Chapter 1. General Provisions of California Harbors And Navigation Code >> Division 6. >> Part 4. >> Chapter 1.

This part may be cited as the Harbor Development Bond Law of 1958.

As used in this chapter the following words shall have the following meanings:
  (a) "Committee" means the Harbor Improvement Bond Committee.
  (b) "Authority" means the San Francisco Port Authority, as the same is constituted by Part 1 (commencing at Section 1690) of Division 6 of the Harbors and Navigation Code, or any successor thereof.
  (c) "Commission" means the Harbors and Watercraft Commission, as the same is constituted by Division 1 (commencing with Section 30) of this code, or any successor thereof.
  (d) "San Francisco Harbor Improvement Fund" means the fund now existing in the State Treasury and created by Section 1706.

The following funds are created in the State Treasury for the purposes of this part:
  (a) Harbor Bond Sinking Fund.
  (b) Fifth San Francisco Seawall Fund.
  (c) Small Craft Harbor Bond Fund.
  (d) Small Craft Harbor Improvement Fund.

There is in the State Government the Harbor Improvement Bond Committee. The committee shall consist of the State Controller, the State Treasurer, and the Director of Finance. The Director of Finance shall be the chairman of the committee. A majority of the members of the committee shall be empowered to act for the committee. The committee shall hold meetings at such times and places as the chairman shall direct or upon the written request of any two members of the board.

The members of the committee shall not receive additional compensation for their services under this part.

For the purpose of creating funds to provide for the construction, improvement and development of harbors in this State as provided in this part, the Harbor Improvement Bond Committee is authorized and empowered to create a debt or debts, liability or liabilities, of the State of California, in the manner and to the extent hereinafter provided, but not otherwise, nor in excess thereof.

After adoption of any resolution by the committee, provided for in Section 3907, the State Treasurer shall arrange for the preparation of the requisite number of suitable bonds in accordance with the specifications contained in such resolution. The aggregate par value of all bonds issued under this part shall not exceed the sum of sixty million dollars ($60,000,000). The authorization to issue bonds as herein set forth shall be a continuing authorization until all of said bonds shall have been issued and sold, but no bonds shall be issued or sold pursuant to this part subsequent to July 1, 1999.

Whenever the authority pursuant to Section 3940 or the commission pursuant to Section 3950 determines by resolution that a bond issue under this part is necessary or desirable in order to make any of the expenditures authorized by this part, and so certifies to the committee, then the said committee shall approve or disapprove said resolution, and if it approves said resolution, the committee shall adopt a resolution authorizing and directing the State Treasurer to arrange for the preparation of the requisite number of suitable bonds and shall specify as to such bonds then to be sold:
  (a) The aggregate number, aggregate par value, demoninations and the date of the bonds to be then sold. The bonds may be issued in series or divisions of the total authorized issue. Such demoninations shall be in the sum of one thousand dollars ($1,000), or multiples thereof. The date appearing on the bonds or series or division shall be deemed to be the date of issuance of such series or division for all purposes of this part, irrespective of the actual date of delivery of such bonds of such series or division and the payment of the purchase price thereof.
  (b) The dates of maturity, and the amount and numercial sequence of the bonds maturing at each date of maturity, which amounts need not be equal, but which dates shall be at annual or semiannual intervals, and the first of which dates of maturity shall be not more than five years, and the last of which dates of maturity shall be not more than 50 years, after the date of the bonds or any series or division thereof.
  (c) Whether or not the bonds are to be subject to redemption at the option of the authority or the commission, as the case may be, prior to maturity, and, if so, the provisions for such redemption, the manner of the call thereof, and the price or prices at which the bonds shall be subject to redemption.
  (d) The annual rate, or rates, of interest which the bonds to be issued shall bear, which rate, or rates, at the discretion of the committee, may be determined by the bidder at the time of sale of said bonds, not to exceed 6 percent per annum. Such interest may be payable at such periods as may be fixed by the committee.
  (e) The technical form and language of the bonds and interest coupons.
  (f) Whether or not the right is reserved to make delivery in the form of temporary or interim bonds, certificates, or receipts, exchangeable for definitive bonds when executed and available for delivery, and if such right is reserved the denominations and form of such temporary securities.
  (g) Whether or not the bonds are to be subject to registration, the demoninations of registered bonds and the provisions, if any, for the interexchange of bonds of different denominations, the issuance of new bonds of different denominations in lieu of, or in exchange for, bonds of a like aggregate principal amount but of different denominations and the form and all of the terms and conditions of such registration and of such exchange. If such registration is provided for, all of the provisions of this part with reference to the payment of bonds and interest coupons shall be subject to the terms and conditions of such registration with respect to the payment of registered bonds and the interest thereon.
  (h) All other terms and conditions of the bonds and of the execution, issuance and sale thereof, which shall be consistent with all of the provisions of this part.
  (i) The committee may authorize the State Treasurer to sell all or any part of the bonds herein authorized at such time or times as may be fixed by the State Treasurer.

