2005 California Government Code Sections 16730-16737 Article 2. Issuance of Bonds

16730.  Upon request of the board, supported as required in the bond
act, the committee shall determine the necessity or desirability of
obtaining interim financing pursuant to Section 16312 or 16313 and of
issuing any bonds authorized to be issued and the amount of interim
financing or bonds then to be obtained or issued and sold.
Successive issues of bonds may be authorized and sold and shall be
designated by an appropriate number or other designation.  It is not
necessary that all of the bonds authorized to be issued be sold at
any one time.
16731.  Whenever the committee determines that the sale of all or
any part of the bonds authorized to be issued is necessary or
desirable, it shall adopt a resolution to that effect.  The
resolution shall specify the following as to the bonds then to be
sold:
   (a) The aggregate number, aggregate par value, denominations, and
the date of the bonds to be then sold.  The denominations shall be in
the sum of one thousand dollars ($1,000) or multiples of that sum.
The date appearing on the bonds shall be deemed to be the date of
issuance for all purposes of this chapter, irrespective of the actual
date of delivery of the bonds and the payment of the purchase price
of the bonds.
   (b) The dates of maturity and the amount of the bonds maturing at
each date of maturity, which amounts need not be equal.  The last
dates of maturity shall be not more than 45 years after the date of
the bonds.
   (c) Whether or not the bonds are to be subject to redemption or
tender prior to maturity, and, if so, the provisions for the
redemption or tender, the manner of the call or notice thereof, and
the price or prices at which the bonds shall be subject to redemption
or tender.
   (d) The annual rate, or rates, of interest that the bonds to be
issued shall bear, which may be in multiples of one-eighth or
one-twentieth of 1 percent, but not in excess of 11 percent.  The
rate or rates may be determined at the time of the sale of the bonds.
  Alternatively, the resolution may specify that the bonds may pay a
variable interest rate, as prescribed in the resolution.  However, at
the time and as the result of the issuance of any bonds bearing a
variable interest rate, the aggregate principal amount of all state
general obligation bonds bearing variable interest rates may not
exceed 20 percent of the aggregate principal amount of all state
general obligation bonds then outstanding.  For purposes of this
calculation, variable rate bonds shall not include bonds issued
pursuant to Section 16731.6 or bonds that have an effective fixed
interest rate through a hedging contract.  Notwithstanding any other
provision of this chapter, if the committee decides to issue state
general obligation bonds bearing variable interest rates, the
committee is not required to comply with Section 16732.
Notwithstanding any other provision of law, if bonds are issued
bearing a variable interest rate under a bond act approved by the
voters prior to January 1, 2002, and if the variable interest rate
bonds provide a right of tender, then any amount payable by the
state as a result of the tender with respect to principal of and
interest on the bonds prior to the regularly scheduled principal or
interest payment dates, or payable by the state pursuant to
redemption or call initiated as a means to repay the obligation of
the state resulting from the tender, is not backed by the full faith
and credit of the state and shall not be payable under the bond act.
Further, no contractual obligation of the state under a standby bond
purchase agreement or other liquidity facility entered into in
connection with variable interest rate bonds providing a right of
tender and issued under a bond act approved by the voters prior to
January 1, 2002, shall be backed by the full faith and credit of the
state and shall not be payable under the bond act.  These obligations
are subject to annual appropriation by the Legislature.
   (e) The interest payment dates.
   (f) The technical form and language of the bonds.
   (g) 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.  If the right is reserved, the denominations and form of
the temporary securities shall be stated.
   (h) Provisions for the registration and exchange of bonds and for
the use of a depository to hold book-entry bonds after issuance.
   (i) All other terms and conditions of the bonds and of the
execution, issuance, and sale of the bonds, which shall be consistent
with all of this chapter.
