On March 19, 2013, High-Speed Rail Authority and its Finance Committee filed a validation action to obtain a judgment validating more than $8 billion in bonds authorized under Proposition 1A – the Bond Act.
The trial court denied the validation, holding that the Finance Committee’s determination that issuance of the bonds was “necessary or desirable” was a quasi-legislative act that must be supported by evidence in the record. The trial court also issued a peremptory writ of mandate commanding the Authority to rescind its preliminary funding plan (2704.08(c)) and to redo that plan.
Everyone under the sun appealed.
The Court of Appeal held that:
- Contrary to the trial court’s determination, the Finance Committee properly found that issuance of bonds for the project was “necessary or desirable.” The Court found no authority for the trial court’s decision, as neither the State bond law, nor the specific Bond Act, required the Finance Committee to make any factual findings or to explain the basis for its determination.
- The preliminary funding plan was intended to provide guidance to the Legislature in acting on the Authority’s appropriation request. Because the Legislature appropriated bond proceeds following receipt of the preliminary funding plan approved by the Authority, the preliminary funding plan had served its purpose. A writ of mandamus would not lie to compel the idle act of rescinding and redoing it.
The Court of Appeal issued a peremptory writ of mandate directing the trial court to enter judgment validating the authorization of the bond issuance for purposes of the Bond Act. The writ also compelled the trial court to vacate its rulings requiring the Authority to perform the idle act of redoing the preliminary section 2704.08, subdivision (c) funding plan after the Legislature appropriated the bond funds.