Article 4. General Obligation Bonds of California Harbors And Navigation Code >> Division 8. >> Part 7. >> Chapter 6. >> Article 4.

Whenever the board deems if necessary for the district to incur a general obligation bonded indebtedness for (a) the acquisition, construction, completion or repair of any or all improvements, works or property mentioned in this part, or (b) the funding or refunding of any outstanding indebtedness of the district, including premiums, if any be payable, the board shall, by resolution, so declare and call an election to be held in the district for the purpose of submitting to the qualified voters the proposition of incurring indebtedness by the issuance of bonds of the district.
The resolution shall state:
  (a) The purpose for which the proposed debt is to be incurred, which may include expenses of all proceedings for the authorization, issuance and sale of the bonds.
  (b) The amount of debt to be incurred.
  (c) The maximum term the bonds proposed to be issued shall run before maturity, which shall not exceed 40 years.
  (d) The maximum rate of interest to be paid, which shall not exceed 6 percent per annum, payable semiannualy, except that interest for the first year may be payable at the end of the year.
  (e) The measure to be submitted to the voters.
  (f) The date upon which an election shall be held for the purpose of authorizing the bonded indebtedness to be incurred; and
  (g) The designation of the precincts, the location of the polling places and the names of the officers selected to conduct the election, who shall consist of one inspector, one judge, and two clerks in each precinct.
Notice of the holding of the election shall be given by publishing the resolution calling the election pursuant to Section 6066 of the Government Code in at least one newspaper published in the district. The first publication to be at least two weeks prior to the date of the election. If there is no newspaper published in the district the resolutions shall be posted in three public places in the district for not less than two weeks prior to the date of the election. No other notice of the election need be given.
The returns of the election shall be made, the votes canvassed at least seven days following the election, and the results thereof ascertained and declared in accordance with the provisions of the Elections Code, so far as they may be applicable, except as otherwise provided in this part. The secretary, as soon as the result is declared, shall enter in the district records a statement of the result of the election.
No irregularities or informalities in conducting the election shall invalidate the same, if the election shall have been otherwise fairly conducted.
Any action or proceeding wherein the validity of the election or of the proceedings in relation thereto is contested, questioned or denied, shall be commenced within three months from the date of the election; otherwise the election and all proceedings in relation thereto shall be held to be valid and in every respect legal and incontestable.
If from the election returns it appears that more than two-thirds of the votes cast upon the measure were in favor of and assented to the incurring of the general obligation bonded indebtedness, then the board may, by resolution, at the time or times it deems proper, issue bonds of the district for the whole or any part of the amount of the indebtedness so authorized, and may from time to time provide for the issuance of such amounts as the necessity thereof may appear, until the full amount of the bonds authorized shall have been issued.
The full amount of bonds may be divided into two or more series and different dates fixed for the bonds of each series. The maximum term which the bonds of any series shall run before maturity shall not exceed 40 years from the date of each series respectively.
The board shall, by resolution, prescribe the form of the bonds and the form of the coupons attached thereto and fix the time when the whole or any part of the principal shall become due and payable. The payment of the first installment of principal may be deferred for a period of not more than five years from the date of the bonds or the date of the bonds of each series respectively.
The bonds shall bear interest at a rate or rates not to exceed 6 percent per annum payable semiannually, except that interest for the first year shall be payable at the end of the year.
The board may also provide for the call and redemption of bonds prior to maturity at the time and prices and upon such other terms as it may specify. A bond shall not be subject to call or redemption prior to maturity unless it contains a recital to that effect, or unless a statement to that effect is printed thereon.
The denomination of the bonds shall be stated in the resolution providing for their issuance, but shall not be less than one hundred dollars ($100).
The principal and interest shall be payable in lawful money of the United States at the office of the treasurer of the district or at any other place or places as may be designated, or at either place or places at the option of the holder of the bond.
The bonds shall be dated, numbered consecutively, and be signed by the president of the board and the treasurer of the district and countersigned by the secretary of the district and the official seal of the district affixed. The interest coupons of the bonds shall be signed by the treasurer of the district. All the signatures and countersignatures may be printed, lithographed or mechanically reproduced, except that one of said signatures or countersignatures to said bonds shall be manually affixed. If any officer whose signature or countersignature appears on any bonds or coupons ceases to be an officer before the delivery of the bonds to the purchaser, the signature or countersignature either on the bonds or the coupons, or on both, is nevertheless valid and sufficient for all purposes the same as if the officer had remained in office until the delivery of the bonds, and the signature upon the coupons of the person who is treasurer at the date of the bonds, is valid although the bonds themselves may be attested by a different person who is treasurer at the time of delivery of the bonds.
Before selling the bonds, or any part thereof, the board shall give notice inviting sealed bids in such manner as it may prescribe. If satisfactory bids are received, the bonds offered for sale shall be awarded to the highest responsible bidder. If no bids are received or if the board determines that the bids received are not satisfactory as to price or responsibility of the bidders, it may reject all bids received, if any, and either readvertise or sell the bonds at private sale.
The proceeds from the sale of the bonds shall be paid into the treasury of the district and placed to the credit of a special improvement fund and expended only for the purpose for which the indebtedness was created; however, when the purpose has been accomplished, any moneys remaining in the special improvement fund may be transferred to the fund to be used for the payment of the principal of and interest on the bonds.
Any action or proceeding, wherein the validity of any such bonds or of proceedings in relation thereto is contested, questioned or denied, shall be commenced within three months from the date of the issuance thereof; otherwise said bonds and all proceedings in relation thereto shall be held to be valid and in every respect legal and incontestable.
Any general obligation bonds issued by a district shall have the same force, value and use as bonds issued by any city and shall be exempt from all taxation within the State of California.