2009 California Penal Code - Section 7300-7311 :: Chapter 14. New Prison Construction Bond Act Of 1986

PENAL CODE
SECTION 7300-7311

7300.  This chapter shall be known and may be cited as the New
Prison Construction Bond Act of 1986.

7301.  The State General Obligation Bond Law is adopted for the
purpose of the issuance, sale and repayment of, and otherwise
providing with respect to, the bonds authorized to be issued by this
chapter, and the provisions of that law are included in this chapter
as though set out in full in this chapter except that,
notwithstanding anything in the State General Obligation Bond Law,
the maximum maturity of the bonds shall not exceed 20 years from the
date of each respective series. The maturity of each respective
series shall be calculated from the date of such series.

7302.  There is in the State Treasury the 1986 Prison Construction
Fund, which fund is hereby created. The proceeds of the sale of bonds
authorized by this act shall be deposited in this fund and may be
transferred upon request of the Department of Corrections and upon
approval of the Director of Finance, to the 1984 Prison Construction
Fund established by Section 7202. If the moneys are so transferred,
"fund" means the 1984 Prison Construction Fund.

7303.  The 1986 Prison Construction Committee is hereby created. The
committee shall consist of the Controller, the State Treasurer, and
the Director of Finance. That committee shall be the "committee," as
that term is used in the State General Obligation Bond Law.
   The Department of Corrections is the "board" for the purpose of
the State General Obligation Bond Law and this chapter.

7304.  The committee is hereby authorized and empowered to create a
debt or debts, liability or liabilities, of the State of California,
in the aggregate of five hundred million dollars ($500,000,000), in
the manner provided in this chapter. That debt or debts, liability or
liabilities, shall be created for the purpose of providing the fund
to be used for the object and work specified in Section 7306.

7305.  The committee may determine whether or not it is necessary or
desirable to issue any bonds authorized under this chapter, and if
so, the amount of bonds then to be issued and sold. The committee may
authorize the Treasurer to sell all or any part of the bonds herein
authorized at such time or times as may be fixed by the Treasurer.

7306.  The moneys in the fund shall be used for the acquisition,
construction, renovation, remodeling, and deferred maintenance of
state youth and adult corrections facilities.

7307.  (a) 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
thereon.
   (b) 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 those bonds, and it is hereby
made the duty of all officers charged by law with any duty in regard
to the collection of that revenue to do and perform each and every
act which shall be necessary to collect that additional sum.
   (c) All money deposited in the fund which has been derived from
premium and accrued interest on bonds sold shall be available for
transfer to the General Fund as a credit to expenditures for bond
interest.
   (d) All money deposited in the fund pursuant to any provision of
law requiring repayments to the state which are financed by the
proceeds of the bonds authorized by this chapter shall be available
for transfer to the General Fund. When transferred to the General
Fund that money shall be applied as a reimbursement to the General
Fund on account of principal and interest on the bonds which has been
paid from the General Fund.

7308.  There is hereby appropriated from the General Fund in the
State Treasury for the purpose of this chapter such an amount as will
equal the following:
   (a) That sum annually as will be necessary to pay the principal of
and the interest on the bonds issued and sold pursuant to the
provisions of this chapter.
   (b) That sum as is necessary to carry out the provisions of
Section 7309, which sum is appropriated without regard to fiscal
years.

7309.  For the purpose of carrying out the provisions of this
chapter, the Director of Finance may by executive order authorize the
withdrawal from the General Fund of an amount or amounts not to
exceed the amount of the unsold bonds which the committee has by
resolution authorized to be sold for the purpose of carrying out this
chapter. Any amounts withdrawn shall be deposited in the fund and
shall be disbursed by the committee in accordance with this chapter.
Any money made available under this section to the board shall be
returned by the board to the General Fund from moneys received from
the sale of bonds sold for the purpose of carrying out this chapter.
Those withdrawals from the General Fund shall be returned to the
General Fund with interest at the rate which would otherwise have
been earned by those sums in the Pooled Money Investment Fund.

7309.5.  Notwithstanding any other provision of this bond act, or of
the State General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code), if the Treasurer sells bonds pursuant to this bond act that
include a bond counsel opinion to the effect that the interest on the
bonds is excluded from gross income for federal tax purposes under
designated conditions, the Treasurer may maintain separate accounts
for the bond proceeds invested and the investment earnings on those
proceeds, and may use or direct the use of those proceeds or earnings
to pay any rebate, penalty, or other payment required under federal
law, or take any other action with respect to the investment and use
of those bond proceeds, as may be required or desirable under federal
law in order to maintain the tax-exempt status of those bonds and to
obtain any other advantage under federal law on behalf of the funds
of this state.

7310.  All proceeds from the sale of bonds, except those derived
from premiums and accrued interest, shall be available for the
purpose provided in Section 7306 but shall not be available for
transfer to the General Fund to pay principal and interest on bonds.
The money in the fund may be expended only as herein provided.

7311.  Money in the fund may only be expended pursuant to
appropriations by the Legislature.


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