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Article 1. General of California Government Code >> Division 4. >> Title 2. >> Part 3. >> Chapter 4. >> Article 1.
This chapter shall be known and may be cited as the State
General Obligation Bond Law.
The purpose of this chapter is to provide a procedure which
may be adopted by other acts for use with whatever modifications are
necessary in authorizing the issuance and sale of state general
obligation bonds and providing for the repayment of such bonds. This
chapter does not itself authorize the issuance or sale of any bonds.
As used in this chapter, the following terms shall have the
following meaning unless the context otherwise requires:
(a) "Board" means the state board, department, or agency authorized by that act to request the committee to cause bonds to be issued for the purpose of creating a fund that is to be expended by the board for the purposes specified in that act.
(b) "Bond" means a state general obligation bond issued pursuant to an act adopting the provisions of this chapter.
(c) "Bond act" means the act authorizing the issuance of state general obligation bonds and adopting this chapter by reference.
(d) "Committee" means the finance committee or other body created by that act and authorized to cause bonds to be issued by the adoption of a resolution or resolutions.
(e) "Fund" means the fund created by that act, and into which the proceeds from the sale of the bonds are paid.
(f) "Tender" means a term of a bond that gives the holder the right to have the bond purchased from the holder at a predetermined price prior to maturity.
(a) "Board" means the state board, department, or agency authorized by that act to request the committee to cause bonds to be issued for the purpose of creating a fund that is to be expended by the board for the purposes specified in that act.
(b) "Bond" means a state general obligation bond issued pursuant to an act adopting the provisions of this chapter.
(c) "Bond act" means the act authorizing the issuance of state general obligation bonds and adopting this chapter by reference.
(d) "Committee" means the finance committee or other body created by that act and authorized to cause bonds to be issued by the adoption of a resolution or resolutions.
(e) "Fund" means the fund created by that act, and into which the proceeds from the sale of the bonds are paid.
(f) "Tender" means a term of a bond that gives the holder the right to have the bond purchased from the holder at a predetermined price prior to maturity.
Any bond act may adopt the provisions of this chapter by
reference to its short title, and such reference shall serve to
incorporate the provisions of this chapter in said act as though set
out in full therein. Notwithstanding such adoption by reference, the
bond act may contain provisions applicable to the bonds issued
thereunder, and, in case of conflict, the provisions in the bond act
shall prevail.
The bond act shall contain all of the following provisions:
(a) A statement of the total amount of bonds authorized to be issued and the purpose for which the proceeds from the sale of the bonds may be used.
(b) The creation of a committee and fund, and the naming of the board as these items are defined in Section 16722.
(c) A statement that the bonds are valid obligations of the state and a pledge of the full faith and credit of the state for the punctual payment of both principal and interest thereof.
(d) An appropriation from the General Fund in the State Treasury of the sum annually as shall be necessary to pay the principal and interest on the bonds as they become due and payable.
(e) A requirement that there be collected annually in the same manner and at the same time as other state revenue is collected the sum, in addition to the ordinary revenues of the state, as is required to pay the principal and interest on the bonds; and a provision making it the duty of all officers charged by law with any duty in regard to the collections of the revenue to do and perform each and every act which is necessary to collect that additional sum.
(f) If the bond act provides that the fund shall have any receipts other than the proceeds of the sale of bonds, the proceeds of interim financing, or the investment earnings on the proceeds of bond sales or interim financing, then the bond act shall also specify whether those receipts shall be transferred to the General Fund as a reimbursement for debt service payments or be used for the same purpose for which the proceeds of the sale of the bonds may be used.
(g) A provision incorporating the provisions of this chapter, and a declaration that the provisions hereof are included in the act as though set out in full therein.
(h) A statement that the bonds may be refunded in accordance with Article 6 (commencing with Section 16780), and that approval of the authorization of the bonds by the electors includes approval of any bonds issued to refund the bonds originally issued.
