SLONs Authorization Extended for California Special Districts

Best Best & Krieger LLP

Best Best & Krieger LLP

Governor Approves AB 2107 to Allow for Securitized Limited Obligation Notes by Special Districts

Assembly Bill 2107 re-establishes Securitized Limited Obligation Notes, or SLONs, as financing tools for California’s special districts. Prior to AB 2107’s passage, Government Code section 53839 authorized special districts to issue SLONs for the acquisition or improvement of land, facilities or equipment until Dec. 31, 2019. Signed by Gov. Gavin Newsom on Sept. 28, AB 2107 extends that authorization to Dec. 31, 2024.

SLONs are one of several financing options that special districts may utilize to acquire or improve real property, facilities or equipment. SLONs permit a public agency to issue a note to finance lower-cost acquisitions or improvements of land, facilities or equipment. SLONs are viewed as practical and cost-effective and do not require voter approval.

When issuing a SLON, special districts must adopt a resolution containing specified information. A four-fifths vote of the governing body is required as well. SLONs may not exceed a 10-year term and may not exceed $2 million outstanding. The California Special Districts Association states that, “[f]or many special districts, especially for smaller districts with limited resources, SLONs may be the only pragmatic and cost-effective medium-term financing method available to fund a variety of modest projects.”

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Best Best & Krieger LLP | Attorney Advertising

Written by:

Best Best & Krieger LLP

Best Best & Krieger LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.