instrument, type of sale, tax status of issuance, purpose of issuance and the legal authorization for the proposed issuance.

CERTIFICATION OF LOCAL DEBT POLICIES – Issuers must certify on the Report of Proposed Debt Issuance that they have adopted local policies concerning the use of debt and that the proposed debt issuance is consistent with those policies. Specifically, an issuer should certify that its local debt policies include the components listed in Government Code Section 8855(i)(1)(A) through (E), as follows:

  1. The purposes for which the debt proceeds may be used

  2. The types of debt that may be issued

  3. The relationship of the debt to, and integration with, the issuer’s capital improvement program or budget, if applicable

  4. Policy goals related to the issuer’s planning goals and objectives

  5. The internal control procedures that the issuer has implemented, or will implement, to ensure that the proceeds of the proposed debt issuance will be directed to the intended use

A conduit issuer must certify that it has adopted local debt policies in compliance with Section 8855(i)(1) and that these local debt policies include (A) through (E) of Section 8855(i)(1). Alternatively, a conduit issuer that has adopted local debt policies in compliance with Section 8855(i)(1), with policies that include (A) and (B) above, may rely upon a certification from the borrower. The borrower of the proceeds of the conduit bond in this case must certify that it has adopted local debt policies in compliance with Section 8855(i)(1) and that the local debt policies of the other government entity include (C), (D), and (E), above.