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Article 4. Investment Bond Act Of 1909 of California Government Code >> Division 4. >> Title 4. >> Chapter 4. >> Article 4.
This article may be cited as the Investment Bond Act of
1909.
Whenever the public interest or necessity requires, any city
may incur a bonded indebtedness to acquire bonds:
(a) Issued by the city.
(b) Issued by or for any district in the city.
(c) Issued for street work or other public improvements in the city under any law providing for the performance of street work or other public improvements or the issuance of bonds to represent or be secured by assessments levied for such work or improvements, including bonds issued under the Improvement Bond Act of 1915 and the Acquisition and Improvement Act of 1925.
(a) Issued by the city.
(b) Issued by or for any district in the city.
(c) Issued for street work or other public improvements in the city under any law providing for the performance of street work or other public improvements or the issuance of bonds to represent or be secured by assessments levied for such work or improvements, including bonds issued under the Improvement Bond Act of 1915 and the Acquisition and Improvement Act of 1925.
It is the intent of the Legislature in adopting this article
that the acquisition of such bonds or investments of the general
improvement fund shall be for any or all of the following purposes:
(a) Aiding or facilitating the making of needed public improvements in the city.
(b) Limiting or preventing such increasing of district taxes or assessments as may impair the general tax revenues of the city from any district.
(c) Providing means to reduce district indebtedness or assessments represented by or securing bonds.
(d) Obtaining collection of delinquent city taxes.
(e) Restoring property to the tax rolls in order that city taxes may be collected on such property.
(a) Aiding or facilitating the making of needed public improvements in the city.
(b) Limiting or preventing such increasing of district taxes or assessments as may impair the general tax revenues of the city from any district.
(c) Providing means to reduce district indebtedness or assessments represented by or securing bonds.
(d) Obtaining collection of delinquent city taxes.
(e) Restoring property to the tax rolls in order that city taxes may be collected on such property.
Bonds issued pursuant to this article shall be issued
substantially in the manner prescribed by Article 1 of this chapter.
The ordinance calling the election need not contain any
statement as to the estimated cost of the proposed public
improvement.
If the bonds are to be issued to acquire outstanding bonds,
the ordinance shall state generally:
(a) What bonds are to be purchased or acquired.
(b) The total principal amount of such bonds.
(c) The maximum purchase price proposed to be paid for them. The maximum purchase price shall not exceed the amount stated.
(a) What bonds are to be purchased or acquired.
(b) The total principal amount of such bonds.
(c) The maximum purchase price proposed to be paid for them. The maximum purchase price shall not exceed the amount stated.
The interest rate on the bonds need not be the same during
the entire term and different rates may be fixed for one or more
interest payments.
The bonds shall not be sold at less than their par value.
They 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 purchase price stated in the ordinance calling the
election.
In the exchange of bonds, interest upon the bonds to be
acquired accruing to the date of exchange may be offset against the
interest accruing upon the bonds issued pursuant to this article. In
the purchase of bonds, interest accruing to date of exchange may be
paid.
Bonds issued pursuant to this article shall be redeemed and
paid pursuant to Article 1 of this chapter.
Taxes for the payment of the bonds shall be levied pursuant
to Article 1 except where any issue of bonds pursuant to this article
is to mature at one time.
The legislative body of any city shall keep the funds
arising from the sale of bonds pursuant to this article separate and
distinct from all other municipal funds in a fund to be called
"general improvement fund," and shall invest and reinvest the money
in bonds issued by the city, or bonds issued for street, sewer,
drainage, or any other improvements within the city. It shall collect
the principal of and interest on such bonds and credit it to the
fund.
If the bonds are issued to acquire or to provide funds for
the purchase of certain outstanding bonds, they may be used only for
that purpose. All of the funds not so used and all sums received in
payment of principal or interest of the bonds acquired by the city or
received from their sale shall be used for the payment of the
principal and interest of the bonds issued pursuant to this article.
At such times as the legislative body determines, it may
sell any of the bonds purchased by it. The bonds shall not be sold at
a price less than that paid for them.
The purchase price of any bonds sold and the accrued
interest on them shall be placed in the general improvement fund and
may be reinvested in bonds, or, if such reinvestment is not
permitted, shall be used to pay principal and interest of the bonds
issued pursuant to this article.
During the time the city 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
legislative body may omit any sum for the payment of principal and
interest past due and unpaid because of delinquencies from the amount
of the annual tax or assessment to be levied for the payment of
principal and interest of such bonds. It may also limit or omit any
sum for anticipated delinquencies. The legislative body may exercise
its discretion as to such omission each year. The tax or assessment
shall be levied pursuant to the statute under which the bonds
acquired were issued, but the total amount of the annual levy may be
limited as provided in this section.
When bonds are acquired at less than their par value, the
legislative body may reduce the total principal amount of any issue
acquired and held by it to a total principal amount to be fixed by
ordinance. The reduced total principal amount of the issue shall not
be less at par than the total purchase price of the total principal
amount of the issue acquired by the legislative body.