(i) A statement that notwithstanding any other provision of the bond act, or of the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), if the Treasurer sells bonds pursuant to this bond act that include a bond counsel opinion to the effect that the interest on the bonds is excluded from gross income for federal tax purposes under designated conditions, the Treasurer may maintain separate accounts for the bond proceeds invested and the investment earnings on those proceeds, and may use or direct the use of those proceeds or earnings to pay any rebate, penalty, or other payment required under federal law, or take any other action with respect to the investment and use of those bond proceeds, as may be required or desirable under federal law in order to maintain the tax-exempt status of those bonds and to obtain any other advantage under federal law on behalf of the funds of this state.
(j) A statement that the board may request the Pooled Money Investment Board to make a loan from the Pooled Money Investment Account, in accordance with Section 16312, for the purposes of carrying out the bond act. The amount of the request shall not exceed the amount of the unsold bonds that the committee has by resolution authorized to be sold for the purpose of carrying out the bond act. The board shall execute any documents required by the Pooled Money Investment Board to obtain and repay the loan. Any amounts loaned shall be deposited in the fund to be allocated by the board in accordance with the bond act.
(a) A statement of the total amount of bonds authorized to be issued and the purpose for which the proceeds from the sale of the bonds may be used.
(b) The creation of a committee and fund, and the naming of the board as these items are defined in Section 16722.
(c) A statement that the bonds are valid obligations of the state and a pledge of the full faith and credit of the state for the punctual payment of both principal and interest thereof.
(d) An appropriation from the General Fund in the State Treasury of the sum annually as shall be necessary to pay the principal and interest on the bonds as they become due and payable.
(e) A requirement that there be collected annually in the same manner and at the same time as other state revenue is collected the sum, in addition to the ordinary revenues of the state, as is required to pay the principal and interest on the bonds; and a provision making it the duty of all officers charged by law with any duty in regard to the collections of the revenue to do and perform each and every act which is necessary to collect that additional sum.
(f) If the bond act provides that the fund shall have any receipts other than the proceeds of the sale of bonds, the proceeds of interim financing, or the investment earnings on the proceeds of bond sales or interim financing, then the bond act shall also specify whether those receipts shall be transferred to the General Fund as a reimbursement for debt service payments or be used for the same purpose for which the proceeds of the sale of the bonds may be used.
(g) A provision incorporating the provisions of this chapter, and a declaration that the provisions hereof are included in the act as though set out in full therein.
(h) A statement that the bonds may be refunded in accordance with Article 6 (commencing with Section 16780), and that approval of the authorization of the bonds by the electors includes approval of any bonds issued to refund the bonds originally issued.
(i) A statement that notwithstanding any other provision of the bond act, or of the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), if the Treasurer sells bonds pursuant to this bond act that include a bond counsel opinion to the effect that the interest on the bonds is excluded from gross income for federal tax purposes under designated conditions, the Treasurer may maintain separate accounts for the bond proceeds invested and the investment earnings on those proceeds, and may use or direct the use of those proceeds or earnings to pay any rebate, penalty, or other payment required under federal law, or take any other action with respect to the investment and use of those bond proceeds, as may be required or desirable under federal law in order to maintain the tax-exempt status of those bonds and to obtain any other advantage under federal law on behalf of the funds of this state.
(j) A statement that the board may request the Pooled Money Investment Board to make a loan from the Pooled Money Investment Account, in accordance with Section 16312, for the purposes of carrying out the bond act. The amount of the request shall not exceed the amount of the unsold bonds that the committee has by resolution authorized to be sold for the purpose of carrying out the bond act. The board shall execute any documents required by the Pooled Money Investment Board to obtain and repay the loan. Any amounts loaned shall be deposited in the fund to be allocated by the board in accordance with the bond act.
Any state bond measure approved by the voters on or after
January 1, 2004, shall be subject to an annual reporting process, as
follows:
(a) The head of the lead state agency administering the bond proceeds shall report to the Legislature and the Department of Finance no later than January 1, 2005, or the January 1 of the second year following the enactment of the bond measure, whichever is later, and at least once a year thereafter. The annual report shall contain all of the following:
(1) A list of all projects and their geographical location that have been funded or are required or authorized to receive funds.
(2) The amount of funds allocated on each project.