The aggregate par value of all bonds issued under this part at the instance of the authority shall not exceed fifty million dollars ($50,000,000) and the aggregate par value of all bonds issued under this part at the instance of the commission shall not exceed ten million dollars ($10,000,000).

All bonds issued under this part shall bear the facsimile signature of the Governor and the facsimile countersignature of the Controller and shall be endorsed by the State Treasurer by facsimile signature and the bonds shall be signed, countersigned and endorsed by the officers who shall be in office on the date of the adoption of the resolution of the committee, and each of the bonds shall bear a facsimile of the Great Seal of the State of California. Interest coupons attached to each bond shall bear the facsimile signature of the State Treasurer who shall be in office on the date of the adoption of the resolution of the committee. The bonds and coupons so signed, countersigned, endorsed and sealed, when sold and delivered, shall be and constitute a valid and binding obligation upon the State of California, although the sale or delivery thereof be made at a date or dates upon which the officers having signed, countersigned and endorsed the bonds, or any or either of such officers, shall have ceased to be the incumbents of the offices held by them at the time of signing, countersigning, or endorsing such bonds. Each bond issued under this part shall contain a clause or clauses stating that interest shall cease to accrue thereon from and after the date of maturity thereof, and referring to the resolution of the committee, by virtue of which the bond is issued.

All bonds herein authorized, which shall have been duly sold and delivered as herein provided, shall constitute valid and legally binding general obligations of the State of California, and the full faith and credit of the State of California is hereby pledged for the punctual payment of both principal and interest thereof. There is hereby appropriated from any available moneys in the account established in the Harbor Bond Sinking Fund pursuant to subdivision (a) of Section 3918.5, or if such moneys are insufficient, then from the General Fund of the State of California, such sum annually as will be necessary to pay the principal of and interest on the bonds issued and sold at the instance of the authority pursuant to the provisions of this part, as such principal and interest become due and payable. There is hereby appropriated from any available moneys in the account established in the Harbor Bond Sinking Fund pursuant to subdivision (b) of Section 3918.5, or if such moneys are insufficient then from the General Fund of the State of California, such sum annually as will be necessary to pay the principal of and interest on the bonds issued and sold at the instance of the commission pursuant to the provisions of this part, as such principal and interest become due and payable. Any sums withdrawn from the General Fund for the payment of principal of or interest on the bonds shall be returned to the General Fund as soon as moneys are available for that purpose in the Harbor Bond Sinking Fund account for the benefit of which the appropriation had been made from the General Fund, together with interest thereon at the same rate as, at the time of appropriation, is earned by short term current investments through the pooled money investment account, such earnings to be determined by the Controller. There shall be collected annually in the same manner and at the same time as other state revenue is collected such a sum, in addition to the ordinary revenues of the State, as shall be required to pay the principal and interest on said bonds as herein provided, and it is hereby made the duty of all officers charged by law with any duty in regard to the collections of said revenue, to do and perform each and every act which shall be necessary to collect such additional sum.

In determining the dates of maturity of the bonds, and the amount thereof to mature at each date of maturity, the committee shall be guided, so far as it may deem to be practicable, by the amounts of the revenue estimated to accrue to the Harbor Bond Sinking Fund. The committee shall fix and determine the dates and amounts of such maturities in such manner that, together with the dates and amounts of interest payments on the bonds, they shall coincide, as nearly as it may deem to be practicable, with the dates and amounts of such estimated revenue.

The rate of interest to be borne by the bonds need not be uniform for all bonds of the same issue, series or division and shall be the rate or rates fixed and determined by the committee in a resolution adopted prior to the sale of the bonds or as specified in the bid accepted by the State Treasurer if the bonds are sold on the basis of the bidder naming the interest rate or rates, in which event the State Treasurer shall fix such rate or rates in conformity with the bid of the successful bidder.

