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Article 3. Special Improvement Bonds of California Government Code >> Division 3. >> Title 3. >> Chapter 6. >> Article 3.
Any county may incur a bonded indebtedness for any of the
following purposes.
(a) To acquire any bonds:
(1) Issued by the county.
(2) Issued by or for any district in the county.
(3) Issued for street work or other public improvements of any kind or character in the county under any act of the Legislature providing for the performance of street work or any other public improvements.
(b) To represent or be secured by assessments levied for such work or improvements, including any bonds issued under the Road District Improvement Act of 1907, the Acquisition and Improvement Act of 1925, and the Street Opening Bond Act of 1921.
(a) To acquire any bonds:
(1) Issued by the county.
(2) Issued by or for any district in the county.
(3) Issued for street work or other public improvements of any kind or character in the county under any act of the Legislature providing for the performance of street work or any other public improvements.
(b) To represent or be secured by assessments levied for such work or improvements, including any bonds issued under the Road District Improvement Act of 1907, the Acquisition and Improvement Act of 1925, and the Street Opening Bond Act of 1921.
The intent of this article is that investments of county
funds shall be made for the purpose of: (a) aiding and facilitating
the making of needed public improvements in the county; (b) limiting
or preventing the increasing of district taxes or assessments which
may lessen or impair the general tax revenues of the county from any
district; and (c) providing means by which district indebtedness or
assessments represented by or securing bonds may be reduced.
Except as otherwise provided in this article, the bonds
authorized to be issued pursuant to this article may be issued and
sold pursuant to Article 1 or any other law governing the issuance
and sale of general county obligations.
The interest rate on the bonds need not be the same during
their entire term, but different rates may be fixed for one or more
interest payments on the bonds.
If the bonds are to be issued to acquire outstanding bonds,
the order calling the election shall briefly and generally state what
bonds are to be purchased or acquired, the total principal amount,
and the maximum price proposed to be paid. The maximum price so
stated shall not be exceeded in the purchase of the bonds.
The bonds shall not be sold at less than their par value, or
may be exchanged at their par value for the outstanding bonds, if
the outstanding bonds are taken in exchange at a price not exceeding
the maximum price stated in the order calling the election.
The bonds shall be redeemed and paid pursuant to Article 1.
The taxes for the payment of the bonds shall be levied
pursuant to Article 1, except where the entire issue is to mature at
one time, taxes shall be levied annually to provide interest and a
sinking fund under this article.
The county treasurer shall keep the money arising from the
sale of bonds issued pursuant to this article separate and distinct
from all other county money in a fund called "General improvement
fund."
The board shall invest and reinvest the money in the general
improvement fund in bonds issued by the county or bonds issued for
highway, sewer, drainage, or other improvements within the county.
The board shall collect the principal and interest on the
bonds and credit the amount collected to the general improvement
fund, except that if the bonds are issued to acquire or to provide
money for the purchase of certain outstanding bonds, it shall be used
only for that purpose, and all of the money not so used and all sums
received in payment of principal or interest on the bonds acquired
by the county or received from the sale thereof shall be used for the
payment of the principal and interest of the bonds issued pursuant
to this article.
The board may sell any of the bonds purchased by it at a
price not less than that paid. The purchase price of any bonds so
sold and the accrued interest thereon shall be placed in the general
improvement fund and may be reinvested in bonds, except where such
reinvestment is not permitted.
During the time the county owns any district bonds payable
from taxes or assessments levied wholly or partially in accordance
with the assessed value of the land within the district, the board of
supervisors may each year omit from the amount of the annual tax or
assessment to be levied for the payment of principal and interest of
the bonds any sum for the payment of principal and interest due and
unpaid because of delinquencies, and may limit or omit any sum for
anticipated delinquencies. The tax or assessment shall be levied in
accordance with the statute under which the bonds acquired were
issued, but the total amount of any annual levy may be limited as
provided in this article.