16731.5.  (a) Notwithstanding any other provision of this chapter,
the committee may provide for the issuance of all or part of the
bonds authorized to be issued as zero coupon or capital appreciation
bonds.  The committee shall adopt a resolution finding that issuance
of these bonds is necessary and desirable, directing the Treasurer to
arrange for preparation of the requisite number of suitable bonds,
and specifying other provisions relating to the bonds including the
following:
   (1) The date, number, denominations, and aggregate par value of
the bonds payable at maturity.  The aggregate par value may be
represented by bond certificates in denominations as the committee
deems appropriate, but not less than one thousand dollars ($1,000).
   (2) The dates of maturity and the aggregate amounts of the bonds
maturing on each of these dates.  Determination of maturity dates and
amounts by the committee shall be made upon recommendation of the
Treasurer to provide the maximum benefit to potential purchasers and
to respond to the expected demand for the bonds.  Whenever the
committee determines to issue bonds from any authorized bond act as
zero coupon or capital appreciation bonds, and to issue bonds from
the same authorization at the same time pursuant to Section 16731,
the committee may comply with the requirements of subdivision (b) of
Section 16731 by taking into account all the bonds of the same
authorization being issued at the same time.
   (3) The interest rate or rates, and interest payment dates
applicable to the bonds.  Zero coupon bonds may bear a zero rate of
interest, and capital appreciation bonds may bear a stated rate of
interest payable only at maturity, compounded at the same rate, which
rate or rates may be determined at the time of sale of the bonds.
The rate of interest borne by these bonds, or the nominal interest
rate taking into account the original issue discount of these bonds,
when bearing a zero interest rate, shall not exceed 11 percent per
annum.
   (4) Any provisions for the redemption of the bonds prior to their
stated maturity.
   (5) The technical form and language of the bonds.
   (6) All other terms and conditions of the bonds and of their
execution, issuance, and sale, deemed necessary and appropriate by
the committee.
   (b) Notwithstanding any other provision of this chapter, when the
committee determines to issue bonds as zero coupon or capital
appreciation bonds, all of the following shall apply:
   (1) The bonds may be sold at negotiated sale at a price below the
par value in a manner consistent with paragraph (3) of subdivision
(a).  If the committee determines to issue other bonds authorized by
the same bond act at the same time as zero coupon or capital
appreciation bonds are issued, the other bonds may also be sold at
negotiated sale with a discount of not more than 3 percent of the par
amount thereof.
   (2) For purposes of determining the principal amount of bonds of
any voted authorization outstanding, in the case of any bonds which
are zero coupon or capital appreciation bonds and do not provide for
payment of interest on the bond prior to maturity, the principal
amount of the bonds shall be the cash price paid by the initial
purchasers of the bonds to the state, and deposited in the fund, plus
the amount of any costs of issuance of the bonds.  Within 30 days of
the delivery of any zero coupon or capital appreciation bonds, the
Treasurer shall submit to the committee a certificate stating the
principal amount of bonds of each issue, calculated as stated in this
subdivision, which have been sold, and the certification shall be
conclusive for all purposes under this chapter and the constitution.
   (3) The committee may arrange to utilize the services of
investment banks, commercial banks, savings and loans or other
financial institutions, or other advisers as it may deem appropriate
to publicize and assist in the marketing and sale of zero coupon or
capital appreciation bonds.
   (c) When zero coupon or capital appreciation bonds are issued
pursuant to this section, the debt service payments on the bonds
should continue to be managed in a manner consistent with the state's
policy of retiring general obligation bonds in an orderly efficient
manner.  It is the expectation of the Legislature that the authority
provided by this section will not be used to defer debt service
payments as a means of preserving General Fund moneys for short-term
purposes.  The committee shall provide in the resolution authorizing
the issuance of zero coupon or capital appreciation bonds that the
state shall set aside, in a separate trust fund within the State
Treasury, an amount in each year representing the amount of interest
accrued during that year to be payable at the maturity of the bonds,
with these payments to be deemed a payment of debt service on the
bonds.
