(a) The lien of the bonds of the same issue shall be prior and superior to all revenue bonds subsequently issued.
(b) The district shall only issue parity revenue bonds if the district board determines, based on an audit of the district’s finances conducted under generally accepted accounting principles, that both of the following conditions exist:
(1) The district is not in default in the repayment of any prior issuance of its bonds.
(2) The net revenues of the district for the prior fiscal year have amounted to at least 125 percent of the maximum annual debt service in any fiscal year thereafter, including all indebtedness incurred as the result of additional issues of bonds.
(A) For purposes of calculating the net revenues of the district for the prior fiscal year pursuant to this paragraph, the district may include up to 75 percent of the district’s estimated additional annual net revenue to be derived from either of the following:
(i) Any additions, improvements, or extensions to the district’s properties, works, or facilities, or the pro rata portion thereof, which were not in service during the prior fiscal year, and that were, or are to be, made using funds from any source, including, but not limited to, the parity revenue bonds.
(ii) Any increase in the charges made for the district’s services that became effective prior to the authorization of the parity revenue bonds but which were not in effect during the prior fiscal year.
(Amended by Stats. 1996, Ch. 770, Sec. 3. Effective January 1, 1997.)
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