If any bonds are acquired at less than their par value, the
board may reduce the total principal amount of any issue of bonds so
acquired and held to a total principal amount which it may fix by
ordinance. The reduced total principal amount of any issue shall not
be less at par than the total purchase price of the total principal
amount of the bonds of the issue acquired by the county.
The ordinance shall designate the issue of bonds to be
reduced, the total principal amount of the issue acquired, the
purchase price paid, the principal amount of the proposed reduction,
the numbers, denominations, maturity dates of the bonds to be
canceled, and the time and place of the proposed cancellation. The
ordinance is subject to referendum.
Unless prevented by petition protesting the passage of the
ordinance, signed and filed with the board pursuant to Section 9144
of the Elections Code, the bonds shall be publicly canceled at the
time and place fixed, and the clerk of the board of supervisors shall
enter on the minutes of the board of supervisors a record of the
bonds canceled sufficient to identify them and the fact and date of
the cancellation.
If the bonds canceled are issued pursuant to the Improvement
Bond Act of 1915 to pay the cost of any work or improvement made
under the Improvement Act of 1911, the board shall reduce the
principal amount of the assessments securing the bonds to the total
principal amount of the unpaid and uncanceled bonds of the same
issue. The reduction of assessments shall be carried out by canceling
such proportion of the assessments as is necessary, and the board
shall provide procedure for the cancellation in accordance with
constitutional requirements. The uncanceled portion of the
assessments shall be valid and collected in accordance with the terms
of the statutes under which the original assessments were levied and
bonds issued.
The board may make any issue of bonds issued pursuant to
this article mature at one time, not to exceed 20 years after the
date of issuance.
If the bonds mature at one time, the annual tax levy shall
be sufficient to pay the interest on the bonds as it comes due and
create a sinking fund for the payment of the principal on or before
maturity. The sum to be raised each year and placed in the sinking
fund for the payment of the principal of the bonds shall not be less
than an amount obtained by dividing the total principal amount of the
bonds issued by the total number of years the bonds are to run.
If the entire issue of bonds is to mature at one time, such
bonds may be called for redemption in numerical order at par and
accrued interest on any interest-payment date prior to their fixed
maturity, and a statement to that effect shall be set forth in each
bond. No bond shall be callable or redeemable prior to its fixed
maturity date, unless a statement that the bond is callable is
contained in the bond.
At least once each year within 60 days prior to an
interest-payment date, if the sinking fund contains sufficient
available money to call one or more of the outstanding bonds, the
board shall, by notice published once a week for two successive weeks
in some newspaper published in the county, and, in its discretion,
in any other newspaper or newspapers, invite sealed proposals for the
sale to the county of any bonds for the payment of which the sinking
fund was created. The notice shall state the amount available for
redemption of the bonds and specify the time and the place the
proposals will be opened.
At the time and place designated all proposals shall be
opened in public. Any or all of the proposals may be rejected in the
discretion of the board. Proposals shall not be accepted unless the
sales price is less than par and accrued interest.
If no proposals are received, or if those received are
rejected or are insufficient to exhaust the money available for the
redemption of bonds, the board shall call in numerical order such
outstanding bonds as can be redeemed from the money available for
that purpose.
Notice of the call of bonds for redemption shall be
published once a week for two weeks in a newspaper of general
circulation published in the county. The first publication shall be
not less than 30 days prior to the date fixed for redemption.
Upon the date fixed for redemption, the bonds called shall
be redeemed at par and accrued interest to that date.
If any bonds called are not presented for redemption on the
date fixed, on the day following a sum sufficient for the payment of
the principal the bonds and accrued interest to the date of
redemption shall be placed in a special fund for that purpose, and
interest on the bonds for which provision is made shall cease on the
redemption date.
This article is intended to provide an alternative system
for the issuance of bonds and does not affect any other provision of
law for the issuance of bonds. If in the discretion of the board
proceedings are commenced under this article, this article shall
govern the procedure to be taken.