Both principal of and interest on the bonds shall be payable in lawful money of the United States, at the Office of the State Treasurer, or at the office of any duly authorized fiscal agent of the State.

Each bond shall contain a reference to this part and if subject to call or redemption prior to maturity, a recital to that effect.

The bonds authorized to be issued under this part shall be sold by the State Treasurer to the highest bidder for cash, either at public auction or upon sealed bids as the committee may by resolution determine. Highest bidder shall be the bidder whose bid will result in the lowest net interest cost on account of said bonds. If the State Treasurer determines that the bids received are not satisfactory as to price or responsibility of the bidders, the State Treasurer may reject all bids received. The Treasurer may from time to time, by public announcement at the place and time fixed for the sale, continue such sale, as to the whole of the bonds offered, or any part thereof offered, at such time and place as he may select. If the bonds are offered for sale upon sealed bids, then each bid shall be in writing and signed by the bidder and sealed, and shall be accompanied by the deposit of a certified check or cashier's check for one-half of one percent (0.5%) of the par value of the bonds so offered for sale, but not exceeding one hundred thousand dollars ($100,000), drawn on a bank or trust company authorized to transact and transacting business in the State of California, payable to the Treasurer of the State of California, such deposit not to bear interest. The deposit of each unsuccessful bidder shall be returned to him immediately upon the nonacceptance of his bid, and the deposit of the successful bidder shall immediately upon the acceptance of his bid become and be the property of the State of California and be placed in the State Treasury to the credit of the Fifth San Francisco Seawall Fund with respect to bonds issued at the instance of the authority and to the credit of the Small Craft Harbor Bond Fund with respect to bonds issued at the instance of the commission, and shall be credited to the successful purchaser upon the purchase price of the bonds bid for in case such purchase price is paid in full by him within the time mutually agreed upon between the successful bidder and the Treasurer. If the purchase price is not so paid, the successful bidder shall have no right in and to the bonds or by reason of such bid, or to the recovery of the deposit accompanying the bid, or to any allowance or credit by reason of such deposit unless it shall appear that the bonds would not be validly issued if delivered to the purchaser in the form and manner proposed. In case the purchase price is not so paid, the bonds so sold but not paid for shall be resold by the State Treasurer upon notice as provided in case of original sale. Temporary or interim bonds, certificates, or receipts of any denomination whatever and with or without coupons attached thereto, to be signed by the State Treasurer, may be issued and delivered until the definitive bonds are executed and available for delivery. Signature of the State Treasurer may be by facsimile or signature stamp.

Due notice of the time and place of sale of all bonds shall be given by the State Treasurer by publication in one newspaper published in the City and County of San Francisco and also by publication in one newspaper published in the City of Sacramento and by publication in one newspaper published in the City of Los Angeles once a week during two weeks prior to such sale. In addition to the notice last above provided for, the State Treasurer may give such further notice as he may deem advisable. All money secured from the sale of bonds issued at the instance of the authority, other than such amount as may have been paid as premium or accrued interest thereon, and excluding any amount paid pursuant to Section 3916.5, shall be placed in the State Treasury to the credit of the Fifth San Francisco Seawall Fund. All money secured from the sale of bonds issued at the instance of the commission, other than such amount as may have been paid as premium or accrued interest thereon, and excluding any amount paid pursuant to Section 3916.5 shall be placed in the State Treasury to the credit of the Small Craft Harbor Bond Fund. Any premium or accrued interest received on the sale of bonds issued and sold at the instance of the authority shall be deposited in the account established in the Harbor Bond Sinking Fund pursuant to subdivision (a) of Section 3918.5, and any premium or accrued interest received on the sale of bonds issued and sold at the instance of the commission shall be deposited in the account established in the Harbor Bond Sinking Fund pursuant to subdivision (b) of Section 3918.5.

The sum of seventy-five thousand dollars ($75,000) is hereby appropriated out of the General Fund to be used as a revolving fund to pay the expenses incurred by the State Treasurer in having the bonds prepared and in advertising their sale or their prior redemption, for expenses incurred by the committee, and for legal services. Whenever bonds are sold at the instance of the authority out of the first money realized from their sale, there shall be redeposited in the revolving fund such sums as have been expended for the above purposes with respect to such bonds, which may be used for the same purpose and repaid in the same manner whenever additional sales are made. Whenever bonds are sold at the instance of the commission, out of the first money realized from their sale, there shall be redeposited in the revolving fund such sums as have been expended for the above purposes with respect to such bonds, which may be used for the same purpose and repaid in the same manner whenever additional sales are made. Whenever all the bonds authorized by this part have been sold, the amount of the appropriation made by this section shall revert to the unappropriated surplus in the General Fund.