The ordinance is subject to referendum as other ordinances
and shall designate:
(a) The issue of bonds to be reduced.
(b) The total principal amount of the issue acquired.
(c) The purchase price paid for the bonds.
(d) The principal amount of the proposed reduction.
(e) The numbers, denominations, and maturity dates of the bonds to be canceled.
(f) The time and place of the proposed cancellation.
(a) The issue of bonds to be reduced.
(b) The total principal amount of the issue acquired.
(c) The purchase price paid for the bonds.
(d) The principal amount of the proposed reduction.
(e) The numbers, denominations, and maturity dates of the bonds to be canceled.
(f) The time and place of the proposed cancellation.
At the time and place fixed, the bonds shall be publicly
canceled, and the city clerk shall enter on the minutes of the
legislative body a record of the bonds canceled sufficient to
identify them and the fact and date of their cancellation.
If the bonds canceled are issued under the Improvement Bond
Act of 1915, the legislative body 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
legislative body may provide procedure for such cancellation. The
uncanceled portion of the assessments is valid and shall be collected
pursuant to the statutes under which the original assessments were
levied and bonds issued.
When the legislative body of any city has acquired any
district bonds pursuant to this article, it may, as an alternative to
the procedure prescribed in Sections 43775 to 43780, inclusive,
cancel all or any of such district bonds, if in its opinion the
public interest and welfare will be better served by such
cancellation than by enforcing the lien securing the bonds.
Before ordering the cancellation, by ordinance the
legislative body shall:
(a) Determine that the public interest and welfare will be best served by the cancellation of all or part of the principal and interest of the bonds.
(b) Designate the issue of bonds to be canceled or the principal amount, numbers, and denominations of the bonds proposed to be canceled, if less than all.
(c) Fix the time and place of the proposed cancellation. The ordinance is subject to referendum as other ordinances of the city.
(a) Determine that the public interest and welfare will be best served by the cancellation of all or part of the principal and interest of the bonds.
(b) Designate the issue of bonds to be canceled or the principal amount, numbers, and denominations of the bonds proposed to be canceled, if less than all.
(c) Fix the time and place of the proposed cancellation. The ordinance is subject to referendum as other ordinances of the city.
At the time and place fixed in the ordinance, the bonds
shall be publicly canceled, and the legislative body shall cause a
record of the cancellation to be entered on its minutes. It shall
cancel all assessments securing the bonds and all liens upon any
property subject to assessment for the payment of the bonds, or such
part of the assessments as is necessary, including any delinquent
assessments and interest, penalties, and costs.
The legislative body may sell any district bonds acquired
from money in the general improvement fund to any property owner at
such price as it determines, to enable him to use the bonds upon
redemption of any property subject to assessment for the payment of
such bonds. Such sale shall not be made unless the property owner
simultaneously redeems the property and reinstates it upon the
assessment rolls of the city free and clear of all unpaid liens and
assessments, other than the lien for current city taxes not yet due
and payable.
All district bonds sold for the purpose of effecting such
redemption shall be canceled and discharged upon the redemption of
the property. The treasurer shall cause the proper notation of
cancellation and discharge to be entered upon the city records.
The legislative body may determine that any issue of bonds
pursuant to this article shall mature at one time, not to exceed
twenty years from the date of issue.
If the bonds are made to 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 shall not be less than an
amount obtained by dividing the total principal amount of the bonds
issued by the total number of years they are to run.
If the entire issue of bonds is to mature at one time, the
bonds may be called for redemption in numerical order at par and
accrued interest on any interest payment date prior to their fixed
maturity.
Any bond issued pursuant to this article shall not be
callable or redeemable prior to its fixed maturity date unless it
contains a statement that the bond is callable.
At least once each year, within sixty 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
legislative body shall invite sealed proposals for the sale to the
city of any bonds for payment of which the sinking fund was created.
The invitation shall be by a notice published once a week for two
weeks in a newspaper published in the city. The legislative body may
provide for additional publication in other newspapers.
The notice shall state the amount available for the
redemption of bonds and specify the time and place the proposals will
be opened. At such time and place, all proposals shall be opened in
public. Any or all proposals may be rejected in the discretion of the
legislative body.
A proposal shall not be accepted unless the sale 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 legislative body
shall call in numerical order such outstanding bonds as can be
redeemed from the money available for that purpose.
Notice of the call for redemption shall be published once a
week for two weeks in a newspaper of general circulation in the city.
The first publication shall be not less than thirty days prior to
the date fixed for redemption. Upon the date fixed, 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 of such bonds and accrued interest to the date of
redemption shall be placed in a special fund for that purpose, and
interest on such bonds ceases on the redemption date.
This article provides an alternative system for the issuance
of bonds. When proceedings are commenced under this article, its
provisions govern all procedures to be taken.
This article shall be liberally construed to the end that
its purposes may be made effective.