16731.6.  (a) Notwithstanding any other provision of this chapter,
and as an alternative to the procedures set forth in Section 16731,
the committee may provide for the issuance of all or part of the
bonds authorized to be issued as commercial paper notes.  The
committee shall adopt a resolution finding that issuance of the bonds
in the form of commercial paper notes is necessary and desirable,
directing the Treasurer to arrange for preparation of the requisite
number of suitable notes, and specifying other provisions relating to
the commercial paper notes including the following:
   (1) For each program of commercial paper notes authorized, the
final date of maturity and the total aggregate principal amount of
the commercial paper notes authorized to be outstanding at any one
time up to the maturity date.  The resolution may provide that the
commercial paper notes may be issued and renewed from time to time
until the final maturity date, and that the amount issued from time
to time may be set by the Treasurer up to the maximum amount
authorized to be outstanding at any one time.  The resolution shall
include methods of setting the dates, numbers, and denominations of
the commercial paper notes.  Determination of the final maturity date
and total amount by the committee shall be made upon recommendation
of the Treasurer to meet the needs of the state for funds, to provide
the maximum benefit to potential purchasers, and to respond to the
expected demand for the commercial paper notes.  Notwithstanding any
other provision of this chapter, whenever the committee determines to
issue commercial paper notes, the committee need not comply with the
requirements of Section 16732.
   (2) The method of setting the interest rates and interest payment
dates applicable to the commercial paper notes.  Commercial paper
notes may bear a state rate of interest payable only at maturity,
which rate or rates may be determined at the time of sale of each
unit of commercial paper notes.  The rate of interest borne by the
commercial paper notes shall not exceed 11 percent per annum.
Notwithstanding any other provision of this chapter, whenever the
committee determines to issue commercial paper notes, the committee
need not comply with the requirements of Section 16733.
   (3) Any provisions for the redemption of the commercial paper
notes prior to stated maturity.
   (4) The technical form and language of the commercial paper notes.
   (5) All other terms and conditions of the commercial paper notes
and of their execution, issuance, and sale, deemed necessary and
appropriate by the committee.
   (b) Notwithstanding any other provision of this chapter, when the
committee determines to issue commercial paper notes, all of the
following shall apply:
   (1) The commercial paper notes may be sold at negotiated sale at a
price below the par value in a manner consistent with paragraph (2)
of subdivision (a).
   (2) For purposes of determining the principal amount of bonds of
any voted authorization outstanding, in the case of any commercial
paper notes, the principal amount deemed outstanding at any time
during the term of a program of commercial paper notes shall be the
maximum amount authorized in the resolution.
   (3) During the term of any program of commercial paper notes, the
renewal and reissuance from time to time of the commercial paper
notes in an amount up to the maximum amount authorized by the
resolution shall be deemed to be a refunding of the previously
maturing amount, permitted by and consistent with Article 6
(commencing with Section 16780).
   (4) Consistent with the intent for the General Fund to realize a
savings in debt service costs when commercial paper notes are issued
in place of bonds without shifting or adding financing and debt
service costs to the bond funds, the state administrative costs of
commercial paper and interest payable and other costs associated with
commercial paper notes shall be paid for as follows:
   (A) The proceeds of commercial paper notes are, notwithstanding
Section 13340, continuously appropriated to pay the state
administrative costs of commercial paper including, but not limited
to, costs of the Treasurer's office, the Controller's office, and the
Department of Finance.
   (B) The interest payable on maturing commercial paper notes and
other costs associated with commercial paper notes not specified in
paragraph (A), including, but not limited to, remarketing fees,
issuing and paying agent fees, the letter or line of credit provider
fees, the rating agency fees, and bond counsel fees, shall be paid
from the General Fund which, notwithstanding Section 13340, is
continuously appropriated to pay the interests and costs.
16732.  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 and dates of maturity of the revenue estimated to accrue to
the fund pursuant to the bond act.  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 revenues.