The committee may provide for the issuance, sale or exchange of refunding bonds out of the bonds issued under this part for the purpose of redeeming or retiring any bond issued by the committee if, under the terms of that issue, the bonds issued thereunder may be redeemed or retired. Any bonds issued hereunder may be redeemed or retired if the resolution under which the bonds are issued so permits.

For the payment of the principal and interest of the bonds the Harbor Bond Sinking Fund shall consist of the following:
  (a) Payments from any available moneys in the San Francisco Harbor Improvement Fund, from time to time on order of the authority, of amounts equaling, in the aggregate:
  (1) That required under this part to be expended from the Harbor Bond Sinking Fund and the General Fund, to pay the principal and interest on all bonds issued at the instance of the authority;
  (2) Plus interest as required to be paid to the General Fund under Section 3910 on any amounts paid from the General Fund by reason of insufficient payments having been made from the San Francisco Harbor Improvement Fund to pay, when due, the principal and interest on any bonds issued at the instance of the authority;
  (3) Less the amount equal to any interest that accrues from the investment of money in the Harbor Bond Sinking Fund which has been paid into that fund from the San Francisco Harbor Improvement Fund.
  (b) Payments from any available moneys in the Small Craft Harbor Improvement Fund from time to time, on order of the commission, of amounts equaling, in the aggregate:
  (1) That required under this part to be expended from the Harbor Bond Sinking Fund and the General Fund, to pay the principal and interest on all bonds issued at the instance of the commission;
  (2) Plus interest required to be paid to the General Fund under Section 3910 on any amounts paid from the General Fund by reason of insufficient payments having been made from the Small Craft Harbor Improvement Fund to pay, when due, the principal and interest on any bonds issued at the instance of the commission.
  (3) Less the amount equal to any interest that accrues from the investment of money in the Harbor Bond Sinking Fund which has been paid into that fund from the Small Craft Harbor Improvement Fund.

(a) A separate account shall be established in the Harbor Bond Sinking Fund, in which shall be deposited all money paid into such fund from the San Francisco Harbor Improvement Fund. The money deposited to such account shall be expended only for the purposes described in subsections (1) and (2) of subdivision (a) of Section 3918.
  (b) A separate account shall be established in the Harbor Bond Sinking Fund, in which shall be deposited all money paid into such fund from the Small Craft Harbor Improvement Fund. The money deposited in such account shall be expended only for the purposes described in subsections (1) and (2) of subdivision (b) of Section 3918.

The State Treasurer shall on Controller's warrants duly drawn for that purpose, invest the moneys in the Harbor Bond Sinking Fund in the purchase of the bonds of the United States, or of the State of California, including any bonds authorized, issued and theretofore sold under authority of this part or of the several counties, municipalities, school districts, or other public agencies of the State of California, which bonds shall be kept in a proper receptacle, appropriately labeled; but he shall keep on hand a sufficient amount of money in the sinking fund with which to pay the principal and interest on such of the state bonds as the same become due. The State Treasurer may only purchase such bonds authorized and issued under authority of this part with moneys in the sinking fund as have been theretofore sold. Interest accruing upon investment made from moneys in the Harbor Bond Sinking Fund shall be deposited in the respective accounts thereof from which the money invested was derived unless otherwise required under any resolution providing for the issuance of revenue bonds to be credited to the San Francisco Harbor Improvement Fund.

The authority is authorized with the approval of the Department of Finance, to invest any surplus moneys in the Fifth San Francisco Seawall Fund in bonds or other obligations of the United States, or of the several counties, municipalities, school districts, or other public agencies of the State of California, and to sell such bonds or obligations, or any of them, at the governing market rates, upon approval of the Department of Finance; or the authority may, with the approval of the Director of Finance, invest money in such fund, in interest-bearing certificates of deposit of state banks having a paid-up capital of five hundred thousand dollars ($500,000) or more; provided, the total amount of money so deposited with any one bank shall not exceed a sum equal to 50 percent of the paid-up capital of such bank; provided, however, nothing herein contained shall inhibit the depositing in banks in accordance with Chapter 4 (commencing at Section 16500), Part 2, Division 4, Title 2 of the Government Code, of money of any of the funds subject to the control of the authority or appropriated for their use. Interest accruing upon the deposit of money of the fund shall be paid into and credited to the San Francisco Harbor Improvement Fund.

