2007 California Government Code Article 4.5. General Obligation Bonds

CA Codes (gov:53506-53509.3)

53506.  (a) This article is full authority for the issuance of bonds
or refunding bonds by any city, county, city and county,  school
district, community college district, or special district, secured by
the levy of ad valorem taxes, authorized in accordance with the
Constitution and, in the case of a chartered city, county, or city
and county, with the charter thereof, or in the case of a special
district, with the district's principal act.
   (b) This article is intended to provide a complete additional and
alternative method for doing the things authorized by this article.
The powers conferred by this article are supplemental and additional
to the powers conferred by any other laws, and the limitations
imposed by this article do not affect the powers conferred by any
other law.


53506.5.  This article shall be liberally construed to promote its
objectives.  If inconsistent with any other law, this article shall
be controlling.


53507.  As used in this article, the following terms shall have the
meanings assigned to them in this section.
   (a) "Bonds" means bonds, notes, warrants, or other evidence of
indebtedness payable, both principal and interest, from the proceeds
of ad valorem taxes that may be levied without limitation as to rate
or amount upon property subject to taxation by the legislative body.

   (b) "Issuer" means a city, county, city and county, school
district, community college district, or special district, secured by
the levy of ad valorem taxes, authorized to issue bonds pursuant to
this article.
   (c) "Legislative body" means the governing body of the issuer.



53507.5.  (a) The legislative body may, by resolution, provide for
the issuance of bonds pursuant to this article.
   (b) The resolution shall state that the bonds are being issued
pursuant to this article.



53508.  The resolution authorizing any bonds or any issue of bonds
may provide for any of the following:
   (a) The form of the bonds to be issued as serial bonds, or sinking
fund bonds, with serial or term maturities, or any combination
thereof.
   (b) The number of series in which the bonds are to be issued.
   (c) The form of the bonds as coupon, registered, or book entry.
   (d) The interest on the bonds, either fixed or variable, and the
interest rate or rates, payable at the times and in the manner
specified therein, and whether all or part of any series of the bonds
shall be issued as zero coupon or capital appreciation bonds;
provided, however, that under no conditions may the annual interest
rate, whether fixed or variable, exceed the maximum rate permitted by
Section 53531 or 53532.
   (e) The time, medium, and place or places of payment.
   (f) The time or times of maturity of the bonds, not exceeding 40
years from their respective dates.
   (g) The date or dates to be borne by the bonds of each series.
   (h) The denomination of the bonds.
   (i) The registration and conversion privileges of the bonds.
   (j) The manner in which the bonds are to be executed.
   (k) The terms of redemption, with or without premium.
   (l) Other terms and conditions of the bonds and of their
execution, issuance, and sale deemed necessary and appropriate by the
legislative body.


53508.3.  (a) No bond shall be subject to mandatory tender for
purchase or redemption prior to its fixed maturity date unless it
contains a recital to that effect.
   (b) Any bond protected by its terms or by the terms of this
section from mandatory tender for purchase or redemption prior to its
fixed maturity date or for a specified period of time after
issuance, may specify terms upon which the issuer may sell or
transfer its right to require the bond to be tendered for purchase or
redemption prior to its fixed maturity date.



53508.5.  (a) Annual payments of the principal and interest on an
issue of bonds shall be structured to amortize the bonds in a manner
whereby the maximum annual debt service payment on the bonds does not
exceed the minimum annual debt service payment on the bonds by more
than 10 percent.  Notwithstanding the provisions of this subdivision,
a deviation in annual debt service in excess of 10 percent is
allowable if the excess deviation is the result of an accelerated
repayment of principal on the bonds.
   (b) The restrictions set forth in subdivision (a) shall not apply
if, as a result of the issuance of the particular bond issue, the
overall outstanding general obligation bond debt of the issuer will
be amortized in a more level manner.



53508.7.  (a) The bonds shall be sold at a public or private sale
and at a price at, above, or below par, as the legislative body
determines.
   (b) Any bonds sold at a discount below the par value of the bonds
shall be sold in compliance with the provisions of Section 53532.
   (c) The private sale of bonds is limited to the sale of school
districts' and community college districts' bonds pursuant to
Sections 15140 or 15146 of the Education Code.



53509.  (a) Any bond issued under the authority of this article may
be refunded pursuant to this or any other applicable law.  Any bond
may be refunded pursuant to this article regardless of whether the
bond or the legislation under which its issuance was authorized
explicitly provides that the bond may be refunded.
   (b) Refunding bonds shall not be issued if the total net interest
cost to maturity on the refunding bonds plus the principal amount of
the refunding bonds exceeds the total net interest cost to maturity
on the bonds to be refunded plus the principal amount of the bonds to
be refunded.  Subject to that limitation, the principal amount of
the refunding bonds may be more than, less than, or the same as the
principal amount of the bonds to be refunded.



53509.3.  Nothing in this article shall limit the authority of the
legislative body to enter into any contract in connection with the
issuance of the bonds which it is permitted by Section 5922 to enter
into.