(3) The status of any project required or authorized to be funded.
(b) Costs of the report may be included in the cost of administering the bond measure unless the measure specifically prohibits those expenses.
(a) The head of the lead state agency administering the bond proceeds shall report to the Legislature and the Department of Finance no later than January 1, 2005, or the January 1 of the second year following the enactment of the bond measure, whichever is later, and at least once a year thereafter. The annual report shall contain all of the following:
(1) A list of all projects and their geographical location that have been funded or are required or authorized to receive funds.
(2) The amount of funds allocated on each project.
(3) The status of any project required or authorized to be funded.
(b) Costs of the report may be included in the cost of administering the bond measure unless the measure specifically prohibits those expenses.
(a) For purposes of this section, "revolving fund" means
the General Obligation Bond Expense Revolving Fund created pursuant
to this section.
(b) There is in the State Treasury the General Obligation Bond Expense Revolving Fund, which shall consist of all moneys appropriated by the Legislature into that fund or payable into that fund in accordance with this section.
(c) All moneys in the revolving fund are hereby appropriated and shall be available without regard to fiscal years for all of the following:
(1) The payment of the expenses incurred by the Treasurer in having the bonds prepared and in advertising their sale or their prior redemption, and of the other costs described in subdivision (e) of Section 16727.
(2) For expenses incurred by the committee pursuant to Section 16758.
(3) For payment for legal services pursuant to Section 16760.
(d) Whenever bonds are sold, out of the first moneys realized from their sale, there shall be redeposited in the revolving fund the sums that have been expended for the purposes specified in subdivision (c), which may be used for the same purposes and repaid in the same manner whenever additional sales are made.
(b) There is in the State Treasury the General Obligation Bond Expense Revolving Fund, which shall consist of all moneys appropriated by the Legislature into that fund or payable into that fund in accordance with this section.
(c) All moneys in the revolving fund are hereby appropriated and shall be available without regard to fiscal years for all of the following:
(1) The payment of the expenses incurred by the Treasurer in having the bonds prepared and in advertising their sale or their prior redemption, and of the other costs described in subdivision (e) of Section 16727.
(2) For expenses incurred by the committee pursuant to Section 16758.
(3) For payment for legal services pursuant to Section 16760.
(d) Whenever bonds are sold, out of the first moneys realized from their sale, there shall be redeposited in the revolving fund the sums that have been expended for the purposes specified in subdivision (c), which may be used for the same purposes and repaid in the same manner whenever additional sales are made.
There is hereby transferred from any bond fund created for
the proceeds of sales of state general obligation bonds, the amounts
necessary to reimburse the Treasurer, the Controller, and the
Department of Finance for actual expenses incurred in: (1)
administering or reviewing loans from the Pooled Money Investment
Account to the bond fund including review by the Public Works Board
staff, (2) assuring bond program compliance with federal laws and
regulations related to tax-exempt government obligations by tracking
arbitrage and expenditures, calculating and remitting federal rebates
and penalties, investing bond sale proceeds, establishing and
maintaining special accounting systems, and providing other services
the Treasurer determines are necessary to maintain the tax-exempt
status of the bonds.
Costs incurred by the state in connection with state
general obligation bonds bearing variable interest rates that are
different from costs determined by the Treasurer to be customary
costs for state general obligation bonds bearing interest at fixed
rates (including, but not limited to, fees and charges of
underwriters, remarketing or auction agents, tender and paying
agents, rating agencies, financial advisors, counsel, and staff costs
directly associated with the foregoing), shall be paid from annual
appropriations from the General Fund if the bonds are issued under a
bond act approved by the voters prior to January 1, 2002. If the
bonds are issued under a bond act approved by the voters after
January 1, 2002, these costs are authorized to be paid, and may be
paid, from the General Obligation Bond Expense Revolving Fund created
by Section 16724.5 or from proceeds from the sale of any bonds
issued pursuant to this chapter.
