California Water Resources Development Finance Committee v. Betts

GIBSON, C. J. This case concerns the validity of waiver provisions contained in bonds proposed to be issued under the authority of the California Water Resources Development Bond Act (Wat. Code, § 12930 et seq.), hereafter called the Burns-Porter Act, and involves in part the matter decided in Warne v. Harkness, ante, p. 579 [35 Cal.Rptr. 601, 387 P.2d 377], namely, the relationship between the Burns-Porter Act and financing provisions of the Central Valley Project Act (Wat. Code, § 11100 et seq.) The California Water Resources Development Finance Committee1 seeks a writ of mandate to compel the State Treasurer to publish a notice of sale of Burns-Porter Act bonds in the principal amount of $100,000,000 and to prepare and sell the bonds in accordance with the provisions of certain resolutions of the committee. Respondent, although admitting that it is his duty as Treasurer to cause valid bonds to be prepared and sold as directed by the committee, has refused to act in this instance upon the ground that the inclusion of the waiver provisions in the notice and in the bonds is contrary to the authority of the committee under the Burns-Porter Act.

The resolutions adopted by the committee prescribe the form and language of bonds to be issued under the Burns-Porter Act, provide for the form of notice of sale, and set forth the determination of the committee that the issuance of bonds in the aggregate principal amount of $100,000,000 is necessary at this time. (Resolutions I and II, adopted May 21, 1963; Resolution IV, adopted July 12, 1963.) Each bond is to contain the following waiver provision (which is also to appear in a shorter form in the notice of sale) : “The holder of this bond, by his acceptance hereof, consents and agrees [597]that such income and revenues remaining after the annual payment of the principal of and interest on the bonds issued under the Act may be pledged and allocated to the annual payment of the principal of and interest on general obligation bonds hereafter authorized and issued by the State, the proceeds of which are required by law to be deposited in the California Water Resources Development Bond Fund created by the Act, without preference, priority or distinction of any one such bond over any other by reason of prior authorizations, issuance, or sale, and further consents and agrees that any income and revenues derived from the operation of power facilities, for the construction of which revenue bonds under the Water Code governing the Central Valley Project are issued, may be pledged and allocated to the annual payment of the principal of and interest on such revenue bonds and to the payment of expenses and to the creation of such reserve or other funds as may be established for the better securing of such revenue bonds, and further waives the provisions of any law inconsistent with the foregoing consents and agreements herein set forth. ’ ’