2005 California Government Code Sections 16752-16760 Article 4. Sale of Bonds

16752.  The State Treasurer may from time to time, by public
announcement at the place and time fixed for the sale, continue such
sale to such time and place as he may select.
16752.1.  The State Treasurer may cancel or postpone the sale to an
indefinite date by public announcement made prior to or at the time
and place fixed for the sale of the bonds.  After two consecutive
cancellations or postponements of such sale, any further
cancellations or postponements shall be with the prior approval of
the committee.  The State Treasurer may give such notice of the new
time and place of the sale of the bonds as he may deem advisable.
16753.  (a) Each bid shall be submitted to the Treasurer in the form
and by the means specified by the Treasurer by public announcement.
   (b) The Treasurer shall require that each bidder provide a good
faith deposit of one-half of 1 percent of the principal amount of the
bonds for which the bidder submits a bid.  The Treasurer shall
specify the form of the deposit, which may be a cashier's check, a
surety bond, a wire transfer of funds, or a combination thereof.  The
deposit shall not bear interest.
16754.  The bonds specified in the resolution shall be sold by the
Treasurer, at the time fixed by the Treasurer, and upon the notice
that the Treasurer may deem advisable, or at the time to which the
sale shall have been so continued, at public sale to the bidder whose
bid will result in the lowest interest cost on account of those
bonds, but the Treasurer shall reject any and all bids for the bonds
that shall be below the par value thereof plus the interest that
shall have accrued thereon from the date thereof (or, if any past due
coupon or coupons have been detached from the bonds prior to the
delivery thereof, then from the due date of the latest coupon so
detached) to the date of the purchaser's payment for the bond.  The
method of determining the lowest interest cost bid shall be
prescribed in the bond resolution and shall be limited to either the
net interest cost method or the present worth basis method, also
referred to as the true interest cost, bond book basis, and Canadian
interest cost method.  The net interest cost of each bid shall be
determined by ascertaining the total amount of interest that the
state would be required to pay under that bid, from the date of the
bonds to the respective maturity dates of the bonds then offered for
sale, at the coupon rate or rates specified in the bid, less the
total amount of the premium, if any, offered by the bid.  The bid
under which the amount so ascertained is the least shall be deemed to
be the bid resulting in the lowest net interest cost.  Under the
present worth basis method, the bonds shall be awarded to the bidder
submitting the lowest interest rate bid determined by doubling the
semiannual interest rate, compounded semiannually, necessary to
discount the debt service payments to the specified interest
computation date and to the price bid.  Under either method, the sale
shall be for cash, payable upon the delivery of the bonds in
definitive form, or if the right to deliver temporary securities has
been reserved, then upon the delivery of the temporary securities.
16754.3.  (a) The bonds specified in the resolution shall be sold by
the Treasurer, at the time fixed by the Treasurer, and upon the
notice that the Treasurer may deem advisable, or at the time to which
the sale shall have been so continued, either at public sale to the
bidder whose bid will result in the lowest interest cost on account
of those bonds or by negotiated sale if the Treasurer determines it
will result in a lower interest cost.  With respect to bonds sold by
the Treasurer by negotiated sales, the Treasurer shall make a finding
on the public record as to why a public sale was not used.  The
Treasurer may sell the bonds at a price below the par value thereof,
but the discount on bonds so sold shall not exceed 3 percent of the
par value.  The interest, if any, accrued to the date of delivery of,
and payment for, the bonds shall be added to the sale price of the
bonds in any case.
   (b) The method of determining the lowest interest cost bid shall
be prescribed in the bond resolution and shall be limited to either
the net interest cost method or the true interest cost method.  The
net interest cost of each bid shall be determined by ascertaining the
total amount of interest that the state would be required to pay
under that bid, from the date of the bonds to the respective maturity
dates of the bonds then offered for sale, at the interest rate or
rates specified in the bid, less the total amount of the premium, if
any, or plus the total amount of the discount, if any, offered by the
bid.  The bid under which the amount so ascertained is the least
shall be deemed to be the bid resulting in the lowest net interest
cost.  Under the true interest cost method, the bonds shall be
awarded to the bidder submitting the lowest interest rate bid
determined by the nominal interest rate that, when compounded
semiannually and used to discount the debt service payments on the
bonds to the date of the bonds, results in an amount equal to the
price bid for the bonds, excluding interest accrued to the date of
delivery.  Under either method the sale shall be for cash, payable
upon the delivery of the bonds in definitive form, or if the right to
deliver temporary securities has been reserved, then upon the
delivery of the temporary securities.
   (c) Notwithstanding subdivision (a) or (b), if the resolution
prescribes that the bonds may pay a variable interest rate, as
specified in subdivision (d) of Section 16731, the Treasurer may sell
the bonds by negotiated sales if the Treasurer determines that it is
in the best interest of the state to do so.
   (d) This section shall apply to any bonds authorized at any
statewide election held at any time after the effective date of this
section.  Section 16754 shall apply only to bonds authorized at
elections held before the effective date of this section.
16754.5.  Notwithstanding any provision in this article to the
contrary, bonds to provide farm and home aid for veterans in
accordance with the Veterans' Farm and Home Purchase Act of 1974
(Article 3.1 (commencing with Section 987.50) of Chapter 6 of
Division 4 of the Military and Veterans Code), may be sold by
negotiated sale by the Treasurer with the approval of the Veterans'
Finance Committee of 1943.
16755.  The deposit of each unsuccessful bidder shall be returned to
him immediately upon the rejection of his bid or the acceptance of
another bid.
   The deposit of the successful bidder shall, immediately upon the
acceptance of his bid, become and be the property of the State and be
placed in the State Treasury to the credit of the fund, 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 State 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 his bid, nor, unless it shall appear that the bonds would
not be validly issued if delivered to the purchaser in the form and
manner proposed, shall such successful bidder have any right to the
recovery of the deposit accompanying his bid or to any allowance or
credit by reason of such deposit.
16756.  Upon payment in full, the bonds shall be delivered to the
purchaser in definitive form, unless the right to deliver temporary
securities has been reserved or the purchaser has waived the right to
receive definitive bonds at the time of payment, in either of which
events such temporary securities, exchangeable for definitive bonds,
may be delivered upon such payment.  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.
16757.  The proceeds of each sale of bonds, and such amount as may
have been paid as accrued interest on such bonds, shall be forthwith
paid over by the State Treasurer into the fund.  All money deposited
in the fund under the provisions of this section which is derived
from premium and accrued interest on bonds sold shall be reserved in
the fund and shall be available for transfer to the General Fund as
provided in the bond act.
16758.  All actual and necessary expenses of the committee and of
the members thereof incurred in the performance of their duties shall
be paid out of the fund.  Such expenses incurred by members of the
committee shall be so paid upon claims filed with the State
Controller by the member or members who incurred such expenses.
16759.  The Treasurer shall submit to the Chairperson of the Joint
Legislative Budget Committee, after each sale of bonds authorized to
be sold under this chapter, an update as to the percentage of general
fund moneys that would be used to service the resulting general
obligation bond obligations.
16760.  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.