The Controller, the State Treasurer and the committee shall
keep full and particular account and record of all their proceedings
under the bond act and this chapter and they shall transmit to the
Governor an abstract of all such proceedings thereunder, with an
annual report, to be transmitted by the Governor to the Legislature
annually. All books and papers pertaining to the matters provided for
in the bond act and this chapter shall at all times be open to the
inspection of the Governor, the Attorney General, any committee of
either branch of the Legislature, or any joint committee of both, any
citizen of the State, or any interested party.
Upon request of the board stating that the purposes for
which the bonds were issued and sold has been effected, the committee
shall certify this fact to the State Controller, and thereupon the
unencumbered balance of cash remaining from the proceeds of the sale
of the bonds in the fund shall, on order of the State Controller, be
transferred therefrom to the General Fund.
Proceeds from the sale of any bonds issued pursuant to this
chapter shall be used only for the following purposes:
(a) The costs of construction or acquisition of capital assets. "Capital assets" mean tangible physical property with an expected useful life of 15 years or more. "Capital assets" also means tangible physical property with an expected useful life of 10 to 15 years, but these costs may not exceed 10 percent of the bond proceeds net of all issuance costs. "Capital assets" include major maintenance, reconstruction, demolition for purposes of reconstruction of facilities, and retrofitting work that is ordinarily done no more often than once every 5 to 15 years or expenditures that continue or enhance the useful life of the capital asset. "Capital assets" also include equipment with an expected useful life of two years or more. Costs allowable under this section include costs incidentally but directly related to construction or acquisition, including, but not limited to, planning, engineering, construction management, architectural, and other design work, environmental impact reports and assessments, required mitigation expenses, appraisals, legal expenses, site acquisitions, and necessary easements.
(b) To make grants or loans, if the proceeds of the grants or loans are used for the costs of construction or acquisition of capital assets. Bond proceeds may also be used to pay the costs of a state agency for administering the grant or loan program.
(c) To repay funds borrowed in anticipation of the sale of the bonds, including interest, or to pay interest on the bonds themselves.
(d) To pay the costs of a state agency with responsibility for administering the bond program. These costs include those incurred by the Treasurer, the Controller, the Department of Finance, and the Public Works Board for staff, operating expenses and equipment, and consultants' costs.
(e) The costs of the Treasurer's office directly associated with the sale and payment of the bonds, including, but not limited to, underwriting discounts, costs of printing, bond counsel, registration, and fees of trustees. Nothing in this section is intended to prohibit the investment of bond proceeds or the use of proceeds of those investments in any manner authorized by law.
(a) The costs of construction or acquisition of capital assets. "Capital assets" mean tangible physical property with an expected useful life of 15 years or more. "Capital assets" also means tangible physical property with an expected useful life of 10 to 15 years, but these costs may not exceed 10 percent of the bond proceeds net of all issuance costs. "Capital assets" include major maintenance, reconstruction, demolition for purposes of reconstruction of facilities, and retrofitting work that is ordinarily done no more often than once every 5 to 15 years or expenditures that continue or enhance the useful life of the capital asset. "Capital assets" also include equipment with an expected useful life of two years or more. Costs allowable under this section include costs incidentally but directly related to construction or acquisition, including, but not limited to, planning, engineering, construction management, architectural, and other design work, environmental impact reports and assessments, required mitigation expenses, appraisals, legal expenses, site acquisitions, and necessary easements.
(b) To make grants or loans, if the proceeds of the grants or loans are used for the costs of construction or acquisition of capital assets. Bond proceeds may also be used to pay the costs of a state agency for administering the grant or loan program.
(c) To repay funds borrowed in anticipation of the sale of the bonds, including interest, or to pay interest on the bonds themselves.
(d) To pay the costs of a state agency with responsibility for administering the bond program. These costs include those incurred by the Treasurer, the Controller, the Department of Finance, and the Public Works Board for staff, operating expenses and equipment, and consultants' costs.
(e) The costs of the Treasurer's office directly associated with the sale and payment of the bonds, including, but not limited to, underwriting discounts, costs of printing, bond counsel, registration, and fees of trustees. Nothing in this section is intended to prohibit the investment of bond proceeds or the use of proceeds of those investments in any manner authorized by law.