Whenever the committee deems that it will increase the salability or the price of the bonds to obtain, prior to or after sale, a legal opinion, other than that of the Attorney General, as to the validity of the bonds, the committee may authorize the State Treasurer or the Department of Finance, or both, to obtain such a legal opinion. Payment for such legal services shall be made from the proceeds of the sale of the bonds, or any other funds available to the authority with respect to bonds authorized pursuant to Section 3940 or the commission with respect to bonds authorized pursuant to Section 3950.

The State Treasurer directly or through a state fiscal agent, or agents, shall, on the respective dates of maturity of all bonds, or on the date fixed for the prior redemption of any thereof which may be duly called for redemption, and on the respective due dates of all coupons pertaining to any of said bonds, other than coupons canceled because of the redemption of any of said bonds prior to maturity, or as soon thereafter as said bonds or coupons respectively are surrendered to him, or to such state fiscal agent, or agents, pay the same.

Upon the payment of any such bond or coupon, the State Treasurer, or such state fiscal agent, or agents, shall perforate the same with a suitable device in a manner to indicate such payment and a record of such payment shall be made thereof. The State Treasurer, or such state fiscal agent, or agents, shall also on the respective dates of maturity of any such bonds which have been executed but which remain unsold, cancel the same by perforation with a suitable device in a manner to indicate such cancellation and the date thereof, and on the respective due dates of all coupons attached to any such bond remaining unsold, shall detach all such coupons the due date of which has been reached, and cancel them in the same manner as provided for the cancellation of bonds remaining unsold. After proceedings set forth in Section 3907 new bonds conforming to the directions of the committee may be prepared and executed in lieu of any bonds so canceled, and may be sold and issued in the same manner as provided for other bonds in this part.

The State Treasurer, or such state fiscal agent, or agents, with the approval of the State Treasurer, may destroy or cremate any or all bonds and any or all coupons pertaining thereto which have been previously paid or canceled as provided herein in accordance with the provisions of Government Code Section 16772.

It shall be the duty of the State Treasurer to pay the interest of said bonds, when the same falls due, out of the moneys provided for in this part, on Controller's warrants duly drawn for that purpose.

All bonds issued under this part and sold shall be deemed to have been called in at their respective dates of maturity and the State Treasurer shall, on the respective dates of maturity of said bonds, or as soon thereafter as said matured bonds are surrendered to him, pay the same upon Controller's warrants duly drawn for that purpose. The provisions of this section shall be applicable also to the interest coupons pertaining to the bonds authorized by this part to be issued.

Whenever the committee shall determine that any bonds then outstanding, and which by their terms are subject to redemption prior to maturity, should be redeemed, and that money sufficient for such redemption will be available at the time proposed for such redemption, it may, by resolution, direct the State Treasurer to call and redeem any such bonds, at a time specified in such resolution, and the State Treasurer shall thereupon give notice of such proposed redemption and redeem the bonds in accordance with the provisions for redemption provided for in the resolution of the committee adopted under Section 3907 pursuant to which the bonds were issued.

The State Controller and the State Treasurer shall keep full and particular account and record of all their proceedings under this part, and they shall transmit to the Governor an abstract of all such proceedings thereunder. All books and papers pertaining to the matter provided for in this part shall at all times be open to the inspection of any party interested, or the Governor, or the Attorney General, or a committee of either house of the Legislature, or a joint committee of both, or any citizen of the State.

All money remaining in the account of the Harbor Bond Sinking Fund, established pursuant to subdivision (a) of Section 3918.5, after the principal of and interest upon all bonds issued under this part at the instance of the authority have been paid in full and after all such bonds and interest coupons therefrom have been canceled, shall be paid into the San Francisco Harbor Improvement Fund to be expended in accordance with law. All money remaining in the account of the Harbor Bond Sinking Fund, established pursuant to subdivision (b) of Section 3918.5, after the principal of and interest upon all bonds issued under this part at the instance of the commission have been paid in full and after all such bonds and interest coupons therefrom have been canceled, shall be paid into the Small Craft Harbor Improvement Fund to be expended in accordance with law.