16733.  The rate of interest to be borne by the bonds need not be
uniform for all bonds of the same issue, and shall be the rate or
rates specified in the bid or proposal for negotiated sale accepted
by the Treasurer, unless a variable interest rate is prescribed for
the bonds in the resolution pursuant to subdivision (d) of Section
16731.  The first interest payment date may be any date within one
year after the date of the bonds.
16734.  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 state fiscal agent, or at the
office of any duly authorized agent of the State Treasurer.
16735.  Each bond shall contain a reference to the bond act, and if
subject to call or redemption prior to maturity, a recital to that
effect.
16736.  When the committee deems it in the best interests of the
state, it may authorize the State Treasurer upon such terms and
conditions as may be fixed by the committee to issue notes, on a
negotiated or a competitive-bid basis, maturing within a period not
to exceed two years, in anticipation of the sale of bonds duly
authorized at the time such notes are issued.  The proceeds from the
sale of such notes shall be used only for the purposes for which may
be used the proceeds of the sale of bonds in anticipation whereof the
notes were issued.
   When the committee deems it in the best interests of the state, it
may authorize the State Treasurer to deliver such notes in payment
for work or material furnished to the state for a public improvement,
pursuant to a contract awarded in the manner prescribed by law.
Such notes shall be so delivered only for the purposes for which may
be used the proceeds of the sale of bonds in anticipation whereof the
notes were issued.
   All notes issued and any renewals thereof shall be payable at a
fixed time, solely from the proceeds of the sale of the bonds and not
otherwise, except that in the event that the sale of the bonds shall
not have occurred prior to the maturity of the notes issued in
anticipation of the sale, the State Treasurer shall, in order to meet
the notes then maturing, issue renewal notes for such purpose.  No
renewal of a note shall be issued after the sale of bonds in
anticipation of which the original note was issued.
   Every note and any renewal thereof shall be payable from the
proceeds of the sale of bonds and not otherwise.  The total amount of
such notes or renewals thereof issued and outstanding shall at no
time exceed the total amount of the unsold bonds.
   Interest on the notes shall be payable from any appropriation made
for that purpose.
16737.  When the committee deems it in the best interests of the
state, it may authorize the State Treasurer, upon such terms and
conditions as may be fixed by the committee, to issue notes, on a
negotiated or a competitive-bid basis, maturing within a period not
to exceed two years, in anticipation of the sale of bonds duly
authorized at the time such notes are issued.  The proceeds from the
sale of such notes shall be used only for the purposes for which may
be used the proceeds of the sale of bonds in anticipation whereof the
notes were issued.
   When the committee deems it in the best interests of the state, it
may authorize the State Treasurer to deliver such notes in payment
for work or material furnished to the state for a public improvement,
pursuant to a contract awarded in the manner prescribed by law.
Such notes shall be so delivered only for the purposes for which may
be used the proceeds of the sale of bonds in anticipation whereof the
notes were issued.
   All notes issued and any renewals thereof shall be payable at a
fixed time, solely from the proceeds of the sale of the bonds and not
otherwise, except that in the event that the sale of the bonds shall
not have occurred prior to the maturity of the notes issued in
anticipation of the sale, the State Treasurer shall, in order to meet
the notes then maturing, issue renewal notes for such purpose.  No
renewal of a note shall be issued after the sale of bonds in
anticipation of which the original note was issued.
   Every note and any renewal thereof shall be payable from the
proceeds of the sale of bonds and not otherwise.  The total amount of
such notes or renewals thereof issued and outstanding shall at no
time exceed the total amount of the unsold bonds.
   Interest on the notes shall be payable from any appropriation made
for that purpose.
   This section shall be effective only with respect to bond
anticipation notes issued in anticipation of the sale of bonds
authorized either at statewide elections held prior to September 15,
1961, or authorized at any statewide election duly called and held at
any time after the effective date of this section.